The S&P 500 on Friday ended a wild week nearly 1% lower, primarily due to a continued selloff in technology stocks. The S&P 500 information technology sector has now slumped more than 7% in two weeks. Meanwhile, the rotation trade has continued, with the equal weight S&P up about 1% for the week and the barometer for small-caps, the Russell 2000 (RTY), up more than 3%.
An eventful five-days saw market participants digesting yet another twist in the U.S. election race at the beginning, followed by a dramatic selloff in the middle and a rebound at the end. Eyes now turn to the Federal Reserve’s latest monetary policy rate decision next week, where the central bank is expected to pave the way for a rate cut in September.
For the week, the S&P (SP500) retreated -0.8%, while the tech-heavy Nasdaq Composite (COMP:IND) slipped -2.1%. The blue-chip Dow (DJI) climbed +0.8%. Read a preview of next week’s major events in Seeking Alpha’s Catalyst Watch.
Following overwhelming pressure from senior Democrats, President Biden abandoned his re-election bid and endorsed Vice President Kamala Harris to be the party’s new presidential nominee. It only took her days to cement the support of all major Democrats, including former President Barack Obama and Michelle Obama, as well as party leaders in Congress. Harris is a staunch defender of Biden’s economic approach, and is largely expected to stick to his foreign policy playbook. What does it mean for markets? “At the moment, not much,” said TS Lombard, noting that each party platform reflects a “Jacksonian rather than Hamiltonian tilt.” (68 comments)
The cryptoverse notched a new milestone on Tuesday with the launch of spot ether ETFs following their approval by the SEC. However, the nine new ETFs concluded their first trading session lower, as the crypto slipped and concerns surrounding net inflows remained. Now that the funds are live, investors are focusing on whether the ether-holding ETFs can achieve net inflows comparable to those of their bitcoin (BTC-USD) counterparts, although skepticism remains prevalent. In related news, former President Donald Trump, a crypto detractor-turned-advocate, will headline the world’s largest bitcoin conference this weekend. (25 comments)
Stocks only go up. Until they don’t. The Nasdaq (COMP:IND) on Wednesday suffered its worst day of 2024, with the tech-heavy index sliding more than 3% for the first time in more than 400 trading days. The plunge wiped out hundreds of billions of dollars in market cap from the Magnificent Seven, as results from Alphabet (GOOG, GOOGL) and Tesla (TSLA) underwhelmed, with investors increasingly demanding returns for hefty AI investments. Looking to put a halt to the wipeout, U.S. GDP growth accelerated in Q2 and topped estimates, highlighting a resilient consumer and more business spending in the face of economic worries. (35 comments)
Boeing (BA) formally filed a guilty plea with the Department of Justice regarding making false representations about key software for the 737 Max linked to two fatal crashes in 2018 and 2019. The DOJ noted that Boeing neglected to ensure employees documented removing parts during airplane manufacture, and didn’t confirm if mechanics and inspectors actually completed work. “We will continue to work transparently with regulators as we take significant actions across Boeing to strengthen our safety, quality and compliance programs,” the planemaker declared. It will also pay a $243.6M fine as part of the agreement. (12 comments)
The 2024 Paris Olympics kicked off on Friday, with the opening ceremony taking place under a backdrop of heavy security and arson attacks that disrupted France’s high-speed rail system. The Games will offer a big stage for U.S. companies associated with the Olympic Partner Program, like Airbnb (ABNB), Coca-Cola (KO), and Visa (V), as well as big viewership opportunities. However, the price tag to host the event has increased in recent years. “Fold in all the costs and revenues, it’s always been that a debt has to be paid somewhere,” explained Robert Barney, director of the International Center for Olympic Studies at the University of Western Ontario. (5 comments)
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