Run the Numbers: Why the Stock Market Just Had Its Worst Day in 2019

Run the Numbers, FN’s new data column, unpacks the data that’s driving top retail trends in the industry.

The stock market has given back yesterday’s solid gains after warnings of a recession put investors on edge over the health of the U.S. economy.

The sell-off marked the worst day of trading in 2019 and followed a series of worrying economic indicators from abroad: Germany’s gross domestic product shrank 0.1% in the second quarter, and China reported lower-than-expected industrial output in July.

Concerned traders subsequently sought safer investments, dragging the yield on the benchmark 30-year Treasury bond to a new low of about 2.05%.

Another alarming sign was the inverted yield curve, or the point where interest rates on U.S. Treasury bonds flip — leading two-year investments to pay higher than 10-year investments.

In the past, such an inversion has pointed to higher interest rates for short-term rather than long-term investments — a situation that hasn’t happened since 2005 and which preceded the Great Recession that began in late 2007. An inversion in the curve implies that traders are predicting an unusual occurrence in the near future. Historically, it has been the harbinger of an economic slowdown.

 

 

10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity. (Shaded areas indicate U.S. recessions.)
10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity. (Shaded areas indicate U.S. recessions.)
CREDIT: Federal Reserve Bank of St. Louis

Market Moves

(all figures were logged at market close)

Dow Jones Industrial Average: -800.49 points, or 3.05%, to 25,479.42

S&P 500: -85.72 points, or 2.93%, to 2,840.60

Nasdaq Composite: -242.42 points, or 3.02%, to 7,773.94

10-year Treasury yield: -9.6 basis points or 1.584%

Fashion and Footwear Stocks

Retail stocks were also clobbered during the trading day. On top of the broader sell-off, Wall Street expressed concerns that major player Macy’s disappointing earnings, released this morning, were emblematic of larger problems in the retail sector. In recent years, big brick-and-mortar mainstays have been struggling to keep up with changing consumer preferences and the strength of major online players like Amazon.

Nike Inc.: down 2.75% to $81.03

Skechers USA Inc.: down 5.57% to $31.18

Under Armour Inc.: down 4.88% to $16.96

Nordstrom Inc.: down 10.65% to $26.02

Foot Locker Inc.: down 5.34% to $37.96

Caleres Inc.: down 2.79% to $14.96

Designer Brands Inc.: down 5.29% to $15.05

Deckers Outdoor Corp.: down 5.9% to $137.39

Crocs Inc.: down 2.08% to $23.96

VF Corp.: down 4.08% to $79.40

Steve Madden Ltd.: down 0.53% to $30.12

Wolverine World Wide Inc.: down 4.87% to $23.85

 

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