{"id":29319,"date":"2024-04-18T05:38:13","date_gmt":"2024-04-18T05:38:13","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/04\/18\/sp-500-suffers-its-longest-slide-since-january-times-of-india\/"},"modified":"2024-04-18T05:38:13","modified_gmt":"2024-04-18T05:38:13","slug":"sp-500-suffers-its-longest-slide-since-january-times-of-india","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/04\/18\/sp-500-suffers-its-longest-slide-since-january-times-of-india\/","title":{"rendered":"S&P 500 suffers its longest slide since January – Times of India"},"content":{"rendered":"
\"S&P<\/div>\n
The stock market saw its longest losing streak since January as a handful of big techs sold off \u2014 despite a slide in bond yields.
Equities fell for a fourth straight day, with the S&P 500 extending a drop from its all-time high to more than 4%. Chipmakers bore the brunt of the selling after ASML Holding NV\u2019s orders tumbled. Nvidia Corp. led losses in megacaps.A tug of war between bulls and bears unfolded amid the expiration of VIX options \u2014 with Wall Street\u2019s favorite volatility gauge whipsawing.
The US economy has \u201cexpanded slightly\u201d since late February and firms reported greater difficulty in passing on higher costs, the Federal Reserve said in its Beige Book survey of regional business contacts.
Powell signaled this week that policymakers will wait longer than previously anticipated to cut rates following a series of surprisingly high inflation readings. Fed officials narrowly penciled in three cuts in forecasts published last month \u2014 but investors are now betting on just one to two this year, futures markets show.
\u201cFed Chair Powell was downright hawkish,\u201d said Win Thin and Elias Haddad at Brown Brothers Harriman. \u201cThe Fed wants the market to do the tightening for them. Financial conditions remain too loose \u2014 and so some combination of higher yields, wider spreads, stronger dollar, and lower equities is needed to tighten conditions.\u201d
While global equities are facing tactical headwinds, this is just a consolidation phase and stocks are expected to keep rising this year, according to UBS strategists led by Andrew Garthwaite.
They noted positive developments including artificial intelligence pushing productivity and earnings higher, lower warranted equity risk premium, likely falling labor costs and less worries on margin pressures.
The equity risk premium for US equities \u2014 a measure of the differential between stocks and bonds\u2019 expected returns \u2014 is now deep in negative territory, something that hasn\u2019t happened since the early 2000s.
While this is not necessarily a negative indicator for the stock market, it all depends on the economic cycle. The lower ERP can be seen as a promise of a future boost in corporate profits, but also that a bubble is in the making.
Fundamentals and technical trends for equity markets still appear supportive, suggesting the recent pullback should prove temporary, according to HSBC strategists led by Max Kettner, who are using the decline to add to their bullish stance.
\u201cSentiment and positioning are not flashing a warning signal, though real money investors have started to extend their constructive stance on equities lately, they wrote.
US corporate earnings are set for a \u201chealthier runway\u201d through 2024 and investors are growing more confident that companies can meet expectations, according to Morgan Stanley strategists.<\/div>\n