UPDATE: The stock market is in turmoil as major indexes are on track to close the week with significant losses. The Nasdaq Composite has plunged over 2%, while the S&P 500 is struggling at a critical technical level of 6,665. This downturn is driven by concerns over inflated tech valuations and disappointing earnings, prompting investor unease.
As of 9:30 a.m. on Friday, October 27, 2023, market figures revealed:
– S&P 500: 6,660.37, down 0.9%
– Dow Jones Industrial Average: 46,745.05, down 0.36% (-167.25 points)
– Nasdaq Composite: 22,710.64, down 1.5%
The sell-off intensified as fears grew that tech giants, particularly Palantir, may not meet inflated investor expectations. The company’s stock has plummeted 13% in just five days, trading at a staggering forward price-to-earnings ratio of approximately 187.
“We are starting to see some tech heavyweights fail to live up to investor expectations,” noted David Rosenberg, president of Rosenberg Research. The caution was echoed by CEOs from Goldman Sachs and Morgan Stanley, who warned of potential corrections on the horizon.
Despite the grim outlook, there are voices on Wall Street advocating for a “buy-the-dip” strategy. In a recent note, JPMorgan‘s market intelligence team confirmed their intent to purchase dips at least until the end of the year. “Some big tech stocks are on sale, presenting buying opportunities for investors,” said Glen Smith, CIO of GDS Wealth Management.
The weak job market adds another layer to the current situation. Recent data from Challenger, Gray & Christmas revealed that 153,000 job cuts were announced in October, more than double the previous month and the worst since 2003. This has led to increased speculation about potential Federal Reserve rate cuts, with the probability of a 25 basis-point cut in December rising to over 70%.
Market analysts are closely watching the 6,665 level on the S&P 500, which represents its 50-day moving average. If this support fails, it could lead to a deeper decline, potentially dropping to as low as 6,500, according to Katie Stockton, a technical strategist. However, some experts, like Mark Newton of Fundstrat Research, anticipate a rebound could begin as early as Monday.
As investors brace for more volatility, the urgency to monitor these developments is high. The market’s reaction over the coming days will be pivotal in determining the trajectory of stocks and the potential for recovery. Stay tuned for further updates as this situation evolves.
