MW: Oil risks becoming deeper thorn in markets’ side
Another day, another tech rout? Investors would be forgiven for some tech apprehension today after a really ugly day for Apple.
After suffering its worst one-day loss on Wednesday, Apple AAPL, +0.54% is headed for its worst week since nearly the start of the year. But on the brighter side, Jani from the CrackedMarket blog points out that while techs have been bleeding billions in market cap, the selling hasn't stretched much beyond that sector.
“If the market was overbought, this was more than enough of an excuse to break down. How contained the selling was shows owners remain confident and are supporting these prices,” said Jani. Read more here on that.
Some buyers are being lured in right now. Kim Caughey Forrest, portfolio manager at Fort Pitt Capital Group, told MarketWatch yesterday that markets are starting to get tempting for value investors like herself — the crowd who look for stocks they think the market has undervalued.
Others are still unsettled. Dana Lyons, partner at J. Lyons Fund Management, has been in a state of angst over how weak the strongest areas of this market are getting. He says if many more leaders like Apple begin to crumble, “the resulting correction could feel like a 500-pound weight to the chest of investors.” Read his blog here.
But commodities — that other developing thorn in investors’ side — may provide a distraction from the tech turmoil. Only not a real happy one. U.S. crude settled at under $50 a barrel for the first time since early April yesterday on rising supplies. It‘s still below that marker this morning, as some worry $40 oil could be here in a month.
That brings us to our call of the day. A fine time to get into oil stocks? Maybe. And our chart of the day shows how chip makers may have seen Apple’s pain coming a mile away.
Key market gauges
Markets are pointing to a slightly better open for Wall Street, with Nasdaq futures NQU5, +0.17% in the lead, but those for the Dow YMU5, -0.04% and the S&P ESU5, +0.11% just in the black. Europe’s Stoxx 600 SXXP, -0.30% is barely up,as the market initially got a lift on news Greece’s parliament passed a second round of reforms, but then trimmed gains.
Asian markets ADOW, -0.19% closed mainly higher, with a 2.4% bounce and another gain for the Shanghai Composite SHCOMP, +2.43% Gold GCU5, +0.77% is clinging on above $1,100 an ounce, while crude CLU5, +0.24% is holding steady under $50 a barrel.
The economy
Weekly jobless claims and the Chicago Fed national activity index are coming at 8:30 a.m. Eastern, followed by leading indicators at 10 a.m. Eastern.
The stat
United Tech and IBM are among those talking of pain in their overseas markets. Well, that whining has now been backed up by official numbers. (H/T to Wolf Richter at Wolf Street blog for digging this one up.)
“World trade shrank 1.2% in May from the previous month. The index fell to 135.1, the lowest level since July 2014, having dropped nearly every month so far this year. It’s down 4.7 points from its peak in December, the sharpest and longest decline since the financial crisis,” Richter cites from the report.
Caterpillar CAT, -2.99% shares slide Thursday morning after reporting weaker-than-expected sales and a lowered outlook.
Shares of network-security provider Fortinet FTNT, -1.54% soared after analysts at J.P. Morgan raised their price target after the company’s earnings beat late Wednesday.
