Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

S&P 500 renews slide, hits near two-year low

Economic Indicators Sep 27, 2022 08:07PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 27, 2022. REUTERS/Brendan McDermid
 
US500
+0.16%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DJI
+0.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

NEW YORK (Reuters) - The S&P 500 fell to its lowest level in almost two years on Tuesday on worries about super aggressive Federal Reserve policy tightening, trading under its old 2022 low from June and leaving investors appraising how much further stocks would have to fall before stabilizing.

After the benchmark index fell more than 20% from its early January high to a low on June 16, which confirmed that the retreat was indeed a bear market, the S&P then rallied into mid-August before running out of gas.

That bear-market rally is now over.

[.N]

MARKET REACTION: STOCKS: The S&P 500 lost 10.94 points, or 0.30%, to stand at 3,644.1, just above the old low at 3,636.87. The Dow Jones Industrial Average fell 138.43 points, or 0.47%, to 29,122.38

COMMENTS:

CHRISTIAN LEDOUX, DIRECTOR OF INVESTMENTS, CAPTRUST, TEXAS

"Investors are stuck in a period of uncertainty where we won’t be hearing from the Fed again until November and Fed policy is the primary weight on the stock market. Even if the inflation data gets better with the next report in mid-October, we won’t know how the Fed will react to it. The recent comments from the Fed has been unilateral in its commitment to stay the course, investors may doubt that even a meaningful improvement in inflation would result in the Fed pausing its tightening cycle.

"Many strategists we follow believe a recession would bring S&P earnings per share to $190-$200 (from the current run rate of about $225). Back-of-the-napkin math with a 10-year treasury yield of around 3.5% (potentially dropping below 3% in a recessionary environment) should translate to around 17-20x P/E multiple for the index. That would equate to about $3300 on the index level or about 10% more downside to this hypothetical downside scenario.

"Inflation is the top data point to watch, as that will ultimately drive Fed policy."

CAROL SCHLEIF, DEPUTY CHIEF INVESTMENT OFFICER, BMO FAMILY OFFICE, MINNEAPOLIS, MINNESOTA

“In my 40 years in the business, I’ve never seen coincident bear market in both bonds and stocks so investors are unsettled with nowhere to hide”

“No one quite knows how to parse the global data, geopolitics or policy moves – both super stimulative and restrictive, so markets are unsure which to hinge to”

“Sentiment has become very bearish (which is a long term positive for potential market rebound) – but it can stay bearish for a bit.  Also, no overt catalysts to propel breakout to the upside”

“Markets had “fought the Fed” all year, hoping for more dovish tilt soon.  Fed’s message last week was unequivocal, so even though some of the data is supportive of peaked inflation, investor sentiment is approaching wash out level.”

MICHAEL PURVES, CHIEF EXECUTIVE, TALLBACKEN CAPITAL ADVISORS, NEW YORK

    "I am a little bit less concerned about a new closing low. I think that is an interesting data point but it doesn't really mean we can't get a very substantial relief rally, nor does it mean we can't go further down too."

    "What equity volatility really needs is Treasury volatility to come in here and they are not ... we are just seeing yields sky-rocketing."

    "The bond market is king here, you got to respect that."   

    "I think there is a good scenario where once we get through the bond market violence we get to a more tradable bottom. There is a good case for that to happen if we get some inflation data that is a lot less scary than the last report."

ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, IN FAIRFIELD, CONNECTICUT    "It's disappointing, but it's not a surprise. We've been heading that way."    "People are concerned about the Federal Reserve, the direction of interest rates, the health of the economy, and also the next couple of weeks with earnings season coming up and companies reporting lower-than-expected earnings."  (The support level for the S&P is) "a stretch at 3400, maybe 3200 and the worst case is probably 3000."

    TIM GHRISKEY, SENIOR PORTFOLIO STRATEGIST, INGALLS & SNYDER, NEW YORK

    "It's all about the Fed, and as long as the Fed continues to raise rates, and investors don't anticipate an end of the rate hikes, I think this market is going to continue to be weak. Having said that, we've seen a number of bear market rallies, year to date. So, would I be surprised to see the market bounce up again? No, I wouldn't. Traders are looking for opportunities like that. But in terms of a sustained rally, I think it really takes anticipating the end of Fed rate hikes."  

(Story corrects job title of Christian Ledoux, first commentator, to director of investments, not chief investment officer)

(Americas Economics and Markets Desk; +1-646 223-6300)

S&P 500 renews slide, hits near two-year low
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (5)
Joe Rizzuto
Joe Rizzuto Sep 28, 2022 8:20AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
from ledoux p/e estimate range... low end: $190x17 then spx at 3230, 10% down from here. fair enough. BUT high end, $200x20 then spx at 4000, 12% higher. so it could go lower or it could go higher, brilliant!
John Berry
John Berry Sep 28, 2022 4:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Market is a scam
Tom Michaels
Tom Michaels Sep 27, 2022 10:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
total rigging
lakes Tenn
lakes Tenn Sep 27, 2022 4:31PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
so it looks like everything is negative with Biden policies
SIMRANJEET KAUR
SIMRANJEET KAUR Sep 27, 2022 1:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
will DJI market will high tomorrow
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email