• Nasdaq Composite: +15.8%
• S&P 500: -2.3%
• Dow Jones Industrial Average: -8.6%
• Russell 2000: -15.9%
Tesla (TSLA) has been on a magical run rarely seen in market history and set the stage throughout the session. It initially surged out of the gate, sans any news other than Elon Musk surpassing Warren Buffet on the world’s richest list. The rally stalled and the selling began on Monday. Once Tesla gave up the ghost, the so-called FANG names followed, along with other growth names. It was a heck of a trip for the electric automaker.
- High: $1,794
- Close: $1,497
In the process, Tesla managed to trigger selling among all the famous growth juggernauts, including those so-called FANG names. The Nasdaq was still up big for the session, but the S&P 500 missed a huge breakout opportunity.
S&P Loses Grip
The big growth pullback, also weighed heavily on the S&P 500, as Technology and Communication Services were the worst performers in the session.
S&P 500 Index | -0.94% | |
Communication Services XLC | -2.01% | |
Consumer Discretionary XLY | -1.27% | |
Consumer Staples XLP | -0.15% | |
Energy XLE | -0.53% | |
Financials XLF | +0.43% | |
Health Care XLV | +0.57% | |
Industrials XLI | +0.41% | |
Materials XLB | 0.00% | |
Real Estate XLRE | -1.57% | |
Technology XLK | -2.07% | |
Utilities XLU | +0.10% |
Earlier in the session, the S&P 500 finally grabbed that breakout rung, but it could not hold.
The S&P 500 challenged 3,232, rallying to 3,235 briefly before the index began to tumble. Consequently, it formed a double top - which is a bearish chart formation -putting 3,080 in play on the downside.
I think the initial pullback was all technical after failing at this critical test. Then, there was additional selling from ‘shutdown’ news out of California.
California Governor Gavin Newsom is calling for the immediate closing of businesses that range from dine-in restaurants to gyms. Also, during the pullback, Apple (AAPL) retail workers at 90 of its 271 U.S. locations will work from home. Apple sees those locations closed for the remainder of the year. Meanwhile, management is shipping coronavirus test kits to U.S. workers.
The headlines were more impactful than the economic fallout from the news, which wasn’t a complete surprise coming out of California and Oregon.
Portfolio Approach
Today’s Session
Big Money Center banks were winners ahead of earnings:
Inflation?
The market edged higher on those earnings releases but has since drifted on higher than expected Consumer Price Index (CPI).
To see the charts click here, and here.
- Goldman Sachs (GS): +1.62% on 4.3 million shares against a daily average volume of 3.5 million.
- JPMorgan (JPM): +1.43% on 31.4 million shares against a daily average volume of 24.5 million.
- Headline +0.6% estimate +0.5%
- Core +0.2 estimate +0.1% m/m
- Core +1.2 estimate +1.1% y/y