Stocks sell the worst day since February amid fears of rate

[ad_1]
<div _ngcontent-c15 = "" innerhtml = "

The noise you might hear is that the stock market is being criticized.

Fears of higher rates and the resulting earnings season have contributed to the drop in equities at their worst monthly loss. Tech was hit by shock, with most shares of FAANG falling sharply as investors seemed to avoid risk.

Let's face it: the day was not beautiful. This was the worst session for the markets since last February, as investors were worried about rising rates and were withdrawing money from previously rising tech stocks. Most of the big names in technology collapsed in single-digit averages, and the S & P 500 took key moving averages, including the 50-day lag, before dropping.

The Dow Jones Industrial Average plunged more than 800 points, down 3.1%, while the Nasdaq plunged more than 4% with the technology outage. Volatility rose as VIX climbed 43% to the top 22, compared with the 11 low points last month.

If all this brings back memories of the correction at the beginning of this year, it's not surprising. There is still no correction for the S & P 500 because a correction means a 10% drop from the highest. However, believe it or not, the last two days have taken the S & P 500 largely. It is down about 5% from the September 21 intraday peak of nearly 2941.

After Wednesday's session, the bloody battlefield was cluttered with tech names and names such as Facebook, which until recently had specialized in technology but now resided in the new "communications services" sector. Communication services fell by almost 4%, while technologies dropped by almost 5%. Among the biggest losses were Amazon (-6%), Facebook (-4%) and Netflix (-8%). Microsoft and Apple have both fallen sharply.

For some time around noon, it seemed like the S & P 500 had found support close to the 2840 level, but once it collapsed, a small panic sell took over and l? sent well below 2800 at the end of the day. The 200-day moving average of nearly 2765 on Wednesday's approach could be an important level to watch for tomorrow.

The late sell in the S & P 500, which is somewhat overweight in financial services, could also reflect a mid-session change in fortunes for bank stocks. The financial sector had held up fairly well until about the last hour, but then moved from virtually unchanged, or slightly, to a rapid decline of 2% to 3.5%. When you experience this kind of dramatic change in an overweight sector, that's when things fall apart. Most major banks, including JP Morgan and Goldman Sachs, were a resounding success on Wednesday.

This is the first round of five consecutive losses for the S & P 500 since December 2016 and the worst day for tech stocks since August 2011, according to media reports.

Changing area sands

We talked a little bit about "quicksand" on the market this morning. Last week, we saw people withdrawing money from info-technology and this money potentially seems to switch to what some people once called "flight to safety" type investments, such as commodities, utilities and the US dollar (even though commodities were swept into Wednesday's wash). Although no market investment is really "safe," some investors seem to be worried that rising yields will eventually lead to a downturn in the economy. In a slower growth environment, dividend-paying investments such as utilities and basic necessities sometimes give rise to more love.

It also appears that some investors are withdrawing money from the markets and are turning to cash ahead of the report of the Consumer Price Index (CPI) released on Thursday and the soaring profits of the big banks . What are the points to this? The fact that fixed income and gold did not see much buying even as the shares sold on Wednesday.

In general, when issues arise in equities, some investors enter and buy fixed income securities as a possible security game – even if nothing is really "safe" when you invest. Bonds ended slightly higher in the day, but in fact spent much of the session down. Gold climbed less than 0.5%. The scientific term used to describe today's market is perhaps "unpredictable". It's a strange sale, and people do not seem sure what to do.

Market turmoil comes at the start of the earnings season and is a bit more worrying. Do higher prices for materials and energy reduce profit margins? Are companies reducing their expectations on the basis of tariffs vis-à-vis China or the rising cost of goods? Answers to some of these questions could be heard during teleconferences in the coming weeks, so be sure to pay close attention. Remember that the exact figures for the third quarter reflect what has already happened. The conference calls highlighted the expectations of business leaders for the fourth quarter and beyond.

It's arguable that the field is moving under the market right now, and the numbers for the next two days – first on inflation, then on the banks – could really help show where things would be for the rest of the month. . Judging by today's action, some investors are simply transferring money until they see what the next two days will reveal and tomorrow could spark a nervous trading.

