Stock market today: The Nasdaq falls into bearish territory
Governments and private companies continued to put more distance between themselves and Russia, sending commodities higher but triggering a fall in stocks that sent tech-heavy Nasdaq Compound in a bear market.
Oil soared on Monday as Congress and the White House reportedly favor moving forward with a Russian oil ban, even if Europe fails to implement measures. similar measures. U.S. crude oil futures jumped 3.2% to settle at $119.40 a barrel, its highest level in 13 years.
Gold Futures Contractsmeanwhile, had its best performance since August 2020, climbing 1.5% to settle at $1,995.90 per ounce after trading above $2,000 intraday.
Also, on weekends, Adobe (ADBE), netflix (NFLX), PayPal (PYPL) and others have joined a growing list of companies at least partially shutting down operations in Russia. However, US equities continued to feel the brunt of these moves. The Financials (-3.6%) and Consumer Discretionary (-4.9%) sectors suffered the largest losses on a bright red day for all markets.
The Nasdaq was the worst off among the major indexes with a 3.6% drop to 12,830 that put it in bearish territory, down more than 20% from its November 19 peak. the S&P500 (-3.0% to 4,201) and the Dow Jones Industrial Average (-2.4% to 32,817) also ended well in the red.
“The S&P 500 posted the worst day since October 2020,” said Cliff Hodge, chief investment officer at financial planner Cornerstone Wealth. “The fear is palpable. There seems to be no evidence of improvement in Ukraine, and DC’s rhetoric continues to grow more hawkish.
“While it is impossible to know where the ultimate bottom is, from a risk-reward perspective the market looks very reasonable. We are using weakness to add exposure as we continue to see very little chance recession over our forecast horizon.”
Other news on the stock market today:
- Small cap Russell 2000 fell 2.5% to 1,951.
- Bitcoin fell 5.1% to $37,560.26. (Bitcoin trades 24 hours a day; prices shown here are as of 4 p.m.)
- Bed bath and beyond (BBBY) was a rare touch of green in today’s trade, jumping 34.2% on news that Ryan Cohen – founder of online pet company Chewy (CHWY) and chairman of the retailer video game company GameStop (GME) – took a 9.8% stake in the home goods retailer through its investment firm RC Ventures. Cohen believes BBBY needs to explore strategic options, including spinning off its baby division, buybuy Baby, according to a letter he wrote to RC Ventures board members. Wedbush analyst Seth Basham maintained a neutral (holding) rating on BBBY. “While BBBY shares may rise on the back of new activist involvement and high short interest, we remain on the sidelines with no further visibility on the sustainability of market share for Bed Bath’s core business.” , says the analyst.
- Soaring oil prices again weighed on airline stocks. United Airlines (CUE, -15.0%), Delta Airlines (DAL, -12.8%) and American airlines (AAL, -12.0%) were among the biggest declines of the day.
- UberTechnologies (UBER, -4.2%) increased its first-quarter adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) to a range of $130-150 million from its previous guidance of $100-130 million. dollars. The upgraded forecast comes amid increased demand for rides and food delivery, the company said. “We find mobility trends in February very encouraging, with travel at 90% and gross bookings at 95% recovered from pre-pandemic levels (February 2019), while annualized gross bookings of the delivery have reached new heights,” said Angelo, an analyst at CFRA Research. Zino (strong buy).
Protect yourself against stagflation
We’re hearing the “S” word thrown around on Wall Street more and more. Stagflation, that is.
Yes, the unemployment rate is back to near pre-pandemic lows, but the other two hallmarks – searing inflation and slowing economic growth – are certainly on the doorstep. Several economists have recently lowered their estimates of US GDP, including Jeffrey Roach, chief economist at LPL Financial.
“We currently expect the US economy to grow 3.7% in 2022,” he said, rising from 4% to 4.5% in LPL’s 2022 outlook. (Kiplinger currently expects 4.0%).
“Risks are on the downside as the Fed could err on the side of tightening too quickly, the recent commodity boom could ripple through to the U.S. consumer, and supply-demand imbalances could last longer than expected.”
Commodities are considered one of the best defenses against potential stagflation, and you can access them in several ways. Exchange-traded funds, such as these 14 ETFs, allow you to invest in baskets of commodity stocks, futures, and sometimes the physical goods themselves.
But those who want a more concentrated bet might consider individual stock picks. From energy producers to miners, these five “stagflation stocks” represent a short list of commodities-related plays that should provide protection if the economy continues to cool while inflation continues to heat up.