This is a warning. 3810 is a very critical level at the S&P 500, and futures are down more than 2% today. We`re flirting with a support level of around 3,900, but the real panic can set in at around 34,000. What is that supposed to mean? It means that the S&P 500 will go down in a bear market. And that is a sign of stocks that are going down in value.
Since 1928 and the big stock market crash, the S&P 500 has plummeted into a bear market 26 times. A bear market is where the market is down more than 20% or more than that in a two-month period.
Not only that. A bear market can also be part of a recession where the economy has high unemployment and negative GDP output.
The average decline in a bear market was 35,6% since 1928, and the average length of time was 289 days.
Software Powerhouse Microsoft Corp beat Wall Street expectations for quarterly revenue on Tuesday. They have a strong demand for the software giant`s cloud-based services from the pandemic-triggered shift to hybrid work models.
Some companies lost big during the pandemic, but Microsoft profited big from it as individuals and organizations turned to products like Outlook and Teams workplace messaging app. People shifted their behavior as they were working from home during the pandemic.
But it seems like people loved the idea to work from home because after the economies opened up again, people and businesses tend to use a hybrid model of allowing staff to alternatively work from home. And that is strengthening Microsoft`s cloud services, including their flagship cloud offering Azure.
Microsoft reported revenue of $49,36 billion in the third quarter, compared with $41,7 billion a year earlier.
Net income rose to $16,73 billion, or $2,22 per share, in the quarter ended March 31, from $15,46 billion, or $2,03 per share, a year earlier.
«Continued customer commitment to our cloud platform and strong sales execution drove better-than-expected commercial bookings growth of 28% and Microsoft Cloud revenue of $23,4 billion, up 32% YoY,» Chief Financial Officer Amy Hood said in a news release.
For the current quarter, Microsoft expects to generate sales of $52,8 billion, based on the midpoint of its guidance. That matches Wall Street`s target for the June quarter. In the year-earlier period, it posted $46,2 billion in sales.
Microsoft stock fell 3,7% on Tuesday to close at 270,22 amid a broad market sell-off, but in after-hours trading (as I write this article), the stock is up 4,47%. It happened on a day were Nasdaq plummeted 3,7%, while Tesla went down 12,18%. I have been following Microsoft since the 90s, and this is one of the few that survived the dot-com bubble. This company continues to impress.
The times we are living in are far from «normal.» But we cannot blame an invisible virus for all that is happening right now. The question for retailers now is how this holiday season will look like?
Online spending on Black Friday 2021 decreased for the first time ever. According to Adobe Analytics, online shoppers spent a total of $8,9 billion, and that is down a little bit from last year’s $9 billion.
It can be many reasons for the dip, but Adobe believes it can be caused by an uptick in early spending, as some stores started sales and promotions as early as October. Shoppers are also being strategic in their gift shopping, buying much earlier in the season and being flexible about when they shop to make sure they get the best deals.
Black Friday traffic in stores also dropped -28,3% from pre-pandemic levels. Cyber Monday did also have a bad day and dropped for the first time ever. Cyber Monday online sales drop -1,4% from last year to $10,7 billion.
Adobe expects the entire holiday season will see record-breaking e-commerce activity, as shoppers spread out their dollars over more days. Adobe anticipates digital sales from November 1st, to December 31st will hit $207 billion which would represent record gains of 10%.
FedEx forecasts Monday will be one of the highest volume e-commerce days of the 2021 holiday season as it prepares to deliver an estimated 100 million more packages than it did from Black Friday to Christmas in 2019.
According to National Retail Federation, the holiday season will be fine. Spending in November and December could grow as much as 11,5% compared with the same period a year ago. This is much higher than many retail analysts themselves had predicted.
Sales in November and December can hit an all-time high of between $834,4 billion and $859 billion. In other words; we`re on the path for a record holiday season. Omicron can destroy the holiday season, but it can also help.
Instead of taking a trip by plane to other places, consumers will spend their money on Target or Macy`s. That will boost consumer demand, helped by higher wages and inflation. A lockdown will increase online sales and put more pressure on FedEx. People want packages no matter what.
Inflation soared to 4,2% in April of 2021, and that`s a big jump from 2,6% in March. The stock market declined while the inflation rate came in well above market forecast of 3,6%, and this is the highest reading since September 2008.
The biggest increases were recorded for gasoline (49,6% vs 22,5% in March), fuel oil (37,3% vs 20,2%) and used car and trucks (21% vs 9,4%). It`s interesting to see the inflation slowed for food (2,4% vs 3,5%).
The jump in inflation is the highest in 13 years, and Wall Street sent the stock down on Wednesday in a broad market sell-off. Tech stock were hit hard as higher interest rates are threatening to undermine the valuations of those companies.
Nasdaq is down about -5% so far this week, but the European markets ended higher on Wednesday as stocks in Europe recovered from a global sell-off sparked by concerns that rising inflation will prompt central banks to tighten monetary policy sooner and more abruptly than expected.
Federal Reserve`s vice chair, Richard Clarida, had some dovish comments, and that helped calm nervous markets. He said that the twin shocks of a disappointing payroll report and higher inflation in April hadn`t changed the central bank`s view on maintaining its current ultra-accomodative policy.
Coalition For A Prosperous America chief economist Jeff Ferry said to Fox that the Trump administration`s tariffs have a positive impact on the steel industry. This is one of the reasons why Trump is so popular in the United States.
Jeff Ferry said; «…..even as some pundits and economists say America`s steel industry is in decline…… for those who understand the steel industry, it`s clear that the Trump administration`s steel tariffs have generated a boom in steel investment and a shift to newer technologies that are creating high-paying jobs for thousands of new steelworkers.
Steel prices last year were lower than they were in 2017, before Trump`s tariffs. Donald Trump and Wilbur Ross did this because they know the steel industry. They did it because they knew that Communist China subsidized the steel and dumped the prices.
This kind of protectionism is good for Communist China, but it made it difficult for the United States to compete, and this is exactly here where Trump`s «America First» agenda comes in. He protects the U.S steel industry, its workers, and America.
The U.S steel industry is healthy, and steel consumers are better off because they pay the same price for steel now as they did a few years ago. Before the tariffs. Now, the U.S steel industry can invest in new technology, and grow and meet their need much better than before.
This is the difference between Biden who has been in politics for the last 47 years and Trump who is one of the few to stand up against Communist China.