U.S. stocks plunged in early trading Wednesday as markets looked to reverse all of Tuesday’s gains.
The Dow Jones Industrial Average lost 429 points at the open, trading down -1.25%. The S&P 500 lost 46 points, for a loss of -1.07%, and the Nasdaq Composite Index lost 86 points, or -1.01%.
Investors are growing nervous that inflation is running unchecked and will ultimately either slow the economy, slow earnings — or both.
Oil reached the highest level in seven years, partially due to the increase in the price of natural gas in Europe. The price on WTI is just shy of $80 per barrel.
Higher energy costs hurt consumers — indeed, the price of energy has been pushing consumer prices higher in the past months. Meanwhile, I have warned of $75-100 oil in the final months of the year and, unfortunately, we’re already in that territory.
Amid the rising energy costs and worries of a slower-than-expected recovery, Goldman Sachs downgraded some key airlines. Shares of American Airlines (AAL) and Jet Blue (JBLU) were both down 4% in early trading on the news.
U.S. Dollar and Treasuries
Treasury yields faltered as investors sought safety, with the yield on the 10-year Treasury back below 1.5%. The dollar strengthened against a basket of major currencies.
|U.S. Dollar Index (DXY):||94.36||+0.39||+0.41%|
Stocks to Watch
Shares of Voyager Therapeutics rose after the company signed a licencing deal with Pfizer that could be worth $360 million. Pfizer has staked that much money to finance Voyager’s next-gen gene therapies.
Stocks of a big data analytics company Palantir surged after the company announced an $823 million contract with the U.S. Army to deliver intelligence data analytics for the Capability Drop 2 (CD-2) program.
Camber Energy extended its losses in premarket trading after dropping 50% on Tuesday after a short-seller targeted the meme stock. Investment firm Kerrisdale Capital issued a report claiming that the company is “in a middle of a death spiral” and that it would once again be a penny stock.
We are short $CEI. Report avail at https://t.co/Tdwm1bSFni. This one has something for everyone: death-spiral financing, a fake CFO, delinquent filings, fired auditors 3 wks ago, insolvent energy assets & the saddest family of entrepreneurs in the cleantech vaporware space ☹️ 1/7
— Kerrisdale Capital (@KerrisdaleCap) October 5, 2021
Energy company Gran Tierra extended its gains after surging almost 15% on Tuesday. No company-specific news was released this week. The stock is benefiting from the surge in energy prices that has inflated its assets.
Meme stock Farmmi Inc was flat as retail investor enthusiasm subsided.
Commodities to Watch
Oil rose as the global energy crunch worsened, and OPEC decided not to increase output beyond what was planned. Gold was down.
|WTI Crude Oil||$78.19||-0.95%|
|Brent Crude Oil||$81.98||-0.70%|
Bitcoin broke $51,000 on mounting institutional interest, as U.S. Bancorp and Bank of America expressed interest in the cryptocurrency.
The global crypto market cap is $2.19T, a 0.21% decrease over the last 24 hours. Bitcoin’s dominance is currently 44.27%, an increase of 1.26% in the same period.
|Symbol||Price||Chg. %||Market Cap.|