Stocks Hammered as Bears Crash Thanksgiving

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Forget about turkeys. Last week the bears showed up for Thanksgiving.

The S&P 500 dropped 3.8 percent in the holiday-shortened week between Friday, November 16, and Friday November 23. Selling was widespread across sectors and put the index on pace for its second straight losing month.

Several economic reports showed signs of weakening and confirmed some of the market’s recent bearishness. Durable-goods orders declined more than feared as business investment slowed. The rock-solid employment market also showed some minor cracks as initial jobless claims rose more than expected and manufacturing data suggested weaker factory hiring.

Forecasters at Goldman Sachs, JP Morgan and the Organization for Economic Cooperation and Development (OECD) also downgraded their outlooks for economic growth. All those considerations may increase attention on Federal Reserve Chairman Jerome Powell’s speech this Wednesday.

Technology remained the worst-performing major sector as Apple (AAPL) crumbled through its 200-day moving average and growth investors liquidated electronic-payment stocks like MasterCard (MA) and PayPal (PYPL). Chips also continued to crumble.

Energy was second worst as oil bears hammered crude futures (@CL) to a new 52-week low. Can OPEC stop the bleeding with production cuts at its next meeting on December 6?

Housing and airlines, on the other hand, had positive weeks. Home builders have taken a beating all year but could benefit from the Fed slowing its rate hikes. Airlines, meanwhile, face strong demand and lower fuel costs.

Nasdaq-100 (NDX) with 50- and 200-day moving averages.

The S&P 500 and Dow Jones Industrial Average are slightly above their October troughs, while the Nasdaq-100 made a new low. That’s consistent with the recent pattern of investors fleeing technology in favor of “boring” safe havens.

One other big story last week was a selloff in retail as investors took a glass-half-full view of key merchants. That placed Ross Stores (ROST), Target (TGT) and L Brands (LB) at the bottom of the S&P 500’s rankings with drops of 15-16 percent.

Rockwell Collins (COL) was the biggest gainer, advancing 7 percent after China approved its purchase by United Technologies (UTX). HanesBrands (HBI) and Agilent Technologies (A) vied for the No. 2 spot.

Big macro stories involving interest rates and geopolitics will likely be the main catalysts this week. Traders may want to be on the lookout for comments by President Trump before a key G-20 meeting starts on Friday.

Nothing big is scheduled for today, but tomorrow brings consumer confidence, the Case-Shiller index of home prices and Salesforce.com (CRM) earnings after the closing bell.

Powell’s speech at the Economic Club of New York will probably get the most attention on Wednesday. Revised numbers for third-quarter gross domestic product and oil inventories are also due.

Thursday features initial jobless claims and minutes from the last Fed meeting.

Friday marks the start of a key G-20 meeting, which will be watched for signs of better trade relations between the U.S. and China. The conference ends on Saturday, December 1.

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David Russell is VP of Content Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.