Stock Market Falls After Bullish Start; TSLA, MMC, AvalonBay In Focus | Stock Market Today | Summary and Q&A

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April 21, 2022
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Investor's Business Daily
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Stock Market Falls After Bullish Start; TSLA, MMC, AvalonBay In Focus | Stock Market Today

TL;DR

The market experienced significant selling, with the Nasdaq down 2.1% and the S&P 500 down 1.5% due to concerns about inflation and interest rate hikes.

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Key Insights

  • 🥳 The market is experiencing distribution days, indicating institutional selling in the indexes.
  • ☠️ Concerns about inflation and interest rate hikes are impacting the market.
  • 🥹 Tesla's earnings report was initially well-received but failed to hold on to its gains.
  • 😮 The 10-year treasury yield continues to rise, signaling expectations of aggressive rate hikes by the Fed.
  • 🛀 The insurance sector, including stocks like Marsh & McLennan, is showing relative strength.
  • 😫 Avalon Bay, an apartment REIT, is setting up for potential outperformance in the coming weeks.
  • 🧑‍💻 Tech stocks may take some time to recover, while REITs could provide some stability and leadership.

Transcript

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Questions & Answers

Q: Why did the market experience significant selling?

The market had been experiencing distribution days, indicating institutional selling. Additionally, concerns about inflation and interest rate hikes added to the selling pressure.

Q: What impact did Fed Chair Powell's remarks have on the market?

Powell's comments about taming inflation and the possibility of rate hikes in May were already priced into the market. The market has already priced in multiple rate hikes, leading to a rise in the 10-year yield.

Q: How did the major indexes perform in today's session?

The Nasdaq was down 2.1%, the S&P 500 was down 1.5%, the Dow was down 1.1%, and the Russell 2000 was down over 2%. Resistance was seen at the 50-day moving average for the Nasdaq and the 200-day moving average for the S&P 500.

Q: What was the reaction to Tesla's earnings report?

Tesla initially had a big pre-market gain but failed to hold on to the gains throughout the day, closing up 3.2%. This highlights the dangers of buying into strength in the current market environment.

Summary & Key Takeaways

  • The market experienced heavy selling, indicating institutional selling in the indexes.

  • Certain stocks, such as airline stocks, performed well initially but gave back their gains later in the session.

  • Tesla reported good earnings but failed to hold on to its pre-market gains.

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