Causes of High Electricity Bills in Thai Apartments

[rooster59]

Dow sees worst day in two years as bond yields jump

By Stephen Culp

 

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., January 26, 2018. REUTERS/Brendan McDermid

 

NEW YORK (Reuters) - Worries about the impact of a tightening job market on the prospects for inflation and a surge in bond yields sent investors fleeing equities on Friday, with the Dow Jones Industrials Average swooning almost 666 points, for its biggest daily percentage loss in 20 months.

 

It was the biggest daily point fall in the Dow since December 2008 during the financial crisis.

 

With Friday's rout, Wall Street's three major indexes logged their biggest weekly losses in two years, after closing at record highs the previous week. The S&P 500 and Dow saw their worst weeks since early January 2016 while Nasdaq had its worst week since early Feb 2016.

 

"People are starting to really get increasingly uncomfortable with the rapid rise in interest rates that we have seen and the uncertainty of how that is actually going to start to play out relative to competition for stocks," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

 

Overnight stock price losses accelerated after the U.S. Labor Department reported employment grew more than expected in January with the biggest wage gain in more than 8-1/2 years. The picture of workers commanding higher salaries fueled expectations that inflation is on the rise, which could prompt the Federal Reserve to take a more aggressive approach to rate hikes this year.

 

That caused the 10-year Treasury yield to surge to 2.8450 percent the highest since Jan. 2014, which could make returns on Treasuries look more attractive relative to stocks.

 

But market players are not convinced that the bull market in stocks that that saw the S&P 500 rise 5.6 percent in January is over. In fact many say a pull back was overdue.

 

"You have a jobs report today that was pretty robust all kind of feeding into the higher interest rates, greater inflation story, and I think the markets are trying to grapple with that right now," said Carlson.

 

The Dow Jones Industrial Average <.DJI> fell 665.75 points, or 2.54 percent, to 25,520.96, the S&P 500 <.SPX> lost 59.85 points, or 2.12 percent, to 2,762.13 and the Nasdaq Composite <.IXIC> dropped 144.92 points, or 1.96 percent, to 7,240.95.

 

S&P 500 e-mini stock futures <EScv1> extended losses after 4 p.m. ET close in the cash market. S&P 500 futures closed down 2.3 percent, the biggest daily percentage drop since September 2016.

 

All 11 major sectors of the S&P 500 closed down. Technology <.SPLRCT> weighed the heaviest, with Microsoft <MSFT.O> pulling the sector down 3.0 percent.

 

The CBOE Volatility Index <.VIX>, the most widely followed barometer of expected near-term volatility for the S&P 500 Index rose more than four points to 17.86, its highest since November 2016. VIX options trading volume hit a record high.

 

Analysts now see fourth-quarter earnings growth of 13.6 percent for the S&P 500, up from 12 percent on January 1. Half of the index's companies have reported, 78 percent of which beat Street expectations, according to Thomson Reuters data.

 

Exxon Mobil Corp <XOM.N> and Chevron Corp <CVX.N> shares were down 5.1 percent and 5.6 percent, respectively, after the oil companies posted lower-than-expected fourth-quarter profit.

 

Alphabet <GOOGL.O> fell 5.3 percent after the Google parent's fourth-quarter profit came in below consensus on increased spending.

 

Apple <AAPL.O> shares were off by 4.3 percent as investors worried about the iPhone maker's weak outlook amid reports of scaled back iPhone X production.

 

Amazon.com <AMZN.O> was a bright spot, up 2.9 percent as Wall Street analysts quickly upped their price targets following the online retailer's impressive earnings report.

 

Declining issues outnumbered advancing ones on the NYSE by a 7.70-to-1 ratio; on Nasdaq, a 3.90-to-1 ratio favored decliners.

 

The S&P 500 posted 18 new 52-week highs and 18 new lows; the Nasdaq Composite recorded 48 new highs and 103 new lows.

 

Volume on U.S. exchanges was 5.39 billion shares, compared to the 7.33 billion average for the full session over the last 20 trading days.

 

 

-- © Copyright Reuters 2018-02-03

[malibukid]

great, maybe the $$ will strengthen.

[RichardColeman]

5 hours ago, rooster59 said:

People are starting to really get increasingly uncomfortable with the rapid rise in interest rates that we have seen

More probably 'umcomfortable' with living lifestyles not planned for future interest rises !

[Jonnapat]

Hardly surprising, markets have been overpriced for months 

[how241]

19 minutes ago, Jonnapat said:

Hardly surprising, markets have been overpriced for months 

Yes,  markets have been going and going up for months...This lose will be recaptured in a few days, maybe.

[BuaBS]

36 minutes ago, Jonnapat said:

Hardly surprising, markets have been overpriced for months 

Try YEARS !

[Basil B]

Not again...

 

America sneezes, and the rest of the world catches a cold. 

 

[Jingthing]

An overdue correction.

Eventually bull markets turn into bear markets.

Predicting exactly when is beyond mere mortals.

[Gecko123]

Whether bond yields are going to continue to climb is the $64K dollar question. I found the analysis in the attached article to be very interesting:

 

https://www.marketwatch.com/story/permabear-albert-edwards-says-the-10-year-treasury-yield-will-eventually-go-negative-2018-02-02?siteid=yhoof2&yptr=yahoo

[dexterm]

34 minutes ago, Jingthing said:

An overdue correction.

Eventually bull markets turn into bear markets.

Predicting exactly when is beyond mere mortals.

Try Heikin Ashi candlesticks...on most charting software. Turned negative on DJI on 30 Jan for first time in over a month. Not the ultimate indicator, of course..nothing is...but in combination with others is not bad. Certainly a warning sign to lighten one's portfolio, if you're an active trader, and maybe even think of shorting. Long term may be just a hiccup...who knows?

The chart tells all. Good luck.

Edited February 3, 2018 by dexterm

[Basil B]

Fortunately I sold a lot of stock recently, which I have not reinvested yet, so see what the markets do next week...

[joecoolfrog]

Has Trump been on Twitter to claim credit yet ?

[Jingthing]

48 minutes ago, joecoolfrog said:

Has Trump been on Twitter to claim credit yet ?

 

Glad you said it.

Yes, "trump" has been crowing that he is completely responsible for the stock market rally since the election (no mention of the very long up trend under Obama).

If it gets worse, he'll find a way to blame the crash on the democrats.

You know I'm right. 

Edited February 4, 2018 by Jingthing

[ilostmypassword]

It's useful to remember that much of the basis for the stock market rise was the slashing of corporate taxes. Not because it will significantly stimulate the economy. That's just nonsense given the low interest rates for borrowers. Rather, it's because most of that extra cash will go to stock buybacks and increased dividends. Not much to do with the economic lives of most Americans or correlated entirely with the continued improvement in that economy. That has largely to do with the fact that for the first time in many, many years. most of the developed nations' economies are experiecing strong growth.