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Another down day of trading starts a new week, following the selloff that began Thursday and Friday last week after setting fresh all-time highs in the Nasdaq and S&P 500 on Wednesday. The Nasdaq is suddenly 10% off its highs as of Tuesday’s close, with the Tech industry alone down 4.6% on the day. All sectors in the S&P 500 were down Tuesday, with Energy at -3.7%, including an 8% drop in Natural Gas.
We’re not really seeing anything in the market we weren’t seeing during the weeks and weeks of run-up. There is still no new stimulus package passed by Congress to replace the CARES Act, which expired in late July. We still see outbreaks of Covid-19 in various regions of the country, including a recent report that a motorcycle festival in Sturgis, South Dakota may have spread the coronavirus to an astounding 260K people. Previously, the market had treated news items like these as if they didn’t matter; now the attitude seems to be: maybe they do.
In any case, the Nasdaq fell 465 points, or -4.1% on the day. The S&P 500 lost 95 points, or -2.78%. The Dow pretty much mirrored that performance, losing 632 points, -2.25%. Even the small-cap Russell 2000 index, which had not quite enjoyed the same high levels the other indexes had recently, fell 31 points, or -2%.
Tesla (TSLA - Free Report) was hit hardest of heavily traded names, shedding 21% on being passed over from inclusion onto the S&P 500 as well as electric vehicle competitor Nikola finding a major manufacturing partner in General Motors (GM - Free Report) , which happened to be up 8% on the day. But going back to last week, following a huge buying binge of Tesla stock that began after its stock split was announced a month ago, the company started selling off after announcing a new $5 billion stock offering. The market didn’t appear to appreciate this move by CEO Elon Musk very much.
The contagion was then felt over at Apple (AAPL - Free Report) , which had also previously announced its own stock split that sent shares higher. But the stock is now 15% down from its all-time high, with another 6.5% sold off in Tuesday’s regular session. That said, Apple shares are still up 54% year-to-date, and well over 100% higher than a year ago at this time.
Consumer Credit grew by a billion dollars month over month in July, to $12 billion. The NFIB Small Business Index earlier today saw a minor bump up in August to 100.2 from 98.8 reported in July. But these numbers did not move the market in any conceivable way today. In fact, very little real-time reaction to any economic data is one of the hallmarks of this most recent bull market.
This makes it more puzzling to predict going forward, as well — if markets cannot be swayed by economic data, they must then be swayed solely by the whims of traders themselves. So the question is: is the market’s mind made up and the bubble has now been popped, or is there something that might change the market’s attitudes back to where they were a week ago? Also: would there be a conceivable reason why?
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Has the Market Made Up Its Mind Yet?
Another down day of trading starts a new week, following the selloff that began Thursday and Friday last week after setting fresh all-time highs in the Nasdaq and S&P 500 on Wednesday. The Nasdaq is suddenly 10% off its highs as of Tuesday’s close, with the Tech industry alone down 4.6% on the day. All sectors in the S&P 500 were down Tuesday, with Energy at -3.7%, including an 8% drop in Natural Gas.
We’re not really seeing anything in the market we weren’t seeing during the weeks and weeks of run-up. There is still no new stimulus package passed by Congress to replace the CARES Act, which expired in late July. We still see outbreaks of Covid-19 in various regions of the country, including a recent report that a motorcycle festival in Sturgis, South Dakota may have spread the coronavirus to an astounding 260K people. Previously, the market had treated news items like these as if they didn’t matter; now the attitude seems to be: maybe they do.
In any case, the Nasdaq fell 465 points, or -4.1% on the day. The S&P 500 lost 95 points, or -2.78%. The Dow pretty much mirrored that performance, losing 632 points, -2.25%. Even the small-cap Russell 2000 index, which had not quite enjoyed the same high levels the other indexes had recently, fell 31 points, or -2%.
Tesla (TSLA - Free Report) was hit hardest of heavily traded names, shedding 21% on being passed over from inclusion onto the S&P 500 as well as electric vehicle competitor Nikola finding a major manufacturing partner in General Motors (GM - Free Report) , which happened to be up 8% on the day. But going back to last week, following a huge buying binge of Tesla stock that began after its stock split was announced a month ago, the company started selling off after announcing a new $5 billion stock offering. The market didn’t appear to appreciate this move by CEO Elon Musk very much.
The contagion was then felt over at Apple (AAPL - Free Report) , which had also previously announced its own stock split that sent shares higher. But the stock is now 15% down from its all-time high, with another 6.5% sold off in Tuesday’s regular session. That said, Apple shares are still up 54% year-to-date, and well over 100% higher than a year ago at this time.
Consumer Credit grew by a billion dollars month over month in July, to $12 billion. The NFIB Small Business Index earlier today saw a minor bump up in August to 100.2 from 98.8 reported in July. But these numbers did not move the market in any conceivable way today. In fact, very little real-time reaction to any economic data is one of the hallmarks of this most recent bull market.
This makes it more puzzling to predict going forward, as well — if markets cannot be swayed by economic data, they must then be swayed solely by the whims of traders themselves. So the question is: is the market’s mind made up and the bubble has now been popped, or is there something that might change the market’s attitudes back to where they were a week ago? Also: would there be a conceivable reason why?
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The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>