It was another brutal week for Wall Street, but with a glimmer of hope that sparked fresh talk about whether the stock market had finally hit a “bottom” that will allow a new rally phase to start.
Despite the heavy losses, some analysts expressed optimism that the market was able to hold above key lows for the indexes last month, and said this could be a sign that selling pressures have been exhausted.
Analysts pointed to market action on Thursday, where the Dow Jones Industrial Average reversed losses of some 300 points to stage a powerful rally of more than 550 points.
The market action “may go down as the final low of the market mess that began a year ago,” said Bob Dickey, a technical analyst at RBC Wealth Management.
“It was the fourth test of the low zone in five weeks, and by most technical measures was also the most meaningful ... There was no apparent reason for the market to rally, which actually helps in the analysis, because it means that the markets have most likely seen an exhaustion of the selling pressure,” he said.
Still, in the week to Friday, Dow index slid 4.99 percent to 8,497.31. The tech-heavy NASDAQ plunged 7.92 percent to 1,516.85 and the broad-market Standard & Poor’s 500 dropped 6.17 percent to end at 873.29.
Some said it was too soon to say the bottom had been reached.
“So many analysts are saying that [Thursday] represented a successful test of the intraday lows and probably marked capitulation,” Fred Dickson at DA Davidson & Co said.
“We will withhold judgment on that question until we make sure that having recorded some gains, traders decide to take profit, starting the familiar cycle over again,” he said.
Linda Deussel at Federated Investors said the market is likely to remain under pressure for some time but does not see further heavy declines.
“This may not be the time to jump into stocks with both feet,” she said. “But we strongly believe that a bottoming process is under way. We remind investors that the lion’s share of the first-year gains in a new bull come in the first few months.”
The bond market remained firm. The yield on the 10-year Treasury bond fell to 3.750 percent from 3.780 percent a week earlier, and than on the 30-year Treasury bond eased to 4.230 percent from 4.261 percent. The lower yields reflect higher bond prices.
In the coming week, the market is likely to consider any actions by the weekend summit of the G20, an emergency meeting of leaders on the global financial crisis.
Also on tap are reports on US industrial production, housing starts and inflation.
Some analysts say the grimmer-than-expected data point to conditions that are even worse than markets have anticipated.
“It turns out I haven’t been pessimistic enough,” said Scott Anderson, economist at Wells Fargo.
“The negative feedback from the bank credit losses, tighter credit conditions, and worsening economy have been more difficult to overcome than I expected,” Anderson said.
“The current quarter is going to be terrible, and there isn’t much Washington is going to be able to do about it. GDP growth in the fourth quarter is now on track to plunge 4.2 percent on an annualized basis with no major sector left to hold up this ‘wet noodle’ of an economy,” he said.
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
‘SOMETHING SPECIAL’: Donald Trump vowed to reward his supporters, while President William Lai said he was confident the Taiwan-US partnership would continue Donald Trump was elected the 47th president of the US early yesterday morning, an extraordinary comeback for a former president who was convicted of felony charges and survived two assassination attempts. With a win in Wisconsin, Trump cleared the 270 electoral votes needed to clinch the presidency. As of press time last night, The Associated Press had Trump on 277 electoral college votes to 224 for US Vice President Kamala Harris, the Democratic Party’s nominee, with Alaska, Arizona, Maine, Michigan and Nevada yet to finalize results. He had 71,289,216 votes nationwide, or 51 percent, while Harris had 66,360,324 (47.5 percent). “We’ve been through so