Stop Breaking Down
There’s nothing to see here, yet.
It’s tempting to read another in a series of technical glitches to affect financial market trading in recent weeks as part of a story of impending doom.What happened during a software update at the New York Stock Exchange to cause approximately 40 stocks to be halted and for some to be quoted at outrageous discounts to their previous closing prices is all too prosaic in the computer age.
It just so happens that it’s the third such disruption within a week. InteractiveBrokers chief strategist Steve Sosnick told Bloomberg it’s “a little weird, but almost undoubtedly coincidental.
“We’ve gotten used to huge amounts of uptimes without exchange incidents, so when a couple of glitches in a row occur it is notable.”
It’s also notable when Warren Buffett’s company is down 100 percent.
The Dow Jones Industrial Average was down 0.30 percent, and the Russell 2000 shed 0.50 percent.
Looking forward to Friday’s release of May labor market data by the Bureau of Labor Statistics, investors, traders, and speculators saw a contracting Institute for Supply Management manufacturing gauge as grounds for a rate cut.
The ISM indicator declined to 48.7 in May from 49.2 in April to its lowest level in three months and well below a consensus forecast of 49.5. Readings below 50 indicate contraction.
A steep decline for crude oil despite an announcement by OPEC+ that it would maintain production cuts reflects reduced fuel consumption as well as higher output from non-cartel countries, including the US.
Brent crossed below $80 per barrel for the first time since February, and West Texas Intermediate hit a four-month low as well.
The Energy Information Administration recently reported thatAmericans burned an average of 120,000 barrels of gasoline per day less in March than they did a year earlier. That could be about efficiency gains and a greater share of hybrid and electric vehicles in the fleet.
It is no doubt a good thing for US consumers concerned about inflation.
Everyone expects both the Bank of Canada (Wednesday) and the European Central Bank (Thursday) to begin their rate-cutting regimes this week, setting up a divergence scenario among major monetary policymakers.
We’ll see how long the Federal Reserve holds out.