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It’s starting to look more like the past 10 weeks or so of overall bullishness — in what was decidedly a bear market previously — spooked market participants last week, racing back toward pre-bearish highs at a pretty alarming clip. Either that, or algorithmic triggers all through Wall Street were going off at the markets’ surge up to 200-day levels. A stiff sell-off occurred off those near-term highs, and a short plateau to a Friday close lower was the start of this reaction.
Today, it was more emphatic: the Dow slid -643 points, - 1.91% — the best-performing of the four main indices on the day — while the S&P 500 was -2.13%. The Nasdaq lost -323 points, -2.55% on the day, while the relatively small-cap Russell 2000 was off -2.33%. This is on virtually no major news items other than another mini-crash in crypto over the weekend, and oil prices clawing back over $90 per barrel.
This amounts to the single-worst trading day for the Nasdaq since June 28th; June 16th for the Dow and S&P. Those are (thus far) the deepest cuts to market valuations all year. The Nasdaq is now negative for the month of August, after starting at a fairly robust clip. It’s the fourth down-day of the last five for the tech-heavy index; third down day in the past four for the Dow and S&P. All 11 sectors in the S&P were lower, though Healthcare and Energy showed some resilience.
Much of this newly found tension is in the service of gearing up for Friday, when Fed Chair Powell speaks at Jackson Hole for the KC Fed’s annual symposium. The last time we heard from Powell, it was following the Fed’s latest 75 basis-point (bps) hike on the Fed funds rate; he came off as calm and seemingly almost dovish in his approach to the press while answering questions. But in the minutes of that Fed meeting, released last week, investors saw voting Fed members to pretty uniformly hawkish and single-minded on keeping the hammer to inflation with higher hikes going forward.
Thus, the wishful notion that somehow seeing CPI data roll over slightly was enough for the Fed to consider pausing hikes — or, perhaps more ludicrously, cutting interest rates at some point next year — was dashed upon the rocks late last week, and they’re further down the waterfall today. Of course, this may be in line with what we’ve seen employed recently: that market participants are taking clear bearish stances ahead of big Fed news (and Powell’s speech Friday qualifies here). This way, either they’ve got a lead-off to further selling if the news is bad; or a nicely spring-loaded rally to enjoy later this week if it's good.
In the meantime, cybersecurity major Palo Alto Networks (PANW - Free Report) outperformed expectations on both top and bottom lines in its fiscal Q4 earnings report after the closing bell. Earnings of $2.39 per share beat the Zacks consensus by 11 cents per share, while revenues in the quarter of $1.55 billion slightly improved on the expected $1.54 billion. Palo Alto has not disappointed on earnings at least as far back as 2014, perhaps further (the company’s IPO was in the summer of 2012).
Shares of PANW are up +6% on the news, as higher next-quarter guidance was joined by an unexpected three-for-one stock split. The company’s billings came in at $2.7 billion for the quarter, much stronger than the $1.9 billion expected. Palo Alto carried a Zacks Rank #2 (Buy) into this afternoon’s earnings report.
Zoom Video (ZM - Free Report) also released earnings results for its Q2 today, with mixed results: earnings of $1.05 per share easily surpassed the 92 cents per share expected (though still off the $1.36 per share the company made in the year-ago quarter), on a slight miss in revenues: $1.10 billion versus $1.12 billion. Guidance was also notched down, both for Q3 and full-year 2022. Shares are trading off -4% in the late session. Questions or comments about this article and/or its author? Click here>>
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Bears Assert Themselves Ahead of Jackson Hole
It’s starting to look more like the past 10 weeks or so of overall bullishness — in what was decidedly a bear market previously — spooked market participants last week, racing back toward pre-bearish highs at a pretty alarming clip. Either that, or algorithmic triggers all through Wall Street were going off at the markets’ surge up to 200-day levels. A stiff sell-off occurred off those near-term highs, and a short plateau to a Friday close lower was the start of this reaction.
Today, it was more emphatic: the Dow slid -643 points, - 1.91% — the best-performing of the four main indices on the day — while the S&P 500 was -2.13%. The Nasdaq lost -323 points, -2.55% on the day, while the relatively small-cap Russell 2000 was off -2.33%. This is on virtually no major news items other than another mini-crash in crypto over the weekend, and oil prices clawing back over $90 per barrel.
This amounts to the single-worst trading day for the Nasdaq since June 28th; June 16th for the Dow and S&P. Those are (thus far) the deepest cuts to market valuations all year. The Nasdaq is now negative for the month of August, after starting at a fairly robust clip. It’s the fourth down-day of the last five for the tech-heavy index; third down day in the past four for the Dow and S&P. All 11 sectors in the S&P were lower, though Healthcare and Energy showed some resilience.
Much of this newly found tension is in the service of gearing up for Friday, when Fed Chair Powell speaks at Jackson Hole for the KC Fed’s annual symposium. The last time we heard from Powell, it was following the Fed’s latest 75 basis-point (bps) hike on the Fed funds rate; he came off as calm and seemingly almost dovish in his approach to the press while answering questions. But in the minutes of that Fed meeting, released last week, investors saw voting Fed members to pretty uniformly hawkish and single-minded on keeping the hammer to inflation with higher hikes going forward.
Thus, the wishful notion that somehow seeing CPI data roll over slightly was enough for the Fed to consider pausing hikes — or, perhaps more ludicrously, cutting interest rates at some point next year — was dashed upon the rocks late last week, and they’re further down the waterfall today. Of course, this may be in line with what we’ve seen employed recently: that market participants are taking clear bearish stances ahead of big Fed news (and Powell’s speech Friday qualifies here). This way, either they’ve got a lead-off to further selling if the news is bad; or a nicely spring-loaded rally to enjoy later this week if it's good.
In the meantime, cybersecurity major Palo Alto Networks (PANW - Free Report) outperformed expectations on both top and bottom lines in its fiscal Q4 earnings report after the closing bell. Earnings of $2.39 per share beat the Zacks consensus by 11 cents per share, while revenues in the quarter of $1.55 billion slightly improved on the expected $1.54 billion. Palo Alto has not disappointed on earnings at least as far back as 2014, perhaps further (the company’s IPO was in the summer of 2012).
Shares of PANW are up +6% on the news, as higher next-quarter guidance was joined by an unexpected three-for-one stock split. The company’s billings came in at $2.7 billion for the quarter, much stronger than the $1.9 billion expected. Palo Alto carried a Zacks Rank #2 (Buy) into this afternoon’s earnings report.
Zoom Video (ZM - Free Report) also released earnings results for its Q2 today, with mixed results: earnings of $1.05 per share easily surpassed the 92 cents per share expected (though still off the $1.36 per share the company made in the year-ago quarter), on a slight miss in revenues: $1.10 billion versus $1.12 billion. Guidance was also notched down, both for Q3 and full-year 2022. Shares are trading off -4% in the late session.
Questions or comments about this article and/or its author? Click here>>