Analisis Forex & Kajian: 10.08.2023 - US stock market in downtrend

10.08.2023 02:16 PM

US stock market in downtrend

The US stock indices are trading with a slight dip of up to 1.5%. Specifically, the Dow Jones Industrial Average fell by 0.54%, the broad-based S&P 500 ended down by 0.7%, while the tech-heavy NASDAQ dropped by 1.17%.

The primary reason for the market's jittery sentiment is the anticipation of the release of fresh inflation data for the past month. Analysts expect an annualized consumer price index to accelerate to 3.3% in July from 3% in June.

This metric plays a significant role in guiding the US Federal Reserve's future monetary policy decisions. However, some experts argue that even a minor uptick in consumer price growth may not heavily influence the Fed's actions.

Here, consumer sentiments also matter. If they remain optimistic, the chances of further interest rate hikes will be minimal.

The corporate earnings season continues. Investors' attention was particularly drawn to Lyft's report, which led to a 5% decline in its share price. While the company reported revenue growth, it wasn't as high as anticipated, suggesting that Lyft is still struggling to fully recover from the pandemic's effects.

Among the Dow Jones components, Dow Inc led with a 0.96% surge in its stock price, followed by Honeywell International Inc, which rose by 0.85%, and Caterpillar Inc, which climbed by 0.58%. On the flip side, shares of other corporations dropped in value: Salesforce Inc fell by 2.7%, Intel Corporation declined by 2.11%, and Goldman Sachs Group Inc shed 1.6%.

In the S&P 500 index, Axon Enterprise Inc witnessed the most substantial growth of 14.06%, followed by Akamai Technologies Inc, up by 8.47%, and Fleetcor Technologies Inc, appreciating by 6.29%. On the contrary, some companies showed a dip in their stock prices: NVIDIA Corporation went down by 4.72%, Paramount Global Class B decreased by 4.46%, and Broadcom Inc dropped by 3.67%.

For NASDAQ components, the top performers were shares of Tango Therapeutics Inc, surging by 103.92%, Renovaro Biosciences Inc, rising by 82.35%, and Decibel Therapeutics Inc, gaining 80.29%.

Several companies experienced a decrease in their stock prices: Palisade Bio Inc's shares fell by a staggering 62.5%, Bruush Oral Care Inc Unit dipped by 44.94%, and Yellow Corp's stocks retreated by 44.81%.

On the New York Stock Exchange, the number of stocks that decreased in price (1,593) marginally surpassed the number of stocks that appreciated (1,324). Meanwhile, NASDAQ paints a different picture: the number of stocks that declined (2,225) was almost double the number that increased (1,284).

Akamai Technologies Inc's stock value hit its annual peak, closing at $102.99. Conversely, another stock's price plummeted to a record low, settling at $0.72.

The futures market for gold and oil also witnessed changes: gold futures dropped by 0.57%, trading at $1.00 per troy ounce. In contrast, oil prices surged with WTI increasing by 1.62% to $84.26 per barrel, and Brent oil up by 1.47% to $87.44 per barrel.

What lies ahead?

Despite a short-term decline in US stock indices, experts remain optimistic about future prospects. According to analysts' assessments, Wall Street's indices have already added around 20% this year, with further growth anticipated.

Notably, experts forecast the S&P 500 index to rise to 14,000 within the next decade, by 2034. Such predictions indicate a strong bullish trend in the market. Analysts believe the bull market cycle, which commenced in 2016, will last between 16 to 18 years.

If the experts' forecasts prove to be accurate and the S&P 500 indeed hits the 14,000 mark, it would represent a 209% growth compared to the current average annual growth rate of 10%.

These evaluations are based on a long-term analysis of the S&P 500 index chart dating back to the 1930s. Such extended bull cycles, like the one currently projected, were observed in the 1950s and 1960s and again in the 1980s and 1990s. On average, returns for the index during these cycles amounted to 2,300%. However, periods of growth were intermittently marked by prolonged downtrends.

Therefore, experts advise investors to overlook short-term stock sell-offs and view them as opportunities to strategically acquire stocks for the long run. Volatility may persist throughout the earnings season and into the end of the current quarter. Yet, market participants should stick to their strategies and maintain optimism.

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