U.S. equities are being hammered right now – with the Dow down over 200 points and the other indices following suit. There isn’t a lot of green on the map right now outside of select names such as AT&T, Disney, Comcast, Medtronic – and of course, Roku – which crushed estimates.
Meanwhile, the VIX is spiking – up around 10%.
The Washington Post reported today that a senate Republican plan could delay tax reform until 2019.
“That’s what gave us this new leg down,” said Art Cashin, director of floor operations at UBS, on CNBC’s “Squawk Alley.” “There’s also some speculation in Washington circles that when the president finishes his trip and comes back, there may be some more legal troubles for members of the cabinet.”
Of course, the yield curve tightening – as Fly reported at 4AM because he’s potentially not human, is also a factor.
Tech is the best performing sector YTD – up 37 percent in 2017, while all indices are up at least 15 percent on the year.
“The market is digesting its recent gains,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott. “After a prolonged rally, everyone gets worried that they will be caught off-guard when the music stops.”
CNBC reports:
Also giving investors pause was a decline in risky high-yield bonds. The iShares iBoxx High Yield Corporate Bond exchange-traded fund (HYG) fell 0.5 percent Wednesday and has pulled back 1.6 percent over the past month. Wall Street looks at high-yield bonds as a leading indicator for stocks.
“People are wondering if that’s a canary in the coal mine” for stocks, said Janney’s Luschini.
Stocks around the world also declined Thursday. The Stoxx 600 — which tracks a broad swath of European equities — fell 1.1 percent. In Asia, the Japanese Nikkei 225 finished 0.2 percent lower; it briefly rose more than 2 percent to hit its highest level since 1991.
Global equities have risen alongside their U.S. counterparts this year as economic conditions around the world have improved.
On the data front, weekly U.S. jobless claims totaled 239,000 last week, above the expected 232,000. Wholesale trade numbers are slated for release at 10 a.m. in New York.
Later on Thursday, Disney, Nvidia, and News Corp. will release their quarterly results. Media stocks have been in the spotlight recently as talks about dealmaking pick up. Earlier this week, CNBC reported that 21st Century Fox has been in talks to sell most of its company to Disney. As for chip maker Nvidia, its stock has been on fire this year, rising 95 percent.
Earnings have been mostly strong this season. According to FactSet, 73 percent of S&P 500 companies that have reported have surpassed earnings expectations.
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Optics. Nothing to worry about until next year when the training wheels come off with war in MENA. This is just to keep everybody on their toes so the market does not look as rigged as it already is. Artificial.
Rising rates also going to skullfuck markets.
The war will be a perfect cover for the arsonists at the FED to burn the market down by “elevating” int rates. All wars are bankers’ wars.