Significant Downside Risks Pull Stocks Lower

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as significant downside risks pull stocks lower. Stocks in heat map are based on the top 10 holdings of each sector ETF. Click on each picture to zoom in. Below is a summary of today’s action on Wall Street provided by CNBC:

Stock futures fall slightly, extending losses from the previous session

U.S. stock futures moved lower in overnight trading and pointed to losses at the open on Wednesday, after a sharp sell-off in the previous session. Dow futures fell 70 points, indicating a loss of 0.3%. The S&P 500 and Nasdaq were also set to open lower, with losses of 0.4% and 0.3%, respectively.

S&P 500 (SPY) dropped -1.75% today. All 11 sectors ended in the red as shown below in the sector graph. Losses ranged from -4.54% to less than 1%.

The Dow Jones index fell -516 points (-2.17%) to close at 23,247. The Nasdaq lost -139 points (-1.55%) to settle at 8,863.

Significant Downside Risks Pull Stocks Lower

Stocks landed in negative territory Wednesday as investors digested the Fed Chair’s comments.

Fed Chairman Jerome Powell said that more needs to be done to support the economy.

“While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks,” he said. Powell added, however, the economy should see a substantial recovery once the coronavirus is under control.

Powell’s remarks came after the Labor Department reported last week that a record 20.5 million jobs were lost in April. They also come as several states begin reopening their economies, raising concern among experts about the potential of a second wave of coronavirus cases.

The major averages were also under pressure after billionaire investor David Tepper called this market the second-most overvalued he’s ever seen.

“The market is pretty high and the Fed has put a lot of money in here,” Tepper, founder of Appaloosa Management, told CNBC’s “Halftime Report.” “There’s been different misallocation of capital in the markets. Certainly you are seeing pockets of that now in the stock market. The market is by anybody’s standard pretty full.”

Dr. Anthony Fauci said Tuesday that a vaccine will be essential in stopping the coronavirus spread, but warned it will be a while before a usable one is available. Fauci added the U.S. could face more “suffering and death” if states start to reopen too quickly.

Key Takeaways…

Powell says more policy help may be needed to pull the US out of economic downturn

Federal Reserve Chairman Jerome Powell said Wednesday that policymakers may have to use additional weapons to pull the country out of an economic mire that has cost at least 20 million jobs and caused “a level of pain that is hard to capture in words.”

David Tepper says this is the second-most overvalued stock market he’s ever seen behind only ’99

Billionaire investor David Tepper said the stock market is one of the most overpriced he’s ever seen. Before Wednesday’s sell-off, it was “maybe the second-most overvalued stock market I’ve even seen,” Tepper said Wednesday on CNBC’s ” Halftime Report.” “I would say ’99 was more overvalued.”

Notable S&P 500 Movers…

Below I’ve highlighted some notable S&P 500 movers (both winners & losers).

Credit: Sector Graph provided by Sector SPDR app. Sector breakdown provided by Charles Schwab. Sector heat map provided by finviz. Information Credit: News Headlines and quotes were taken from CNBC in the writing of this post.

Download our new Handy ETF Guide

Subscribe to get our free weekly newsletter by email.

We won't send you spam. Unsubscribe at any time. Powered by ConvertKit

5/13/20

S&P 500 Sector Graph

Significant Downside Risks Pull Stocks Lower

S&P 500 (SPY)

Significant Downside Risks Pull Stocks Lower

Communication Services (XLC)

Significant Downside Risks Pull Stocks Lower

Consumer Discretionary (XLY)

Significant Downside Risks Pull Stocks Lower

Consumer Staples (XLP)

Significant Downside Risks Pull Stocks Lower

Energy (XLE)

Significant Downside Risks Pull Stocks Lower

Episode 1: Basic Investment Strategy – Simply Stock Info: The Podcast

Simply Stock Info: The Podcast Episode 1: Basic Investment Strategy Episode 1 goes over my basic investment strategy for individual investors (from years of watching and learning from CNBC).

Financials (XLF)

Real Estate (XLRE)

Healthcare (XLV)

Industrials (XLI)

Materials (XLB)

Technology (XLK)

Significant Downside Risks Pull Stocks Lower

Episode 2: Building a Diversified Portfolio – Simply Stock Info: The Podcast

Simply Stock Info: The Podcast Episode 2: Building a Diversified Portfolio In this episode, I go over 5 stocks to build a diversified portfolio on. These are 5 stocks to hold for the long term in a retirement account such as a Roth or traditional IRA account.

Utilities (XLU)

S&P 500 Sector Heat Map

 

Leave a Reply

Your email address will not be published. Required fields are marked *