Market Pull Back? Finally? | Wall Street Today
RECAP
April rain better mean the stock market stops the pain by May: the market declined Tuesday, punctuated by the fall of fan favorite Tesla. The EV maker made less EV's than last year and dropped nearly 5%.
Stocks closed lower, the $S&P 500 Index (.SPX.US)$ was recently down about 0.72%. $NASDAQ 100 Index (.NDX.US)$ fell about 0.94%. $Dow Jones Industrial Average (.DJI.US)$ fell 1%.
MACRO
Job openings recorded by JOLTS were just shy of expectations at 8.75M, but above last weeks 8.74M. Yields on U.S. government debt jumped Tuesday after last Friday's PCE report.
The yield on the 10-year Treasury note jumped almost 12 basis points to 4.389%, from 4.311% on Thursday. Yields hit a four month high, as investors price in the reality that fewer Federal Funds rate cuts may be likely in 2024. The probability of a June rate cut dropped below 50% according to CME Fed Watch tool on Monday, and now sits at about 60%.
Gregory Faranello, head of U.S. rates for AmeriVet Securities in New York, said he sees a "higher yield story from here," with the 10-year rate possibly reaching 4.5%-5% in the next month or so. A 5% Treasury yield is the level that others in the financial market have associated with a likely stock-market correction. '
Tuesday saw multiple FOMC members speak about rates. Cleveland Fed President Loretta Mester said Tuesday that she still expects three interest rate cuts in 2024, but added it was a close call.
"I still think three is reasonable, but it's close call," Mester told reporters after a speech.
Earlier, in her prepared speech, Mester said that May would be too soon for the first cut. Asked about the possibility of a cut in June, Mester said she wouldn't rule that out. San Francisco Fed President Mary Daly said three rate cuts are a reasonable expectation, but there is no urgency to make adjustments.
SECTORS
When it comes to sectors tracked by moomoo, Nvidia and Semiconductors were down big, pulling back about 2.2%. Recently listed $GCT Semiconductor Holding dropped 9.9%, leading the fall. Further down in the pack, $ON Semiconductor and $Advanced Micro Devices fell nearly 4%.
Bitcoin Pulls Back 7% While Crypto Companies Fall to Follow
$Bitcoin (BTC.CC)$ briefly tumbled below $65,000 Tuesday. The decline put the coin about 7% lower than its level Monday. Bitcoin climbed above $70,000 recently but has struggled to break higher. The cryptocurrency edged past its previous record high last month, but has faced volatility since.
Shares of crypto companies fell. Exchange $Coinbase , $MicroStrategy fell 3%, $Marathon Digital fell nearly 9%.
Health Insurers providing Medicare Advantage Felt Pain
Insurers and providers fell after the Centers for Medicare and Medicaid Services announced a payment rate that disappointed investors looking for a bigger increase.
Shares of $Humana (HUM.US)$ tumbled 14.1% in morning trading, to put them on track for the lowest close since April 3, 2020.
$CVS Health (CVS.US)$ was the S&P 500's second-biggest decliner as it dropped 8.1%, and $UnitedHealth (UNH.US)$ sank 6.2% toward a nine-month low to lead the Dow Jones Industrial Average's DJIA losers.
Elsewhere, shares of $Elevance Health (ELV.US)$ slid 3.2%, $Centene (CNC.US)$ was down 5% and $Molina Healthcare (MOH.US)$ shed 5.4%.
CMS said late Monday that under the 2025 Rate Announcement, government payments to Medicare Advantage (MA) plans are expected to increase by 3.7% on average, or by $16 billion, from 2024.
COMPANIES
Tesla Deliveries Miss Expectations
$Tesla fell after the firm said it produced 433,371 vehicles in the first quarter, down from 440,808 in the same period a year ago. Deliveries fell to 386,810, down from 422,875 in the same period last year.
GM's First-Quarter Sales -- A Little Good News and a Little Bad News
$General Motors (GM.US)$ announced first quarter delivery results Tuewsday. The firm said it sold 594,233 vehicles, down 1.5% year over year. The stock fell about 1.12% for the day.
Endeavor Shares Rise as It Agrees to Be Acquired by Silver Lake for $13 Billion
$Endeavor Group (EDR.US)$ shares gained after the sports and entertainment company said Tuesday that it has agreed to be acquired by private equity firm Silver Lake for an equity value of $13 billion.
Mooers: What do you think, how do you feel about the Market? What's the word from the Herd?
Source: Bloomberg, Dow Jones, CNBC, Reuters
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In 10 minutes it’s history. At four I’m a dinosaur!
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binjh : Well, they do say sell in May and go away.
Power Bull : Good update. Keep it coming
eldritch : market is bleeding right now bears got it on lock for now it can only rise
KL6808 : Bear trap, value trap or whatsoever, I belong to the old school where only death and taxes are certain.
If history always repeat itself, then no one will lose a dime.
Ask yourself what you are, intraday, medium, long term trader, what are your core holdings and what are your tactical, speculative bets?
It's always good to take some money off the table if the underlying hit their ATH. If you ain't so lucky as some are approaching their ATL, then should you cut some losses?
Meanwhile, some guru, big fund managers are talking about three rate cuts this year, but don't bet on it that they will come soon. Even if they do, or if the cuts are more than 25bp, then you better be worried that FED might have seen something coming, eg a worst off recession and a potential harder landing than the markets expect.