{"id":7660,"date":"2024-08-10T07:45:17","date_gmt":"2024-08-10T07:45:17","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/08\/10\/tech-5-recession-fears-kick-panic-selling-into-overdrive-tech-selloff-ensues\/"},"modified":"2024-08-10T07:45:17","modified_gmt":"2024-08-10T07:45:17","slug":"tech-5-recession-fears-kick-panic-selling-into-overdrive-tech-selloff-ensues","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/08\/10\/tech-5-recession-fears-kick-panic-selling-into-overdrive-tech-selloff-ensues\/","title":{"rendered":"\u200bTech 5: Recession Fears Kick Panic Selling into Overdrive, Tech Selloff Ensues"},"content":{"rendered":"

The stock market experienced a turbulent week influenced by concerns over US economic data. Cryptocurrencies also experienced significant losses before recovering toward the end of the week. <\/strong><\/p>\n

Meanwhile, a long-awaited ruling could have massive implications for the tech sector, and a California-based chip stock became the most recent to fall short of steep expectations.<\/p>\n

\n

1. Panic selling kicks off the week <\/h3>\n

The stock market experienced one of its most turbulent weeks since the pandemic after a sudden shift in Japan\u2019s monetary policy triggered an unwinding of yen carry trades on Monday (August 5). That set off a chain reaction that led to a selloff in Asian stock markets as investors tried to reduce their risk exposure.<\/p>\n

In the US, investors were already on edge following troubling economic data from the previous week. The poor performance of Asian indexes stoked fears of a looming recession and sparked a massive selloff of high-risk assets, including inflated tech stocks. The S&P 500 (INDEXSP:.INX) opened at 5,151 on Monday, 0.67 percent below Friday\u2019s close, and lost another 0.62 percent during early trading, bottoming out at 5,119. <\/p>\n

Meanwhile, the Nasdaq-100 (INDEXNASDAQ:NDX) was down 2.52 percent from Friday at the opening bell on Monday, and shed another 0.05 percent early on, dropping to a low of 17,435.<\/p>\n

The Volatility Index (INDEXCBOE:VIX), which is better known as the VIX and is considered Wall Street\u2019s \u201cfear gauge,\u201d opened Monday at 65.73, jumping 42 points above its close on Friday, its largest-ever intraday jump.<\/p>\n

By the end of the day, market sentiment had improved. The S&P 500 and Nasdaq-100 both saw rebounds, closing 2.36 and 3.68 percent higher, respectively, from their lowest points on Monday. <\/p>\n<\/div>\n

<\/small><\/p>\n

S&P 500\u2019s performance, week of August 5, 2024.<\/em><\/p>\n

<\/small><\/p>\n

Chart via Google Finance.<\/em><\/p>\n

However, volatility plagued the market leading up to Thursday\u2019s (August 8) weekly US jobs report.<\/p>\n

The report shows initial jobless claims of 233,000, fewer than the 240,000 estimate, suggesting elevated data from last week may have been disproportionately influenced by disruptions caused by Hurricane Debby.<\/p>\n

Indexes gained some ground as investors trickled back into tech stocks. The S&P 500 recovered more than 4 percent and the Nasdaq-100 gained over 5 percent on Thursday, as compared to their lowest points on Monday, indicating a substantial rebound from the previous week\u2019s losses. <\/p>\n

As for individual stocks, Intel (NASDAQ:INTC) took the lead, regaining nearly 8 percent by the time trading closed on Thursday, with artificial intelligence darling NVIDIA (NASDAQ:NVDA) in a close second with over 6 percent.<\/p>\n

For the week, the S&P 500 was down 0.05 percent, the Dow Jones Industrial Average (INDEXDJX:.DJI) was down 0.6 percent and the Nasdaq was down 0.2 percent.<\/p>\n<\/div>\n

\n

2. Solana breaks out as crypto sector recovers <\/h3>\n

Panic selling also added to uncertainty in cryptocurrency markets this week. <\/p>\n

According to the Block\u2019s crypto price page, the entire industry sank 18.2 percent in 24 hours as of Monday.<\/p>\n

Bitcoin suffered the most significant losses heading into the week, eventually shedding 16 percent to fall below US$50,000 for the first time since February at Monday\u2019s market open. Ethereum also experienced major price movements, dropping to a low of US$2,197 on Monday morning. The Bitcoin Volmex Implied Volatility Index reached its highest level in 20 months. <\/p>\n

Along with macroeconomic events, Jump Crypto\u2019s asset movements and the increasing odds of Kamala Harris winning the upcoming presidential election against pro-crypto Donald Trump\u00a0were also cited as factors for the price drop. <\/p>\n

Institutional investors buying digital assets at low rates drove a recovery on Tuesday (August 6) and Wednesday (August 7). Solana also saw major gains, hitting an all-time high against Ether. Wednesday also marked the conclusion of Ripple\u2019s long legal battle with the SEC, with Judge Analisa Torres ruling sales of Ripple\u2019s XRP token violated securities law and ordering the company to pay a US$125 million fine, sparking a 20 percent rally and a surge in trading volume. <\/p>\n

On Thursday the rally continued, with Bitcoin crossing into US$60,000 territory for the first time this week and Ethereum breaking past US$2,600. <\/p>\n

While prices have somewhat rebounded alongside stock markets, the recovery has been uneven. As of Friday (August 9)afternoon, Bitcoin is selling for 2.2 percent less than last week and down 1.7 percent in 24 hours, but up 5.5 percent over 30 days. Conversely, Ethereum has struggled to regain lost ground, currently down 2.8 percent in 24 hours, and still down 13.6 percent and 16.2 percent over seven and 30 days, respectively.<\/p>\n<\/div>\n

