Stalled

U.S. markets tumble as stimulus talks stall and weekly unemployment numbers spike.

Read in Browser   The Market Sum | Insight after the bell By Caleb Silver, Editor in Chief Thursday's Headlines 1. US markets tumble as tech shares lead declines 2. 1.41M Americans file for first-time unemployment last week 3. Berkshire Hathaway raises its stake in Bank of America 4. Metal ETFs are crushing the stock market 5. The value investor blues Markets Closed Dow 26,652.33 −353.51 (-1.31%) S&P 3,235.66 −40.36 (-1.23%) Nasdaq 10,461.42 −244.71 (-2.29%) VIX 26.08 +1.76 (+7.24%) Bitcoin $9,567.76 +$47.03 (+0.49%) US 10-Yr Yield 0.582 −0.013 (-2.18%)     Image courtesy Fotoeventis/Getty   Markets Today U.S. markets sold off hard today as tech stocks led the slide. As they go, so go the markets, and today all sectors were pulled lower. The DJIA and the S&P 500 snapped four-day winning streaks, and the tech-heavy Nasdaq tumbled 2.2%. Shares of Apple and Microsoft both fell more than 4% following Microsoft's earnings report yesterday afternoon. Microsoft reported a solid quarter, to be sure, but investors have high expectations for these highly valued companies.    Republican leaders say their version of a new stimulus bill will be released early next week, but they and their Democratic counterparts remain far apart on many details. With the end of the pandemic unemployment insurance checks coming soon, fears of a double-dip recession are starting to build, again.   Those fears were amplified by a higher-than-expected number of new U.S. unemployment claims filed in the past week. 1.41 million Americans filed for first-time claims, and as of the first week of July, 31.8 million Americans are collecting some form of unemployment. The spike in weekly claims was the first increase in 17-straight weeks since the pandemic began—a sign that the recovery has stalled amid a resurgence of the virus.     Headlines: Warren Buffett's Berkshire Hathaway bought more than $800 million worth of Bank of America stock this week, boosting its stake in the banking giant to more than 11%, according to SEC filings. Berkshire Hathaway purchased nearly 34 million shares at an average price of about $24 between Monday and Wednesday, which values the stake at $813 million. Berkshire's total stake in the Bank is worth about $23.9 billion, based on Bank of America's stock price of $24.31 as of Wednesday's close. Mortgage rates in the U.S. rose for the first time in six weeks while still hovering close to a record low. The average for a 30-year fixed loan climbed to 3.01%, up from 2.98% last week, which was the lowest in Freddie Mac data going back to 1971. Australia's budget deficit surged to a post-World War II record amid a surge in spending to plug a virus-induced economic hole, as the government sees the crisis spilling into next year. The underlying cash balance will be a A$184.5 billion ($132 billion) shortfall in the 12 months through June 30, 2021, the government said. The deficit in the fiscal year ended last month was estimated at A$85.8 billion. Southwest Airlines posted a $915 million net loss for the second quarter and warned travel demand will likely remain depressed until there's a vaccine or treatment for the coronavirus. Revenue dropped nearly 83% in the quarter from a year earlier to a little over $1 billion, higher than analyst estimates. American Airlines posted a net loss of $2.1 billion in the second quarter, and added more capacity back than some of its large competitors, as it hopes to capitalize on an uptick in air travel demand that bottomed out in April. Walmart is selling its Indian stores to Flipkart, the e-commerce startup it controls, consolidating its operations in the world's second-most-populous country as it works to fend off Amazon.com. Indian regulations prohibit Walmart from operating super-centers or selling its own inventory directly to consumers through its websites. Tesla is suing electric-vehicle start-up Rivian, saying in a filing this week that its rival stole trade secrets and poached employees. The suit also named four former Tesla employees for allegedly taking confidential information.  