Indexes Pull Back Following Japan, Labor, Tech, Consumer Pull Back | Wall Street Today
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August has officially started with bloody days, after the third session this month that saw dramatically declined markets Monday, with the Dow Jones Industrial Average Falling 1,033 points in one day and the Nasdaq dropping 7% over four days. Tech and consumer staples led the way lower, with Nvidia falling 6% and Amazon pulling back 4%.
A combination of worrying factors led to a $CBOE Volatility S&P 500 Index (.VIX.US)$ climbing 120% at one point, according to moomoo data.
Just past the 4 pm ET close, the $S&P 500 Index (.SPX.US)$ fell 3%, the $Dow Jones Industrial Average (.DJI.US)$ fell 2.60%, and the $Nasdaq Composite Index (.IXIC.US)$ fell 3.42%.
MACRO
The turbulence began last week after multiple earnings reports from the largest companies did not meet estimates. Then, minutes of Japan's head Bank showed some members wanted to raise rates, Friday, sending the $Nikkei 225 (.N225.JP)$ down 12% in Monday trading, the worst since the 1980s.
The U.S. market was already down Friday by about 3% on each index, and further stress pushed it over the edge. The Middle East conflict between Israel and Iran also threatened to inflame further over the weekend.
Meanwhile, last week's macro numbers pointed to a rush of unemployment. The numbers showed non-farm payrolls dropped from the month before, the economy only added 114k jobs vs 175k forecast and 179k in June, according to the Bureau of Labor Statistics. The unemployment rate in July rose to 4.3%, compared to 4.1% last month. The Federal Reserve has looked extensively at the labor market as an indicator of its monetary policy and appetite for rate cuts.
The FOMC left rates unchanged last Wednesday, and after the release at 2 pm ET, Federal Reserve President Jerome Powell answered press questions and said if all goes well, the FOMC would consider a rate cut in September.
"For example, if inflation was moving down quickly or in line with expectations, growth remains reasonably strong, and the labor market remains consistent with its current condition, then I would think that a rate cut could be on the table at the September meeting,' Powell said.
SECTORS
What a red one it's turning out to be. August has proven painful overall, with only down sessions for Indexes. All 11 market sectors were in the red: here are stories from the herd on Wall St today, and here are moovin' stonks.
$Crude Oil Futures(OCT4) (CLmain.US)$ fell back 0.60%, $Bitcoin (BTC.CC)$ fell 10% to $52k, Gold and silver pulled back. $U.S. 2-Year Treasury Notes Yield (US2Y.BD)$ fell, and remained below 4% for the first time since spring 2023, and the $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ fell. Every top moving industry was in the red on moomoo, and the "Volatility" stock collection was the highest performing.
MOOVERS
$Apple (AAPL.US)$ fell nearly 5% Monday after Berkshire Hathaway $Berkshire Hathaway-B (BRK.B.US)$ earnigns over the weekend showed it had cut its stake in the tech giant by half and was sitting on $277B in cash. The giants investing dry powder sitting on the sidelines helped stir terror into the $CBOE Volatility S&P 500 Index (.VIX.US)$, that saw a 120% jump Monday.
$NVIDIA (NVDA.US)$ and other major tech stocks also fell, Nvidia pulling back 6% Monday, there are too many falling stocks to mention them all here; even brokerage firms like Fidelity and Schwab were reporting user issues with login: there was so much volatility investors were clogging web pages trying to get in.
$Shopify (SHOP.US)$, the e-commerce giant, is set to announce its Q2 earnings on Wednesday, August 7, before the market opens. Entering the report, Shopify has witnessed a significant underperformance compared to broader market indices, with its stock price declining more than 20% since the start of the year.
Mars, the company behind M&M's and Snickers, is considering buying snacks maker Kellanova, multiple news outlets reported, citing sources familiar with the matter. $Kellanova (K.US)$ climbed 12% on the news.
$Intel (INTC.US)$ fell a further 7%, the lowest on the Dow, S&P 500-, and Nasdaq 100, after its earnings miss hit the stock for a -30% price drop. It's report concerned investors that the AI tide was not pulling up every company, even long-established semiconductor chip companies like Intel.
$MicroStrategy (MSTR.US)$ shares are falling Monday after the price of $Bitcoin (BTC.CC)$ dropped below $50,000.
Investors are watching for a slimmer earnings week than the last. $Uber Technologies (UBER.US)$ should report on Tuesday, $Disney (DIS.US)$ and $Novo-Nordisk A/S (NVO.US)$ come out on Wednesday, and $Eli Lilly and Co (LLY.US)$ comes out on Thursday, alongside dozens of other +$10B MK giants.
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Word from the herd: Mooers, what are you watching?
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Disclaimer: This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Indexes are unmanaged and cannot be directly invested in. Past performance is no indication of future results. Investing involves risk and the potential to lose principal. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information regarding your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty regarding its adequacy, completeness, accuracy, or timeliness for any purpose of the above content. See this link for more information.
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