Stock Market Today (9/6/22): Rising-Rate Fears Keep Stocks in the Red – Kiplinger’s Personal Finance
It was a choppy start to the short trading week, with stocks spending time in both positive and negative territory Tuesday. Bears gained the upper hand in the afternoon, though, with the three major indexes ending another day in the red.
Although this week’s economic calendar is fairly thin, data from the Institute for Supply Management (ISM) this morning showed that activity in the services sector ticked up to 56.9% in August – the highest level since April – from July’s 56.7%.
"This is the most recent piece of data to suggest the economy remains resilient and as such the market takeaway is that this gives the Fed more room to continue raising rates," says Michael Reinking, senior market strategist for the New York Stock Exchange. "Futures markets are now pricing in a 75% chance of a 75 basis-point hike later this month from a coin flip late last week." A basis point is one-one hundredth of a percentage point.
In reaction to today’s ISM data, the 10-year Treasury yield rose to its loftiest level since mid-June. This, in turn, weighed on shares in the communication services (-1.3%) and technology (-0.6%) sectors, with names such as streaming giant Netflix (NFLX, -3.4%) and chipmaker Intel (INTC, -2.8%) seeing notable declines.
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As for the major indexes, the tech-heavy Nasdaq Composite fell 0.7% to 11,544, its seventh straight loss. The S&P 500 Index shed 0.4% to 3,908, and the Dow Jones Industrial Average gave back 0.6% to 31,145.
Other news in the stock market today:
It’s becoming increasingly clear that the summer rally in stocks was not the start of a new bull market. "The 17% rally off the June lows appears to have been just a typical bear market rally," says Savita Subramanian, head of equity and quantitative strategy at BofA Securities. "Our bull market signposts continue to show no real signs of a bottom, with just 30% being triggered vs. 80%+ triggered in prior bottoms. September has seasonally been a weak month and we expect more pain in the market."
The market’s head fake creates a situation in which at least some investors might want to re-evaluate their portfolios. And any assessment of your own holdings stands to benefit from a look at what other successful investors are doing.
Warren Buffett, for example, did plenty of bargain-hunting in the second quarter as the S&P 500 fell into bear-market territory. But Buffett was hardly alone. We recently took a look at the top stock picks of billionaire investors during Q2. The rich get richer for a reason, and studying where they’re putting their money – especially during times of market turbulence – can be an instructive exercise for investors.
Karee Venema was long GOOGL as of this writing.
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September 6, 2022 at 04:20PM