U.S. markets were mixed on Tuesday and turned downright weak on Wednesday. The Nasdaq dropped 3.3%, the S&P 500 dipped by 1.9%, and the Dow Jones industrials dropped by 0.9%. Stocks sold off following the release of the FOMC’s minutes of its December meeting. Investors reading the tea leaves think that rate hikes may not be delayed until June but could begin as soon as March. The best performing sectors (materials and energy) broke even, while the worst performers (real estate and technology) were down more than 3%. Thursday’s premarket trading was mixed again, with the Dow trading higher, the S&P 500 essentially flat and the Nasdaq down more than half a percentage point.
Crude oil continues climbing, topping out overnight at nearly $79 a barrel and recently trading just a few pennies below that level. Bitcoin got hammered Wednesday and dropped by nearly $3,000. The cryptocurrency traded at around $43,000 early Thursday. The yield on 10-year Treasury notes rose by five basis points to 1.71% on Wednesday and traded at around 1.73% Thursday morning. Two-year notes also added five basis points Wednesday and traded up another three points in the morning at around 0.86%.
Only a handful of equities from our meme stock watch list posted gains on Wednesday. The biggest losers included Bed Bath & Beyond Inc. (NASDAQ: BBBY), which dropped by nearly 11% on Wednesday, before announcing quarterly earnings Thursday morning. After missing on both revenue and profit estimates (analysts expected a break-even quarter and the company posted a per-share loss of $0.25), the stock traded down by nearly as much in early premarket trading. At last look, however, the stock was up more than 9% for some reason. Short squeeze? Options? Stay tuned.
AMC Entertainment Holdings Inc. (NYSE: AMC) also dropped by nearly 11% on Wednesday, likely due to the Fed’s seemingly more hawkish stance on interest rate hikes. That could throw AMC CEO Adam Aron’s plan to refinance for a loop.
Camber Energy Inc. (NYSEAMERICAN: CEI) dropped by about 7.5% on Wednesday and traded up more than 7% in Thursday’s premarket session. The oil and gas producer filed a report with the U.S. Securities and Exchange Commission on Wednesday announcing that an accredited institutional investor has agreed to purchase 10,544 shares of a new Series G redeemable convertible preferred stock issue. Each share has a face value of $10,000, and the aggregate value of the agreement is $100 million, including a 5% original issue discount.
Tesla Inc. (NASDAQ: TSLA) dropped almost 5.4% on Wednesday and traded down more than another 1% in Thursday’s premarket session. It appears that the good news on fourth-quarter deliveries has had all the positive impact it is going to have, until the company reports quarterly earnings later this month.
Rising yields on 10-year Treasuries indicate that investors are worried about inflation. But that rise could be stopped by a single data point that inflation will cool and the economy will strengthen. Maybe Friday’s employment situation report will do the job.