Day Traders Diary

8/15/23

The major averages closed sharply lower following weak global economic data, earnings and cautious comments from Fitch about possible downgrades for the major banks. The Dow Jones Industrial Average dropped 361 points or 1%. The S&P 500 fell 51 points or 1.1% while the Nasdaq declined 157 points or 1.14%.  

Sentiment across the globe was downbeat after disappointing data out of China and a surprise rate cut from the country's central bank.

Industrial production in China increased by 3.7% in July from the year-earlier period, missing expectations. Retail sales also grew less than expected from the year-earlier period. Meanwhile, the People's Bank of China lowered rates by 15 basis points to 2.5%. However, the rate cut failed to soothe investor concerns and instead raised more worry about an emerging property crisis in China.

Shares of JPMorgan Chase, Citigroup, Wells Fargo and Bank of America were all lower after Fitch warned it may have to downgrade dozens of banks, including JPMorgan Chase. Last week, Moody's lowered its rating on 10 U.S. while putting some big institutions on downgrade watch.

Wall Street is coming off a winning session, led by a rally in Nvidia. While more upside may be in store for the market into year end, some on Wall Street, including BNY Mellon Wealth Management's Alicia Levine, are bracing for more consolidation as yields hover near highs.

A packed earnings week for the largest retailers kicks into gear Tuesday. Home Depot reported earnings per share and revenue that beat analyst expectations, pushing its stock slightly higher in the premarket. Later in the week, traders will parse releases from Target and Walmart.