Twitter said the hackers who took over the accounts of around 130 people last week in an apparent bitcoin scam were able to access direct messages. The hackers accessed 36 direct message inboxes, including one for an elected official in the Netherlands, Twitter said. Direct messages are similar to phone text messages, and they are generally presumed to be private. The company reported a larger loss and less revenue than analysts had forecast last quarter, but its daily active users grew 34% in the three-month period. Ascena, the parent company of Ann Taylor and Lane Bryant, has filed for bankruptcy, the latest apparel seller unable to survive the economic damage caused by the pandemic. Old school retailers that were once dominant brand names in America have folded under the sudden disappearance of shoppers and staggering debt loads. Here's a look at how much debt these bankrupt companies have carried as they filed for bankruptcy protection:     A Metal Winning Year We've written a lot about gold's out-performance in 2020, and we've touched on the surge in silver prices of late. Silver prices surged 16% this week, alone. But we hadn't realized the extent of the performance of those metals relative to other hot asset classes.     chart courtesy YCharts   SLV, the silver ETF, has now outperformed the QQQ ETF, which consists of the largest tech stocks, as well as GLD, the gold ETF, and TLT, the long-term U.S. Treasury bond ETF. In fact, all four of those ETFs have crushed the SPY ETF, which tracks the S&P 500, all year long. This may be the first time in history that those asset classes all rose higher, together, in the middle of a recession and a bear market.   Silver prices, according to commodity experts, are benefitting from both the flight to safety, just like gold, as well as hopes for an economic recovery. It is a more widely used metal for manufacturing and production, and like gold, it is a presumed store of value that investors like to hold on to when markets appear uncertain.   Every asset has its moment, and this one belongs to silver.     Growth Trouncing Value It's a tough time to be a value investor. According to Bespoke Investments, in the 100 trading days through Monday, the S&P 500 Growth index was up over 14%, while the S&P 500 Value index declined 8%. That's a spread of 22.5 percentage points, the widest it has been since at least 1996.   The chart above shows the rolling 100-trading day spread between the performance of the S&P 500 Growth and Value indices going back to 1996. Prior to Monday, the record spread between the two indices was 22.1 percentage points, which was reached during the dot-com boom in Dec. 1999. Besides that period, the only time the spread was even close to current levels was in March 2009, when it topped 17 percentage points.   In other words, the last two times this happened, the market was cascading into a bear market in 1999 and about to stampede into a bull market in 2009.    We like to learn from history when we invest, but it's not very helpful given this market dynamic.  More News: Amazon Earnings: What to Look For Alphabet Earnings: What to Look For AutoNation Stock Extends Breakout Amid Continued Expansion SPONSORED BY INVESCO The Complete Guide to ETFs ETFs are becoming increasingly popular and soaring to new heights among investors. Invesco's insights can help you determine if these investment vehicles are right for you. LEARN MORE  > (chart courtesy YCHARTS)     Shares of Whirlpool are up by 8% after the home appliance company posted Q2 earnings results that beat analyst expectations. Similarly, Hershey's stock price rose by over 5.5% after the chocolate manufacturer released results for the second quarter that also beat estimates.     Shares of technology stocks, such as Citrix Systems, Intel, Apple, and Microsoft, fell today as investors start to doubt the sustainability of the tech rally. Shares of Chipotle fell over 5% today, despite a better-than-expected earnings report yesterday. Word of the Day Value Investing Value investing is an investment strategy that involves picking stocks that appear to be trading for less than their intrinsic or book value. Value investors actively ferret out stocks they think the stock market is underestimating. They believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond to a company's long-term fundamentals. The overreaction offers an opportunity to profit by buying stocks at discounted prices—on sale.     photo courtesy poemsearcher.com   Today in History July 23, 1878: Notorious bank robber, Charles E. Bowles, aka "Black Bart," robs a Wells Fargo stagecoach in California. Wearing a flour sack over his head, the armed robber stole the small safe box with less than $400 and a passenger's diamond ring and watch. When the empty box was recovered, a taunting poem signed "Black Bart" was found inside:   "Here I lay me down to sleep to wait the coming morrow, Perhaps success, perhaps defeat / And everlasting sorrow,   Yet come what will, I'll try it once, My conditions can't be worse, And if there's money in that box, 'Tis money in my purse."   Source: https://www.history.com/this-day-in-history/black-bart-strikes-again Want more Investopedia market news? Sign Up for 'The Express' Get more market insights and financial headlines before the opening bell. 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