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- 📈 3 Thoughts about the market
Good morning & happy Friday.
After Monday’s flash crash, the markets have bounced considerably, with the S&P marking its best day since 2022. There’s a great blog post towards the end of today’s edition with some afterthoughts.
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Markets
Wall Street rallies to its best day since 2022 (3 minute read)
Wall Street bounced back Thursday with a sharp rally, sparked by an encouraging unemployment report that eased concerns about the economy's slowdown. The S&P 500 surged 2.3%, marking its best day since 2022, while the Dow Jones jumped 683 points, or 1.8%. Tech giants like Nvidia powered the Nasdaq up by 2.9%. Treasury yields also climbed, reflecting a boost in investor confidence after fewer workers filed for unemployment benefits than anticipated.
A comprehensive list of 2024 tech layoffs (4+ minute read)
The tech layoff wave continues in 2024, with 60,000 jobs already cut across 254 companies. Major players like Tesla, Amazon, and Microsoft are leading the charge, here’s a comprehensive list so far.
Oil set for 3% weekly gain on easing recession concerns, rising Mideast tension (2 minute read)
Oil prices held steady on Friday, set to close the week with a gain of over 3%. U.S. jobs data eased worries about demand, while ongoing fears of escalating conflict in the Middle East kept prices buoyant. The market remains cautious but optimistic.
Solana Hits All-Time High Against Ether, Outperforms Bitcoin in Crypto Rebound (3 minute read)
Cryptocurrencies extended their recovery from Monday's lows, with Solana leading the charge. SOL surged to an all-time high against ETH, reaching 0.062, up 7.5% in 24 hours and 13.6% for the week.
Top Stories
ENTERTAINMENT
Parks Pressure Disney
Disney’s stock took a hit Wednesday, dropping nearly 4% to a 2024 low, following warnings about weaker demand in its crucial parks division.
Despite beating analyst expectations on profits and revenue, Disney’s shares fell to just above $86, their lowest level since November 2023. CEO Bob Iger highlighted a "demand moderation" in U.S. theme parks, a key profit driver, as lower-income consumers tighten their belts amid economic uncertainty.
The broader travel sector is also feeling the pinch, with Bank of America noting a dip in credit card transactions for travel in June, though overall demand remains strong.
On a positive note, Disney’s streaming services turned a profit for the first time, leading to across-the-board price hikes for Disney+, Hulu, and ESPN+. Despite these challenges, Disney is planning to invest $5 billion in Europe over the next five years to produce blockbuster films and shows.
ECONOMY
3 Thoughts About the Market Correction
Global markets took a nosedive on Monday, with volatility spiking to its third-highest level ever. This sudden drop has many investors on edge, fearing a looming recession or something even worse.
Ben Carlson, from A Wealth of Common Sense, offered his insights on the situation. He noted that, despite the panic, the S&P 500 is still only 7-8% off its all-time highs. We’re not even technically in correction territory, yet the market's reaction on Monday was one of pure fear.
The VIX, often referred to as the "fear gauge," surged out of nowhere. This kind of move suggests that investors were caught off guard.
Japan’s Nikkei experienced its worst day since the 1987 Black Monday crash. The drop was even more severe than during the financial crises of 2008 and 2020.
Carlson pointed out that the stock market doesn’t always mirror the economy. Sometimes, it predicts recessions that never happen. The 2022 bear market is a prime example, where the stock market "predicted" more recessions than actually occurred.
The recent chaos might be signaling deeper economic trouble, or it could simply be a flash crash driven by overleveraged trades. Many traders, particularly those involved in the Yen carry trade, may have been forced to liquidate their positions, causing a cascade of selling pressure.
Whether this is just a temporary blip or the start of something more serious remains to be seen. Check out the full blog post for more thoughts.
Your thoughts
Was Monday a flash crash or start of a recession? |
Thanks for reading, see you on Monday. 👀