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Stock indexes could not sustain the gains they had started with in today’s pre-market, dropping quickly after the opening bell and pretty much staying there across the board. After a slight lift back from session lows around mid-day, the last half-hour of trading looked to want to test these lows. The Dow finished -320 points on the day, -0.89%, while the S&P 500 was -0.91%. The Nasdaq and Russell 2000 fared even worse: -1.39% and -1.42%, respectively.
With no direct catalysts today, either in major earnings reports or economic data, the reasons for a softening in sentiment are likely to do with the Fed meeting this week — the first since early November’s announcement of a $15 billion per month taper of asset purchases in treasuries and mortgage-backed securities. In testimony later last month, Fed Chair Powell spoke on the Fed’s interest in speeding up the taper, bringing us closer to interest rate hikes in early-mid 2022.
Thus, with markets back up near all-time highs — the S&P finished last week at a peak closing high — market participants saw fit to stay cautious, even sell off some of what had been big gainers earlier in the year. To wit, meme stocks such as GameStop (GME - Free Report) and AMC (AMC - Free Report) closed down -14% and -15%, even thought they are still up +693% and +1050% year to date, respectively, are taking on the bearish near-term sentiment.
Similarly, Energy was the weakest sector on the S&P today, down overall nearly -3% -- with oilfield services giant Halliburton (HAL - Free Report) -5% on the day -- even as Energy has been the best year-to-date performer. Consumer Staples were up +2.6% today, as holiday shopping season remains robust on higher wage incomes, even though supply-chain issues leading to higher price points are keeping holiday bounties within range this year.
Tomorrow morning’s Producer Price Index (PPI) for November will arguably be the most important economic print of the week, with expectations coming down to a still-strong +0.5% from +0.6% posted for October. These also follow last Friday’s Consumer Price Index (CPI), which came in higher than expectations and hit a 39 1/2-year high of +6.8% year over year. The CPI and PPI relate directly to economic inflation, and tomorrow’s look is the last major piece of data to inform the Fed ahead of Wednesday’s new monetary policy decision.
Image: Bigstock
Markets Lose Mojo Ahead of PPI, New Fed Policy
Stock indexes could not sustain the gains they had started with in today’s pre-market, dropping quickly after the opening bell and pretty much staying there across the board. After a slight lift back from session lows around mid-day, the last half-hour of trading looked to want to test these lows. The Dow finished -320 points on the day, -0.89%, while the S&P 500 was -0.91%. The Nasdaq and Russell 2000 fared even worse: -1.39% and -1.42%, respectively.
With no direct catalysts today, either in major earnings reports or economic data, the reasons for a softening in sentiment are likely to do with the Fed meeting this week — the first since early November’s announcement of a $15 billion per month taper of asset purchases in treasuries and mortgage-backed securities. In testimony later last month, Fed Chair Powell spoke on the Fed’s interest in speeding up the taper, bringing us closer to interest rate hikes in early-mid 2022.
Thus, with markets back up near all-time highs — the S&P finished last week at a peak closing high — market participants saw fit to stay cautious, even sell off some of what had been big gainers earlier in the year. To wit, meme stocks such as GameStop (GME - Free Report) and AMC (AMC - Free Report) closed down -14% and -15%, even thought they are still up +693% and +1050% year to date, respectively, are taking on the bearish near-term sentiment.
Similarly, Energy was the weakest sector on the S&P today, down overall nearly -3% -- with oilfield services giant Halliburton (HAL - Free Report) -5% on the day -- even as Energy has been the best year-to-date performer. Consumer Staples were up +2.6% today, as holiday shopping season remains robust on higher wage incomes, even though supply-chain issues leading to higher price points are keeping holiday bounties within range this year.
Tomorrow morning’s Producer Price Index (PPI) for November will arguably be the most important economic print of the week, with expectations coming down to a still-strong +0.5% from +0.6% posted for October. These also follow last Friday’s Consumer Price Index (CPI), which came in higher than expectations and hit a 39 1/2-year high of +6.8% year over year. The CPI and PPI relate directly to economic inflation, and tomorrow’s look is the last major piece of data to inform the Fed ahead of Wednesday’s new monetary policy decision.
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