December 4, 2022

The S&P 500 index closed at its lowest level in nearly two years on Tuesday, while the market remained volatile, consolidating its longest losing streak since February 2020, with only the Nasdaq Composite escaping daily losses.

how the shares were traded

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The Dow entered a bear market on Monday, falling 20.5% from its record close on January 4, while the S&P 500 hit its June 16 2022 low to its lowest level since December 14, 2020. The Nasdaq Composite fell. 0.6%, and is one of only three major indices that have not dropped below their lowest level since June.

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Shares fluctuated between gains and losses on Tuesday, but the S&P 500 eventually closed at its lowest level since November 30, 2020, while the Dow posted its lowest level since November 12 of the same year.

The blue-chip gauge broke below 29,000 on Tuesday afternoon, the first time that it has dropped below that level on an intraday basis since November 12, 2020.

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Market analysts blamed higher Treasury yields and a stronger dollar for the stock crisis, which have become major deterrents for the market. He also blamed a batch of unexpectedly strong economic data that helped cement the belief that “good news” for the US economy is once again “bad news” for the market.

“What you saw today is ‘good news is bad news’ – we’re back at that again,” said Joe Saluzzi, Co-Head of Equity Trading at Themis Trading. “It gives the Fed more cover if people start complaining about what the Fed is doing.”

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He also said that he expects stocks to remain under pressure for some time.

“There is no trust in this market,” Saluzzi said.

Yield on 10 Year Treasury TMUBMUSD10Y,
3.948%
rose 8.5 basis points to 3.963%, while the 2-year yield TMUBMUSD02Y,
4.287%
increased by less than 1 basis point to 4.308%. Dollar trades marginally higher with ICE US Dollar Index DXY Up 0.1% at 114.26.

A rising US dollar is creating a ‘volatile situation’ for the stock market, warns Morgan Stanley’s Wilson

Investors digested US economic data on Tuesday, but Saluzzi said the focus was on new home sales data for August as well as a report on consumer confidence.

New home sales last month stood at 685,000, beating consensus expectations, while the Conference Board’s consumer confidence indicator printed at 108, the best since April.

Peter Boukwar, chief investment officer at Blakely Advisory Group, responded to the data in an email note, saying the boost to consumer sentiment is mostly driven by lower gasoline prices and the still-strong labor market.

In other economic-data news, durable-goods orders fell 0.2% in August, a less than forecast drop. Orders minus transportation were up 0.2%, while core durable-goods orders climbed 1.3%. The Case-Shiller 20-City Home Price Index showed that home prices in July fell for the first time in just over 10 years.

Investors also heard Tuesday from several Fed speakers, including Chicago Fed Chairman Charles Evans, who said rates may need to plateau next year.

Minneapolis Fed Chairman Neil Kashkari said Fed officials are in rare agreement on a target to bring inflation down to the 2% target, adding that a “soft landing” for the US economy is still possible.

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Fed’s Powell Eyes Monitoring of Stablecoin Issuers, Regulation of Crypto Wallets

Fed Chairman Jerome Powell spoke at a cryptocurrency conference, but didn’t say anything noteworthy about monetary policy.

CBOE Volatility Gauge VIX,
+1.05%,
The VIX, also known as the VIX, gained 1.9% to end Tuesday’s session, just shy of 33, its highest level since June.

Stock market ‘trading’ may be on the verge of rebound, according to a leading technical indicator

Outside the US, relative calm has returned to the UK gilt market TMBMKGB-10Y,
4.514%
After its expiration on Friday and Monday due to fears about the government’s fiscal strategy. This has helped stabilize the pounds.

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