Wednesday, January 19

Big Tech Smashes On A Nervous Day For Stocks: Markets Wrap Up


As the Federal Reserve prepares to wrap up its last meeting of the year, another report showing inflation is on fire has sunk some of the most expensive pockets in the stock market.

Revered by investors during the pandemic for their strong balance sheets, big tech companies led a selloff Tuesday. A record jump in producer prices added further pressure on the Fed to accelerate its reduction in asset purchases and begin raising rates next year. While officials have shown no signs of rushing to tighten policy, a hasty switch to control inflation is seen as the biggest downside risk for stocks in 2022, according to an informal Bloomberg News survey of fund managers.

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Comments:

  • “Anytime there is a risk of easy money being withdrawn, that will result in some of these very expensive areas of the market going backwards,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors.
  • “The pressure on the Fed to accelerate the pace of adjustment is only increasing. With higher prices permeating the market, we could see a snowball effect when it comes to inflationary challenges as more suppliers justify higher prices and more consumers start closing their wallets, ”said Mike Loewengart, managing director of strategy at investment in E * Trade Financial.
  • “The trajectory of inflation continues to be worrying. While we believe price pressures will ease next year, the Fed is doing the prudent thing to decline faster, so it is well positioned to raise rates if necessary, ”said Win Thin, global head of foreign exchange strategy at Brown Brothers Harriman.

A Goldman Sachs Group Inc. basket of the 50 shortest stocks has plunged back into a bear market for the first time since June, generating profits for traders who sell shares they had borrowed in hopes of buying them back at lower prices. low. The renewed sell-off in the most speculative corners of the market adds further evidence of a waning appetite for risk taking as a new variant of the coronavirus spreads and the Fed focuses on fighting inflation.

Corporate highlights:

  • Elon Musk moved further toward his promise to sell 10% of his stake in Tesla Inc., and it may have cost the automaker his $ 1 trillion valuation.
  • Boeing Co. received 109 gross orders for 737 Max jets last month, bringing its sales count for narrow-body jets to 692 this year, according to the planemaker’s website.
  • 3M Co. agreed to separate its food safety business and merge it with Neogen Corp. in a deal that would value the combined company at approximately $ 9.3 billion.

Elsewhere, oil fell as the International Energy Agency said the global market has returned to surplus with the omicron variant slowing international travel.

Here are some key events from this week:

  • China releases November industrial production, retail sales data, on Wednesday.
  • Fed rate decision, Wednesday.
  • US Business Inventories, Retail Sales, Empire Manufacturing, Wednesday.
  • BOE rate decision, Thursday.
  • ECB rate decision, Thursday.
  • US Housing Start, Initial Jobless Claims, Industrial Production, Thursday.
  • BOJ monetary policy decision, Friday.
  • Quarterly rebalancing of the S&P Dow Jones Indices effective after markets close on Friday.
  • Day of “quadruple witchcraft” in the US market, when options and futures on indices and stocks expire, Friday.

Some of the main movements in the markets:

Stocks

  • The S&P 500 fell 1.2% at 1:20 p.m. New York time
  • The Nasdaq 100 fell 1.8%
  • The Dow Jones Industrial Average fell 0.4%
  • The MSCI World Index fell 1%

Coins

  • Bloomberg’s dollar spot index rose 0.2%
  • The euro fell 0.1% to $ 1.1269.
  • The British pound rose 0.1% to $ 1.3232
  • The Japanese yen fell 0.1% to 113.68 per dollar

Captivity

  • The 10-year Treasury yield advanced two basis points to 1.44%.
  • Germany’s 10-year yield advanced one basis point to -0.37%
  • UK 10-year yield advanced three basis points to 0.72%

Raw Materials

  • West Texas Intermediate crude fell 1% to $ 70.55 a barrel
  • Gold futures fell 0.9% to $ 1,773 an ounce

© 2021 Bloomberg LP


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