Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

What Happened This Week: The Pound, The Dow, VIX And Even Meta React

ca.investing.com/analysis/what-happened-this-week-the-pound-the-dow-vix-and-even-meta-react-200527784
What Happened This Week: The Pound, The Dow, VIX And Even Meta React
By Brenda O'Farrell/Investing.com   |  Sep 24, 2022 07:55
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
GBP/USD
-0.11%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DJI
-0.56%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
META
+1.98%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
US500
-0.09%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GIS
+0.14%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CPB
-0.15%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Actions and reactions. That is one way to sum up the week that was in the markets, as events – both big and small – reverberated through Wall Street and beyond.

First, yesterday’s so-called “mini budget” brought down by U.K.’s new prime minister, Liz Truss, shook things up, causing the pound to take a dive. The pound sunk to below US$1.09 for the first time in more than 35 years. Investors sold off U.K. assets, while government bonds soared.

According to reports, Deutsche Bank’s head of foreign exchange, George Saravelos, said sterling was “in danger.”

“It is extremely unusual for a developed market currency to weaken at the same time as yields are rising sharply,” Saravelos was quoted in the Canadian-based Financial Post.

The aim of the government’s budget update is to cut taxes and curb household energy bills while simultaneously stimulating economic growth. Described as “the most sweeping tax cuts since 1972,” the move made big waves.

Dow Heads Into Bear Territory

The U.S. markets reacted to a number of factors this week, culminating Friday with the Dow Jones officially dropping into a bear market.

Before the close on Friday, the Dow Jones fell below 29,439.72, the threshold marking the first bear market since the first major COVID-induced plunge in early 2020. An index enters a bear market when it sheds 20% or more from a recent high. In the case of the Dow, it lost more than that since its peak in January of this year.

It edged up slightly by the closing bell to finish the day at 29,590.41, down 1.62% for the session.

Dow Jones Weekly Chart
Dow Jones Weekly Chart

Source: Investing.com

Meanwhile, the S&P 500 fell 1.72%, marking a new 2022 closing low, and the NASDAQ Composite lost 1.8% on the day.

The markets were reacting to continued inflation, the Federal Reserve’s latest interest-rate hike and its promises of more to come, geopolitical issues that include Russia raising the spectre of intensifying and escalating its war in Ukraine, as well as the volatility of the markets in the U.K. and its plunging pound.

As Quincy Krosby, an analyst with LPL Financial was quoted in media reports said: “This is a global macro mess that the market is trying to sort out."

To quantify that mess in another way: Only two of the 30 stocks listed on the Dow closed yesterday not in the red – Home Depot (NYSE:HD) and Johnson & Johnson (NYSE:JNJ).

And The VIX Hit A New Recent High

And as the markets fell, the VIX moved higher. But the key here was how much higher. By the close on Friday the Cboe Volatility Index brushed 30, a level it has not breached since June.

Meta Reacts To Revenue Drop

Getting back to my theme of actions and reactions: An event at Meta Platforms back in July reverberated this week.

Back in the summer, the company formerly known as Facebook (NASDAQ:META) reported its first quarterly drop in revenue in its history. Its second-quarter revenues missed analysts’ expectations, dropping 1% to $28.82 billion compared with revenues from the same quarter a year earlier of $29.1 billion. That turnaround sent waves through the company.

Fast forward to this past week, and the reaction came as Meta reportedly put workers on what it calls its “30-day list,” whereby the employees have a month to find a new job within the organization or leave if their department is downsized. The move is said to be a direct result of CEO Mark Zuckerberg stating back in July when the disappointing results were revealed that the company would reduce the number of employees on several teams during the coming year.

It's a sign of the resizing going on in several tech companies.

Top Winners And Losers Of The Week

Again, for all those out there who are keeping score, here are the top gainers of the past week:

On the S&P 500

  • General Mills (NYSE:GIS): +5.21%
  • Kellogg Company (NYSE:K): +2.76%
  • Allegion (NYSE:ALLE) PLC: +2.62%
  • Hormel Foods (NYSE:HRL): +2.36%
  • Campbell Soup Company (NYSE:CPB): +1.91%

On the NASDAQ Composite

  • Air T Inc (NASDAQ:AIRT): +41.87%
  • Stabilis Solutions Inc (NASDAQ:SLNG): +39.11%
  • Cassava Sciences (NASDAQ:SAVA): +34.89%
  • Reading International (NASDAQ:RDI): +18.20%
  • American Public Education (NASDAQ:APEI): +15.58%

And the biggest losers:

On the S&P 500

  • Caesars Entertainment Corp (NASDAQ:CZR): -21.54%
  • APA Corporation (NASDAQ:APA): -18.76%
  • Carnival (NYSE:CCL): -16:82%
  • SolarEdge Technologies (NASDAQ:SEDG): -16.65%
  • Marathon Oil Corp (NYSE:MRO): -16.48%

On the NASDAQ Composite

  • Schmitt Industries Inc (NASDAQ:SMIT): -46.99%
  • S&W Seed Company (NASDAQ:SANW): -39.66%
  • BioLine RX Ltd (TASE:BLRX): -38.57%
  • Color Star Technology Co Ltd (NASDAQ:CSCW): -36.86%
  • Neptune Wellness Solutions (NASDAQ:NEPT): -32.52%
What Happened This Week: The Pound, The Dow, VIX And Even Meta React
 

Related Articles

What Happened This Week: The Pound, The Dow, VIX And Even Meta React

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email