Stock Futures Flat, NASDAQ Worst Month Since 2008 🎢😩
U.S. stock index futures were flat during overnight trading Sunday after the Nasdaq Composite Index posted its worst month since 2008, pressured by rising rates, rampant inflation, and underwhelming earnings from some of the largest technology companies.
Futures contracts tied to the Dow Jones Industrial Average slid 11 points. S&P 500 futures were flat, while Nasdaq 100 futures declined 0.2%.
The major averages sank on Friday, accelerating April's losses. The Dow sank 939 points during the session, bringing its loss last week to roughly 2.5%. It was the 30-stock benchmark's fifth-straight negative week.
The S&P 500 declined 3.63% on Friday, its worst day since June 2020, and posted its fourth-straight negative week for the first time since September 2020. The Nasdaq also posted a fourth-straight week of losses, after falling 4.2% on Friday. Both indexes registered their lowest closing levels of the year.
"This has become a classic trader's market as spikes in volatility and increasingly bearish headlines reverberate," said Quincy Krosby, chief equity strategist for LPL Financial.
The Dow and S&P 500 are coming off their worst month since March 2020, when the pandemic took hold. The Dow finished April 4.9% lower, while the S&P tanked 8.8%.
The selling was even more extreme in the tech-heavy Nasdaq Composite, which plunged 13.26% in April, its worst month since October 2008. The steep decline follows underperformance from large tech companies, including Amazon, Netflix and Meta Platforms.
"[D]isappointing guidance from technology giants Amazon and Apple have exacerbated concern that a decidedly more hawkish Fed, coupled with still intractable supply chain issues, and rising energy prices may make the hope of a 'soft landing' from the Fed more elusive," Krosby said.
Netflix is down 49% over the last month, with Amazon and Meta losing 24% and 10.8%, respectively. Tech stocks have been hit especially hard since their often-elevated valuations and promise of future growth begin to look less attractive in a rising-rate environment.
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Investors are looking ahead to Wednesday, when the Federal Open Market Committee will issue a statement on monetary policy. The decision will be released at 2 p.m. ET, with Federal Reserve Chairman Jerome Powell holding a press conference at 2:30 p.m.
"Rising cost pressures and uncertain outlooks from the largest technology names have investors agitated...and investors are not likely to be comfortable any time soon with the Fed widely expected to deliver a 50 basis point hike along with a hawkish message next week," said Charlie Ripley, senior investment strategist for Allianz Investment Management.
Another key economic indicator will come Friday when April's jobs report is released.
Earnings season is now more than halfway finished, but a number of companies are set to post results in the coming week, including a host of consumer-focused restaurant and travel companies.
Expedia, MGM Resorts, Pfizer, Airbnb, Starbucks, Lyft, Marriott, Yum Brands, Uber eBay and TripAdvisor are just some of the names on deck.
Of the 275 S&P 500 companies that have reported earnings so far, 80% have beat earnings estimates with 73% topping revenue expectations, according to data from Refinitiv.
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March, the Fed made a quarter percentage point hike, from near zero. Powell told the International Monetary Fund forum last month, “It is appropriate in my view to be moving a little more quickly. I also think there’s something in the idea of front-end loading whatever accommodation one thinks is appropriate.” Some regarded that comment as a signal of “peak hawkishness” to come.
Don’t fight the Fed, as the saying goes. A person’s real fight, experts say, is understanding their emotions and financial capabilities in this moment — and making the best of it during a volatile stock market not helped by the drumbeat of another possible recession.
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Rising inflation-adjusted yields in the U.S. are undermining the long-running trade in which investors favor stocks over other asset classes, and are poised to hit the technology sector even harder.
That trade — known as “TINA,” an acronym for “There Is No Alternative” to equities — is being increasingly tested by real yields, which have risen from below zero on expectations of aggressively higher interest rates by the Federal Reserve. Five-, 10- and 30-year inflation-adjusted yields are at their highest or least negative levels of roughly the past two years, according to Tradeweb.
Meanwhile, all three major stock indexes have taken huge hits: the S&P 500 index SPX and Dow industrials DJIA just finished their worst April performances since 1970 — down by 8.8% and 4.9%, respectively, for the month. The tech-heavy Nasdaq Composite COMP was down 13.3% in April, its worst showing for that month since 2000.
$Netflix(NFLX)$
Netflix's most jarring number was its loss of 200,000 subscribers for the quarter, the first decline since 2011. This was especially dismal because Netflix had forecast it would have between 2.5 million and 4 million net additions, so investors were blindsided by the drop to 221.64 million worldwide subscribers. It didn't help, either, that Netflix expects the carnage to continue in the second quarter, with a potential loss of as many as 2 million subscribers.
Netflix is still seeing growth in viewing time, according to Nieslen data, as the chart below shows. But with inflation soaring to levels not seen in 40 years, maintaining a subscription is no longer a priority for consumers.
Latest Stock Futures News
Stock futures fell slightly in early morning trade after the Federal Reserve raised rates by half a point and the major averages rallied to end the day.
