Tech Meltdown Hits the NASDAQ Hard

Markets fell again today, with all three major indices down. The Dow lead the day in losses, dropping 0.93%, or 162.61 points, to close out the day at 17,348.73. The NASDAQ had a rough day as well, falling 40.30 points to close out the trading day at 5,019.05. The S&P 500 lost 17.31 points and closed at 2,079.61.

Tech Meltdown Hits the NASDAQ Hard

Today's tech meltdown hit the NASDAQ especially hard. SanDisk (SNDK) and Seagate (STX) lead the way in losses, with each company dropping more than 5% in trading today.
SanDisk fell by 3.09 points and closed the day at $53.81 per share. Seagate mirrored the fall, losing 2.62 points to close the day at $49.43 per share.

Oil Continues to Drop

Oil is still falling without any end in site. In trading today, the cost of a barrel of light, sweet crude ended trading at $40.55. That's a 52-week low, and is right in line with my prediction of $25 oil by early winter. In fact, some analysts believe that oil could fall further than that, down as far as $15 per barrel, but I’m holding to my $25 prediction.

Just over the course of the trailing month, the price of oil has fallen from over $50 per barrel to below $41 today. That represents a nearly 20% fall in the price of oil. If that trend were to continue going into the next month, oil would be at $32.80 per barrel by the end of September.

I think it's likely that this trend is going to continue, because the supply glut shows no signs of slowing down. The US is producing oil at record levels, and so is OPEC. Neither party looks likely to blink. There are also other international players, like Russia and Iran, which might also flood their respective regions with cheap oil.

And that's really the core of the issue. Production is too high and consumption is falling. In America, consumption is right about on target with where it always has been. The rest of the world hasn't shown the ability to rebound like America has, and is still in recession. It's not just Europe that's ailing either, Canada is having problems right now too.

The biggest problem that Canada is facing is the price of oil. Their oil mostly comes from processing tar sands, which costs a lot more money than traditional methods. The low prices are taking their toll up north, where the Canadian economy is approaching another recession.
Published on Aug 19, 2015
By Aaron Phillips
Aaron Phillips is a financial researcher and journalist based out of Michigan. He regularly writes the IG Daily and IG Weekly columns.

Copyrighted 2020. Content published with author's permission.

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