Worries about smart phone and chip demand hit stocks hard today–and a rise in commodity prices, while good for commodity producers raised fears of higher inflation. As of 3 p.m. New York time, the Standard & Poor’s 500 stock index was off 0.79% and the Dow Jones Industrial Average was lower by 0.43%.
The market didn’t reverse or fade today. The Standard & Poor’s 500 stock index hit 2656 by 10:30 and then, despite a dip that took 20 points off the index around 12:30 managed to close at 2656 for the day. That was a gain of 1.67% for the day and near the top that Monday’s market hit before its end of the day reversal. The Dow Jones Industrial Average finished up 1.79%; the NASDAQ Composite was higher by 2.07%.
Tuesday looked fine until noon–12:04 p.m. New York time, to be precise. That turned out to be the high for the day–at 2674.62–up 0.62% from the Monday close. It looked like we might even get follow through on Monday’s huge bounce. And then came the reversal. The index slipped steadily if unspectacularly until by 2:43 p.m. it was down 0.19% for the day. Then the slip turned into a plunge. But the real development of the day was the collapse of stocks in the technology sector
As of 11:30 a.m. New York time this morning, the Standard & Poor’s 500 Stock index was down 1.15%. The Dow Jones Industrial Average was off 1.02%. And the technology heavy NASDAQ was lower by 1.84%. Much of the talk this morning has centered on news from Facebook (FB) and Apple (AAPL) this weekend as the reason for the drop. I think that explanation is misleading
An absolutely inconclusive day so far. Â Which is actually kind of positive. The upward move in technology shares and other risky sectors isn’t strong enough to qualify as a bounce. But it’s certainly not a continuation of the strong selling on Monday and extending backward into last week.
Lot of action last week worth paying attention to. But not a lot of clarity, yet, on what all the action meant. It’s too early to say that last week was a pivotal week for the market but it’s sure time to start thinking about the possibility. The Standard & Poor’s 500 saw a huge surge. In the options market the implied volatility for the index began the week at plus/minus $21, Don Kaufman of Theo Trade noted this weekend. The move for the week turned out to be twice that at $42. At the same time the NASDAQ, and especially the big tech stars of the recent market–Amazon, Alphabet, Google, etc.–broke to the downside. The financial and energy sectors moved up on the week by more than enough to offset the drop in technology, however.
The Standard & Poor’s 500 was off 0.04% today. That’s a remarkably good performance given the rout in technology stocks. The Technology Select Sector SPDR ETF (XLK) was down 2.21%. If not for bank stocks, the entire market would have been sent reeling today. But bank stocks shouldn’t be rallying on a flattening yield curve. What’s up?
Before AMD’s earnings report on October 24, traders had speculated that the company’s earnings would be a useful indicator for what Nvidia (NVDA) would report on November 9. After all, the two companies do compete in some of the same markets with processors for gaming, and servers, and, increasingly for chips with parallel architectures used in artificial intelligence and autonomous driving applications. But AMD dropped almost 11% after it reported. Does that have any significance for Nvidia?
