briefing.com June 13, 2022 closing Market Snapshot -
| Dow | 30516.74 | -876.05 | (-2.79%) | | Nasdaq | 10809.22 | -530.80 | (-4.68%) | | SP 500 | 3749.63 | -151.23 | (-3.88%) |
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| | NYSE | Adv 182 | Dec 3166 | Vol 1.2 bln | | Nasdaq | Adv 583 | Dec 4238 | Vol 5.8 bln |
Industry Watch
Strong: -- None
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| Weak: Energy, Consumer Discretionary, Real Estate, Information Technology, Materials, Utilities, Communication Services
| Moving the Market
-- General growth concerns
-- Treasury note yield curve flattening on rate-hike worries
-- Cryptocurrency market taking a big hit after Celsius freezes asset withdrawals and transfers
-- Downside leadership from mega caps
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Closing Summary
13-Jun-22 16:25 ET
Dow -876.05 at 30516.74, Nasdaq -530.80 at 10809.22, S&P -151.23 at 3749.63
[BRIEFING.COM] Last week ended on a bad note, and the new week started on an even worse note. There were myriad concerns in today's trading mix that drove the Dow, Nasdaq, and S&P 500 to new 52-week lows and the S&P 500 back into bear market territory.
The troubling writing was on the wall for both the Treasury market and the stock market. The former got clobbered on rate-hike concerns while the latter got clobbered on a combination of rate-hike concerns and growth concerns.
By and large, both markets got knocked out today with repeated jabs of selling interest.
The 2-yr note yield settled the day up 23 basis points at 3.27%, and then climbed as high as 3.43% following the close of the cash session when The Wall Street Journal reported that the Fed is apt to consider a 75-basis point rate hike at this week's FOMC meeting given the bad inflation report seen last Friday. Similarly, the 10-yr note yield settled the day up 21 basis points at 3.37%, and also went to 3.43% following the close of the cash session.
There had already been concerns about the Fed taking a more aggressive rate-hike path, yet the timing of the article, and the source, lent some credence to the idea that the Fed could possibly "surprise" the market this week. That's not a given, but it is intended to explain why there was some knee-jerk selling interest late in the day following the report.
Stocks had already been struggling with the jump in yields, but they cascaded to new session lows, or close to session lows, in the final hour in a move that coincided with the extra spike in Treasury yields following the report.
It was a fitting end to a day where most stocks were treated like punching bags. The body blows came early, and were firing on the following influences:
- Worries about the Fed taking a more aggressive rate-hike path to fight inflation.
- Reports of renewed lockdowns/shutdowns in Shanghai and Beijing due to the detection of new COVID cases.
- A lack of confidence in valuations given that forward earnings estimates have yet to be cut in any meaningful way despite expectations for much slower growth and/or a recession in coming months.
- Massive losses for cryptocurrencies coinciding with news that crypto lender Celsius has paused customer withdrawals and transfers due to "extreme market conditions."
- As of this writing, Bitcoin was down 15.5% to $23,212.40 while Ethereum was down 17.2% to $1228.22.
- General growth concerns tied to rising interest rates and a flattening yield curve.
- Nervousness about forced selling due to margin calls.
The advance-decline line told the tale of a market lacking any strong buying interest.
Declining issues outpaced advancing issues by by a 16-to-1 margin at the NYSE (that spread was 23-to-1 shortly after the open) and by a 7-to-1 margin at the Nasdaq (that spread was 11-to-1 shortly after the open).
All 11 S&P 500 sectors closed with losses that ranged from 2.2% (consumer staples) to 5.1% (energy). Nine of the 11 sectors fell at least 3.0%. The Vanguard Mega-Cap Growth ETF (MGK) dropped 4.5% while the Invesco S&P 500 Equal Weight ETF (RSP) fell 4.0%. The Russell 3000 Growth Index declined 4.5% and the Russell 3000 Value Index declined 3.8%.
In sum, it was a day where nothing worked outside of some individual stocks with company-specific news catalysts, like Duke Realty (DRE 50.32, +0.54, +1.1%), which is going to be acquired by Prologis (PLD 108.35, -8.89, -7.6%) in a $26 billion all-stock deal.
Reflecting the nervous state of the market, the CBOE Volatility Index surged 23.9% to 34.39.
There was no economic data of note today. Looking ahead, market participants will receive the May NFIB Small Business Optimism Index (6:00 a.m. ET) and May Producer Price Index report (8:30 a.m. ET) on Tuesday. |
