Search Mark
Home / Expert Opinion

Amazon Shares Slide and Taper Test


Daily Insights: Expert Opinion - Doo Prime News

US Stocks fell on Friday, 30 July 2021, on the back of a selloff in Amazon shares. Amazon shares dropped 7.6% after the company’s revenue and sales outlook missed expectations. Markets whipsawed last week on a combination of factors.

Earnings from Big Tech, such as Amazon, Apple, Microsoft, and Tesla, coupled with China market selloff, US GDP, and stimulus talks contributed to the volatility, Fed said.

Fed Chairman, Jerome Powell, said Federal Reserve officials are moving closer to when they can start reducing support for the US economy, but added that there is “still some way to go”.

Markets shrugged off selling earlier in the week and posted nice gains on Wednesday, 28 July, and Thursday, 29 July 2021. This shows the eagerness in buying the dips.

Unfortunately, the Amazon news proved too much and the market gapped down on the open on Friday and just could not close the gap.
However, the market posted a comeback and closed well off the lows.

Here are the closing levels on Friday:-

 Last               Change        %Change 
Dow Jones   34,935,47 -149.06 -0.42% 
S&P 500  4395.26 -23.89 -0.54% 
Nasdaq Comp 14672.68 -105.59 -0.71% 
US 10Y 1.226   
VIX 18.24 0.54 3.05% 

The US jobs market has some ways to go to meet the Fed Taper Test, Governor Lael Brainard said on Friday.

Brainard also suggested that the recent surge in inflation is likely to prove temporary and that she saw upside and downside risks to the economy, the latter attributed to the Delta variant of COVID-19.

In terms of tapering asset purchase, Federal Reserve Bank of St Louis CEO James Bullard says, “My preference would be to get to a decision in September and start sometime after that.”

We are expecting more data from IHS Markit US Manufacturing PMI, factory orders, ADP National Employment Report, and non-farm payrolls to come.

With Fed officials citing jobs growth in their speeches, the market will be reacting to any readings outside of expectation.

Economists polled by Reuters forecast the economy added 926,000 jobs in July after June’s forecast-beating 850,000 in June. 

August is when most Americans take their summer holidays. This could affect liquidity and could exaggerate moves. With the Chicago Board Options Exchange’s (CBOE’s) Volatility Index at 18.24, you want to be prepared for volatility.



Source: CBOE, Reuters, Bloomberg

This commentary was written by James Gomes
James has been in the finance industry for over 30 years and most recently worked for a large US bank for more than 20 years.

Disclaimer
While every effort has been made to ensure the accuracy of the information in this document, the DOO Group does not warrant or guarantee the accuracy, completeness or reliability of this information. The DOO Group does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. A decision to invest in financial instruments, any investment related products or any other products, securities or investments should not be made in reliance on any of the statements in this document. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.

Without limiting any of the foregoing, in no event will the DOO Group or any of its affiliates be liable for any decision made or action taken in reliance on the information in this document and, in any event the DOO Group and its affiliates shall not be liable for any consequential, special, punitive, incidental, indirect or similar damages arising from, related to or connected with this document, even if notified of the possibility of such damages.

This document contains forward-looking statements. The forward-looking statements included in this document are based on current expectations that involve a number of risks and uncertainties. These forward-looking statements are based on the analysis of DOO Group of the statistics available to it. Assumptions relating to the forward-looking statement involve judgments with respect to, among other things, future economic, competitive and market conditions all of which are difficult or impossible to predict accurately. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the DOO Group that the forward-looking statements will be achieved. The DOO Group cautions you not to place undue reliance on its forward looking statements and we assume no responsibility for updating any forward-looking statements. Expressions of opinion are those of the authors and are subject to change without notice.

This document is strictly confidential to the recipient. It is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly to other person or published, in whole or in part. For any purpose, neither this document nor any copy of it may be taken or transmitted into Singapore, Hong Kong, Malaysia, United Kingdom and the United States or distributed directly or indirectly in Singapore, Hong Kong, Malaysia, United Kingdom and the United States. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document should inform themselves about, and observe any such restrictions. By accepting this report you agree to be bound  by the foregoing instructions. 

Share to

Expert Opinion

Markets Dip on Inflation Fears Despite Strong Jobs Report

The US stock market reacted negatively to the strong jobs report on Friday, as investors weighed the potential impact on future interest rate decisions.

2024-6-10 | Expert Opinion

Mixed Week for Stocks Amid Inflation and Tech Rotation

The early week saw cautious trading as investors digested inflation data and awaited key events. However, Friday delivered a dramatic eleventh-hour rally

2024-6-4 | Expert Opinion

US Stocks See Gains Amid Inflation Concerns and Nvidia's Strong Earnings

US stocks saw gains but ended the week mixed due to inflation concerns triggered by robust economic data and Nvidia's impressive first-quarter earnings report.

2024-5-27 | Expert Opinion