Two weeks ago, FT Alphaville noticed that something is amiss beneath the surface of a roaring American stock market.
Despite near-record highs in the indices, a larger and larger group of shares in the Russell 3000 – which accounts for about 96 percent of the entire market – reached new lows of 52 weeks with some big capitalization names keeping the market afloat. .
Two weeks later, little has changed. While the S&P 500 has fallen only 2.7 percent since then, the number of stocks hitting new lows holds new highs, and the number reaching new highs remains new lows:
In fact, on Thursday, the number of companies reaching new 52-week highs was just 13. The lowest number since September 2020.
The macro environment did not help. What with Grandmaster Jay revealing that he intends to take off faster than expected, and the emergence of a new variant of Covid. But even then, it seems that traders are getting shaky about even the slightest hint of bad news.
Take digital signature business DocuSign. After the clock on Thursday, the Covid winner reported earnings: beat estimates on both earnings and earnings per share. All right then? Well, not exactly. The company revealed that its $ 565 million accounts – revenue that has been contracted but has yet to be recognized – did not have its own lead of $ 585 million to $ 597 million. And in the words of CEO Dan Springer, “after six quarters of accelerated growth, we have seen customers return to more normalized buying patterns [following Covid]. ” In the forex market, the stock fell 32 percent. To wipe out about $ 15 billion from its market capitalization. Oof.
Of course, it should be pointed out that when you are a high-growth software company that trades at an enterprise value to drive sales volume of 22, there is very little margin for error if you miss estimates.
However, you can not help but feel that with the year-end fast approaching and the threat of the holiday season’s low volumes creeping into focus, that some fund managers may want to start including profits to ensure performance-based bonus comes in. as planned. Otherwise, Santa Claus, carrying his bag, might not deliver this year.
US stocks: tap, tap, tap – FT Alphaville