It was another bearish week for U.S. stocks as the major indexes suffered weekly declines following growing worries about aggressive Federal Reserve rate hikes. Also weighing in on market is troubling earning reports from companies, particularly tech stocks.
The New York Stock Exchange (NYSE) All Share Index (ASI) lost 2.26% for the week representing its 5th week of consecutive decline. It opened, trading at 16,054.8 basis points and it closed the week trading at 15,694.2 basis points. Although the week started bearish for the NYSE, it, however, closed Friday bullish by 1.85% but this was not enough to offset the bears.
The NASDAQ posted its 4th week of decline, losing 3.93% during the week under consideration. It started at a basis point of 12,749.17 and ended the week at 12,334.64 basis points. The week in question saw a decline in the volume of transactions against the previous week by 75.77% as the market recorded a volume of 1.09 billion
The Dow Jones and the S&P 500 also posted declines, 2.47% and 3.27% respectively. The Dow Jones is on its 5th week of decline while the S&P 500 is on its 4th week of market downturn.
What’s moving the market?
Stocks closed out their worst month in years, as investors battled a host of headwinds, including monetary tightening from the Federal Reserve, rising interest rates, worsening inflation, COVID lockdowns in China and the ongoing war in Ukraine.
- As previously mentioned, the stance of the U.S. Fed is the major driver of the performance of the U.S. market as Fed Chair Jerome Powell has stated that a 50 basis-point hike was on the table. Next week, the Fed is expected to pull the trigger on its first half-percentage point rate hike since 2000, and it could begin to reverse its large-scale asset purchases used to help stabilize markets during the COVID crisis.
- Also weighing in was the decline of the U.S. GDP by 1.40%, which brought about fear as inflation became the main focus. Data showed the personal consumption expenditures price index, the Fed’s favoured measure of inflation, shot up 0.9% in March after climbing 0.5% in February.
- The Nasdaq fell 13.3% in April, its worst monthly performance since the financial crisis in October 2008, the S&P 500 sank 8.8% for its biggest monthly drop since the onset of the pandemic in March 2020, and the Dow was down 3.9%. The Nasdaq has dropped deeply into bear territory, now 24% off its high, with tech stocks enduring the worst of the April selloff.
- Amazon’s share price tumbled 14.05% in its steepest one-day drop since 2006, leaving the widely held stock near two-year lows. The decline was because the e-commerce giant delivered a disappointing quarter and outlook, swamped by higher costs.
- Apple, the world’s most valuable company, dropped 3.66% after its disappointing outlook overshadowed record quarterly profit and sales. The firm gave warnings about supply chain constraints that could impact revenues in the current quarter by up to $8 billion.
- In a series of SEC filings, it was revealed that Elon Musk sold nearly $4B worth of Tesla stock to fund his $44 billion deal for taking Twitter private. The sales took place on Tuesday and Wednesday, with blocks of stock being sold at prices between $872 to $999 per share. He went further to tweet, “No further TSLA sales planned after today,” after the filings became public.
Musk has promised to chip in $21B of personal equity for the Twitter deal, with the rest of the cash coming from investment banks (after convincing them that Twitter produced enough cash flow to service the debt). $13B in loans will be secured against Twitter, as well as a $12.5B margin loan tied to his Tesla stock, making Musk America’s most leveraged CEO.
The top 5 gainers are;
Although the U.S. markets performed poorly, there are still some notable gainers for the week. They include:
- Nkarta Inc (NKTX) 137.32%
- Gty Technology Holdings Inc (GTYH) 130.68%
- Vaxxinity Inc Cl A (VAXX) 117.19%
- T Stamp Inc (IDAI) 116.84%
- Redbox Entertainment Inc (RDBX) 109.82%
The top 5 losers include;
- Agile Therapeutics Inc (AGRX) -59.45%
- Toughbuilt Industries Inc (TBLT) -58.57%
- Accolade Inc (ACCD) -54.13%
- Molecular Partners Ag ADR (MOLN) -53.14%
- Protagonist Therapeutics Inc (PTGX) -51.93%