Horror is back on the Wall Street trading desk and the average investor portfolio.
“Wednesday’s sell-off seems to be a really chain reaction, with retailers vulnerable to fears that consumers may slow down, that inflation remains a problem, that inventories are too high, and that it could push profit margins,” Official Keith Larner told Yahoo Finance. “When your family names like this go down so much, it scares the wider market.”
Larner, who has been warning of a market downturn for months, downgraded his outlook on the stock in April. The call looks prescient.
Here’s what professionals are telling us about new market pressures:
Walmart and Missed Target Earnings = a material consumer cost pullback potential start
Closing below 4,000 is unpleasant for the S&P 500 trading algorithm
No signs of high inflation = the Federal Reserve is hard on interest rates
More Hedge Funds Concerned About Forced Sale (See Melvin Capital’s Hedge Fund News
A big question among market participants is whether the bearish activity of the market over the last two days represents a capitalization. This is what happens in the market when all the selling activity is exhausted because the speculators go out of the field. Instead, it brings in new buyers who are looking for attractive value.
The general vibe on the streets is that more and more are being sold in the near future
“No, I’m still not afraid,” Steve Sosnick, chief strategist at Interactive Brokers, told Yahoo Finance. “We’ve got a 10: 1 down / up volume day, but we don’t have a VIX between 10: 1 advance / fall or high 30. On top of that, our customers are strong net buyers of their favorite stock. Until I see that behavior change, we I did not see the surrender.
Sosnick added that “retailers are leading the decline. This is a big problem. If middle and working class consumers are stretched and nervous, it does not bode well for the economy or the market. It is really difficult to expect market formation.” Below. “
U.S. stocks fell on Wednesday after a series of disappointing quarterly results from some major retailers Target, Walmart and TJX, which have already hit market sentiment. All three companies hit worrying notes on the state of U.S. consumer and fugitive inflation.
Brian Cornell, chairman and CEO of Target, told Yahoo Finance, “We never expected the kind of increase in freight and transportation we see right now.”
Investors have also digested comments from Federal Reserve officials reaffirming their commitment to controlling inflation.
By the closing bell, the S&P 500 fell 4% on its worst day since June 2020, closing at 3,923.68. The Nasdaq Composite fell 4.7% to 11,418.15, while the Dow Jones Industrial Average fell 1,100 points, or more than 3.6%.
Apparently no market area was safe. Shares of Safe-Haven stocks, such as Coca-Cola and Apple, often lose about 6% per session.
As of 5:40 AM on Thursday, stock futures show that losses on Wall Street will continue, with the Dow down more than 400 points. Tech heavyweight Cisco’s disappointing quarterly market sentiment after closing yesterday is not helping to hurt.
Yahoo Finance Emily McCormick Contribute to this story.
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