(News Bulletin 247) – Falling session on Wall Street, in the wake of semiconductor manufacturers, and in particular Intel or Nvidia with -3.2%.
The S&P500 dropped -0.68% to 4,535 and the Nasdaq fell sharply from -2.05% to 14,063, which suddenly wiped out all the gains since last Thursday (at the opening auction).
No one had seen this air pocket coming, especially since the fall of Tesla and Netflix was not immediate on 07/19 at 10:10 p.m. when the results were published (the price remained stable for a long time in electronic transactions, before unscrewing late at night).

The scenario is all the more unexpected on this eve of the ‘3 witches’ as all the lights were green after 8 bull sessions, with no warning sign of a reversal.
And ‘overbought’ is not a relevant reason because the market has been technically overbought for months, and it continues to rise as if the rise in rates, the general over-indebtedness and the slowdown in consumption did not exist.

The Dow Jones nevertheless aligns a ninth session increase (+0.47% to 35,225) in the wake of IBM +2.1%, Boeing +2.4% and especially the defensive Johnson & Johnson with +6.1%.

The Nasdaq fell in the wake of semiconductors after the warning from Taiwanese TSMC (-5% on July 20): Applied Materials, -5.5%, AMD and ASML -5.3%, ON Semiconductors -4.5%, KLA -4.4%, NXP and Microchip -3.8%, Nvidia -3.3%.
Bad session also for the ‘magnificent 7’ with Tesla -9.7%, Meta -4.3%, Amazon -4%, Alphabet and Microsoft -2.3%, Apple -1%

Some good performances on the bank side with quarterly reports that continue to be praised: Zion Bancorp +10%, Keycorp +4.1%, Goldman Sachs +3%, Charles Schwab +2.9%, Fifth Third Bancorp +2.7%.

Several economic statistics were on the menu of the day and those of unemployment are the only ones to justify – excluding all the rest of the ‘macro’ news – a rate tension of +12pts to 3.8600%.

Registrations for unemployment benefits are down -9,000 (despite a drop in job offers) and still do not reflect a weak labor market, quite the contrary since wages continue to rise, roughly at the rate of inflation now.

The picture seems a little less idyllic with the index of leading indicators, supposed to foreshadow the general trend of the American economy for the months to come: it fell again in June (-0.7% to 106.1) in particular under the effect of the deterioration in consumer morale.

Given the high level of inflation, the tightening of monetary policy and credit conditions and the reduction in government spending, the ConfBoard says it predicts a recession in the 3rd quarter.
The survey’s general activity and new orders indicators remained negative. In addition, the shipments index declined and turned negative; the employment index suggests an overall stable labor force.
Philadelphia Fed Index: The Philly Fed fell from -13.7 last month to -13.5 in July, its 11th consecutive negative reading, and as the consensus hoped for a slightly sharper rally.

Finally, sales of existing homes in the United States fell 3.3% last month compared to May, to 4.16 million at an annualized rate and in seasonally adjusted data (CVS), according to the National Federation of Realtors (NAR).

The median sale price reached $410,200, its second highest level since January 1999, and the inventory of unsold existing homes remained at 1.08 million at the end of June, or 3.1 months at the current rate of flow.

Copyright (c) 2023 News Bulletin 247. All rights reserved.