Merely a rotation – or something more?
The tech-heavy NASDAQ slipped in its biggest single-day drop in more than three months on Wednesday (Nov. 29), as investors made the leap into banks (and other names), with an eye on firms and their attendant equities, which could see upside in an economy that is gaining traction.
Certain names also gained positive sentiment, Reuters reported, sparked by lower taxes and relatively higher interest rates that could be in the offing from the Fed by the end of this year.
The NASDAQ was off 1.3 percent on the day to 6,824.34 points. One bellwether, Amazon, slipped 2.7 percent on the day. Yet other holiday shopping-related names were up on the session – Target, for example, gained nearly 9 percent for Wednesday’s action, while Macy’s grabbed more than 8 percent.
Other names that got a boost on Wall Street included financials, which as a group were up almost 2 percent on the day as measured by a group index, showing in banks like JPMorgan and Wells Fargo, each up about 2 percent.
The newswire stated that investors are eyeing the progression of the tax reform bill that is coming through Congress – and, of course, lower taxes for corporates, if they materialize, could goose margins and stock prices.
In broader economic news, the U.S. economy, in its second estimation, grew at a pace that outpaced expectations, as measured for the third quarter. Growth was raised to 3.3 percent from the previous estimate of 3 percent, exceeding October expectations of 2.5 percent. Quickening economic growth usually translates into higher interest rates, which in turn means that profits at financial firms gather momentum.