(CercleFinance.com) – Falling session on Wall Street, in the wake of semiconductor manufacturers, and in particular Intel or Nvidia with -3.2%.
The S&P500 fell -0.68% to 4,535 and the Nasdaq fell sharply -2.05% to 14,063, suddenly wiping out all gains since last Thursday (at the opening fix).
No one had seen this air pocket coming, especially since Tesla’s and Netflix’s declines were not instantaneous on 07/19 at 22:10 when the results were announced (the price remained stable for a long time in electronic transactions before it was turned off late at night).
The scenario is all the more unexpected on this night for the ‘3 witches’ as all the lights were green after 8 bull sessions, with no warning signs of a reversal.
And ‘overbought’ is not a relevant reason, because the market has technically been overbought for months, and it continues to rise as if the rise in interest rates, the general over-indebtedness and the slowdown in consumption did not exist.
The Dow Jones nevertheless adjusts to a ninth session gain (+0.47% to 35,225) in the wake of IBM +2.1%, Boeing +2.4% and especially the defensive Johnson & Johnson with +6.1%.
Nasdaq fell in the wake of semiconductors after the warning from Taiwan’s TSMC (-5% on July 20): Applied Materials, -5.5%, AMD and ASML -5.3%, ON Semiconductors -4.5%, KLA -4.4%, NXP and Microchip -3.8%, Nvidia -33%.
Bad session also for the ‘magnificent 7’ with Tesla -9.7%, Meta -4.3%, Amazon -4%, Alphabet and Microsoft -2.3%, Apple -1%
Some strong performers on the banking side with quarterly reports that continue to be praised: Zion Bancorp +10%, Keycorp +4.1%, Goldman Sachs +3%, Charles Schwab +2.9%, Fifth Third Bancorp +2.7%.
Several economic statistics were on the menu for the day, and the unemployment rate is the only one justifying – apart from all the other “macro” news – a rate hike of +12 basis points to 3.8600%.
Unemployment claims are down -9,000 (despite a drop in job offers) and still don’t reflect a weak labor market, quite the contrary, as wages continue to rise, roughly at the rate of inflation now.
The picture seems a little less idyllic with the index of leading indicators, which is supposed to herald the general trend of the US economy in the coming months: It fell again in June (-0.7% to 106.1), mainly under the impact of the deterioration of consumer morale.
Given the high level of inflation, the tightening of monetary policy and credit conditions and the reduction in public spending, the ConfBoard predicts a recession in the 3rd quarter.
The survey’s general activity and order intake indicators remained negative. In addition, the shipping index fell and turned negative; the employment index suggests an overall stable labor force.
Philadelphia Fed Index: The Philly Fed fell from -13.7 last month to -13.5 in July, its 11th consecutive negative reading and as consensus hoped for a slightly sharper rally.
Finally, US existing home sales fell 3.3% last month compared to May to 4.16 million year-over-year and in seasonally adjusted (CVS) data, according to the National Federation of Realtors (NAR).
The median sales price reached $410,200, the second highest level since January 1999, and the inventory of unsold existing homes remained at 1.08 million at the end of June, or 3.1 months at the current flow rate.
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