Market Insights

A perfect storm of negatives is handing the Nasdaq-100 its worst month since the financial crisis.

The technology-heavy index lost 11 percent of its value between the end of September and yesterday’s close. Depending on where this October ends, it’ll compare with September, October and November of 2008: down 15 percent, 16 percent and 11 percent, respectively.

A blood-letting in the semiconductor space was the latest blow to confidence. Thank you, Texas Instruments (TXN), for missing estimates and cutting guidance. Thank you, Susquehanna, for downgrading a slew of companies.

Thank you, Advanced Micro Devices (AMD), for pouring gasoline on the fire after the closing bell. What’s a $50 million revenue fumble between friends, after all? About 30 percent of downside in the share price, that’s what.

Let’s get back to Susquehanna’s bearish call, which also saw a sharp slowing in IT budgets. That’s expected to hit even the mighty cloud-computing space that’s enjoyed virtually uninterrupted growth all year. Yes, we knew about chips. Yes, we knew about the Federal Reserve hiking rates. But no, we didn’t know about a cloud slowdown. Thank you, Susquehanna.

Speaking of analyst calls, Bank of America Merrill Lynch predicted slower advertising spending at Facebook (FB). You remember FB: They’re the once-mighty e-commerce giant that scuppered the “FANG” rally with a terrible report back in July. Their next set of numbers, by the way, is due after the close next Tuesday, October 30.

Beyond the world of tech, some uninspiring economic news has also surfaced. The Chicago Fed’s activity index fell to its lowest level since May, crude-oil inventories rose more than expected and new-home sales cratered. At least two Fed officials also made hawkish comments: Raphael Bostic, who votes on rates, and Robert Kaplan, who doesn’t.

Rail traffic is the final item that many folks overlook. Do you know it rose just 0.5 percent last week and is in its feeblest period since January? A useful indicator all year, it’s now pointing to slower growth overall. So while not directly linked to the Nasdaq, tech investors never like to see evidence of a weaker economy.

Maybe that’s why money shifted safe havens. The SPDR Utility ETF (XLU) rose 2.4 percent yesterday, its biggest gain in eight months, to its highest level of the year. That usually reflects a belief interest rates will fall, regardless of what Fed speakers might say.

Finally, the Nasdaq-100 failed to hold its January highs around 7000. Ditto for other indexes cited in this post.

In conclusion, a lot of things happened yesterday. And almost all of them seemed to confirm a worsening of the bearish trend.