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Michael Haddad
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Red Monday. Shares tumbled on Monday and old concerns filled the gap in the shortened trading week. The three indices suffered considerably at the end of the day, with technology being the weakest sector. In the midst of concerns about the key rate, commercial uncertainties and the decline in the sentiment of homebuilders, even record buybacks could buy the market. Today After the bell, we…
- … Look at the bear market of the FAANGs;
- … Explain what it means to base on a 200-day moving average;
- … and speculate where the price of oil and energy stocks could go from here.
The bear eats technology
Technology stocks caught the worst in the market rout.
the
Dow Jones Industrial Average
fell by 395.78 points, or 1.6%, to 25,017.44, while the
S & P 500
fell 45.54 points, or 1.7%, to 2690.73, and heavy technology
Nasdaq Composite
plunged 219.40 points, or 3.0%, to 7028.48.
Terms such as "sale", "collapse", "merger" and "correction" have been cited by traders and analysts to make investors go wild. Here's what you need to know.
Apple
(AAPL) slid 4.0% on Monday due to concerns over iPhone demand, and flirts with the territory of the bear. Alphabet (GOOGL) is already there.
Facebook
(FB) lost 5.7% under the control of the leaders.
More than 40% of the shares of the S & P 500 index have fallen more than 20% between the peak and trough, although the index itself has only fallen by 12% at its lowest point of October, according to Michael Wilson of Morgan Stanley. This is the track left by the bearish bear market this year, which has now run its course in most corners of the market and left no sector unscathed at this stage.
Major indices, including the S & P 500, Nasdaq Composite and Russell 2000, all exceeded their 200-day moving averages, signaling a future downtrend. "Historically, when the 200-day moving average goes down, it usually takes months or more to come back." Writes Wilson in a note on Monday. Wilson does not hit the drum to buy. He suggests that investors plan to sell rallies rather than buying troughs.
The good news is that Wilson estimates that 90% of the valuation damage is already done and that the risk will now be much more concentrated at the stock level, especially those that steal high "that do not deserve a valuation premium, but have simply benefited. by crowd effect, he writes.
After entering a bear market and losing 12 days last week, the price of West Texas Intermediate crude oil rose 1.3% to 57.17 dollars Monday as the market expects potential country production cuts. of OPEC at their meeting scheduled next month.
John Lynch of Search LPL think that oil is sold enough and could be expected to rebound. "The recent fall in oil prices is particularly surprising when we consider that the sector has significantly reduced its capital expenditure in the years following the slowdown in oil between late 2014 and early 2015," notes Lynch in a statement. research report published Monday.
How energy actions will act, however, remains uncertain. Oil was up in the first half of the year, but not energy values. "Energy stocks are surprisingly out of touch with oil prices in recent years," writes Lynch, who points out that the relative performance of the S & P 500 energy index compared to the S & P 500 index is not the same. Is not improved from mid-2017 to the summer of 2018 despite soaring crude oil prices.
On the bright side, if the price of oil continues to fall, American consumers will save a lot at the pump for their Thanksgiving trip.
The hot stock
Helmerich & Payne
(HP) dominated the S & P 500 on Monday, thanks to a trio of analysts' upgrades.
Helmerich & Payne increased $ 1.77, or 2.8%, to $ 64.36.
The oil services company has been upgraded from SunTrust Robinson Humphrey to Citigroup's Buy from Hold, SunTrust Robinson Humphrey's Buy de Sell and Credit Suisse's Underperform Neutral. Ken Sill, of SunTrust, wrote this about his double upgrade of the title: "Demand and prices of high-end platforms are not slowing as expected, and the recent correction of HP and Oilfield-Services shares has created a more valuable valuation and entry point. "
Since the beginning of the year, Helmerich & Payne is down 0.4%.
The biggest loser
Nvidia
(NVDA) slipped to the bottom of the index during a bad day for technology in general.
Nvidia lost 19.73 dollars, or 12%, to 144.70 dollars.
Nvidia was already the worst performer on the S & P 500 on Friday, as a result of poor forecasts and price cuts. However, the stock continued to fall on Monday as there was little to distract from its dismal prospects during the holiday week of data, and the technology continued to suffer the shock of the sale.
Since the beginning of the year, Nvidia is down 25.2%.
–Teresa Rivas
Write to Evie Liu at [email protected]
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