FYI: U.S. stocks fell Friday on global growth worries, but major indexes were still poised to close the week with modest gains after a strong kickoff to corporate earnings season.
The Dow Jones Industrial Average dropped 255 points, or 0.95%, in afternoon trading, dragged down by Boeing and Johnson & Johnson. The S&P fell 0.39%, while the Nasdaq Composite declined .83%.
Are three indexes are within 4% of all-time highs reached this summer, showing the resilience of the U.S. stock market despite concerns about slowing growth at home and abroad.
Friday’s declines came after fresh Chinese growth data sparked concerns about the world’s No. 2 economy and a slew of negative headlines pummeled some of the biggest U.S. companies.
Among Friday’s movers, Johnson & Johnson slumped 4.7% after the company said it was recalling a single lot of baby powder after tests found small amounts of chrysotile asbestos. Boeing tumbled 3.5% after Reuters reported that the aircraft maker’s employees may have misled regulators over the safety of the 737 Max.
Technology stocks were broadly lower, with Netflix down 6% after several analysts cut their price targets for the streaming-video company. Chipmaker Micron Technology tumbled 4.4%, while Microsoft fell 1.7%.
But the S&P was still poised for a 0.5% increase for the week--its second consecutive week of gains--largely due to upbeat quarterly earnings reports, including from banks like JPMorgan Chase and Citigroup.
Of the 73 companies in the S&P 500 that have reported earnings through Friday morning, more than four-fifths have topped analysts’ expectations, according to Refinitiv. That’s largely because expectations came down so much in recent months.
Coca-Cola, United Airlines Holdings and health-insurance giant UnitedHealth Group are among the stocks that rallied this week on better-than-expected results.
Overseas, Chinese stocks dropped sharply after data showed the Chinese the economy slowed further in the third quarter. The benchmark Shanghai Composite Index fell 1.3%, its biggest decline in a month.
Fresh data showed that China’s economy grew 6% in the quarter as business activity continued to deteriorate. Each quarterly slowdown in Chinese growth has pulled the country’s economic performance to new lows not seen since the current measure of output was adopted in 1992.
The benchmark Stoxx Europe 600 fell 0.3%. In the U.K., the FTSE 100 dropped 0.4% and the pound climbed 0.4% against the dollar.
Investors are watching developments closely before U.K. lawmakers vote Saturday on a draft Brexit agreement struck with the European Union. Prime Minister Boris Johnson is trying to muster enough support for the deal in the U.K. Parliament.
The yield on U.S. 10-year Treasurys fell to 1.741% from 1.757% on Thursday. Bond yields move in the opposite direction from prices.
In commodities, U.S. crude futures fell 0.6% to $53.59 a barrel. Gold futures slipped 0.2%.
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-10-18/your-evening-briefingMarketWatch:
https://www.marketwatch.com/story/stock-index-futures-struggle-for-direction-after-weak-china-growth-2019-10-18/printWSJ:
https://www.wsj.com/articles/chinese-stocks-slide-after-economic-growth-cools-11571389552Bloomberg:
https://www.bloomberg.com/news/articles/2019-10-17/asia-stocks-set-for-mixed-open-before-china-data-markets-wrap?srnd=premiumIBD:
https://www.investors.com/market-trend/stock-market-today/stock-market-bad-day-continues-these-two-stocks-took-down-the-dow/CNBC:
https://www.cnbc.com/2019/10/18/stock-market-wall-street-in-focus-amid-corporate-earnings.htmlReuters:
https://uk.reuters.com/article/us-usa-stocks/wall-street-pressured-by-jj-global-growth-concerns-idUKKBN1WX1FVU.K:
https://uk.reuters.com/article/uk-britain-stocks/ftse-feels-ihgs-pain-amid-caution-ahead-of-brexit-vote-idUKKBN1WX0QOEurope:
https://www.reuters.com/article/us-europe-stocks/string-of-weak-earnings-leave-european-stocks-barely-up-on-the-week-idUSKBN1WX0PSAsia:
https://www.cnbc.com/2019/10/18/asia-markets-october-18-china-gdp-brexit-oil-and-currencies.htmlBonds:
https://www.cnbc.com/2019/10/18/treasury-yields-tick-higher-as-investors-digest-china-data-brexit-developments.htmlCurrencies:
https://www.cnbc.com/2019/10/18/forex-markets-brexit-deal-chinas-economy-in-focus.htmlOil
https://www.cnbc.com/2019/10/18/gold-markets-brexit-deal-in-focus.htmlGold:
https://www.cnbc.com/2019/10/18/gold-markets-brexit-deal-in-focus.htmlCurrent Futures:
https://finviz.com/futures.ashx 
Comments
Does somebody get paid to cook up these silly headlines every day? Yesterday it was BREXIT. The day before that it might have been the lunar cycle. I don’t know. Of course, only a third grader would believe that a single factor “moves” the markets each day, or for that matter, that there’s been any significant movement at all for a long time.
Truth is the markets have been incredibly stable for a long time now - save perhaps for some nations like China that are hurting from the tariffs. So pretty much nothing happened of consequence in the financial markets today ... or yesterday ... or the day before that. Trying to pretend something important happened borders on insanity.
My headline: “Markets have gone nowhere for most of the year.”
- U.S. stock indexes are near where they sat more than a year ago, mid-way thru 2018. For the most part, they’ve retrenched / recovered from the nasty selloff of late 2018.
- Gold was hot for the first 5-6 months of the year, tacking on $100-$200 and getting up above $1500. But it has in recent weeks slumped back below the $1500 level.
- Oil has stagnated (fitting I guess for a product derived from dead dinosaurs). Brent and NYMEX have been hugging the line just below $60 for several months now - far below their all time highs of several years earlier.
- Interest rates fell sharply for a month or so to absurdly low levels. They’ve retrenched those sharp declines in recent weeks but remain abnormally low.
- Jerome Powell is breathing easier nowadays as the scapegoating of him seems to have abated. DT’s attention and wrath have been diverted away from Chairman Powell’s backside to some - uhmm - other pressing issues.
Yes, someone does. Many articles have outside headline writers different from the authors of the article. Those headline writers are seeking SEO--search engine optimization--so they try to use "key words" that will attract the most online interest, even if sometimes the language of the headline is wrong for the specific article.