The Dow Jones Industrial Average closed down 0.96% to 35,028.65 points. On January 5th, it touched an all-time high of 36,952.65 points.
The Standard & Poor’s 500 Index fell 0.97% to 4,532.76 points. And in the intraday trading on January 4th, it reached the highest value ever at 4818.62 points.
On the other hand, the Nasdaq Technology Index fell 1.15% to settle at 14,340.25 points.
The Nasdaq has entered its retracement territory today – when it loses at least 10% of its recent rally (and when it drops at least 20% it enters the so-called “bear market”) [‘bear market’]). This is because it lost 10% compared to its previous closing number on November 19. On November 22, it hit an all-time high of the day at 16,212.23 points.
Indices on the other side of the Atlantic fluctuated between gains and losses for much of the session, with the S&P 500 testing even a major support level.
Investors are choosing caution, as they assess earnings growth forecasts for listed companies in the context of a potential tightening of monetary policy — with the Fed likely to start as early as March as key interest rates increase and are able to do a total of four times this year.
Two banks – Bank of America and Morgan Stanley – reported today’s accounts good performance (high 0.39% and 1.83% respectively), in contrast to other similar products.
However, tech companies continue to be heavily penalized due to the high interest rates on US sovereign debt, which ended up negatively affecting market sentiment.
The expected tightening of the Federal Reserve’s monetary policy has pushed up Treasury yields, penalizing especially tech yields, which are trading at high prices, having risen in the past two years largely thanks to low interest rates.
Speculation that many central banks, including the Federal Reserve, will have to start raising interest rates sooner than expected has pressured stock markets in general and sent debt rates higher.
bears vs bulls
When we have a bear market, it means that it is going down – and investors who think that the stock markets are declining are also considered bears (because they are in a bearish position).
And why the bear? Because it attacks from above with its claws, causing a downward movement. A “bear market” is entered when a security, index or other asset falls at least 20% from its previous high.
In contrast to the bear, we have the bull, which indicates a bullish market, strong and full of optimism. Anyone who believes in ascension is, therefore, “ascending.” And why the bull? Because it is an animal that attacks from the bottom up with its horns, causing an upward movement.
Thus the financial world uses the terms “bull” and “bear” to refer to the rise and fall of securities listed in the markets. They are mostly used in the stock market, but they can be applied to anything that can be traded on an exchange, such as currencies, bonds, and commodities, for example.
It is not enough for a market to be in an uptrend to immediately be called a “bullish market” – technically, this only happens when it rises 20% or more from the last low – but the bulls can be said to be “in the raft”. Thus, if there are sectors in a particular index that are pulling up while others are pulling down, it is a case of saying that there are bulls and bears in dispute over the main trend of the index.
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