Wednesday's Market Recap - Stocks Decline As Fed Cut Interest Rates 0.25% Basis Point.
What is The Premarket Telling Us?
7:00 AM.
Dow futures are up 61 points, Nasdaq up 25.75 points, and the S&P futures up 4.50 points. Today, all eyes will be on the Fed Chair, Jerome Powell, as he is expected to cut interest rates by twenty five basis points. Shares of Apple, and General Electric are both higher this morning, after reporting better than expected second quarter earnings. Shares of both companies are surging in the premarket.
On The Bond Desk:
The US 10 Year Bond Yield 2.06%, unchanged.
Currency Desk:
Euro dollar: 1.11
UK Pound: 1.21
Crude Oil:
WTI crude oil futures at $58.46/barrel, up 0.71%.
On the Earnings Calendar:
Amgen and Apple beat quarterly earning estimates, after the close yesterday.General Electric also reported a solid quarter before the opening bell this morning.
In M&A News:
None.
What About The Asian And European Markets?
Major Asian markets were moderately lower in their session. Japan (Nikkei 225) was down 0.86%, Shanghai down 0.67%, Hong Kong (Hang Seng) fell 1.31%.
Major European markets closed mixed. German (DAX) gained 0.34%, France CAC 40 up 0.14%, London FTSE 100 down 0.78%.
Market And Sector Dynamics
Markets opened the trading session higher. The Dow gained 40 points, Nasdaq up 17 points, and the S&P added 3 points. Shares of Apple are leading stocks higher after reported a better than expected earnings quarter. WTI crude oil is also pushing higher, at $58.59/barrel, up 0.93%, and helping energy related energy related stocks. Also, on the mind of investors, the Fed/FOMC, is expected to cut interest rated for the first in ten years, later this afternoon.
Stocks pretty much hugged the flat line for most of the morning and afternoon sessions, but fell precipitously after the Fed's decision to cut a quarter point (0.25%), and also ended its Quantitative tightening (winding down the balance sheet) two months early.
At the low of the session, around 3:00 PM, the Dow dived almost 400 points, before regained a fraction of those losses shortly before the close, as investors expressed their disappointment that the Fed did not signal the possibility of future cuts, in September, and October or November. Basically, the Fed Chair Powell, indicated this was just, 'a one and done.'
Today's sell off was sudden and severe. All the S&P sectors closed the day with losses, led by Consumer Staples, Basic Materials, Technology, Consumer Discretionary, Communication Services, Industrials, Utilities, and Financials.
Factors Influencing Today's Market
Fed/FOMC cuts interest rates by 0.25% for the first time in 10 years. Stocks sold off.
Strong quarterly earnings results for Apple. Amgen and GE also reported better than expected results.
July ADP Employment report show the addition of 156,000 private payroll jobs.
WTI crude oil price closed at $58.88/barrel, up 0.91%.
The US 10 Year Bond Yield closed at 2.007%, down 2.57%, after the 0.25% Fed. rate cut.
Market Close Volume Traded And Advance Decline Ratio
At the end of trading the Dow tanked 333.75 points, Nasdaq dived 98.19 points, and S&P lost 32.80 points. Total NYSE volume traded, Total NYSE volume traded, a moderate 4.66 billion shares. Declining shares outpaced Advancing shares by 1.76:1.
Data Sources: Bloomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance.
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