As a commodities trader I rarely dabble in equities, other than the ole 401k and IRA. But it behooves traders in any market to pay attention to activity in the Dow Jones Industrial Average (DJIA), S&P 500 Index (SPX) and NASDAQ Composite Index (Nasdaq) as they can be a harbinger of demand for energy and raw materials down the road. So, as of the close of trading today, the DJIA is down over 1,000 points, the SPX down 160, two-and-half and 3% declines respectively. For the DJIA, this represents a roughly 6% decline from last month’s all-time high and 8 1/2% for the SPX. The tech-heavy Nasdaq is down almost 3 1/2% today, compounding a 13% retracement from its all-time high, which is more interesting, and concerning.
So what’s happening? Several factors seem to be at play here. Some fundamental, some international, some even psychological.
First the fundamentals. The Nasdaq has been propelled to record highs recently on big bets in AI stocks. But after earnings from tech goliaths Amazon, Microsoft, Tesla, Alphabet and Apple disappointed (Meta being a bright exception, although it’s not helping its share price), the luster seems to have faded, at least in the short term. And Intel, once a tech giant now playing catchup in the AI game, had its worst day in 50 years on Friday and is down another 6 1/4% today — it is down an astounding 42% on the year.
The broad sell-off was more or less triggered on Friday when the monthly jobs report was weaker than expected, adding only 114,000 new jobs when 175,000 was the expectation. Unemployment also grew, climbing from 4.1% to 4.3%, igniting fears that the economy may be slowing down. This, of course, is bearish in any environment let alone one already teetering under the weight of disappointing earnings when markets are at lifetime highs. […]
– Read More: www.dailywire.com