Comment TD Ameritrade® for educational purposes only. ISPC Member.

">

The noise you might hear is that the stock market is being criticized.

Fears of higher rates and the resulting earnings season have contributed to the drop in equities at their worst monthly loss. Tech was hit by shock, with most shares of FAANG falling sharply as investors seemed to avoid risk.

Let's face it: the day was not beautiful. This was the worst session for the markets since last February, as investors were worried about rising rates and were withdrawing money from previously rising tech stocks. Most of the big names in technology collapsed in single-digit averages, and the S & P 500 took key moving averages, including the 50-day lag, before dropping.

The Dow Jones Industrial Average plunged more than 800 points, down 3.1%, while the Nasdaq plunged more than 4% with the technology outage. Volatility rose as VIX climbed 43% to the top 22, compared with the 11 low points last month.

If all this brings back memories of the correction at the beginning of this year, it's not surprising. There is still no correction for the S & P 500 because a correction means a 10% drop from the highest. However, believe it or not, the last two days have taken the S & P 500 largely. It is down about 5% from the September 21 intraday peak of nearly 2941.

After Wednesday's session, the bloody battlefield was cluttered with tech names and names such as Facebook, which until recently had specialized in technology but now resided in the new "communications services" sector. Communication services fell by almost 4%, while technologies dropped by almost 5%. Among the biggest losses were Amazon (-6%), Facebook (-4%) and Netflix (-8%). Microsoft and Apple have both fallen sharply.

For some time around noon, it seemed like the S & P 500 had found support close to the 2840 level, but once it collapsed, a small panic sell took over and l? sent well below 2800 at the end of the day. The 200-day moving average of nearly 2765 on Wednesday's approach could be an important level to watch for tomorrow.

The late sell in the S & P 500, which is somewhat overweight in financial services, could also reflect a mid-session change in fortunes for bank stocks. The financial sector had held up fairly well until about the last hour, but then moved from virtually unchanged, or slightly, to a rapid decline of 2% to 3.5%. When you experience this kind of dramatic change in an overweight sector, that's when things fall apart. Most major banks, including JP Morgan and Goldman Sachs, were a resounding success on Wednesday.

This is the first round of five consecutive losses for the S & P 500 since December 2016 and the worst day for tech stocks since August 2011, according to media reports.

Changing area sands

We talked a little bit about "quicksand" on the market this morning. Last week, we saw people withdrawing money from info-technology and this money potentially seems to switch to what some people once called "flight to safety" type investments, such as commodities, utilities and the US dollar (even though commodities were swept into Wednesday's wash). Although no market investment is really "safe," some investors seem to be worried that rising yields will eventually lead to a downturn in the economy. In a slower growth environment, dividend-paying investments such as utilities and basic necessities sometimes give rise to more love.

It also appears that some investors are withdrawing money from the markets and are turning to cash ahead of the report of the Consumer Price Index (CPI) released on Thursday and the soaring profits of the big banks . What are the points to this? The fact that fixed income and gold did not see much buying even as the shares sold on Wednesday.

In general, when issues arise in equities, some investors enter and buy fixed income securities as a possible security game – even if nothing is really "safe" when you invest. Bonds ended slightly higher in the day, but in fact spent much of the session down. Gold climbed less than 0.5%. The scientific term used to describe today's market is perhaps "unpredictable". It's a strange sale, and people do not seem sure what to do.

Market turmoil comes at the start of the earnings season and is a bit more worrying. Do higher prices for materials and energy reduce profit margins? Are companies reducing their expectations on the basis of tariffs vis-à-vis China or the rising cost of goods? Answers to some of these questions could be heard during teleconferences in the coming weeks, so be sure to pay close attention. Remember that the exact figures for the third quarter reflect what has already happened. The conference calls highlighted the expectations of business leaders for the fourth quarter and beyond.

It's arguable that the field is moving under the market right now, and the numbers for the next two days – first on inflation, then on the banks – could really help show where things would be for the rest of the month. . Judging by today's action, some investors are simply transferring money until they see what the next two days will reveal and tomorrow could spark a nervous trading.

Comment TD Ameritrade® for educational purposes only. ISPC Member.