For the first time in nearly a hundred years!
The Dow fell for eight weeks in a row, US stocks had a thrilling night, and Tesla broke below $700
Securities Times Author: Song Tenghu
On May 20, local time, the three major U.S. stock indexes suffered heavy losses during the session. Fortunately, they rebounded in late trading and closed with mixed results.
Among them, the Dow rose 0.03%, the Nasdaq fell 0.30%, fell more than 3% during the session, and the S&P 500 rose 0.01%.
On the same day, the discount department store chain giant Ross Department Store closed down more than 22%, becoming another "collapse" consumer stock after Wal-Mart, Target and other companies.
After encountering multiple negatives, Tesla’s decline continued, and its stock price fell 6.42% to below $700, nearly halving from its all-time high.
This week marked the eighth straight weekly decline for the Dow, the longest losing streak since 1923.
U.S. stocks rebounded in late trading, S&P 500 fell into a bear market
On the same day, the three major U.S. stock indexes opened higher and moved lower. They suffered heavy losses during the session and rose in late trading.
As of the close, the Dow rose 0.03%, and the largest intraday drop was nearly 2%; the Nasdaq fell 0.30%, and once fell more than 3%; the S&P 500 rose 0.01%, and fell more than 2% during the session (down from the historical high in January). over 20%), entering the "bear market" range.
Wall Street does not have an official definition of a bear market, but a short-term loss of at least 20% is a bear market.
This week, the Dow fell 2.9%, the eighth consecutive week of declines, the longest continuous decline since 1923; the Nasdaq fell 3.8%, down about 30% from its record high; the S&P 500 fell 3.05%, on the verge of a bear market , and the Nasdaq fell for the seventh consecutive week, setting a record for the longest losing streak since the Internet bubble more than 20 years ago.
In the commodity market, international oil and gold prices both recorded gains.
Light sweet crude oil futures for June delivery rose $1.02, or 0.91%, to settle at $113.23 a barrel on the New York Mercantile Exchange; London Brent crude futures for July delivery rose $0.51 to settle at $113.23 a barrel $112.55, an increase of 0.46%.
The most actively traded June gold futures price in the New York Mercantile Exchange gold futures market rose 0.9 US dollars from the previous trading day to close at 1,842.1 US dollars an ounce, an increase of 0.05%.
From the perspective of the sector, most of the popular Chinese concept stocks fell, the Nasdaq China Golden Dragon Index fell 0.86%; Pinduoduo fell 2.73%, Alibaba, JD.com, and Weilai fell more than 1%, and NetEase rose 1.59%.
Large technology stocks were mixed. Tesla fell 6.42%, and its stock price fell below $700. It fell more than 10% during the session, Nvidia fell 2.51%, Google fell more than 1%, Facebook parent company Meta rose 1.18%, Apple , Amazon recorded a slight increase.
Although Tesla's sales are soaring, the company is experiencing multiple negatives, and its stock price fell 13.73% this week.
According to the S&P Dow Jones Indices company announcement, the S&P ESG Index, which advocates sustainable development and better environmental, social, and corporate governance standards, has removed Tesla; the National Highway Traffic Safety Administration (NHTSA) has also disclosed that it has A special investigation has been launched into a crash in a Tesla vehicle that has left three people dead.
On the 18th, Tesla CEO Elon Musk said he voted Democrat in previous elections but will vote Republican next time.
Musk tweeted on social media: "In the past, I voted Democrats because they used to be (by and large) the party of goodwill. But they have become a party of division and hatred, so I can no longer support them, will Vote Republican."
Cisco shares rebounded after falling nearly 14% the previous day, leading the tech sector up 2.92% on the day.
However, because the latest earnings report failed to satisfy the market, the stock price of the world's most valuable technology company before the Internet bubble still fell more than 13% this week.
In the fiscal quarter ended April 30, Cisco's revenue was US$12.8 billion, a year-on-year increase of almost zero, which was seriously below market expectations, and the company's outlook for future performance was also very pessimistic.
In addition, market news shows that Dutch company ASML (ASML) is making new extreme ultraviolet (EUV) lithography machines, each priced at about 400 million US dollars, and top chip suppliers are preparing to start mass production of this product as early as 2025 machine.
Over the past decade, ASML has sold about 140 EUV lithography machines, each priced at about $200 million.
As of the close, ASML rose 1.3%, with a total market value of $214.5 billion.
Discount department store chain giant Ross department store plunges more than 22%
On May 26, the Federal Reserve's FOMC will release the minutes of its monetary policy meeting, from which investors will further seek "clues" of monetary policy.
This week, Federal Reserve Chairman Jerome Powell has signaled that he will continue to raise interest rates in an attempt to slow the surge in inflation, and "we will do so without hesitation."
St. Louis Fed President Bullard said the market has repriced in part because of Fed policy.
To control inflation, the Fed has a very good plan.
Rates should hit 3.5% by the end of the year.
A 50 basis point hike is a good plan, but the data must be reviewed.
The consumer sector is most directly affected by inflation. This week, many large retailers, led by Walmart and Target, released poor quarterly reports and issued earnings warnings, which made investors worry about the company's ability to deal with inflation and doubt consumers. Whether they are willing to pay higher prices has put more pressure on the U.S. stock market.
On May 20, the US discount department store chain giant Ross Stores closed down more than 22%, hitting a new low since March 2020, becoming another consumer stock that has suffered a setback.
Ross's financial report showed that revenue, profit and same-store sales growth in the first quarter ended April were weaker than expected; the company also lowered its performance guidance due to concerns about inflation and rising freight costs.
In addition, Dollar Tree fell 5.67% on the day, and Macy's fell 6.2%.
"This week's sell-off feels like the market is starting to recognize that corporate profitability may be at risk," wrote David Wagner, a portfolio manager at Aptus Capital Advisors.
The CICC report pointed out that the main "trouble" currently facing overseas markets is that the market is worried that the "impossible triangle" of tightening, inflation and growth has no solution, and that the Fed does not believe that the "just right" tightening can successfully curb inflation without destroying growth. .
Therefore, the slope of growth decline is particularly important in a context where inflation is still quite sticky and tightening is difficult to "let go" in the next two quarters. Debt double-kill, and strong interest rates and the dollar will also put gold under pressure, making investors "nowhere to hide"; on the contrary, recession itself is not terrible. After the high point of inflation and tightening is resolved, the policy can be gradually turned, and the market will also Can switch to trading bonds and growth styles.
G7 announces joint fight against inflation
In response to inflation, the G7 will also launch action.
On the same day, the G7 Finance Ministers and Central Bank Governors meeting concluded in Petersburg, Koenigswind, Germany.
According to the meeting communiqué, the G7 will work together to fight inflation and accelerate economic growth.
At present, inflation is a "tremendous risk", and central banks have a major responsibility to fight it, and it must be controlled at 2% as soon as possible.
The meeting communiqué also stated that the G7 will continue to support Ukraine and stands ready to take more action if necessary.
Finance ministers of various countries have reached an agreement on further aid to Ukraine, and the G7 will provide Ukraine with an additional $9.5 billion in economic aid.
The G7 has so far provided Ukraine with a total of $19.8 billion in financial aid since the conflict began.
The additional $9.5 billion is aimed at helping Ukraine maintain basic government services and close the funding gap.