Big Tech Gets Crushed In A Day Of Nervousness For Stocks: Market Wrap
(Bloomberg) – As the Federal Reserve prepares to wrap up its final meeting of the year, another report showing skyrocketing inflation has sunk some of the stock market’s most expensive pockets.
Venerated by investors during the pandemic for their strong balance sheets, big tech companies led a massive sell-off on Tuesday. A record jump in producer prices has increased pressure on the Fed to step up its asset purchases reduction and start raising rates next year. Although officials have given no sign of rushing to tighten policy, a rushed change to control inflation is seen as the biggest downside risk for stocks in 2022, according to an informal Bloomberg News survey from fund managers.
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- “Anytime there is a risk of easy cash out, it will cause some of these very expensive areas to be pulled out of the market,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors.
- “The pressure on the Fed to step up the pace of tightening is only intensifying. With higher prices permeating the market, we might see a snowball effect when it comes to inflation issues as more suppliers justify higher prices and more consumers start to shut down. their portfolio, ”said Mike Loewengart, Managing Director of Investment Strategy at E * Trade Financial.
- “The trajectory of inflation remains worrying. While we believe the price pressures will ease over the next year, the Fed is being cautious in cutting faster, so it is well positioned to raise rates if necessary, ”Win Thin said. , Global Head of Foreign Exchange Strategy at Brown Brothers Harriman.
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A Goldman Sachs Group Inc. basket of the 50 shortest stocks fell back into a bear market for the first time since June, generating gains for traders who sell stocks they had borrowed in hopes of buying them back at lower prices. The new massive sell-off in the more speculative corners of the market adds further evidence of a waning appetite for risk as a new variant of the coronavirus spreads and the Fed focuses on fighting inflation.
Read: Fund managers’ rush for cash triggers BofA’s stock buy alert
- Elon Musk has made more progress on his pledge to sell 10% of his stake in Tesla Inc., and that may have cost the automaker its $ 1,000 billion valuation.
- Boeing Co. received 109 gross orders for 737 Max airliners last month, bringing its sales for narrow-body aircraft to 692 this year, according to the aircraft manufacturer’s website.
- 3M Co. has agreed to separate its food safety business and join it with Neogen Corp. in a deal that would value the combined company at around $ 9.3 billion.
Read: Musk and Bezos lead accusation of US billionaires selling stocks
Elsewhere, oil fell as the International Energy Agency said the global market had returned to surplus with the omicron variant limiting international travel.
Here are some key events from this week:
- China releases November industrial production and retail sales data on Wednesday.
- Fed rate decision Wednesday.
- US Business Inventories, Retail Sales, Imperial Manufacturing, Wednesday.
- BOE rate decision, Thursday.
- ECB rate decision, Thursday.
- Housing starts in the United States, initial jobless claims, industrial production, Thursday.
- BOJ monetary policy decision, Friday.
- Quarterly rebalancing of S&P Dow Jones indices effective after market close on Friday.
- Quadruple witch day in the US market, when options and futures on indices and stocks expire on Friday.
For more market analysis, read our MLIV blog.
Some of the main movements in the markets:
- 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 by 1%
- Bloomberg 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
- The yield on 10-year treasury bills rose two basis points to 1.44%
- German 10-year rate rose one basis point to -0.37%
- UK 10-year yield rose three basis points to 0.72%
- West Texas Intermediate crude fell 1% to $ 70.55 a barrel
- Gold futures fell 0.9% to $ 1,773 an ounce
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