How long can economic growth last?The economy hands Wall Street some good news at last, but investors shrug it off to end the day in the red.
- All the big indices eked out their morning gains. The Nasdaq lost 1.2% and is suffering its worst month since 2008, the S&P 500 (SPX) sank 0.54% and is still flirting with correction territory, and the Dow (DJI) declined 0.02%.
- The U.S. economy grew 5.7% last year, its strongest performance since 1984 thanks to all the Covid stimulus the government pumped into the economy – the naysayers think it’s doomed to decline this year after the Fed starts tapering.
- But there are also yay-sayers, who think that the strong growth data will give the Fed more wiggle room to slow down its tapering process and avoid a recession. Only time will tell…
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The Nasdaq revives itselfWall Street stages one of the strongest comebacks we’ve seen in years after a tumultuous start to the week.
- Major indexes visited correction territory on Monday. At their lowest points, the Nasdaq was down just under 5%, the S&P 500 (SPX) was down 4%, and the Dow (DJI) was down 3.25%.
- But prices made a stunning revival with just a few minutes to go, and all three indexes ended the day modestly in the green – it was the Nasdaq’s strongest comeback since the 2008 financial crisis.
- Dip-buyers are probably to thank. There’s a lot to be concerned about – rate hikes, Russia/Ukraine, inflation (to name a new) – but investors seemed to have enough of the bad news and pushed stocks back into the green.
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The Nasdaq’s new neighborhoodThe Nasdaq moves into a sketchy new neighborhood called “Correction Territory”, and investors are missing their sunny suburbia.
- Wall Street continued to wane on Wednesday. The tech-heavy Nasdaq lost 1.07%, while the S&P 500 (SPX) and the Dow (DIJ) both swung down to a one-month low.
- The Nasdaq is down 10.7% from its November 19 record high, meaning it’s officially in its fourth correction since the pandemic started – the last was in early March.
- The words “correction territory” immediately induce images of red heatmaps and empty savings accounts, but in fact it can often be part of the normal market ebb and flow, and isn’t too shocking given the four rate increases we’re waiting for this year.
Illustration by TradingView
Wall Street’s weak start to the weekAny fuzzy feelings from a long weekend of R&R are brought to a swift end when Wall Street gets walloped on its first day back to a shortened trading week.
- All of the big indices ended the day in the red. The Nasdaq sank 2.57%, the S&P 500 (SPX) dropped 1.84%, and the Dow (DJI) dipped 1.51%.
- The Nasdaq is now down 9.7% from its November 19 record high, meaning the index is approaching a 10% correction.
- Financial stocks failed to hold up the team as earnings season heats up, weighed down by Goldman Sachs (GS), and treasury yields are at a two-year high as investors anticipate rate hikes.
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The Nasdaq gets another knockBig tech cuts the cord on the Nasdaq’s three-day winning streak.
- The index plunged 2.57% on Thursday to its lowest closing price since October, moving down with the Dow (DJI) and the S&P 500 (SPX).
- Big tech was behind the slide, led by Microsoft (MSFT), Amazon (AAMZN) and Tesla (TSLA). Stocks are continuing a dramatic sell-off that gave markets a stilted 2022 start, as investors await the first interest rate hike in March.
- Is there more tech trouble on the way? The committee investigating the Capitol riot has subpoenaed Google (GOOGL), Facebook (FB), Twitter (TWTR) and Reddit – all of which experienced losses on Thursday – after “inadequate responses” to their earlier enquiries.
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The Nasdaq comebackInvestors shout “gimme more gimme more” after the Nasdaq makes a stronger comeback than Britney.
- The tech-heavy index gained 0.14% on Monday, which doesn't sound like much, but marks its biggest intraday comeback since March 2020 after opening down 2.7%.
- Investors are anxiously waiting for U.S. inflation data this week, which will give an indication of how aggressive the Fed’s monetary tightening will be.
- U.S economic growth is on the way to its best year in decades, according to JP Morgan CEO Jamie Dimon, who thinks there will be more than four interest hikes this year – so strap in folks.
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A dismal debut into 2022It was an execrable (bad) week for tech, to say the least, and the Nasdaq bears the brunt of the pain.
- The tech heavy Nasdaq lost 4.46% last week to hit its lowest prices since September and mark its worst week since February.
- There’s a lot of economic pressure atm. The Fed is looking to hike interest rates soon and start tapering, and the U.S. added less than half the amount of jobs expected in December.
- Rate hikes hit fast-growing tech stocks hard because it means future profits are worth less now, so companies have to produce more returns to justify the risk of investment.
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