Markets plummet led by very heavy selling in tech stocks

Dow tumbled 504 (near session lows), decliners over advancers a very big 4-1 & NAZ plunged 654.  The MLP index dropped 5+ to 291 & the REIT index fell 5+ to the 398s.  Junk bond funds were sold & Treasuries were hit with selling, raising yields.  Oil crawled higher in the 77s as crude supplies shrank & gold inched up 1 to 2408 (more on both below).

Dow Jones Industrials 

Would-be homebuyers are getting a case of cold feet as they confront still elevated mortgage rates & record-high housing prices.  New findings published by Redfin show that a growing number of buyers are backing out of deals to buy a house at the last minute because buying a home is more expensive than ever.  About 56K home purchases were canceled in Jun, about 15% of homes that went under contract, the highest percentage of any Jun on record.  The median home sale price rose 4% in Jun to $442K, the highest level on record.  At the same time, the average 30-year mortgage rate was about 6.92%, more than double the pandemic-era lows.  "Buyers are getting more and more selective," said Julie Zubiate, a Redfin real estate agent near San Francisco.  "They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list."  Still, there are some signs that home prices may soon fall.  The Redfin report showed that 1 in 5 homes for sale saw a price cut, the highest level of any Jun on record.  It marks a notable increase from the 14.4% pace seen 1 year ago & is just shy of the 21.7% record set in Oct 2022.

Homebuyers are getting cold feet

Google (GOOG) parent company Alphabet reported 2nd-qtr results that were in-line with estimates on revenue & earnings, but missed on YouTube advertising revenue.  Revenue was up 14% year over year, driven by search as well as cloud, which surpassed $10B in quarterly revenues & $1B in operating profit for the first time.  The company reported ad revenue of $64.6B, up from $58.1B last year, showing that its advertising business continues to grow, though at a slower pace than in the first qtr, after rising inflation & interest rates tightened marketing budgets in 2022 & 2023.  While YouTube ad revenue missed estimates, it still grew to $8.66B compared to $7.66B in the year-ago qtr.  Though it's the largest video platform in the world, it faces increased competition from social video sites like TikTok.  EPS was $1.89, compared to $1.44 in the year-ago qtr.  The company's “Other Bets” unit, which includes its self-driving car company Waymo, brought in $365M, up from $285M a year ago.  Finance chief Ruth Porat said that GOOG is committing a new $5B multiyear investment in Waymo.  CEO Sundar Pichai said  that Waymo is now making 50K weekly paid public rides, primarily in San Francisco &  Phoenix.  “Our strong performance this quarter highlights ongoing strength in Search and momentum in Cloud,” Pichai said.  “We are innovating at every layer of the AI stack. Our longstanding infrastructure leadership and in-house research teams position us well as technology evolves and as we pursue the many opportunities ahead.”  The stock dropped 9.23 (5%).

Alphabet meets earnings expectations but misses on YouTube ad revenue

Pfizer (PFE) said its experimental gene therapy for a rare genetic blood-clotting disorder succeeded in a large late-stage trial, paving the way for a potential approval.  The treatment for hemophilia A could become the company's 2nd gene therapy to enter the US market after Beqvez, which was cleared in Apr for a less common type of the bleeding disorder called hemophilia B.  PFE is co-developing the therapy with Sangamo Therapeutics (SGMO), whose shares rose following the data release before paring some of those gains.  PFE is among several drugmakers to invest in the rapidly growing field of gene & cell therapies, 1-time, costly treatments that target a patient's genetic source or cell to cure or significantly alter the course of a disease.  Some industry health experts anticipate those therapies to replace traditional lifelong treatments that patients take to manage chronic conditions.  Hemophilia A is a lifelong disease caused by a lack of blood-clotting protein called factor VIII.  Without enough of that protein, the blood cannot clot properly, increasing the risk of spontaneous bleeding & severe bleeding after surgery.  The condition occurs in roughly 25 in every 100K male births worldwide.  PFE said its 1-time treatment significantly cut the number of annual bleeding episodes in patients with moderately severe to severe hemophilia A after 15 months.  The drug also performed better than the current standard treatment for the disease, which is routine infusions that replace the Factor VIII protein.  PFE stock went up 49¢ & SGMO (a low priced stock) was up 16¢

Pfizer’s gene therapy for rare genetic bleeding disorder succeeds in late-stage trial

Gold prices rose as the $ slipped, with investors' focus shifting to US economic data due this week for more signals on the timing of the central bank's interest rate cuts.  Spot gold was up 0.1% at $2411 per ounce & US gold futures settled 0.3% higher at $2415.  The dollar index (.DXY), was down 0.2%.  A weaker $ makes bullion more attractive to buyers holding other currencies.  The tech-heavy NAZ took the biggest hit in a weak open on Wed.  Investors are looking forward to a US report on gross domestic product for the 2nd qtr on tomorrow & personal consumption expenditures data for Jun on Fri for clues on the Federal Reserve's interest rate cut path.  India cut import duties on gold & silver to 6% from 15%.  Markets are anticipating a 100% chance of a rate cut by the central bank in Sep, according to the CME FedWatch Tool.  Lower interest rates reduce the opportunity cost of holding non-yielding gold.  Investors are also watching developments in the US election campaign, as VP Kamala Harris is expected to be the Dem Party's candidate to face Rep Donald Trump.

Gold Rises on Softer Dollar, Traders Eye More US Data

Oil rose, clawing back from a run of losses, after a gov report showed that US crude inventories fell to the lowest since Feb.  West Texas Intermediate (WTI) topped $77 a barrel after falling 5.5% since last Wed.  US oil inventories shrank by 3.74M barrels last week, the Energy Information Administration reported.  That was the 4th straight decline.  Price gains were limited as traders also eyed declines in equity markets.  Crude's earlier selloff was exacerbated by trend-following algorithms after futures surpasses key technical levels.  Yesterday, WTI settled into oversold territory on the 9-day relative strength index, signaling a rebound was imminent.  Meanwhile, US gasoline inventories dropped the most since Mar, as some refineries remain shuttered & summer driving season propelled seasonal fuel demand on a 4-week basis to the highest level since 2021.  Though driving season typically peaks in late Jul, there may still be some room left to rally.  WTI for Sep rose 0.8% to settle at $77.59 a barrel & Brent for Sep climbed 0.9% to $81.71 a barrel.

Oil Ends Slump as US Inventories Drop to Lowest Since February

In economic news, fresh data from S&P Global showed the business activity in the US grew at its fastest pace in more than 2 years.  Next up are tomorrow's 2nd-qtr GDP report & Fri's key release on Jun PCE inflation, the report favored by the Federal Reserve.  Recent economic data has been raising concerns on the future path for rate cuts.  Nervous investors are buying gold & treasuries.