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3. Berkshire Hathaway halves Apple holdings <\/h3>\n

Berkshire Hathaway\u2019s (NYSE:BRK.A,NYSE:BRK.B) decision to sell nearly half of its Apple (NASDAQ:AAPL) stock may have acted as a catalyst to the recent tech selloff that pummeled the major indexes on Monday. <\/p>\n

Berkshire Hathaway\u2019s Q2 2024 report was released on Saturday (August 3), showing the firm had cut its stake in Apple by 49 percent, leaving it with a position worth US$84.2 billion in Q2 compared to US$174.3 billion in Q1. <\/p>\n

The sale contributed to Berkshire\u2019s cash pile reaching US$276.9 billion.<\/p>\n

Although Buffet previously stated that Berkshire would likely maintain its holdings in companies like Apple, American Express (NYSE:AXP) and Coca-Cola (NYSE:KO) \u2014 \u201cunless something really extraordinary happens\u201d \u2014 analysts watching Buffet\u2019s moves have noticed that he\u2019s been quietly unloading stock. <\/p>\n

Gary Mishuris, managing partner and chief investment officer of Silver Ring Value Partners hinted at a potential change in Berkshire\u2019s approach back in May after the company\u2019s annual meeting.<\/p>\n

Days before the release of the report, on August 1, Edward Jones upgraded Berkshire Hathaway\u2019s status to \u201chold.\u201d \u201cBuffett doesn\u2019t seem to think there are attractive opportunities in publicly traded stocks, including his own. It makes me worry what he thinks about markets and the economy,\u201d Edward Jones analyst Jim Shanahan told Reuters. <\/p>\n

Investors spooked that those worries may have come to fruition engaged in a massive stock selloff during after-hours trading, with major tech stocks like Apple, NVIDIA and Alphabet (NASDAQ:GOOG) dropping 9.45, 14.18 and 6.69 percent over the weekend by Monday\u2019s opening bell. For months, concerns about overvaluation and over-concentration in tech stocks have been simmering in the background, with some asserting that this correction was due.<\/p>\n

While the sector and broader stock market have shown signs of recovery since Monday\u2019s selloff, former US Federal Reserve economist Claudia Sahm, while speaking on Bloomberg\u2019s Surveillance program on Monday, cautioned that we might not be out of the woods yet.<\/p>\n<\/div>\n

\n

4. Long-awaited Google antitrust ruling issued <\/h3>\n

A landmark decision with far-reaching implications for the tech industry was reached on Monday. <\/p>\n

In the US vs. Google antitrust case, which has been closely watched since the US Department of Justice sued the company for monopolizing the digital advertising space in January 2023, Judge Amit Mehta ruled that Google had in fact acted illegally to maintain its dominant position over online search advertising. <\/p>\n

\u201cGoogle\u2019s distribution agreements foreclose a substantial portion of the general search services market and impair rivals\u2019 opportunities to compete,\u201d the ruling reads, referring to the US$26 billion Google paid to Apple, Samsung (KRX:005930) and Mozilla to be the default search engine on web browsers and mobile devices. <\/p>\n

Mehta continued, \u201cThe trial evidence firmly established that Google\u2019s monopoly power, maintained by the exclusive distribution agreements, has enabled Google to increase text ads prices without any meaningful competitive constraint.\u201d<\/p>\n

Alphabet\u2019s Q2 results, which were released on July 23, show that advertising revenues from Google Search, as well as other sources, totaled US$48.5 billion during the period. <\/p>\n

On the ruling, Kent Walker, Google\u2019s president of global affairs, had this to say: <\/p>\n

\u201cWe appreciate the Court\u2019s finding that Google is \u2018the industry\u2019s highest quality search engine, which has earned Google the trust of hundreds of millions of daily users,\u2019 that Google \u2018has long been the best search engine, particularly on mobile devices,\u2019 \u2018has continued to innovate in search\u2019 and that \u2018Apple and Mozilla occasionally assess Google\u2019s search quality relative to its rivals and find Google\u2019s to be superior.\u2019 Given this, and that people are increasingly looking for information in more and more ways, we plan to appeal.\u201d<\/p>\n<\/div>\n

\n

5. Super Micro Computer earnings fall short <\/h3>\n

Super Micro Computer (NASDAQ:SMCI) had one of its worst trading days in six months on Wednesday after its Q4 and fiscal year 2024 results showed a rapid decline in the company\u2019s gross margin. <\/p>\n

The company reported a gross margin of 11.2 percent for Q4 after Tuesday\u2019s bell, below analyst estimates of 14.1 and far below 17 percent from its fiscal Q4 2023. <\/p>\n

Despite a promising sales forecast between US$6 billion and US$7 billion \u2013 above analysts\u2019 forecasted US$5.46 billion \u2013 its stock price plummeted 13.79 percent to open at US$531.88 on Wednesday and continued falling throughout the day. <\/p>\n<\/div>\n

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.<\/strong><\/p>\n<\/p>\n

This post appeared first on investingnews.com<\/div>\n","protected":false},"excerpt":{"rendered":"

The stock market experienced a turbulent week influenced by concerns over US economic data. Cryptocurrencies also experienced significant losses before recovering toward the end of the week. Meanwhile, a long-awaited ruling could have massive implications for the tech sector, and a California-based chip stock became the most recent to fall short of steep expectations. 1. […]<\/p>\n","protected":false},"author":0,"featured_media":7661,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-7660","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/7660","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=7660"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/7660\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/7661"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=7660"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=7660"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=7660"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}