Linea Mercati Interview 7/18/24
July 22, 2024Linea Mercati Interview 7/19/22
July 22, 2024The New York Stock Exchange closed sharply lower on Thursday, with investors fleeing mega-caps for the second session in a row as uncertainties in American politics begin to weigh.
The Dow Jones index led the losses, dropping 1.29% to 40,665.02 points, the technology-dominated Nasdaq lost 0.70% to 17,871.22 points and the S&P 500 fell 0.78%. at 5,544.59 points.
Unlike the day before when the Nasdaq had experienced its worst session in almost two years, on Thursday it was the Dow Jones which slipped the fastest, in particular because of the fall of heavyweights in the index such as the JPMorgan bank (- 3.18%) but also Goldman Sachs (also -3.18%).
“The market has been overbought for a while,” diagnosed Peter Cardillo of Spartan Capital, “but there is also a new political twist with a possible abandonment of Joe Biden’s candidacy at the end of the weekend.”
“This may create some short-term anxiety related to the presidential election,” Mr. Cardillo added.
The 81-year-old Democratic president, who put his campaign on pause because of a mild case of Covid, is gambling on his political survival as the tumult becomes more and more audible among Democrats for him to make way for a other candidate for election.
Even former President Barack Obama, to whom Biden was second, reportedly told people close to him that Joe Biden should reconsider running for president in November.
“If Joe Biden throws in the towel, it opens up new perspectives. Right now, Donald Trump is judged to be the winner, but if Joe Biden were to be replaced by a younger candidate, that could change the prospect of a Trump victory,” continued the Spartan Capital analyst.
The movement of portfolio rotation also continued, with investors diversifying their investments after having mainly focused on tech.
Amazon dropped 2.22%, AMD semiconductors lost 2.30%, Alphabet -1.86% and Apple -2.03%.
For Art Hogan of B. Riley Wealth Management, “the market is so overbought (…) that it doesn’t take much for investors to take their profits after having had such a good run.”
The Russell 2000 index, which brings together small and mid-caps and which benefited from the recent rotation, also lost 1.85%.
After the close, Netflix dropped 1.56% in electronic trading after announcing results that were better than expected.
The streaming pioneer exceeded Wall Street expectations with $9.56 billion in revenue, of which it posted $2.15 billion in net profit.
Netflix gained more than eight million new subscribers in the second quarter, a much better result than the approximately five million expected by the market, after already two quarters of sustained growth.
In a completely different sector, Eli Lilly laboratories, whose shares have soared by 50% since the start of the year with the craving for its anti-obesity injection treatment, collapsed by 6.25%. at $848.90. The stock began to fall on Wednesday when its Swiss competitor Roche announced a promising first trial of an oral pill against excess weight.
Bond rates remained in the green at 4.20% compared to 4.15%.
