Not Even Netflix Was Safe from the Disastrous Day on Wall Street
The stock market fell for a third consecutive day and reached its worst session so far this year. The three major indices have recorded heavy losses, especially the NASDAQ.
Among the reasons to explain this behavior are: the collapse of oil to its lowest level since 2009, China's volatility and the fear for a rate hike by the Federal Reserve.
The Collapse of Oil. The price decline of oil affects in a mixed form as it favors certain industries and hurts others.
China's Volatility. Chinese stocks have suffered a day of correction, and the Shanghai Composite plummeted and kept alive investor concern about the Asian giant. "In Asia, the latest selloff has been triggered by the devaluation although each day there's something new that reinforces the wariness of investors," said Shane Oliver, an investment strategist at AMP Capital to MarketWatch. "The basic thematic is that emerging markets have gone out of favor," he added.
U.S. Interest Rates Hike. The fear of an imminent rate hike by the Federal Reserve is increasing. The minutes of the last meeting of the Federal Open Market Committee (FOMC) tightened the message from previous records. The main message was that "the conditions are close to raising rates ". Although the stock market reacted positively and considered less likely a rate hike in September, the trading day has become pessimism. "The market has really taken a pessimistic stance vis-a-vis the Fed," told Dave Schiegoleit, a senior portfolio manager with The Private Client Reserve of U.S. Bank in Los Angeles to CNBC.
Greece Returns to the Scene. In a statement on national television, Alexis Tsipras announced his resignation as prime minister and proposed holding early elections on September 20. This adds new risks to the third rescue program and revives the implementation of the Grexit.
Stock Sell-Off. Shares of Netflix, Inc. (NFLX) have tumbled 7.84% on Thursday's session, pulled down into the media stock sell-off. However, some analysts consider this an entry point to accumulate shares. Since mid-July, when the company delivered better-than-expected subscriber numbers for the second quarter, the stock has been trading higher as opposed to other media giants like Disney (DIS) and Time Warner (TWC).
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