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Dow sheds more than 400 points as strong data adds to concern Fed will need to be more aggressive

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US stocks fell on Monday after a higher-than-expected reading of the US services sector added to concerns that the Federal Reserve may need to get more aggressive in its battle against inflation, despite fears of a looming recession.

How are stocks traded?
  • Dow Jones Industrial Average DJIA It fell 433 points, or 1.3%, to 33,996 points.

  • S&P 500 index
    SPX,
    -1.96%

    It fell 66 points, or 1.6%, to 4,006 points.

  • NASDAQ Composite
    COMP,
    -8.56%

    It fell 196 points, or 1.7%, to 11,266 points.

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Stocks closed mixed on Friday, although they erased last week’s gains, after the strong November jobs report, which The smartest fears that inflation may not be so easy.

What drives the markets

Strong wage growth numbers Released on Friday It was followed by a strong reading in the US services sector on Monday – both of which helped fuel concerns that the Fed’s interest rate hikes, coupled with the liquidation of its modest balance sheet, had little effect on a tight US labor market.

An ISM measure of US business conditions in the services sector came in stronger than expected, It rose to 56.5% in November, a strong showing that the US economy is still expanding at a steady pace.

The ISM services number “surprised the upside, suggesting that the economy remains well above its sustainable long-term path and that the Fed will have to slow the economy more than expected in 2023,” Bill Adams, Dallas-based chief economist for Comerica Inc.
CMA,
-6.27%
And the
he said over the phone.

In other economic data, S&P’s latest global services PMI for the US for November rose to 46.2 from 46.1, but remained in contraction territory.

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November jobs data released Friday showed average hourly wages grew over the past year by more than 5% as of November, outpacing economists’ expectations and stoking fears that strong wage growth will continue to fuel inflation, according to market strategists.

Concerns about a more aggressive Fed also helped push Treasury returns are higherWhich puts more pressure on stocks. The yield on the 10-year note rose 8 basis points to 3.59% on Monday. Treasury yields move inversely to prices, and yields have fallen sharply over the past month, driven by shifting expectations about the pace of the Fed’s rate hikes.

In other market news, it indicates that the government of China Relaxes COVID restrictions Helped the Hang Seng Index in Hong Kong
HSI,
+4.51%

He finished with 4.5% advance.

See also: ADRs and Chinese casino operators are rallying on signs of COVID easing

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while, Crude oil prices It fell on Monday, a day after OPEC and its allies decided on Sunday to keep production quotas unchanged.

Lower share prices helped drive the CBOE Volatility Index
VIX,
+10.76%
And the
Also known as the VIX, it is again above 20 on Monday. A measure of volatility has fallen sharply in recent weeks as stocks have climbed, which could indicate complacency that could eventually hurt stocks, Jonathan Krinsky, chief market technologist at BTIG, said in a note to clients.

The SPX finds itself again at downtrend resistance around 4100 with the VIX below 20. The 10-year yield is back at key support at 3.50%. We expect both of those levels to hold, but wonder if yields fall below 3.50% if they are going to be considered equity-friendly as the move from 4.25% to 3.50% was? Kerensky said.

Companies in focus
  • Tesla Inc
    Tesla,
    -6.57%

    Shares fell 5.9% after reports of an imminent production cut at its Shanghai plant, Although the electric vehicle manufacturer denied these reports.

  • GameStop Corp. Class A shares
    GME,
    -7.23%

    Decreased 7.1% ahead of the company Third quarter results, which is due to be offered after the market closes on Wednesday. Analysts are looking for a narrowing loss from the video game retailer.

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  • Shares of US airlines and planemakers traded higher on Monday, bucking the broader trend in stocks. Boeing
    BA ,
    +1.66%

    And the United Airlines Holding Company
    UAL,
    +1.55%

    It was among the best performers in the S&P 500, rising 1.6% and 1.1%, respectively.

Jimmy Chisholm contributed to this article.

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MicroStrategy is at its lowest level since 2020 after the sales were revealed

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(Bloomberg) — Shares of MicroStrategy touched their lowest level since August 2020 after the enterprise software company, which in recent years has been known as the largest buyer of bitcoin, revealed its first sale of the token.

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The stock fell 1.1 percent to $136.63 on Thursday, down 75 percent this year. Bitcoin rose less than 1% to around $16,590 and is believed to have fallen 64% since the start of the year.

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In a filing on Wednesday, MicroStrategy said it acquired approximately 2,395 Bitcoin between the beginning of November and December 21 through its subsidiary MacroStrategy, and paid out approximately $42.8 million in cash. It then sold 704 of the tokens on Dec. 22 for a total of about $11.8 million, citing tax purposes, before buying another 810 of them two days later.

Matt Malley, chief market strategist for Miller Tabak + Co. Step down as CEO. This news means they don’t seem to want to do that anytime soon.”

Overall, MicroStrategy held about 132,500 bitcoins worth over $4 billion USD as of December 27th. The company paid an average purchase price of $30,397 per bitcoin.

“Given MicroStrategy’s $2.4 billion in leverage, we believe the company may have a lot of leverage over Bitcoin, and may face some liquidity risk,” Jefferies analyst Brent Thiel wrote in a note on Wednesday. Thill has an “underperform” rating on the stock and a price target of $110.

Over the years of the pandemic, MicroStrategy has become well known for its Bitcoin takeovers, largely led by Saylor. Earlier this year, Saylor stepped down from that role and now serves as CEO at the company and continues to lead its bitcoin strategy.

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MicroStrategy was trading around $120 before Saylor first announced the company’s Bitcoin purchases in 2020. The stock reached an all-time high of $1,315 in February 2021.

(Updates to include the stock’s closing price in the second paragraph.)

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© Bloomberg LP 2022

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Bankman-Fried May File Petition in New York Federal Court Next Week Before Judge Louis Kaplan By Cointelegraph

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Former FTX CEO Sam Bankman-Fried is set to appear in court on the afternoon of January 3 to enter a lawsuit over two counts of wire fraud and six counts of conspiracy against him related to the collapse of cryptocurrency exchange FTX, according to Reuters. mentioned on December 28, citing court records. Bankman-Fried will appear before District Judge Lewis Kaplan in Manhattan.

Judge Kaplan was appointed to hear the case on December 27 after the original judge in the case, Ronnie Abrams, Resigned herself because of connections between FTX and the law firm Davis Polk & Wardwell, where her husband is a partner. The company provided advisory services to FTX in 2021.