When the Leaders and Darlings Stop Leading the Markets Higher and Higher

It is not uncommon for markets to sell-off after big gains. It seemed as though every market participant was just begging for a pullback in late 2017 and early 2018. But now that a sell-off has been seen, it’s the same thing that always happens: investors freeze up, because it could be the end of the great bull market.

The current bull market turned nine years old in March. The difference in what is happening now is that the market darlings are no longer able to carry the stock market higher. It seems that even the greatest companies have some serious hurdles ahead or coming to light, and there are too many nonmarket distractions for retail and smart institutional investors to feel comfortable jumping in.

There are many things front and center with people, and many of them aren’t even normal market events. A potential trade war is brewing (maybe), and hostilities could resume in North Korea on a moment’s notice. There is uncertainty out the you-know-what in Washington, D.C., and a recent porn star scandal for President Trump hasn’t exactly helped matters. We have a period of rising interest rates into a ballooning deficit (at least before today), and the tail can wag the dog with those volatility trades dominating equities. Oil and energy shares have been pressured despite higher oil, and higher regulation of technology companies seems much more possible now.

Some market participants have even started calling for the next bear market to arrive. That may be a premature call, but 24/7 Wall St. has tracked just how bad the leaders of 2017 and the few market darlings have been selling off. These were the moves for the day and also how far down each great leader is from its recent all-time high. We have also updated this story with closing bell levels:

  • Dow Jones industrial average: −344.89 at 23,857.71
  • S&P 500: −45.93 at 2,612.62
  • Nasdaq: −211.74 at 7,008.81
  • 10-year Treasury: −0.06% at 2.79%
  • WTI oil: −$0.97 at $64.91 Inc. (NASDAQ: AMZN) was almost 4% lower at $1,496.50 late on Friday, which is now down almost 8% from its fresh all-time high of $1,617.54. Retail had made a comeback and there have been some concerns about regulatory efforts allowing U.S. law enforcement to access data stored overseas regarding U.S. customers, but this is actually not in any “breaking news” category anymore.

Boeing Co. (NYSE: BA) was down 2.25 at $321.80 on Tuesday, but that is down 13% from the all-time high of $371.60. If tariffs are bringing trade wars, maybe a lot of those new plane orders are at risk.

Caterpillar Inc. (NYSE: CAT) was last seen down 1.9% at $146.31, but that’s down over 15% from its recent high of $173.24. Caterpillar has the same sort of worries as Boeing when it comes to overseas orders potentially going to competitors.

Cisco Systems Inc. (NASDAQ: CSCO) was seeming almost invulnerable of late, but it was almost 3.9% lower at $42.35 on Tuesday — and that is now down over 8% from its fresh post-earnings decade-plus highs. Will China target it if trade war risks look real again?

Facebook Inc. (NASDAQ: FB) was down another 5% at $151.75 late on Tuesday, but that’s down 22% from a recent all-time high of $195.32. It turns out that all the data being stored, how it was being used and some obvious coming regulations are bad for business. Still, you as a Facebook user should have known this was happening (yes, you really should have!).

Home Depot Inc. (NYSE: HD) was last seen down 1.5% at $173.80, but that’s down over 16% from its recent all-time high of $207.61. Maybe with home values up and with affordability becoming harder to justify it means that all the great work they have been doing won’t keep on working ahead.

Micron Technology Inc. (NASDAQ: MU) was down 6% at $52.18 late on Tuesday, down from a recent high of $63.42. Its recent earnings were strong, but guidance being in line with estimates doesn’t work well when a stock rallied 50% in 40 days or so before its earnings.

Netflix Inc. (NASDAQ: NFLX) was over 6.6% lower at $299.00 late on Tuesday, but that’s now down 10% from the recent all-time high of $333.98. People definitely aren’t giving up on Netflix, but when leaders sell off, it’s hard to have a forward P/E of 120 times current year expected earnings.

Nvidia Corp. (NASDAQ: NVDA) was last seen down 9% at $222.30, a retreat from a very recent all-time high of $254.50. The sudden breakdown of the autonomous driving car is to blame, and maybe a more normalized crypto-mining craze.

Tesla Inc. (NASDAQ: TSLA) was down almost 8.5% at $278.50 ahead of Tuesday’s close, but that is actually down more than 28% from its 52-week high of $389.61. Tesla’s endless days of not meeting production targets may actually have started to matter to investors, and the huge shorting of its stock and even its bonds.

Yes, even the darlings can suffer too.