Stocks Hit Hard Again – Nasdaq Drops another 1.7%
US Stock markets took another hit again in trading yesterday as mixed earnings results and strong data prints weighed on market sentiment. The Nasdaq once again took the brunt of the pain, closing the day down 1.74%, followed by the S&P 500 which lost 1.18% and the Dow which dropped 0.76%. GDP data beat expectations and this kept the dollar on the front foot against most of its contemporaries although we did see a small pull back in US treasuries by the end of the trading day. Gold continues to remain well bid in light of more geopolitical risks and Oil dropped again with WTI trading just under the $84/b mark.
Investor Sentiment Remains Firmly Down.
US Earnings results this quarter have actually been relatively strong with nearly four of five companies posting better numbers than expected but the greater fear of higher interest rates for longer and geopolitical risk are weighing more on the market. Stock markets have had a few good reasons to rally this week with some strong results from big tech companies coming out but have ended up well on the back foot with the Nasdaq dropping another 1.7% yesterday. Investors are looking closely at the Fed and although there is no real chance of a hike next week, the prospect of rates remaining elevated for longer – and this continues to be backed up by resilient data – and the possibility of one more hike continue to open stock indices to more moves south.
Key Inflation Data Due Out Today
The macroeconomic event calendar is relatively bare for the first 2 sessions of today’s trading day although APAC traders will be looking closely at the Tokyo CPI number out early in the session and the RBNZ’s Statement of Intent later in the day. But the main focus for investors will come in the New York session with the release of the Federal Reserve’s favoured inflation indicator, the Core PCE Price Index. Market expectation is for a 0.3% month-on-month increase and anything away from this will see markets move sharply. Later in the day the revised University of Michigan’s Consumer Sentiment is due out but expect the PCE data to remain the main driver into the weekend.
