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S&P Stutters as Global Growth Concerns Dent Recent Optimism

Stock Markets Aug 01, 2022 02:25PM ET
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© Reuters

By Yasin Ebrahim

Investing.com -- The S&P 500 struggled for direction Monday, as fresh worries about global growth overshadowed the recent bout of better-than-expected quarterly results that propelled stocks to deliver their best monthly gain since 2020 last month.  

The S&P 500 fell 0.4%, the Dow Jones Industrial Average slipped 0.26%, or 84 points, and the Nasdaq was down 0.2% 

Energy fell more than 3% to lead the broader market lower, pressured by a 5% slump in oil prices after the latest data pointing to weakness in the Chinese housing market and factory activity stoked fresh recession concerns.

“Increased recession fears since the release of our Mid-year outlook have prompted substantial revisions to global growth,” Morgan Stanley said, highlighting the “lack of a bounce-back in China” as one of the key drivers.

The bank now sees global growth at 2.4%Y, 50 basis points lower than its forecast in May.

Coterra Energy Inc (NYSE:CTRA), APA Corporation (NASDAQ:APA), and Halliburton Company (NYSE:HAL) were among the worst performers in the energy sector, falling more than 4% each.

Treasury yields, meanwhile, appeared to be pricing in the increasing prospect of a recession as a key part of the yield curve – the 2-year treasury yield over 10-year Treasury yield - further inverted, a harbinger for a recession.

Against the backdrop of an ongoing inversion in the yield curve, banking stocks struggled pushing the broader financials sector more than 1% lower.

Tech, which was at the forefront of the broader market bounce-back since mid-June following quarterly results that weren’t as bad as feared struggled to turn positive.

Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) were in the red, with the latter reportedly set to kick off a four-part bond sale to strengthen its balance sheet that will support buybacks and dividends, Bloomberg reported.

Twitter (NYSE:TWTR) fell 2% despite Greenlight Capital announcing a new stake in the social media giant betting that the latter will emerge victorious in its court battle with Elon Musk to force the billionaire to follow through on his $44 billion deal to take over the company.

Semiconductor stocks gave back some of their earlier-day gains as weakness in Taiwan Semiconductor Manufacturing (NYSE:TSM) and ON Semiconductor Corporation (NASDAQ:ON) offset strength in NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) ahead of an important week for chipmakers.

Advanced Micro Devices (NASDAQ:AMD) is set to report quarterly results on Tuesday.

In other news, Boeing (NYSE:BA) jumped 7% on reports that the Federal Aviation Administration had approved the jet maker to restart deliveries of its 787 Dreamliner.

S&P Stutters as Global Growth Concerns Dent Recent Optimism
 

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Comments (6)
First Last
First Last Aug 01, 2022 4:19PM ET
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"since 2020" is not too long ago
Dave Jones
Dave Jones Aug 01, 2022 3:56PM ET
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The stutters were the reason for the optimism. Optimism about cheap dough being returned to the spigot.
Matt Kay
Matt Kay Aug 01, 2022 3:55PM ET
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ridiculous... stonks went up 7% last week alone....
Kerry Ditto
Kerry Ditto Aug 01, 2022 3:31PM ET
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Maybe stock market ballooning is the major culprit of inflation.
First Last
First Last Aug 01, 2022 3:31PM ET
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Why shouldn't inflation increase the price of a company like it increases the prices of everything else?
Dave Jones
Dave Jones Aug 01, 2022 3:31PM ET
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Good point. But not multiples of inflation.
First Last
First Last Aug 01, 2022 3:31PM ET
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Dave Jones   From late 2021 to now, the stock market has been down while prices of other goods/services have been up.
First Last
First Last Aug 01, 2022 3:31PM ET
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A possible bullish divergence signal that's been in play since mid-June.
Kerry Ditto
Kerry Ditto Aug 01, 2022 3:24PM ET
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Recession is nothing to balloon out.
G D
G D Aug 01, 2022 3:23PM ET
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Imagine if you could get paid 300k - 1 million for being completely incompetent at what you do, only in Wall Street
Kris Jay
Kris Jay Aug 01, 2022 3:23PM ET
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and the whitehouse
First Last
First Last Aug 01, 2022 3:23PM ET
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And in Trump's family
First Last
First Last Aug 01, 2022 3:23PM ET
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And Trump's political allies.  He pardons Bannon for stealing $ donated to the "We Build the Wall" org.  Bannon must be incompetent because he got caught.
 
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