Yesterday’s selling pressure on above-average volume is a potential turning point for stock markets. Before that, the market exhibited minimal volatility. The daily price change for the indices was often less than 0.25% - 0.50%. Nasdaq’s (QQQ) 3.64% decline, due mostly to Nvidia (NVDA) and other technology mega-cap stocks falling, is an unusual reversal.
Investors who bought a big position in the index nearly two years ago need not panic. Markets would need to fall on high volume by a big percentage to erase those substantial gains. Traders, however, may need to worry. If they bought the SPY or QQQ at an all-time high, a steep correction would create paper losses. This becomes a permanent loss if the index does not recover. Valuations are at record highs. The index will not revisit past highs if investors refuse to pay premiums.
Earnings Watch
Watch Abbvie (ABBV), Keurig Dr. Pepper (KDP), AstraZeneca (AZN), and American Airlines (AA) as they report quarterly results this morning. After the market closes, Dexcom (DXCM), Skechers (SKX), and Deckers Brands (DECK) are among the most-watched stocks.
On Friday, investors will look for 3M (MMM) to post an improvement in its core business.
