Even Apple Can’t Sweeten Market Indexes

The original version of this story appeared in Zacks.

Today’s market indexes were only briefly in the green due to better than expected Consumer Price Index data (CPI), which showed that inflation was not yet the enemy at our doors. Market sentiment quickly turned negative, even though we opened the day with positive numbers. Even Apple’s new iPhone unveiled — the 13A, 13 Pro, and 13 Max — didn’t convince buyers to buy.

Dow lost nearly 300 points or -0.83% in the course of the day. Closer to the S&P 500 (-0.57%) and Nasdaq (-0.45%), respectively. However, the small-cap Russell 2000 suffered a further -1.4% loss. The S&P 500 is still the most popular of the major indexes.

There are technical questions regarding trading resistance. Will we rebound from the 50-day? Or will it fall below it? This could be the beginning of the -5% correction that analysts noted was absent in previous years, and which is happening here in September’s historically bleak month. The market is showing signs of a sour mood, with rumours of supply-chain problems and real shortages in certain industries.

However, Q3 earnings season is going to settle the matter on near-term growth. While we are still one month away from the release of new guidance and reports, it is already clear that Q2 has seen a lower base effect quarter. However, markets have better than expected prospects for the next quarter and next year. These supply-chain problems will continue into the next earnings season. This could lead to more sourness.

Similar situation with employment. If our current lag is not resolved by reporting the month-end numbers, then we may see a longer market lag. Even if supply and demand issues continue for the next few months, things are likely to rebound eventually. Too many products are in high demand. A second push up is possible in 2021 and 2022.

Tomorrow’s Import/Export numbers, Industrial Production/Capacity Usement for August and Empire State Index for September are tomorrow. They will provide the grist for your mill, or at the very least the leaves for you to decide what the next economic move is. These all-time closing highs have been backed by us. How long will it take to get there again?

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Publited at Wed 15 Sep 2021, 00:12.01 +0000

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