The bears have been waiting a long time for this day.But first, the scoreboard:
S&P 500: -22.71
And now, the top stories:
- Where to begin? Probably Tuesday, when Tunisian-inspired protests hit Egypt, spurring a horrendous week for Egyptian stocks. By Wednesday the word was out that Friday would be the big day and it was. Though before we get to that, we’ll just mention that things were pretty quiet in both Asia and Europe, although the Nikkei fell pretty hard in its first day of trading post-S&P downgrade.
- The other big setup to today was last night’s earnings from Microsoft and Amazon, both of which disappointed investors, the latter of which was significantly disappointing.
- Things were basically looking fine in the US in the early going. There continued to be chatter about Moody’s not-so-subtle warning on US debt.
- The protests in Egypt started not long after 6 AM US time — after noon prayers were completed in Egypt — though it took several hours for the intensity to rage. In the meantime, GDP came out in the US and it was mixed. The headline of 3.2% was below expectations. However, the end demand number of +7.1% was lights-out good.
- There was one big earnings report, which was Ford, and the stock got slammed for missing earnings by a huge mark. There was talk about how maybe it didn’t communicate guidance well, but it doesn’t really matter. It was a major jolt to the market.
- For a bit, things were looking bright, as traders took the glass-half-full attitude towards the GDP number. At 9:55 we got a pretty solid Consumer Sentiment.
- After that, it was basically all Egypt all the time, and markets reacted as you’d expect they might if a major, earth-shaking geopolitical event were unfolding in the Middle East. The dollar, the yen, gold, silver, and oil all had fantastic days. Everything else? Not so much. For a full roundup of what happened, see our full coverage here.
- So yeah, in the end, the market took it on the chin pretty good, with small caps and high beta names getting hammered. There were a few winners. The momentum Godzilla known as Netflix had yet another up-day. Tanker stocks did well on concerns over the fate of the Suez Canal, and prospects for pricing power.
- Anyway, will be tense weekend in Egypt, the rest of the Middle East, and in DC.
- For further reading, check out the world’s 7 big oil choke points >