Friday's Market Recap - Trump Tweets Fuels Massive Stock Selloff.
What is The Premarket Telling Us?
7:00 AM.
Stocks futures are modestly positive, following the lead of Asian markets overnight. Dow futures up 23 points, Nasdaq futures up 18 points, and the S&P futures up 5 points.
On The Bond Desk:
The US 10 Year Bond Yield at 1.61%, up two basis points.
Currency Desk:
Euro dollar: 1.10
UK Pound: 1.22
Crude Oil:
WTI crude oil futures at 56.36/barrel, unchanged.
On the Earnings Calendar:
None.
In M&A News:
None
What About The Asian And European Markets?
Major Asian markets traded higher. Japan (Nikkei 225) up 0.40%, Shanghai up 0.49%, Hong Kong (Hang Seng) 0.50%.
Major European markets closed in negative territory. German (DAX) down 1.15%, France CAC 40 down 1.14%, London FTSE 100 lost 0.47%.
Market And Sector Dynamics
Stocks opened today's trading session deep into negative territory. The Dow fell 140 points, Nasdaq down 43 points, and the S&P down 15 points. Investors are responding to retaliatory tariffs, by the China, on $75 billion of US exports, in response to US tariffs on goods from China, scheduled to go into effect, on September 1st. This coming, just ahead of Fed Chair Powell's, address at the annual Fed Symposium, in Jackson Hole, Wyoming, later this morning.
Stocks appeared to settle down after release of the Fed Chair's speech, because investor felt he struck the desired dovish tone, suggesting the Fed will do what's necessary to keep the US expansion going. A short while later the President, released a few negative tweets, criticizing the Chairman, and questioning who was the greater enemy, Fed Chair Powell or China's President Xi. A short will later, the President responded to the newly announced China tariffs, suggesting he would have a response later in the afternoon.
Stocks tank immediately after the President tweets, as investor decided to take profits and move to the sideline, going into the weekend. By 1:20 PM the Dow was down 532 points, Nasdaq down 217 points, and the S&P down 63 points. Then a few minutes later, the yield on the US 10 Year Bond, and that of US 10 Year Bond briefly inverted, sending stocks even lower, and making chances of any recovery impossible. Stocks closed at the low of the day.
Today's selloff was broad based and deep, with all 11 S&P sectors closing with solid losses, led by Energy, Technology, Consumer Discretionary, Industrials, Financials, Basic Materials, Healthcare, and Consumer Staples.
All but one, of the 30 Dow components, ended the session in negative territory. Boeing ended with gains.
Factors Influencing Today's Market
China announced retaliatory tariffs on $75 billion of US imports.
The President tweets criticizing the Fed Chair, Jerome Powell after his Jackson Hole address.
The President promised to respond to China's new tariffs.
The US 10 year bond yield and the US 2 year bond yields inverted intraday.
The US 10 year bond closed at 1.533%, down 4.96%.
July New Home Sales came in short of expectations at 635 K vs 645 K.
WTI crude oil traded moderately today, closing at $54.17/barrel, down 2.13%.
Market Close Volume Traded And Advance Decline Ratio
At the end of today's trading, all the major indices tanked. The Dow dived 623.34 points, Nasdaq plunged 239.62 points, and the S&P lost 75.84 points. Total NYSE volume traded, a moderate 4.0 billion shares. Declining shares outpaced Advancing shares by almost 6:1.
Data Sources: Bloomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance.
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