What you need to know…
The S&P 500 Index ($SPX) (SPY) this morning is down -2.31%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -1.89%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -2.29%.
U.S. stock indexes this morning are falling sharply, with the S&P 500 posting a 3-1/2 month low, the Dow Jones Industrials posting a 4-month low, and the Nasdaq 100 posting a 7-month low. A sell-off in technology stocks today is leading the overall market lower on concern the Fed will announce after the Tue/Wed FOMC meeting that it will start raising interest rates as soon as March. Additionally, stock indexes extended their losses after this morning’s weaker-than-expected U.S. economic data showed the U.S. Jan Markit manufacturing activity expanded at the slowest pace in 15 months, and the Dec Chicago Fed national activity index fell to its weakest level in 10 months.
Today’s U.S. economic data was bearish for stocks. The U.S. Jan Markit manufacturing PMI fell -2.7 to 55.0, weaker than expectations of 56.7 and the slowest pace of expansion in 15 months. Also, the Dec Chicago Fed national activity index fell -0.59 to -0.15, the steepest pace of contraction in 10 months.
Today’s stock movers…
Large U.S. technology companies are falling today on Fed rate-hike concerns. Tesla (TSLA) is down more than -7% to lead losers in the S&P 500 and Nasdaq 100. Also, Netflix (NFLX) and Xilinx (XLNX) are down more than -7%, Nvidia (NVDA) is down more than -5%, and Apple (AAPL) and Amazon.com (AMZN) are down more than -1%.
Bank stocks are weaker today and are weighing on the overall market. Goldman Sachs (GS) is down more than -4% to lead losers in the Dow Jones Industrials. Citigroup (C) is down more than -3%, and Bank of America (BAC), Wells Fargo (WFC), Morgan Stanley (MS), and JPMorgan Chase (JPM) are down more than -2%.
SolarEdge Technologies (SEDG) tumbled -7% today after Truist Securities cut its price target on the stock to $340 from $395.
T-Mobile (TMUS) is up more than +2% today to lead gainers in the Nasdaq 100 after the Russell U.S Strategic Equity Fund announced that it boosted its holdings in T-Mobile by +25% in December.
Fox Corp. (FOXA) is up more than +3% today to lead gainers in the S&P 500 after UBS raised its recommendation on the stock to buy from neutral.
Across the markets…
March 10-year T-notes (ZNH22) this morning are up +9 ticks, and the 10-year T-note yield is down -3.7 bp at 1.721%. Mar T-notes climbed to a 1-week high today, and the 10-year T-note yield fell to a 1-week low of 1.712%. A slump in the S&P 500 to a 3-1/2 month low today is boosting the safe-haven demand for T-notes. Also, ramped-up geopolitical risks in eastern Europe are increasing safe-haven demand for T-notes after the U.S. ordered family members of diplomats to leave Ukraine amid concern Russia could invade the country at any time. Supply pressures may limit the upside in T-note prices as the Treasury will auction $54 billion of 2-year T-notes later today as part of this week’s $188 auction package of T-notes and floating-rate notes.
The dollar index (DXY00) this morning is up +0.42%. The dollar index this morning rallied to a 1-1/2 week high. A slump in stocks today has increased liquidity demand for the dollar, while ramped up geopolitical risks in Ukraine have boosted safe-haven demand for the dollar.
EUR/USD (^EURUSD) this morning is down -0.41%. EUR/USD slid to a 2-week low this morning on rising geopolitical tensions in Ukraine and today’s weaker-than-expected economic data that showed the Eurozone Jan Markit composite PMI fell -0.9 to 52.5, weaker than expectations of 52.6 and the slowest pace of expansion in 11 months. Dovish ECB comment also weighed on EUR/USD after ECB Governing Council member Villeroy de Galhau said, "monetary policy needs to be normalized gradually, but it needs to be done at the right speed of reality and mustn't be done in too tight a way."
USD/JPY (^USDJPY) this morning is up +0.11%. USD/JPY higher recovered from a 1-month low today on reduced safe-haven demand for the yen after the Nikkei Stock Index shook off early losses and closed up +0.34%. USD/JPY initially fell to a 1-month low as the yen strengthened on strong Japanese economic data after the Japan Jan Jibun Bank manufacturing PMI rose +0.3 o 54.6, the fastest pace of expansion in 4 years. A decline in the 10-year T-note yield today to a 1-week low is also supportive for the yen.
February gold (GCG22) this morning is up +6.1 (+0.33%), and March silver (SIH22) is down -0.520 (-2.14%). Precious metals prices this morning are mixed. A rally in the dollar index to a 1-1/2 week high today is weighing on metals prices. However, gold prices erased early losses and moved higher on increased safe-haven demand for gold from heightened tensions in Ukraine. Also, a decline in global bond yields today is bullish for gold.
https://www.barchart.com/story/news/7045195/stocks-plunge-on-the-outlook-for-a-hawkish-fed
