Stocks
Fall, Wiping Out Gains for 2018
The
stock market’s gains for 2018 were erased on Tuesday, as a sell-off
led by giant technology stocks continued. The renewed declines in the
United States came after drops in Asia and Europe.
The
tumble of more than 1.8 percent in the S&P 500 followed a
sell-off in high-flying technology stocks like Google, Apple and
Amazon in the United States on Monday, as investors weighed the
prospects for increased regulation, trade tension and threats to the
profit outlook for the large technology companies that exert a large
influence on major market indexes
Dow finishes down 550 points as stocks erase 2018 gains
20
November, 2018
U.S.
stocks closed sharply lower Tuesday, extending a pre-Thanksgiving
rout that has been fueled mostly by a selling in shares of technology
and internet-related companies, but has now spread to ensnare the
broader market. Sharp declines in Target and Lowe’s after
disappointing earnings also contributed to the tone.
U.S.
financial markets will
be closed Thursday for the Thanksgiving Day holiday and
see an early close Friday.
How did the benchmarks perform?
The
Dow Jones Industrial Average DJIA, -2.21% fell
551.8 points, or 2.2%, to end at 24,465.64, and tumbled by as many as
648 points at the session’s lows. The S&P 500
index SPX, -1.82% was
down 48.84 points, or 1.8%, at 2,641.9, while the Nasdaq Composite
Index NQZ8, +0.45% was
off by 119.65 points to 6,908.82, a drop of 1.7%.
The
Nasdaq remains in correction territory, down more than 14% from
August peak, while the S&P closed just 4 points shy of a
correction, defined as a 10% decline from an index’s most recent
highs.
The
drop erased year-to-date gains for both the Dow and S&P 500,
while the Nasdaq now clings to a 0.1% gain on the year.
Month-to-date, the Nasdaq has fallen 5.4%, the S&P and Dow have
retreated 2.6% in November.
Monday’s
decline resulted in the S&P 500 and the Dow’s worst start to a
Thanksgiving week since 2011, while the Nasdaq registered its worst
such start since 2000, according to Dow Jones Market Data.
What’s drove the market?
U.S.
investors continued to be plagued by doubts surrounding slowing
global growth, U.S.-China trade relations, and the steady rise in
interest rates that can be expected to continue into next year. These
doubts have accumulated to induce fears that we are growing nearer to
the end of the current economic expansion, strategists say.
The
previously highflying technology sector has the most to lose from
this change in sentiment. Tech stocks extended a decline that led the
market lower Monday, with reports from China adding fuel to the day’s
selling after officials in Beijing uncovered widespread evidence of
anticompetitive behavior by Korean rivals. According to The Wall
Street Journal, Beijing investigators implicated Samsung
Electronics 005930, -1.52% SK
Hynix 000660, +0.59% and
Micron TechnologyMU, -1.93%
Market
participants believe that China’s investigation may intensify
festering issues around trade relations between China and other major
counterparts, including the U.S.
Oil
futures accelerated their decline, plunging 7%, with the U.S.
benchmark finishing at
a more-than-one-year low.
The S&P 500 energy sector led decliners, falling 3.3%.
Tuesday’s
selloff was broad-based, but this time led by the Dow, with all 30
components trading lower on the day, as negative sentiment and fears
of growing macro headwinds spread from tech investors to traders of
blue-chip stocks.
Meanwhile, Target
Corp.’s TGT, -10.52% stock
plunged Tuesday, after the discount retailer reported
fiscal third-quarter earnings and same-store sales that missed
expectations.
The retailer’s loss helped spark a broader selloff in the retail
sector, with the SPDR S&P Retail XRT, -3.32% falling
more than 3%, nearly twice the loss suffered by the broader S&P
500 index.
What are strategists saying?
“For
years, the tech sector has benefited from broad multiple expansion,”
Dave Smith vice president of equity analysis at Bailard Inc., told
MarketWatch. “And it was easy for investors to just ride that
momentum.”
After
November’s tech-heavy selloff that continued Tuesday, “tech
multiples have contracted to be in line with the rest of the S&P
500, something we haven’t seen for years,” Smith said, adding
that this creates buying opportunities those brave enough to wade
into today’s choppy market.
“It’s
so hard to say when sentiment is going to turn positive again,”
Smith said. “The one thing I can say for sure is that we’re in
for more volatility.”
“Economic
data remain strong, but the trend in the trend is deteriorating,”
Peter Lazaroff, co-chief investment officer at Plancorp, told
MarketWatch. He made the case that the recent turn in sentiment is
due to investors believing that we’ve already experienced the
fastest rates of growth for both the U.S. economy and corporate
earnings.
“Economic
conditions are good, but the chances of economic conditions
deteriorating over the next year or more is much higher than a
surprise on the upside,” Lazaroff said.
At
the same time, Lazaroff emphasized that volatility levels have merely
returned to ordinary levels, whereas the low volatility that has
characterized much of today’s bull market is the outlier. “This
sort of price action is extremely normal,” he said. “What was
strange was the outsize returns investors have earned in recent years
with effectively no volatility.”
Which stocks were in focus?
Shares
of Apple
Inc. AAPL, -4.78% fell
8.9%, extending the previous session to leave the stock
in bear-market
territory,
defined as a drop of at least 20% from a recent peak.
