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Stock Market Today: Dow in Worst Quarterly Streak Since 2015 as Bears in Control

Stock Markets Sep 30, 2022 04:10PM ET
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By Yasin Ebrahim                               

Investing.com -- The Dow fell Friday, rounding off its worst quarterly losing streak since 2015 that has pushed stocks into bear-market territory as investors prepared for further Federal Reserve rate hikes to cool inflation that continues to run hot.

The Dow Jones Industrial Average fell 1.7%, or 490 points, the Nasdaq was down 1.5%, and the S&P 500 fell 1.4%. All three major averages fell for the third straight quarter. 

The personal consumption expenditure price index, the fed’s preferred inflation measure, showed that inflation rose more than expected in August. This “compounds the pressure for the [Fed] to stay on course in its fight against inflation,” Stifel said in a note.

Fed vice chair Lael Brainard on Friday cautioned against the central bank reversing course on monetary policy too early, saying monetary policy would need to be “restrictive for some time to have confidence that inflation is moving back to target”

After hiking rates by 3% in just six months, the fed continues to echo the need for further hikes, stoking worries among investors that the central bank could overshoot on tightening and push the economy into a deep recession.

The push higher in inflation, however, hasn’t yet had a material impact on the consumer, according to personal spending data Friday, to force a material change in consumer spending, suggesting a deep recession isn't on the horizon.

“We haven't seen that change [in consumer spending habits],” Brian Mulberry, client portfolio manager at Zacks Investment Management told Investing.com in an interview on Friday. “Our forward-looking earnings model shows that companies are forecasting strong sales estimates.”

Growth sectors like consumer discretionary and tech have been in the crosshairs, with the latter down 31% this year, as a rising rate environment has soured investor sentiment on stocks with higher valuations.

Despite the brutal quarter for growth stocks, Mulberry says, it’s “too early” to rotate back into growth from value stocks because “rates aren't done going up.”

The earnings front, meanwhile, did little to turn the tide of negative sentiment as Nike (NYSE:NKE) stumbled nearly 13% following quarterly results that beat Wall Street expectations, but the sportswear giant cut its outlook on gross margin as price cuts will be needed to clear inventory levels.

Nike “lowered its gross margin forecast by 200 bps … due to the need to aggressively discount mis-timed inventory as a result of supply chain challenges,” Goldman Sachs said after cutting its price target on the company to $98 from $120 prior.

Micron Technology (NASDAQ:MU), meanwhile, was flat as investors weighed the chipmaker’s softer guidance delivery after better-than-expected results.

Rent-A-Center (NASDAQ:RCII) slumped 21% after cutting third-quarter guidance as consumer demand came under pressure from weakening economic growth.

Stock Market Today: Dow in Worst Quarterly Streak Since 2015 as Bears in Control
 

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Comments (20)
Dave Jones
Dave Jones Oct 01, 2022 3:56PM ET
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face hider!
Kerry Ditto
Kerry Ditto Oct 01, 2022 12:24PM ET
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without recent fed rate hikes, inflation might have been lowering. anyway, congress should enact if core cpi runs above 5%, entire fed members are to be automatically replaced with non-lawyer qualifiers.
Kerry Ditto
Kerry Ditto Oct 01, 2022 10:11AM ET
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October is time for bears to run for the hill. quicker, better.
Dave Jones
Dave Jones Oct 01, 2022 10:11AM ET
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Based on it being October?
Robert Cox
Robert Cox Oct 01, 2022 10:11AM ET
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Those who forget the past...
Kerry Ditto
Kerry Ditto Oct 01, 2022 8:36AM ET
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bear-destroying october
Kerry Ditto
Kerry Ditto Oct 01, 2022 8:35AM ET
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bear ****october
Kerry Ditto
Kerry Ditto Oct 01, 2022 8:33AM ET
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bear *******October is here.
TALLURI ANJANEYULU
TALLURI ANJANEYULU Sep 30, 2022 11:41PM ET
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BREAKOUT BELOW 3636.00FOR S&P 500IS HIGHLY BEARISH
Ashraf Ashraf
Ashraf Ashraf Sep 30, 2022 10:03PM ET
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Peewee Dahmer
Peewee Dahmer Sep 30, 2022 9:07PM ET
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so guidance cuts coming. got it
Kris Jay
Kris Jay Sep 30, 2022 8:59PM ET
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Obama Stock Market 2.0
Brad Albright
Brad Albright Sep 30, 2022 8:59PM ET
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The market that rose from S&P 750 when Obama took office to 2700 when he left? A smart trader like you surely new of that 250% gain, so why are you pretending to be a know-nothing moran?
ottin nerner
ottin nerner Sep 30, 2022 8:59PM ET
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of course, the money printing starts in his administration.... when they stop QE4 during 2012, the market dives.... look what happened they stop printing money currently the market dives....
Hans Miller
Hans Miller Sep 30, 2022 8:59PM ET
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I am quite sure expansionist monetary policy has been going on in the Fed since ww1. now as for carrying and growing a balance sheet to the tune of 9T, that did start with Bernake.
 
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