Nasdaq, S&P 500 fall 3% each amid US recession fears, Apple drop
Mon August 5, 2024 5:20 PM
In the biggest 3-day % decline in the market in two years, Wall Street was sending a message loud and clear to the Fed that they’ve waited too long and there better be a rate cut coming in September and, in fact, damn well should have been one last week. Last week’s disappointing Q2 and Q3 forecasts from some of the big tech mega-caps combined with lower than desired employment and manufacturing reports have set the markets into a panic over recession worries. Thursday and Friday both saw 3-digit losses greater each day and today the Dow slipped into a 4-digit loss. Wall Street is not only telling the Fed a rate cut is needed right now but is insisting that the September cut be ½ point instead of the usual ¼ point with ½ point priced in at 86% vs 14 for ¼ point.
Warren Buffett also triggered some of this sell off by cutting his stake in Apple in half. Does he know something the rest of us don’t? But he’s also leaving $277B in cash at Berkshire Hathaway so plenty of room for new investments. Eyes on what he’ll do next. The VIX hit its highest close in four years, up to an astounding 55 points in the morning but the good news being that the panic subsided throughout the day to close at 38. Other good news included the Chicago Fed prez downplaying the recession scenario and that though the markets overall suffered the worst losses in two years, the critical tech indexes had been at these lows as recently as May meaning we’ve been here before and not long ago. As could be expected, volume was through the roof at 16.5 billion vs the 4-week average of 12.3 billion.
DJ: 39,737.26 -610.71 NAS: 16,776.16 -417.98 S&P: 5,346.56 -100.12 8/2
DJ: 38,703.27 -1,033.99 NAS: 16,200.08 -576.08 S&P: 5,186.33
-160.23 8/5
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