At this writing at least, it ain’t over yet – the selling, that is.
Though stocks pared their losses intraday in selling that continues on Wall Street on Thursday (Oct. 11), tech stocks continued to fall.
The Dow was down more than 300 points, coming off an 832-point drop on Wednesday. The overall concern, as noted The Wall Street Journal, is whether the bull market still has legs after nine years.
But drilling down a bit, one subsector getting hit, too, is the tech sector. Names such as Netflix and Amazon and Apple have helped fuel a rally into 2018, and might they break it, too? The Journal noted that those three names gave up more than a billion dollars in a now-vanished market cap on Thursday, and the slide continued. There might be a rotation underway to, say, dividend paying utilities.
Amid a broader canvas, the Fed has boosted rates, and rates are on everyone’s collective investing mind, it seems. In addition, you might know that there is a trade war afoot between China and the U.S., which has hit global growth projections per the IMF. All of this could eat into earnings growth, a dampening that will likely not be sector-specific.
Beyond all that, President Trump, say headlines this morning, has said the Federal Reserve has caused the ongoing correction, but that he will not fire Chairman Jay Powell over monetary policy.
The market, to state the obvious, does not like uncertainty. At least for stocks and into the recent rout, noted The Journal, stock buybacks that had once helped put a foundation under prices have been missing from the equation, because we are about to come into earnings season.
On Thursday, market observers got a hint that the selling may not be over. Gene Munster, who founded venture capital firm Loup Ventures, sees another 5 percent downside for names such as Facebook and Amazon, as CNBC reported. He did say that Apple may buck the trend, as the selling prices tied to hardware such as iPhones continue to climb.