There are some impressive breaks lower in the tech stocks. ADBE crashes below the 200 day MA (-8+%). Other software stocks down hard include NOW, DATA, FFIV, TTWO, CRM. VMW just hanging in. FAANG continues to be pummeled with NFLX back at Oct lows, AMZN heading there. A pretty complete puking of the leaders from the prior rally.
At the same time, LLY +1.65%, VZ positive though off the high, KO, PEP, JNJ also higher.
The reason? Nothing new, no major new story though homebuilder sentiment survey is the reason pinned on the losses. No, it is just a continuation in the selling due to the fear the Fed has ALREADY gone too far in rate hikes and has crippled the outlook for 2019. Indeed, GS has concluded that. Add to that the trade freeze from the weekend given Pence's comments and you have a wet blanket overlay that is only allowing the stoic old economy stocks to show any bids. Indeed, even those that are lower today in manufacturing, etc. are still relatively much better performers than anything growth.
So, the market trades as if there is an economic slowdown coming regardless of the cause, and even bonds are getting in on the action -- somewhat -- as the 10 year trades at 3.05% vs 3.05% Friday. Bonds are not totally buying it, but they also have the Fed on a hiking campaign.
The stock indices are heading back toward the October lows, at least growth though NYSE large caps are following. NASDAQ 100 would be at a closing low if it closes here though still just over the intraday low. Ditto overall NASD. RUTX, SP400, SP500, DJ30 nowhere near that, but they are quite heavy today. SOX is teasing last week's low, and if it gives then here comes the October low.
Not a nice start to the first holiday week of the holiday season. Black Friday takes on a new meaning? Still expecting a bumper holiday retail season, but stocks are not trumpeting a banner 2019.
Will Senator Schumer be calling up Chairman Powell to tell him 'get to work Mr. Chairman?' No way. Schumer doesn't care if the economy goes south under the other side's watch.
SP500 -48.26, -1.77%
NADAQ -224.14, -3.09%
DJ30 -428.84, -1.68%
NASDAQ 100 -3.37%
Jon Johnson, Chief Market Strategist
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