Wall Street gyrated wildly on Thursday, the S&P 500 once again narrowly avoiding correction confirmation at the end of a session marked by a rally, selloff and recovery as investors juggled positive economic news with mixed corporate earnings, geopolitical unrest and the prospect of a more hawkish Federal Reserve.
All three major U.S. stock indexes ended lower, having been whipsawed by uncertainty in recent days, marked by wide fluctuations and heightened volatility.
Smallcaps have had a rougher go of it, with the Russell 2000 now more than 20% below its Nov. 8 record high, officially confirming the index has been in a bear market since then.
“This is a market that is schizophrenic,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. “There are those who believe everything negative has been discounted and there are others who believe that the worst is yet to come.”
“It’s a period of a lot of uncertainty, it’s been this way all month,” Ghriskey added.
Among a spate of economic data released on Thursday, the Commerce Department’s advance take on fourth-quarter GDP shows the U.S. economy in 2021 grew at its fastest pace in nearly four decades.
Markets seesawed following the release on Wednesday of the FOMC statement, which left key interest rates near zero, and Fed Chairman Jerome Powell’s subsequent Q&A session during which he appeared to raise the possibility of more rate hikes this year than previously expected, beginning in March.
The fed funds futures market now prices in nearly five rate hikes this year in the wake of Powell’s remarks.
Geopolitical tensions simmered, as Russia continues to build up troops along the Ukrainian border and diplomats scramble to avoid conflict in the region.
The Dow Jones Industrial Average fell 7.31 points, or 0.02%, to 34,160.78, the S&P 500 lost 23.42 points, or 0.54%, to 4,326.51 and the Nasdaq Composite dropped 189.34 points, or 1.4%, to 13,352.78.
Of the 11 major sectors in the S&P 500, five ended in the red, with consumer discretionary stocks suffering the largest percentage slide.
Fourth-quarter reporting season has hit full stride, with 145 of the companies in the S&P 500 having reported. Of those, 79% have delivered consensus-beating results, according to Refinitiv data.
Analysts now see, on aggregate, year-on-year fourth-quarter earnings growth of 24.2% for the S&P 500, per Refinitiv.
“The numbers and especially the guidance has not been that inspiring and that’s a factor that’s been limiting the upside so far this week,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.
Supply-chain challenges, the engine driving inflation through the recovery from the global health crisis, have been a recurring theme this earnings season.
Intel Corp cited that issue as the reason behind its disappointing first-quarter earnings forecast, which sent its shares tumbling 7.0%.
Intel’s dismal outlook weighed on the broader sector, sending the Philadelphia SE semiconductor index down 4.8%, its worst one-day decline since March 8, 2021.
Shares of Tesla Inc dropped 11.6% after the company warned that supply issues will last throughout 2022. Shares of rivals Lucid Group and Rivian Automotive were down 14.1% and 10.5%, respectively.
Netflix Inc jumped 7.5% following news that billionaire investor William Ackman has amassed a new $1 billion stake in the company.
Apple Inc shares gained more than 2% in post-market trading after the iPhone maker beat profit estimates.
Declining issues outnumbered advancing ones on the NYSE by a 2.65-to-1 ratio; on Nasdaq, a 3.71-to-1 ratio favored decliners.
The S&P 500 posted 17 new 52-week highs and 15 new lows; the Nasdaq Composite recorded 19 new highs and 581 new lows.
Volume on U.S. exchanges was 13.29 billion shares, compared with the 11.86 billion average over the last 20 trading days.
(Reporting by Stephen Culp in New York; Additional reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru; Editing by Sriraj Kalluvila and Matthew Lewis)
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
