Tesla’s drag was a key talking point yesterday as tech stocks were hammered with the Nasdaq falling near 4%. The chart doesn’t paint a pretty picture with the index down by over 20% now since the turn of the year:

The support from the 38.2 retracement level @ 12,552 is the key one to watch this week with the March 2021 low @ 12,397 adding to some additional downside buffer. But break that region and things could get even uglier and in such a scenario, I can’t see how that would not spillover and impact broader market sentiment.For now, things are calmer heading into the US session but the earlier optimism has certainly been snuffed out. Nasdaq futures are up 0.1% after having been up by around 0.8%. S&P 500 futures are up 0.5% but part of the gains owes to value stocks with Dow futures seen up 0.7%.

Prior -5.0%
Market index 343.1 vs 374.0 prior
Purchase index 234.7 vs 254.0 prior
Refinancing index 930.7 vs 1,023.2 prior
30-year mortgage rate 5.37% vs 5.20% prior

The average rate of the most popular US home loan jumps to its highest since June 2009 and the rising costs have certainly weighed on demand conditions, as mortgage activity slumped heavily once again. The purchase index has fallen to its lowest since May 2020 while the refinancing index is down to its weakest since January 2019.

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A recap of the headlines from today:Russia’s gas ‚blackmail‘ one to watch in the days aheadRussia’s Gazprom: Gas supplies to Poland, Bulgaria halted until payment in rubles is madeFour European gas buyers said to have already paid for supplies in rublesDo take note that transit supplies (since Poland and Bulgaria are considered ‚transit states‘) will continue as they are but in the event that there is any „stealing“, then Gazprom will reduce said supplies by the amount taken away.

Prior 9UK retail sales is seen slumping in April with the first fall in volumes being reported in more than a year. That just reaffirms the likelihood that we are seeing a change in consumption activity/pattern as the cost-of-living crisis intensifies. CBI notes that:“Retail sales were below seasonal norms in April as consumer spending continued to shift back towards services and rising prices impacted households‘ spending power.“