The US stock market has been responding to conflicting economic signals. Last week, the leading indices appeared well placed on the launching pad for an upside reversal but ended the week on a somber note. Even though October inflation numbers looked better compared to September CPI data, the Central bankers’ speeches on the need for further monetary tightening caused some concern last week. This resulted in a mixed close for financial markets.
The S&P 500 scored its best week since June last week and, as of last Friday’s close, had registered its third weekly rise in four weeks following a CPI figure that was better than anticipated. US equities markets had trouble establishing a solid base last week on either side because indexes were quick to turn around intraday rallies and declines.
The Nasdaq 100 plummeted by 1.18% last week, while the Dow closed the week flat and fell 0.01%. The S&P 500 completed the week down 0.69% and the small-cap Russell 2000 index experienced a 1.75% weekly decline.
These were some of the main developments last week that impacted the markets:
The US equity markets took a break on Monday (November 14) after last week’s (November 7 to 11) rise, with selling pressures intensifying late in the trading session and the S&P 500 ending down -0.9%.
As S&P 500 futures traded as high as +2% following the print and prior to Tuesday’s opening, Tuesday’s PPI print, which was worse than anticipated, added further fuel to the fire started by last week. Following reports of a missile landing in Poland, markets started to decline intraday, but they quickly recovered their losses once concerns about an escalation were allayed by the news that the missile did not come from Russia.
Economic indicators on Wednesday were calm, and markets moved marginally down due to earnings-driven price movement.
Markets were rocked on Thursday morning as a result of Fed Bullard’s remarks that current rates might not be restrictive enough and might need to be raised between 5-7%. These remarks alarmed investors, and the S&P 500 went on to open down more than 1%. The S&P 500 ended the week almost exactly at Wednesday’s pre-Bullard close, demonstrating the markets’ resilience in the face of this pressure by recovering those losses over the course of the last two trading sessions.
Similar to other Chinese technology equities, Tencent has profited from a significant purchasing momentum following recent lows in Hong Kong. It increased by 27.5% week over week.
Following the release of Sea Limited’s third-quarter financial results on Tuesday, the stock increased 18.5% this week as a result of the company’s announcement that it will once again place a stronger emphasis on profitability as opposed to blazingly rapid expansion.
Ross Stores: After reporting a profit in the third quarter that was above analysts’ forecasts, the retailer’s stock increased 14.3% this week.
In a climate that is advantageous for businesses in the industry, BAE Systems, a British aerospace and military specialist, reaffirmed its yearly prediction. Additionally, the group is searching for acquisitions. The stock ended up 7.2% higher.
DLocal Limited, a fintech company from Uruguay listed on Nasdaq, is experiencing difficulties. Research by renowned short seller Muddy Waters concluded that the company exhibited deceptive traits and the stock fell almost 53%.
Despite the most recent fundraising, according to research firm Jefferies, Aston Martin would still require additional funding, most likely in 2024, to get the business back on track. The market does not like this possible diluting source and the stock fell by nearly 17.1%.
The U.S. sales and marketing intelligence expert Zoominfo Technologies hit a wall after management provided a weaker-than-anticipated conservative outlook for 2023 and signs of a slowdown. Zoominfo Technologies stock fell almost 19.6%.
Unsurprisingly, the FTX bankruptcy has sent shockwaves across the cryptocurrency sector, and Coinbase, the Nasdaq-listed cryptocurrency trading platform, is no exception. Overall, Coinbase stock lost 15.1% for the week.
Markets Ahead: Higher terminal rate risk and persistently strong service inflation are still being eyed by the markets. October saw a ninth consecutive month of declining existing home sales, but they were slightly better than anticipated. Given the looming threat of a worldwide recession and the recent rapid surge in financial markets, volatility could reappear at any time. Meanwhile, markets wait to listen to Federal Reserve Chair Jerome Powell at the Hutchins Center on Fiscal and Monetary Policy on the outlook for the economy and the changing labor market on November 30.