On Thursday, markets opened near flat and drifted sideways ahead of Fed Chair Powell’s prepared remarks at the Economic Club of New York.
Once he started talking, the fireworks went off.
The afternoon session bounced between red and green.
The indexes ultimately closed red and at their session lows…
- Dow Jones -0.6%
- Nasdaq -1.0%
- S&P 500 -0.9%
- Russell 2000 -1.5%
Powell’s speech added little new information. The odds of another rate increase this year fell during and after his speech.
However, surging bond rates kept buyers at bay.
Sector Round Up
All of the 11 sectors ended Thursday lower.
Falling the least…
- Communications (XLC) -0.1%
- Energy (XLE) -0.2%
- Technology (XLK) -0.6%
At the bottom…
- Financials (XLF) -1.3%
- Real Estate (XLRE) -2.5%
- Consumer Discretionary (XLY) -2.6%
Netflix (NFLX^) closed 16% higher, propping up the communications sectors.
Tesla (TSLA^) fell more than 9%, dragging down the consumer discretionary sector.
The reasons are outlined in yesterday’s briefing.
The S&P 500 appears ready to retest seasonal lows…
However, oversold conditions are not very far off.
We expect this dip to be bought. We’ll be watching for the market to prove us wrong.
Your latest readout…
- The VIX closed above 20 for the first time since the March banking crisis
- RSI levels are all neutral
- The put-to-call ratio remains oversold
Today, October options expire.
Watch for increased volatility, especially near the closing bell.
Next week, earnings season continues. Your list of the hottest names will be included in Monday’s update.