
Markets continue to rotate out of tech stocks. The NASDAQ index fell by 0.9% yesterday, and is currently approaching the correction territory (the value of the index retreated from the highest point by about 8%). At the time, the small-cap RUSSELL 2000 was up 1.3 percent and the KRW Bank Index was up 1.2 percent, with both indexes up more than 10 percent in the last month.
US annual GDP growth rose to 2.8 percent in the second quarter, the Atlanta Fed's index tracking GDP growth was close at 2.6 percent, but markets were expecting less at 2 percent. Business investment and equipment purchases contributed significantly to growth, although structural investment fell slightly during the quarter. One would expect that faster GDP growth would dampen expectations of a Fed interest rate cut, but data showing that consumer spending grew modestly kept market prospects more or less unchanged.
India has taken over the baton of the fastest growing market in Asia. India's NIFTY 50 index was up 1 percent today, up more than 13 percent this year. Investors are bullish on the huge potential of India's fast-growing economy, while the fall in political risk after the election is allowing investors to increase exposure to the country's stocks. Japan's NIKKEI 225 index fell more than 10 percent from its peak. and went into correction. So far, the country's stock markets have been fueled by soaring tech stocks and the falling value of the Japanese yen, but when both of these factors reversed, stock prices began to slide.