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The Week in Numbers: Stocks Tumble

Stocks in the United States tumbled on Wednesday, October 10, with major indices losing more than 3% in the single session. The Dow Jones Industrial Average lost 3.2% or 830 points to close at 25,498, its biggest drop in eight months. The S&P 500 slumped 3.3%, while the tech-concentrated Nasdaq Composite Index declined by 4.1%, marking its worst single-day decline since the Brexit vote more than two years ago. The S&P 500 technology index dipped 4.8%, its biggest single-day fall in seven years.

Major companies Amazon, Microsoft, Apple and Nike lost more than 4%. The sell-off came just a day after the International Monetary Fund cut its global growth forecast on worries about trade war and weakness in emerging markets. Another concern is that corporate tax cuts have boosted year-on-year earnings. In 2019, the tax cuts will be a year old and will not impact year-on-year earnings growth anymore.

Meanwhile, Uber competitor, Lyft, the second largest ride-hailing company in the United States has asked banks to submit formal pitches to underwrite its initial public offering (IPO) next year. It will be one of the most hotly anticipated IPOs in 2019. In June, Lyft was valued at US$15.1 billion in a private funding round. The company raised US$600 million in a round led by Fidelity Management & Research Co.

Global appetite for mergers and acquisitions could slow considerably as dealmakers worry over rising geopolitical concerns. According to a survey by EY, corporate takeover appetite is at a four-year low with just 46% of executives planning to make purchases in the next 12 months, down from 56% last year. The survey included more than 2,600 dealmakers across 45 countries.

Companies announced US$3 trillion of transactions in the first nine months of 2018, putting 2018 on track to beat the record of US$4.1 trillion set in 2007. However, companies are taking more time to review their options amid the uncertainty.

With oil prices surging this year, analysts at the Bank of America Merrill Lynch worry that if oil prices move past US$100 a barrel, it could shave 0.2 percentage points from global economic growth. But the bank warned that sanctions on Iran, shale bottlenecks, Venezuelan turmoil and increased demand could still drive prices higher. Brent crude futures have risen more than 25% this year to US$84.35 per barrel.

Condominium resale prices in Singapore slipped for the second month in a row, following the announcement of more property cooling measures in July. Condominium and private apartment prices dipped 0.2% in September sequentially. That followed a 0.3% dip in August, which broke a 12-month run of rising resale prices. Prices are now down 0.5% from their peak in July but still up 10.8% from September last year.

Finally, if you’re looking to move abroad for a pay jump, Switzerland is the place to go. A survey showed that expat salary in Switzerland was the highest in the world at US$202.8k per annum. The United States and Hong Kong were second and third with average pay packages of US$185.1k and US$178.7k. Singapore was fifth, with expats receiving US$162.2k on average.

However, according to HSBC’s annual Expat Explorer, Singapore was still the best place to live and work for a fourth straight year, beating New Zealand, Germany and Canada. Switzerland, despite its high pay packages, only ranked eighth.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of  Apple Inc and Amazon. The Motley Fool Singapore contributor Jeremy Chia does not own shares in any company mentioned.