Market Sells Off On Hot Inflation; Albemarle, Northrop, ON In Focus | Stock Market Today

TL;DR

The market took a bearish turn this week, with big losses fueled by the CPI reading. Major indexes, such as the Nasdaq and S&P 500, experienced significant declines, signaling a potential third leg of a bear market.

Transcript

good afternoon everyone welcome to stock market today it's ali coram and ed carson here with a look at the market action today and this week and uh we definitely got a bearish signal the constructive action that we had been seeing in the market ed definitely took a bearish turn on thursday and more big losses today on that cpi reading yeah and the ... Read More

Key Insights

• 🫰 Breakouts started failing before the major indexes showed weakness, indicating early signs of trouble.
• 🦿 The market is potentially entering the third leg of a bear market, which is often the most volatile phase.
• 💨 The Fed meeting next week will be a significant catalyst, but it could go either way in terms of market impact.
• 👀 Investors should focus on stocks with relative strength and watch for potential support levels as buying opportunities.
• 🥹 Energy sector stocks, like Chevron and Exxon, have held up relatively well, despite the broader market weakness.
• 🤘 Metal and mining stocks experienced significant declines, showing weakness in the sector.
• 🌸 ARKK, a popular growth stock ETF, had a rough week, with significant losses and potential support around the May lows.
• ❓ Monitoring the 10-year Treasury yields is crucial as it impacts inflation expectations and the overall market sentiment.

Questions & Answers

Q: What caused the market's bearish turn this week?

The market turned bearish due to the CPI reading, which accelerated inflation. Expectations of a potential 50 basis point hike next week also added to the negative sentiment.

Q: How significant is it that the market closed below the low of the May 26 follow-through day?

Closing below this level is a very negative signal, with a 90% chance that the rally will ultimately fail. Combined with the struggles of leading stocks, it indicates a potential start of the third leg of a bear market.

Q: What are the key levels to watch on the major indexes?

The major indexes, such as the Nasdaq and S&P 500, broke through key support levels, including the 21-day moving average and the 12,000 level on the Nasdaq. These levels will be crucial in determining future market direction.

Q: How are Treasury yields impacting the market?

Rising Treasury yields, particularly the 10-year yield, are causing concerns about inflation and the economy. The possibility of a more aggressive Fed stance to combat inflation creates uncertainty and negatively affects stocks.

Summary & Key Takeaways

• The market started the week on a positive note, but quickly turned bearish as breakouts began to fail and leading stocks struggled.

• Thursday saw a significant decline, with the Nasdaq breaking through key support levels and the leading stocks performing even worse.

• The market closed below the low of the May 26 follow-through day on Friday, signaling a 90% chance of the rally ultimately failing.