CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Stocks turn sharply lower

Article By: ,  Market Analyst
May 18, 2022 3:43 PM

After Tuesday’s big rally on Wall Street, you would expect to see some follow-through. But this is a bear market. Big gains don’t tend to last. Lo and behold, the markets have dropped sharply yet again after a big rally. 

This time, there is no single trigger to point to. It is a combination of factors, mostly fears over and economic slowdown and rising interest rates.


Off Target


But we also had yet another US retail missing the target. “Off Target,” if you will. A 25% drop in Target shares at the open was the biggest since 1987 after the US retail badly missed expectations on earnings amid "unexpectedly high costs." On Tuesday, it was Walmart which plunged by some 11%, the most in 35 years, as it cut its outlook because of inflationary pressures. 


Retailer woes likely to continue amid stagflation risks


The big falls in shares of these retails – and don’t forget Amazon – highlights the damage inflation is inflicting on the sector’s profit margins. What’s more, consumers are getting squeezed as well and if they now start to cut back on spending then retailers could suffer even further. The outlook does look great. Producers will passing on raised input costs onto consumers, and this will ensure inflation is not going to be easing significantly any time soon. 


Keep an eye on S&P


The S&P 500 index has given up most of the gains from the day before and if it closes today’s session below 4000 then this would be a fresh bearish signal that could then see the index start a new downward motion to a new low for the year. 

 


How to trade with City Index

 

You can trade with City Index by following these four easy steps:

 

  1. Open an account, or log in if you’re already a customer 

    • Open an account in the UK
    • Open an account in Australia
    • Open an account in Singapore

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024