The S&P 500 briefly entered bear territory last week for the first time since March 2020 as investors continue to assess record inflation, rising interest rates and their impact on consumer and corporate profits.
Very volatile this Friday, Wall Street managed to close scattered but close to balance, although it lost again during the week.
The Dow Jones Industrial Average gained just 0.03% to 31,261.90 points after spending most of the day in the red. The NASDAQ Composite lost 0.30% to 11,354.62 points, after losing almost 3% in the session. The S&P 500 closed flat (+0.01%) at 3,901.36 points. On Friday it briefly reached the bear market or bear market zone by accumulating a 20% drop in 2022, although it later recovered ground.
So far in 2022, the S&P 500 has fallen 18%, the NASDAQ accumulates a decline of 27.42 percent. The Dow Jones loses 13.97% in the year.
Tesla plunged 6.42% to $663.90 a share on Friday, after Chief Executive Elon Musk denounced “totally false” claims in a news report that he sexually harassed a flight attendant on a private plane in 2016.
Other mega-cap stocks like Alphabet (-1.34%), Microsoft (-0.23%), and Nvidia (-2.51%) also lost ground.
“A bear market for the S&P generally means slower growth for the economy, even a recession next year, as some have suggested,” warned Karl Haeling, an analyst at LBBW.
The New York indices, shaken for weeks by inflation in the United States and in the world, recorded their seventh consecutive week of losses for the NASDAQ and the S&P, for the first time since 2001, when the Internet bubble burst. The Dow posted its eighth consecutive week lower, something not seen since 1923.
For the week, the Dow Jones lost 2.90%, the NASDAQ 3.82% and the S&P 500 3.05 percent.
The pandemic-induced bear market in March 2020 was the fastest on record, going from a new high to a 20% drop in just 16 trading days.
Ryan Detrick, chief market strategist at LPL, told CNBC on Friday that he doesn’t see “a recession materializing this year,” and rather sees “a mid-cycle slowdown in growth similar to 1994 before that.” the stock market resumes its long-term bullish trend.”
For its part, Bank of America warned that the United States faced a one-in-three chance of slipping into a recession next year, but said it would “likely be mild by historical standards.”
The bank’s economists said the risks of a recession are low this year, forecasting a “hard landing” rather than an outright recession as the Federal Reserve tightens financial conditions.
Retailers lead declines
Lackluster results from US retailers like Walmart, Kohl’s and Target were at the center of the week’s downward spiral.
Some firms in the sector have warned that rising costs are reducing their margins and sales and are beginning to change consumers’ purchasing habits.
The companies that lost the most in the week were: Target (-29.30%), at 156.33 dollars each share; Bath & Body Works (-24.15%), at $39.69 each; Ross Stores (-21.93%), at 71.87 dollars per share; Walmart (-19.49%), at 119.20 dollars a share and Kohls (-19.08%), at 39.20 dollars each.
Mexico resists
Unlike Wall Street, the Mexican stock market achieved positive results during the week.
The main index of the Mexican Stock Exchange, the S&P/BMV IPC, had a weekly gain of 3.91%, standing at 51,518.30; while the FTSE-BIVA, of the Institutional Stock Exchange (Biva) rose 3.58%, to 1,063.51 units.
However, the S&P/BMV IPC accumulates a loss of 3.29% in the year, while the FTSE-Biva adds an annual fall of 3.43 percent.
The companies with the highest increases in the week were Industrias Peñoles, with an increase of 18.72% in their shares, to 229.16 pesos each; Grupo México, 13.70%, at 102.43 pesos each.
In third place was Grupo Traxión, whose titles rose 12.82% to 31.41 pesos each, followed by Grupo Carso, 11.10%, to 72.15 pesos each, and América Móvil, 9.50% to 21.20 pesos each. (With information from agencies)
