Market meltdown
Too much crash on the sidelines
Good morning, intrepid traders. This is your Stock Market Rundown for Tuesday, August 6th. Thanks for joining me. Let’s dig in:
TODAY’S TOP STORY: MARKETS IN TURMOIL
Global traders are more jittery than a chihuahua jacked up on espressos, after major stock indexes tumbled on Monday due to recession fears. Big tech took the worst hit, with names like Meta and Microsoft losing billions in market cap.
The S&P 500 was down as much as 7% intraday, and the tech-heavy Nasdaq index as much as 10%. Both clawed some of it back before the close, but the dramatic moves still had the talking heads on CNBC crying for an emergency rate cut from the Federal Reserve
This round of pessimism was triggered by lousy US jobs data last week, then got kicked up a notch when Japan’s benchmark Nikkei index suffered its worst correction since 1987.
Also not helping: tech behemoths like Microsoft and Nvidia have become “over owned”. Translation: their valuations are looking more stretched than my hamstrings after hot yoga.
There was such a flurry of volatility that Schwab and Fidelity crashed—customers couldn’t even log in to see how much money they’d lost. Apparently, the major brokerage firm platforms are held together with chewing gum and twine.
If those retail investors were planning on panic-smashing the sell button, hopefully the login delay helped them relax, unclench, and remember that the S&P 500 historically averages three pullbacks a year of 5% or more. Personally, I’m not breaking out the machine guns and canned food just yet.
SO WHAT ELSE IS GOING ON?
When did Google’s slogan change from “Don’t be evil” to “Don’t get caught”? The search giant’s luck ran out this week when it was nailed by a US court for violating antitrust law.
Oil majors are gushing profits: Shell’s quarterly earnings were up 25% year-over-year, and BP just raised its dividend 10%. That’s partly thanks to refining margins so wide, you could drive a truck through them.
Despite reboots of Jurassic Park, Spider-Man, and Indiana Jones, movie exhibitor AMC’s quarterly profits missed expectations. The real dinosaurs are the executives greenlighting all these rehashes of tired franchises.
Elon Musk is suing OpenAI, accusing the company and its controversial chief, Sam Altman, of putting profits ahead of the public. Maybe instead of pouring $100 million into OpenAI, Elon should’ve developed a Tesla with door handles I can actually get open on the first try.
That’s it for today, my dear friends. Think positive thoughts, and let’s circle back later in the week. Yours in capitalism, The Axe
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