Bulls were hopeful that Monday's market bounce would gain some traction, but a surprisingly poor report from Snap (SNAP) caused more worries about a possible recession. SNAP had a major slowdown in online advertising, and that seems to be the same dynamic that hit the retail sector so hard last month.
The Dow Jones industrial average held up well today, with McDonald's (MCD) , Verizon (VZ) , Coca-Cola (KO) , and Procter & Gamble (PG) performing well, but it was a very different story under the surface, with breadth running 2,400 gainers to 5,900 decliners. Technology stocks and the Nasdaq 100 were the big losers with a loss of 2%. The Invesco fund (QQQ) had a new closing low for the year. The S&P 500 bounced late and was able to avoid a new closing low again, but it is barely hanging above bear market territory.
There are a couple of positives. First, sentiment is ugly, the failed bounces are taking a toll on the few optimists that are left, but it is very hard to say that it is so negative that a strong snap-back will develop. The second positive is that the number of new lows is not expanding. We finished the day with around 740, which is less than the 1,000 level hit last week, and the 3,000 level hit the week prior to that. Many stocks are struggling, but they are holding above recent lows, and that is technically positive.
Travel stocks and retail took fresh hits today, growth names were poor, and all the FATMAAN names were negative. The corrective process continues, and there is no indication of how much longer it will persist.
Have a good evening. I'll see you tomorrow.