Dow Falls More Than 900 Points, Nasdaq Down 4%
Amazon recorded its worst day since 2006, Apple worried about supply chain
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The Dow Jones Industrial Average plummeted 939.18 points on Friday and the tech-heavy Nasdaq Composite fell 4.2% to 12,334.64, finishing up its worst month since 2008.
The DJIA is down 4.9 percent in April. The S&P 500 fell about 3.6 percent on Friday. The core personal consumption expenditures, the price index that the Fed eyes, rose 5.2 percent compared to 2021. The New York Times reported that the dramatic rise was due to “a pop in energy prices early in Russia’s invasion of Ukraine, along with a rise in food prices.”
Aashish Vyas, investment director at Resonanz Capital, told The Wall Street Journal that stocks seem to be entering “a higher volatility regime, when fundamentals matter again.”
There are supply chain concerns, worries about inflation, and looming central bank rate hikes.
“It does seem like we are at a systemic shift,” she said.
KEY DRIVER: The Fed’s interest-rate-setting committee will meet next week and economists expect it will announce a 0.5 percentage point interest rate hike. Reuters pointed out that overall inflation in March rose to a 40-year high of 6.6 percent due to soaring food and gas prices.
Earlier this month, Jerome Powell, the Fed head, said the high inflation could linger and said the Fed hopes to see “actual progress on inflation.”
“It may be that the actual peak was in March but we don't know that and so we're not going to count on it,” he said.
In February, The Trends Journal diagnosed Jay Powell with “Central Bankster Syndrome.” Its symptoms include the compulsion to see soaring prices as “temporary” or “transitory” until long after inflation has rampaged through the economy unchecked.
While Powell was waiting for inflation to give up and go away, we documented its relentless rise in “Inflation Tsunami Approaching” (4 May 2021), “Inflation Soon to Get Much Worse” (18 May 2021), “Fed Officials Send Mixed Signals on Policy Shift” (29 Jun 2021), “When Will Fed End Cheap Money Policy?” (27 Jul 2021) and in many of our “Market Overview” sections.
Amazon was one of the market’s laggards after shares sank 14 percent on the Seattle-based company’s worst day since 2006. CNBC, citing Refinitiv, reported that Amazon had projected revenue between $116 billion to $121 billion in the second quarter. Analysts estimated $125.5 billion. Apple also saw its stock fall about 4 percent after the company warned about supply chain issues.
Keith Buchanan, senior portfolio manager at Globalt Investments in Atlanta, told Reuters that market participants were “nervous to begin with, so there is a quick trigger when it comes to these names when there’s any uncertainty.”
“When assumptions about these companies’ growth fail to materialize, then there’s definitely a ‘shoot first and ask questions later’ mentality,” he added.
Watch: Gregory Mannarino spoke with Gerald Celente earlier this month and gave his insights of what to expect next in this New World Order of what he called “Crisis Economics.”
TREND FORECAST: It is a simple equation. The higher inflation rises, the higher safe-haven assets gold and silver rise. And, when the Banksters raise interest rates, it will bring down Wall Street and Main Street very hard... and the harder they fall, the higher precious metal prices will rise. We maintain our forecast, that on the downside, should gold prices fall below $1,850 per ounce, prices can sink down to the low $1,710 per ounce level. For gold to maintain strength prices must stay in the high $1,900 per ounce range and when they solidify above $2,200 per ounce, gold will spike to new highs.
PUBLISHER’S NOTE: At his December 2020 press conference, Fed-Head Powell pointed to “disinflationary pressures around the globe” and said “it’s not going to be easy to have inflation move up.”
A month later, with inflation on the move well above the Fed’s 2-percent target rate, Powell said it was only “temporary.”
In July, with inflation running at 5 percent, Powell told a Congressional committee that “we really do believe that these things will come down of their own accord as the economy reopens,” he noted. Wrong, wrong, and wrong. Here’s why (Click here for our premium content)