Wall Street Woes
The closing bell on Friday saw the S&P 500 Index ($SPX) (SPY) down by -0.65%, the Dow Jones Industrials Index ($DOWI) (DIA) down by -0.49%, and the Nasdaq 100 Index ($IUXX) (QQQ) down by -1.15%. The Nasdaq 100 hit a 3-week low as inflation fears triggered a surge in the 10-year T-note yield following a surprising uptick in the US import price index ex-petroleum. This jolt, compounded by lackluster CPI and PPI numbers earlier in the week, raises the specter of delayed interest rate cuts by the Fed.
Corporate Blunders
The downward spiral was further exacerbated by grim corporate tidings. Jabil nosedived by over -16% after revising its full-year core EPS outlook. Adobe suffered a similar fate, plummeting by more than -13% due to a Q2 revenue projection below market expectations. Furthermore, semiconductor stocks retreated on news of the Chinese government’s call for local chip purchases by electric vehicle manufacturers.
Volatility and Triple Witching
Market tumult on Friday was amplified by the quarterly expiration of March derivatives, triggering unexpected price gyrations. Approximately $5.3 trillion worth of options were set to expire, adding to the frenzy as traders grappled with the fallout.
Divergent Fortunes Overseas
Global markets painted a mixed picture, with the Euro Stoxx 50 closing down by -0.14%, China’s Shanghai Composite soaring by +0.54%, and Japan’s Nikkei Stock Index dipping by -0.26%.
Interest Rate Turbulence
June 10-year T-notes stumbled on Friday, with the 10-year T-note yield ascending to a 2-week high of 4.318%. The unexpected surge in the US import price index ex-petroleum, coupled with robust Feb manufacturing production figures, elicited a bearish outlook on T-notes and sent shockwaves through the bond market. European government bond yields also trended higher, as markets grappled with shifting inflation expectations.
Global Economic Dynamics
Across the pond, Eurozone inflation teetered close to the 2% target, hinting at a possible ECB policy shift. Nation-specific readings yielded a mixed bag, with France’s CPI inching up while Italy’s registered a marginal decline.
Market Movers and Shakers
Amid the bloodbath, some stocks managed to swim against the tide. Costar Group emerged as a frontrunner, leaping by over +8% after settling litigation with the National Association of Realtors. Steel Dynamics and Valero Energy also defied the downturn, buoyed by favorable forecasts and analyst upgrades.
Hope Amidst Turmoil
While the market convulses in the wake of looming inflation risks, pockets of optimism remain. Companies like Rivian Automotive and Intuitive Surgical saw promising gains, hinting at resilience amidst the chaos. The volatile landscape underscores the importance of agility and foresight in navigating these turbulent times.
Upcoming Earnings Reports (3/18/2024)
Stay tuned for earnings reports from pivotal players such as Smartsheet Inc, Bit Digital Inc, Comtech Telecommunications Corp, and more as they gear up to unveil their financial performance on March 18, 2024.
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Rich Asplund, on the date of publication, did not hold positions in any securities discussed. All information in this article is for informational purposes only. For additional details, refer to the Barchart Disclosure Policy.
The opinions expressed in this piece are solely those of the author and do not necessarily align with those of Nasdaq, Inc.
