Wall Street rebound fizzles out

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Wall Street rebound fizzles out

Traders work on the floor of the New York Stock Exchange during morning trading on August 06, 2024 in New York City. 

Michael M. Santiago | Getty Images

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Fizzling outWall Street’s

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from Monday’s sell-off ran out of steam. The

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surrendered a 480-point gain to close 234 points lower. The

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retreated 0.77%, while the

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experienced a sharper decline of 1.05%. Technology stocks were at the forefront of the reversal, as

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shed 5%,

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dropped 4.4% and

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plummeted 20% following disappointing fourth-quarter earnings. Meanwhile, the yield on the 10-year

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edged higher and

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over 2% amid escalating tensions in the Middle East. 

Write down

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‘s stock dropped more than 6% in extended trading after it reported a

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on its TV networks and missed analyst estimates on second-quarter revenue. The charge reflects the declining value of traditional TV networks as customers flee and advertisers opt to spend on digital and streaming instead. Revenue at its TV networks — which include TBS, ****, Discovery and TLC — was down 8% to $5.27 billion. However, the company’s streaming business Max added 3.6 million subscribers during the quarter, bringing its total global streaming customers to 103.3 million.

Recession on horizon

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CEO

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still believes that the odds of a “soft landing” for the U.S. economy are around 35% to 40%,

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in his mind. “There’s a lot of uncertainty out there,” Dimon told CNBC. “I’ve always pointed to geopolitics, housing, the deficits, the spending, the quantitative tightening, the elections, all these things cause some consternation in markets.”

King of T-bills Warren Buffett’s

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has

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, surpassing the U.S. Federal Reserve’s holdings. The move comes as Buffett builds a massive cash reserve, fueled by selling stocks including

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. The Fed ******** a significant holder of Treasury securities overall, but Buffett’s focus on short-term T-bills reflects a cautious approach amid market uncertainty.

Profitable, finally

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‘s

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. Streaming services Disney+, Hulu and ESPN+

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, making $47 million in the second quarter, a significant shift from a $512 million loss a year ago. The theatrical unit also saw success with record-breaking releases, like “Inside Out 2” and “Deadpool & Wolverine.” However, theme parks experienced a slight decline in consumer demand. Disney’s stock, down 24% over two years while the S&P 500 rose 28%, dropped 4.4% in Wednesday trading.

[PRO] Outperforming stocksAmid stock market volatility and economic worries, gold is attracting investor interest.

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has outperformed stocks and bonds this year, offering

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The bottom line

The

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continues to rebound from its massive sell-off on Monday when the index experienced its

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. On Wednesday, the

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weakened sharply after Bank of Japan Deputy Governor Shinichi Uchida stated that the central bank

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while “financial markets are unstable.”

These comments also offered some relief to Wall Street at the start of trading on Wednesday, as the unwinding of the yen carry trade has been a key factor in market volatility this week. Interestingly, no one knows how big the carry trade is, which CNBC’s Bob Pisani suggests is

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. Additionally, CNBC’s Sam Meredith writes that

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.

Ken Okamura, ********* equities portfolio manager at Neuberger Berman, attributed 

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and reduce bond purchases, coupled with the governor’s more hawkish-than-expected tone in the post-meeting conference.

“We do still anticipate, given the large amounts of trades that have still been left to be unwound in the yen carry trade, there could potentially be some volatility down the line,” Okamura told CNBC.

Okamura emphasized that the root cause of the recent unwinding and central bank actions is the anticipated exit of the ********* economy from the “lost decades and the economy is about to normalize.” 

“This is actually a positive thing. It’s the biggest thing that has happened to Japan in more than 30 years.”

Before Wall Street’s rebound from Monday’s steep sell-off reversed on Wednesday, Chris Verrone, head of technical and macro research at Strategas, observed that the market is still in a precarious position, lying in a “no-man’s land” since last Thursday’s lows.

“I am not blown away with the first bounce attempt from [the] S&P 500 yesterday, as breadth came in a tepid +2.6 to 1 advance/decline,” Verrone noted.

Verrone advised investors to “tread lightly with the first bounce attempt,” suggesting that more significant corrections are likely to occur in the coming months. He explained, “A bottoming sequence typically takes some time to come together, and we can’t think of many correction lows in August.”

— CNBC’s Hakyung Kim, Brian Evans, Alex Sherman, Yun Li, Hugh Son, Lillian Rizzo and Spencer Kimball contributed to this report.

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#Wall #Street #rebound #fizzles

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