It’s been a rough couple of days for many stocks, though equities are mixed this morning. Gold and silver are modestly higher, while Treasuries and the dollar are flat. Crude oil is down a bit.
Several of this year’s hottest investments – from gold to cryptocurrencies to semiconductor and Artificial Intelligence (AI) stocks – have been pulling back recently. Bitcoin knifed through $100,000 late yesterday before regaining that key level this morning, while markets like South Korea’s that are heavily levered to technology dropped 2% overnight. The Invesco QQQ Trust (QQQ) has shed 2.6% in the last five days, while the Global X Artificial Intelligence & Technology ETF (AIQ) has slid 3.5%
Bitcoin, AMD, MCD (YTD % Change)
Data by YCharts
All told, one Bloomberg index of global chip stocks shed $500 billion in market capitalization in just 24 hours. Third-quarter earnings from Advanced Micro Devices Inc. (AMD) late yesterday didn’t help sentiment. While the chipmaker topped estimates in Q3 and forecast better-than-expected Q4 revenue, investors sold the news. That continued a pattern evident for other tech sector highflyers.
It wasn’t all bad on the earnings front, though. Widely held McDonald’s Corp. (MCD) delivered a decent quarter, with same store sales up 2.5% in the US and 3.6% globally. Adjusted earnings per share of $3.22 matched analyst estimates. Optimism about the return of products like the Snack Wrap and the Monopoly game also buoyed the shares.
Finally, the government shutdown officially became the longest ever today. Some optimism has emerged about a deal to end the 36-day-and-counting shutdown, but nothing is confirmed yet. Economists estimate the lockdown is costing the economy around $15 billion per week – though the eventual doling out of back pay and the resultant spending boost could lessen the blow. For its part, the Congressional Budget Office suggested Q4 GDP could come in two percentage points lower, depending on the shutdown’s ultimate length.
