Investors braced for another stomach-churning session as stocks fell sharply in early trading Monday. However, unlike Friday, where losses accelerated as the day progressed, today's selling eased off.
Federal Reserve Chair Jerome Powell's gloomy speech last week in Jackson Hole, Wyoming, seemed to have a lingering effect on Wall Street. "Powell broke no new ground in his remarks, and instead reiterated his stance that the Fed is 1) attempting to moderate demand to allow supply to catch up and 2) monitoring inflation expectations to ensure they remain anchored," says Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company. He adds that the head of the Fed was "more direct" in the central bank's commitment to fight inflation, "saying it is prepared to continue its aggressive rate hike posture for as long as needed, even if it causes pain for the economy and households."
Technology (-1.3%) was Monday's worst-performing sector, pressured lower by semiconductor stocks Advanced Micro Devices (AMD, -3.0%) and Nvidia (NVDA, -2.8%). Meanwhile, energy stocks (+1.5%) outperformed as U.S. crude futures spiked 4.2% to $97.01 per barrel.
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Looking at the major indexes, the tech-heavy Nasdaq Composite, which was off 1.3% at its session low, ended the day down 1.0% at 12,017. The S&P 500 Index fell 0.7% to 4,030 and the Dow Jones Industrial Average gave back 0.6% to 32,098.
Other news in the stock market today:
- The small-cap Russell 2000 fell 0.9% to 1,882.
- Gold futures posted a marginal loss to end at $1,757.90 an ounce.
- Bitcoin shed 2.6% to $20,101.84. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
- Netflix (NFLX) rose 0.6% after a Bloomberg report indicated the streaming giant is getting ready to launch an ad-supported tier. The new plan will be priced at $7 to $9 per month, and will aim to initially include about four minutes of ads for every one hour of content, according to Bloomberg.
- Honda Motor Co. (HMC) gained 1.8% after the car company said it has teamed up with Korea's LG Energy Solution to build a battery production plant for electric vehicles in the U.S. Construction on the $4.4 billion project is expected to get underway early next year, with production of batteries anticipated by the end of 2025.
Hedge Funds' Favorite Blue-Chip Stocks
"What's the smart money doing?" This is a question we attempt to answer each quarter via regulatory filings. The point isn't to copy exactly the moves of hedge funds, institutional investors and high-net-worth individuals. Rather, it's done as a learning exercise – to see what those with access to research and insights typically not available to the average retail investor are doing with their money, particularly during periods of market turbulence.
Warren Buffett, for instance, took advantage of the second-quarter stock market selloff to go bargain-hunting on existing positions in the Berkshire Hathaway equity portfolio.
As for hedge funds, they "cut leverage, shifted back towards growth stocks, and increased portfolio concentrations in their favorite stocks [in Q2]," notes the portfolio strategy team at Goldman Sachs Global Investment Research. In particular, hedge funds honed in on blue-chip stocks. Here, we take a look at the 21 stocks that were most widely held among hedge funds with deep pockets and vast resources in Q2. Take a look.
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