S&P 500 may increase losses in 2023
2023.02.25 01:45
S&P 500 may increase losses in 2023
By Tiffany Smith
Budrigannews.com – Friday’s decline of the S&P 500, which was on track to finish its worst week of the year, was caused by worries that the Federal Reserve might become more aggressive. Data showing that inflation remains extremely high fueled these concerns.
The dipped by 0.93 percent, the dipped by 0.91 percent, or 273 points, and the dipped by 1.6%.
The Fed’s preferred inflation metric, the price index, or core PCE deflator, increased by 4.7% in January, exceeding economic forecasts of 4.3%.
The hot inflation print came at the same time that data showed that consumers were doing better than expected, raising expectations that the Federal Reserve might have to raise interest rates more than expected.
According to a note from Stifel, “[F]or the Fed’s perspective, a solid performance from the consumer despite 425bps of tightening suggests not only that individuals and households can withstand a further backup in rates, but also that significantly more tightening is necessary to result in the type of demand destruction necessary to tame inflation.”
After the data, Treasury yields increased, with the yields getting closer to 4%, triggering a market correction in tech and other rate-sensitive industries.
Alphabet, owned by Google (NASDAQ:), NASDAQ: Microsoft, NASDAQ: Facebook, likewise Apple (NASDAQ:) were less than 2% lower.
NASDAQ: Netflix, meanwhile, it continued to add to its loss from the previous day, even though some Wall Street investors believe that the streaming company’s recent announcement that it will reduce subscription fees by 20% to 60% in over 30 countries could boost growth.
In a note, Bank of America stated, “While on the surface these are significant pricing reductions, we believe that the impact to total revenue will be relatively limited given these territories’ already low ARPUs.”
Beyond Meat (NASDAQ:)’s earnings outlook is as follows: a loss in the fourth quarter that was lower than expected due to cost reductions and stated that it was on track to generate positive cash flow in the second half of the year, sending its share price skyrocketing by 9%.
UBS, on the other hand, stated that Beyond Meat remained a “show me” story and expressed worries “about the company’s ability to improve the sales trajectory in a meaningful way, especially if the economic environment deteriorates further.”
NYSE: Carvana fell 5% as a result of the used-vehicle e-commerce platform reporting a higher profit than anticipated amid rising costs and increased interest rates.
As it continues its transition to right-size its business in response to an aggressive growth strategy in the pandemic, Carvana predicted that sales volume would continue to decline in the first quarter.
After lowering its price target for the stock from $16 to $10, Deutsche Bank stated in a note that this transition period “may last for a couple of years before it can refocus on top-line growth.”
Additionally, Adobe Systems (NASDAQ:) amid reports that the United States Department of Justice may file an antitrust lawsuit to prevent the company’s $20 billion acquisition of Figma, shares fell 7%.
