Stocks slide as momentum builds against growth

Tale of the tape: Tech carnage continues, stock markets continue downwards spiral, pandemic bubble stocks getting some treatment, Bitcoin cracks at $40k. Is this the bear market proper – an end to the ’09-’18 expansion? Jeremy Grantham reckons trend for the S&P 500 is 2,500 – we’re at 4,400 still. Who’s up for a 50% decline? The Fed would try to stop that but can it?

European indices fell over 1% in early trade Friday after a dismal end to the US session on Thursday saw the Nasdaq give up morning gains to finish down 1.3%. The S&P 500 was up 1% at point, finished down 1%. Wild swings are catching many offside. Rates are actually lower; the 10yr US yield dropping under 1.8%, just momentum is unstoppable for now. UK retail sales fell faster than expected in December due to omicron, but this is now rear-view data given the UK is out of the woods now. Inflation still rife even if bonds not doing much – Philly Fed prices paid index jumped 23 points to the highest level since August 1988.

Peloton shares closed down 24% at $24.22, below its IPO price and about 85% below the ATH, after reports it is halting production of some products…Market cap is now below $8bn…Apple should just buy it. Turns out it was just an exercise bike with an iPad attached…everyone knows what happens to exercise bikes. The wheels are off, but were they ever on? Netflix was dumped after hours as it missed on subscriber growth…shares down 20% after the closing bell. Top and bottom line numbers were actually good but stock down on weak subs guide and is caught in the broad mood against pandemic bubble winners.

Nasdaq 100 is now through its 200-day line and looking at flirting with the Oct lows. Definitely now looking to trade in the Jul-Oct range, but does support hold at 14,400, the 23.6% retracement? Looks quite oversold, no capitulation just yet…ARKK finished mildly higher.

The FTSE 100 fell back under 7,500 this morning, bulls mounting a defence at this level. But the index does seem to have marked out a higher range, trend support broken but bouncing off the 20-day line and 23.6% retracement.

Bitcoin is tumbling with tech – deep correlation to equity markets only indicate less utility as an investment class. Next stop $29k?