Stocks Continue to Hit New Lows On Risk-Aversion
4:02 pm Friday, September 30th, 2022
US stocks are on track for their worst monthly rout since April, as markets were repeatedly pummeled by the Federal Reserve’s resolve to keep raising interest rates until inflation eases.
Risk assets have been in a tailspin since the central bank delivered a third jumbo hike last week and warned of more pain in the horizon. Friday’s comments by Fed officials came with some nuance.
Fears of global recession are still mounting as the threat of higher rates saps growth. The case of the UK shows how faultlines between government and central bank policy on tackling inflation can erupt into a crisis.
Index level performance is driven lower by weak mega cap stocks, namely Apple (AAPL). The Vanguard Mega Cap Growth ETF (MGK) is down 1.0% versus a 0.7% loss in the Invesco S&P 500 Equal Weight ETF (RSP).
Treasury yields move higher at the same time. The 10-yr note yield is up four basis points to 3.79% and the 2-yr note yield is up three basis points to 4.20%.
S&P 500 constituents AbbVie (ABBV), J.B. Hunt Transport (JBHT), and Skyworks (SWKS) are among today’s top laggards. ABBV is still decently weaker despite a corrected sell side analyst note that retracted bearish guidance claims, JBHT slips after KeyBanc Capital Markets downgraded the stock to a Sector Weight, while SWKS fails to pick up a boost from chip peer Micron’s (MU) solid Friday showing.
Meanwhile, the U.S. Dollar Index is down less than -0.1% to $112.22.
