US close: Nasdaq-100 has worst day since September as tech stocks deFANGed

META PLATFORMS

$554.08

13:10 15/11/24

-4.00%

-$23.08

Wall Street finished on a mixed note in a light day in terms of corporate and economic news, as Technology shares sold-off alongside data revealing the largest inflows into bonds for 122 weeks.

Netflix Inc.

$823.96

12:54 15/11/24

-1.59%

-$13.30

By the closing bell, the Nasdaq-100 had fallen 2.44%, its worst one-day performance since September.

In prescient fashion, strategists at Bank of America-Merrill Lynch had pointed out the day before how Technology had become the most crowded trade by large-cap active funds that it had ever been, particulary the so-called FANG (the acronym for Facebook-Amazon.com-Netflix-Google) stocks.

Meanwhile, the Dow Jones Industrials gained 0.42% or 89.44 points to close at 21,271.97, even as the S&P 500 slipped 0.08% or 2.02 points to 2,431.77 and the Nasdaq Composite dropped 1.80% or 113.85 points to 6,207.92.

From a sector standpoint, the worst performing areas of the market were: Semiconductors (-4.01%), Computer Hardware (-3.62%), Technology Hardware (-3.43%), Internet (-3.31%) and Toys.

Stock in Facebook fell 3.30%, while that in Amazon.com shed 3.16%, Netflix another -4.73% and Google 3.41%.

Nonetheless, BofA-Merrill added: "although Tech's 8% premium to the S&P 500 P/E is the biggest premium we have paid since 2010, it is still low relative to history, even excluding the Tech Bubble."

Acting as a backdrop, the US dollar spot index was up by 0.46% to 97.36 as the unexpected result of the UK General Elections triggered a small bounce in the greenback.

The risk of the unexpected in Britain, together with caution around events in Qatar, the FBI's Comey, ECB and the US Federal Reserve, drove $16.0bn of inflows into global bonds last week, the most in 122 weeks, according to a separate report from Bank of America-Merrill Lynch dated 8 June.

Nevertheless, the same investment bank also revealed that fund managers' average cash levels were running at 4.9% - versus a 10-year mean of 4.5% - and therefore perhaps not yet indicating 'irrational exhuberance'.

In parallel, the Chicago Board of Options Exchange's VIX volatility rose 5.31% to 10.70, after having retreated by nearly as much earlier during the same session.

To take note of, perhaps, some market chatter earlier on Friday had highlighted how volatility was again moving lower, despite concerns in some quarters regarding the medium-term stability of the Trump administration and around the insistence from the US central bank that further interest rates hikes were still on the cards for after next week's FOMC meeting.

Wholesale inventories in the US shrank by 0.5% month-on-month in April (consensus: -0.1%), revised data from the Department of Commerce showed.

That led analysts at Barclays Research to trim their tracking estimate for second quarter US GDP growth from 2.1% to 2.0%.

Citi was a top riser after UBS upgraded its view on the stock from 'sell' to 'hold'. However, the upgrade was predicated on analyst Saul Martinez' belief that US president Donald Trump's policy promises were less likely to come to fruition.

In parallel, the yield on the benchmark 10-year US Treasury note was up by one basis points to 2.20% and off an intra-day high of 2.23%.

Dow Jones - Risers

Pfizer Inc. (PFE) $32.77 3.21%
JP Morgan Chase & Co. (JPM) $86.96 2.37%
Chevron Corp. (CVX) $106.40 2.31%
Merck & Co. Inc. (MRK) $64.39 1.88%
Exxon Mobil Corp. (XOM) $82.13 1.87%
Goldman Sachs Group Inc. (GS) $222.44 1.68%
E.I. du Pont de Nemours and Co. (DD) $82.90 1.51%
International Business Machines Corp. (IBM) $154.10 1.31%
General Electric Co. (GE) $27.93 1.27%
Walt Disney Co. (DIS) $105.62 1.25%