Futures tied to the Dow Jones Industrial Average lost 41 points, or 0.12%. S&P 500 futures and Nasdaq 100 futures fell 0.22% and 0.33%, respectively.
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Amazon on the likes are trying to rebound.
Stock futures were little changed in overnight trading Tuesday ahead of a key inflation reading.
Futures on the Dow Jones Industrial Average shed about 15 points. S&P 500 futures were marginally lower and Nasdaq 100 futures were near flat.
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Apart from keen interest in stocks like TWTR the US retail investor market has skyrocketed. Individual investors were major buyers on Thursday as stocks sold off over concerns that the U.S. Federal Reserve would have to increase the size of interest rate hikes to tame inflation, which is running at a four-decade high.
Retail investors net bought $2.6 billion worth of stocks and exchange traded funds on Thursday, according to Vanda Research. It was the highest level of net buys ever recorded by Vanda, whose data goes back to January 2014, the company said.
Stocks rose slightly in volatile trading on Friday, as investors tride to find support after the Dow Jones Industrial Average posted its worst day since 2020.
The Dow dropped 260 points, or 0.8%. The S&P 500 lost 0.8%, while the Nasdaq Composite slid 0.8%. The tech-heavy index is now down roughly 25% from its record high last November.
The moves came after stocks sold off sharply on Thursday. The Dow lost more than 1,000 points, and the tech-heavy Nasdaq Composite fell nearly 5%. Both indexes notched their worst single-day drops since 2020. The S&P 500 fell 3.56%, its second-worst day of the year.
Thursday’s losses erased Wednesday’s big post-Federal Reserve meeting rally. Fed Chair Jerome Powell ruled out the prospect of larger rate hikes on Wednesday, sending the S&P 500 and the Dow to their best daily gains since 2020.
Bill Hwang’s lawyers couldn’t believe it.
The fallen billionaire investor was sitting in federal custody in Manhattan, less than 48 hours after his legal team had visited prosecutors to talk them out of criminal charges. The effort seemed to be going well until the feds scooped up Hwang at daybreak on April 27 to face 11 felony charges—and potentially, the rest of his life in prison. “In no event was an arrest necessary,” his attorneys said in a statement expressing frustration that morning, noting Hwang had been voluntarily answering the government’s questions for months.
All of Wall Street should pay close attention. The Hwang case marks an upswing of federal investigations into a slew of suspected trading abuses. Three other broad inquiries have emerged in recent months to examine so-called block trades, short sales, and well-timed wagers. They all center on the same question: Are markets rigged?
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U.S. stocks turned higher in the first session of May following one of the worst monthly performances for the S&P 500 since the depths of the pandemic in 2020.
The S&P 500, Dow and Nasdaq turned positive in the final hour of trading on Monday. U.S. crude oil prices reversed earlier declines to hover above $105 per barrel, and the benchmark 10-year Treasury yield rose to 3%, or its highest level since December 2018.
Investors this week are bracing for more potentially market-moving events to take place following April's volatile stretch of trading. The S&P 500 sank by 8.8% in April for its worst monthly performance since March 2020. Tech stocks especially were battered, and the Nasdaq Composite slid by 13% last month for its worst since October 2008.
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U.S. futures fell with bonds Friday as risk aversion and volatility gripped markets beset by inflation and growth fears.
Contracts on the S&P 500 and Nasdaq 100 pointed lower the day after a rout that slashed 3.5% off the S&P and 5% from the Nasdaq. Treasuries extended a tumble that’s lifted the benchmark yield past 3% and the dollar wavered after erasing an early
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KEY TAKEAWAYS
Central banks cut interest rates when the economy slows down in order to re-invigorate economic activity and growth.
The goal is to reduce the cost of borrowing so that people and companies are more willing to invest and spend.
Interest rate changes spill over to many facets of the economy, including mortgage rates and home sales, consumer credit and consumption, and stock
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US stock market to rebound as shares in Asia-Pacific were mostly higher on Thursday following the U.S. Federal Reserve's widely expected decision overnight to hike rates by half a a percentage point — its biggest increase in two decades.
Mainland Chinese stocks closed in positive territory as they returned to trade following days of holidays. The Shanghai composite gained 0.68% to 3,067.76 while the Shenzhen component rose 0.226% to 11,046.38.
Outlook is bleak but there are signs of recovery. Whether you're a new or tenured investor, the stock market has sent a clear message over the past four months that corrections are an inevitable part of the investing cycle.
Since the year began, the benchmark S&P 500 and iconic Dow Jones Industrial Average entered correction territory with respective declines of at least 10%. Things have been even worse for the growth-driven Nasdaq Composite, which has shed 23% since hitting its all-time closing high in November. This officially puts the Nasdaq in its first bear market since the pandemic meltdown in March 2020.
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Bear market 📉 OMG.
Stocks fell on Thursday, giving back some of the sharp gains seen in the previous session after the Federal Reserve raised rates by half a point.
The Dow Jones Industrial Average fell 1.78%. The S&P 500 and Nasdaq Composite fell 2.19% and 3.12%, respectively.