Dow posts worst weekly performance in a decade, Nasdaq enters bear market

U.S. stocks plunged Friday, extending a crushing week of declines for the major equity indices.
The S&P 500 (^GSPC) fell 2.06%, or 50.76 points, as of market close and is down 7% this week. This was the worst week for the S&P 500 since August 2011.
The Dow (^DJI) slid 1.82%, or 417.11 points. The index fell 6.75% for the week, posting its worst weekly decline since October 2008. 
The Nasdaq (^IXIC) tumbled 2.99%, or 195.41 points, to 6,332.99 points. The index is now solidly in a bear market, or more than 20% off its August 29 high of 8,109.69 points. The Nasdaq fell 8.29% this week, marking the worst weekly performance for the index since November 2008. 
Equities initially jumped and then reversed course following comments from a key Federal Reserve official suggesting that the central bank is open to shifting its views on rate hikes for next year. John Williams, president of the Federal Reserve Bank of New York, said in an interview with CNBC that the Fed is open to “reassessing” its views on the economy and on future rate hikes, “listening to not only markets but everybody that we talk to, looking at all the data and being ready to reassess and reevaluate our views.” Stocks initially jumped following the remarks, with the S&P 500 climbing 1.5% to a session high.
The Fed’s decision on Wednesday to raise the benchmark interest rate, coupled with comments from Fed Chairman Jerome Powell suggesting the bank would barrel ahead with its current balance sheet reduction program, had sent stocks tumbling. Williams’ comments pointed to the Fed’s willingness to reconsider its balance sheet policy, which currently allows for runoff of $50 billion in assets per month.
“I think his main message is that the statement was trying to convey a more dovish message,” Neil Dutta, head of U.S. economics at Renaissance Macro Research, said in an email about Williams.
Meanwhile, investors are digesting the prospect of a government shutdown. The U.S. government will experience a partial shutdown affecting a number of major agencies if a continuing resolution to provide funding is not inked before midnight. President Donald Trump said Friday morning that a government shutdown would last “for a very long time” if a new spending measure omits his request for billions of dollars in funding for a border wall. A House of Representatives bill passed Thursday includes the $5 billion in funding for the wall, while the Senate version of the measure passed on Wednesday omitted the funds.
U.S. Defense Secretary Jim Mattis resigned on Thursday, the day after Trump’s plans to withdraw troops from Syria became public. The U.S. Dollar index (DX-Y.NYB) rose following his resignation, which has prompted speculation of a ramp up in “America First” policies. Mattis noted in his resignation letter that the strength of the U.S. is linked to the strength of its global alliances.
Meanwhile, oil prices extended declines. U.S. crude oil prices (CL=F) fell 29 cents to $45.59 per barrel as of Friday’s settlement, the lowest closing price since January 2016. Prices for the commodity are now down more than 40% over the past 56 trading days.
Quadruple witching takes place for the fourth and final time this year on Friday. This is a phenomenon that occurs on the third Friday in March, June, September and December. During quadruple witching, market index futures, market index options, stock options and stock futures expire on the same day, which tends to result in heightened trading volume. As of 11:48 a.m. ET, New York Stock Exchange volume was seven standard deviations above average.

ECONOMY: Third-quarter GDP reading ticks down, Durable goods orders disappoint in November

The U.S. economy grew at a 3.4% rate in the third quarter, slightly below previous estimates of 3.5%, according to the third print on gross domestic product released Friday.  In the second quarter, real GDP increased 4.2%. With the third estimate for the third quarter, personal consumption expenditures and exports were revised down, while private inventory investment was revised up, according to the statement. The consensus belief among economists is that economic growth is slowing in the fourth quarter to about 2.5%.
Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on December 19, 2018 in New York. (Photo by Bryan R. Smith / AFP) (Photo credit should read BRYAN R. SMITH/AFP/Getty Images)

Dow posts worst weekly performance in a decade, Nasdaq enters bear market

Comments

Post a Comment

Popular posts from this blog

IMF Executive Board Discusses the First Assessment of Eligible Countries under the Multilateral Debt Relief Initiative

On December 21, 2005 the Executive Board of the International Monetary Fund (IMF) established the list of countries that qualify for debt relief from the Fund under the Multilateral Debt Relief Initiative (MDRI). Debt relief delivery, which could start as soon as January 3, 2005, is now conditional on getting the consents of all the contributors to the Subsidy Account of the Poverty Reduction and Growth Facility (PRGF) Trust, whose contributions help finance the Initiative. The MDRI will deliver debt relief from the Fund to qualifying members countries with an annual per capita income at or below US$380, and to countries above the threshold that have reached the completion point under the Heavily Indebted Poor Countries (HIPC) Initiative. The implementation of the MDRI will reduce the external debt burden of a number of the world's poorest countries and will provide additional resources to help them reach the Millennium Development Goals (MDGs). Background The Executive Board appro...
Read more

Oil’s chaotic collapse deepens; stocks drop worldwide

Image
NEW YORK (AP) — Oil prices crumpled even further Tuesday, and U.S. stocks sank to their worst loss in weeks as worries swept markets worldwide about the economic carnage caused by the coronavirus pandemic. The market’s spotlight was again on oil, where prices have plummeted because very few people are flying or driving, and factories have shut amid widespread stay-at-home orders. Global demand is set to drop to levels last seen in the mid 1990s. At the same time, oil producers can’t slow their production fast enough, and all the extra crude means storage tanks are quickly running out of room. The cost for a barrel of U.S. oil to be delivered in June plunged 43% to $11.57. That’s the part of the market that oil traders are focused on and trading most actively. For oil to be delivered next month, which is when storage tanks could top out, the cost of a barrel stood at $10.01. A day earlier, it fell below zero for the first time, meaning traders paid others to take oil off their hand...
Read more

Mapping Extreme Poverty Around the World A new report from the

Image
A new report from the  World Bank  just landed, finding that a record low of 10% of humanity now live in extreme poverty, down from 11% in 2013. But poverty rates aren’t anywhere close to equal between continents or even countries, as our new series of maps clearly demonstrates. The World Bank provides an in-depth explanation for its methodology, which you can find in Appendix A of the full report  here . We focused on the percentage of people in each country living below what the World Bank defines as extreme poverty, or $1.90/day. We’ll let the researchers defend this definition on their own, but there is one caveat to keep in mind. It can be extraordinarily difficult to collect reliable data from so many countries on a regular basis, and in fact we used the latest year in which numbers were available whenever possible. For example, in some of these maps we compare 2011 figures against 2015. In short, our maps provide the clearest possible apples-to-apples compa...
Read more