Shares
of Kulicke
& Soffa Industries Inc. KLIC, +6.73% rose
6.7% Tuesday, after the semiconductor-equipment maker beat fiscal
fourth-quarter earnings expectations. The stock had been down roughly
12% at the start of trade, before reversing those losses Monday
morning.
Lowe’s
Cos.’s
stock LOW, -5.66% fell
5.7%, after the home-improvement retailer reported fiscal
third-quarter earnings that beat expectations but
same-store sales that missed.
Target
shares traded 10.5% lower Tuesday, after
the retailer announced fiscal
third-quarter earnings and same-store sales that came in below Wall
Street estimates.
Cambell
Soup Co. CPB, +5.46% shares
rose 5.7% Tuesday, after
a third-quarter earnings report that
showed the firm beating earnings estimates, while the company
affirmed its upbeat guidance for 2019.
Hormel
Foods Corp. HRL, -0.90% closed
down 1%, after missing revenue estimates in a Tuesday morning
earnings report.
Shares
of Kohl’s
Corp. KSS, -9.23% fell
more than 9%, even after the firm beat Wall Street estimates for
earnings and profit and raised its full-year 2018 guidance. Shares of
the discount retailer are still up 18.9% year-to-date.
Shares
of Analog
Devices, Inc. ADI, +4.09% closed
higher, up 4.1% after beating analyst estimates for fiscal fourth
quarter earnings and revenue in a Tuesday-morning earnings release.
Best
Buy Co Inc. BBY, +2.14% stock
rose 2.1%, following a Tuesday-morning earnings release that showed
the firm beating earnings and revenue estimates.
Shares
of L
Brands Inc. LB, -17.71% closed
down 17.7%, after the retailer announced Monday evening that
it planned
to slash its dividend.
Agilent
Technologies Inc. A, +7.84% shares
rose 7.8% Tuesday, after beating
analysts estimates for
profit and sales in the fourth quarter.
What data did investors watch?
Housing
starts came in at a 1.228 million seasonally adjusted annual rate in
October, while permits came in at a 1.263 million rate, with housing
starts coming in just below consensus estimates per a MarketWatch
poll of economists. Year-over-year, growth in housing starts has
steadily slowed in 2018.
Investors
are particularly focused on the housing market after a disappointing
read in home
builders’ confidence on
Monday, which contributed to Monday’s decline.
How did other markets trade?
Stock
markets in Asia traded
lower Tuesday,
with Japan’s Nikkei NIK, -0.38%losing
1.1%, Hong Kong’s Hang Seng Index HSI, -0.16% down
2%, and the China’s Shanghai Composite Index SHCOMP, -0.13% falling
2.1%.
European
stocks declined Tuesday, with the Stoxx Europe 600 SXXP, -1.14% and
Germany's DAX 30 DAX, -1.58% ending
the day down more than 1%. The FTSE 100 UKX, -0.76% closed
Wednesday down 0.7%
Celente
Predicted The Stock And Crypto Crash, Here’s What’s He Says Is
Next
20
November, 2018
November
20 (King World News) – Gerald Celente: On September 19, two days
before U.S. equity markets hit new highs, we alerted Trends Journal
subscribers to prepare for an Economic 9/11…
Despite
Wall Street optimism following the U.S. midterm elections that
equities would spike, markets are tanking as we had forecast.
What’s
Next?
The
first shots of the Economic 9/11 we forecast have been fired. Even
cryptocurrencies are crashing. But again, Trends Journal subscribers
were forewarned and forearmed. How low will it go and what’s next?
As
far back as August, our crypto-trends expert, Jonathan Cho had
forecast that the decline will continue and that Bitcoin’s bottom
is in the $1,000 range or slightly below. “What’s occurring now
is the beginning of the end, likely not just for Bitcoin but for
cryptocurrencies in general, as they’ll likely never again reach
the heights they did in 2017,” Cho said…
While cryptocurrencies are
highly speculative and unrelated to economic fundamentals, so too
are stock and real estate markets which have been
artificially inflated by the cheap money craze that has
boosted them to soaring heights.
Danger
Ahead
There is a dangerous economic road ahead. From the International Monetary Fund to the biggest hedge funds in the world, they are flashing warning signs that the worst is yet to come; signs and signals of the Economic 9/11 we had forecast that they just now are beginning to recognize.
There is a dangerous economic road ahead. From the International Monetary Fund to the biggest hedge funds in the world, they are flashing warning signs that the worst is yet to come; signs and signals of the Economic 9/11 we had forecast that they just now are beginning to recognize.
The
only possible reversal of the current market decline is if the
Federal Reserve reverses its aggressive schedule of interest rate
hikes.
It
was their monetary methadone that juiced equities and real estate
markets to their artificial highs following the Panic of ‘08, and
only another money drug-fix will keep them from temporarily
crashing…before they OD.
***KWN
has released the
powerful KWN audio interview with Gerald Celente and you can listen
to it by CLICKING
HERE
The
oil and gas sector worldwide lost about $1 trillion in value during a
40-day period that began in early early October and culminated last
week with a record 12th straight day of oil price declines —
including the worst single-day drop in three years.
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