US equities ended slightly higher on Wednesday after a volatile start to the week with sharp losses. Large caps lagged small caps: S&P 500 #ES-F (+0.30%) vs. Russell 2000 (+1.31%).
Energy (+1.58%) and communication services (+1.00%) outperformed the broader market indices, while utilities (-1.48%) and consumer staples (-0.83%) underperformed. Johnson & Johnson (-3.05%) and Coca-Cola (-1.32%) weighed on the Dow (0%); Nike (+1.76%) and Microsoft (+1.38%) were the index’s best performers.
The Nasdaq gained 0.92%, while tech added 0.73%. The “FAANG” stocks were mixed: Facebook (+1.80%), Amazon (+1.42%), Apple (-0.11%), Netflix (-1.82%), Alphabet (+1.16%).
The VIX declined 7.47% to 20.80. The 30-year and 10-year Treasury yields increased to 3.316% and 3.065% respectively, while the 2-year yield rose to 2.816%. The difference between 2-Year and 10-Year Treasuries is at 25 basis points. History shows that once the Treasury yield curve inverts (10s yield less than 2s) a US recession is likely.
Zero Hedge put together a list of 50 stocks on Goldman Sach’s “Very Important Positions” basket for hedge funds as of September 30, 2018. The idea: show the “handful of stocks widely held by most professional investors” that “were the cause of so much pain and nightmares on Wall Street in the past two months”. The top five names were of course all tech: Microsoft, Amazon, Facebook, Alphabet, and Alibaba. here