Electronic Arts Faces Worst Day Since 2008Shares of Electronic Arts Inc. (EA) plummeted 17.5% on Thursday, marking their worst single-day percentage decline since October 31, 2008, when the stock fell by 17.85%. The decline came after the videogame maker warned of slowing demand for its soccer-related titles, which disappointed investors.
The drop is dragging the Nasdaq Composite lower, with EA also becoming the biggest loser in the S&P 500. The slump puts the stock on track for its lowest close since March 23, 2023, when it ended at $116.04.
Tariffs Threaten Currencies: Mexican Peso and Canadian Dollar at RiskAhead of President Donald Trump’s scheduled address at the World Economic Forum, TD Securities strategists have flagged risks of significant depreciations in certain currencies due to tariff policies. The Mexican peso and Canadian dollar, in particular, are projected to drop over 10% given their heavy export reliance on the U.S.
Other currencies, including the Colombian peso, Indian rupee, Chinese yuan, British pound, and the euro, could face a 5-10% depreciation if blanket tariffs are introduced on U.S. imports. Additionally, currencies like the Japanese yen, South Korean won, and Taiwanese dollar, with their trade surpluses and undervaluation, remain under scrutiny for potential declines.
Bond Market on Edge Ahead of Trump's Davos AddressBond market participants are anxiously awaiting Trump’s video address at the World Economic Forum. Yields on 2- through 30-year U.S. Treasury bonds have ticked higher in anticipation of potential clarifications on tariff policies.
David Morrison, senior market analyst at Trade Nation, suggested that Trump might use the platform to outline his tariff strategies. “The question remains whether these tariffs are part of a negotiating tactic or a definitive action,” Morrison said, referring to proposed 25% duties on Canadian and Mexican goods and a potential 10% tariff on Chinese imports.
ETF Investors Favor Growth and Crypto Following ElectionETF flows since the November 5 presidential election reveal a clear preference for growth stocks and cryptocurrencies, according to Todd Sohn of Strategas. Meanwhile, China and European equities, as well as long-duration bonds, have seen limited interest from investors.
Stocks Open Lower as Treasury Yields RiseWall Street had a mixed opening as Treasury yields resumed their upward march. The 10-year Treasury yield climbed 5 basis points to 4.654%, contributing to investor jitters ahead of Trump’s remarks.
The Dow Jones Industrial Average rose by 70 points (0.2%), while the S&P 500 dipped by 0.1%, and the Nasdaq Composite fell by 0.4%. The rise in yields comes after a brief retreat last week that had allowed markets to recover and the S&P 500 to hit an intraday record on Wednesday.
Unemployment Claims Rise Amid Prolonged Job HuntsThe U.S. labor market showed signs of stress as first-time jobless claims climbed to a six-week high of 223,000, largely attributed to California’s wildfires. Continuing unemployment claims rose by 46,000 to 1.9 million, their highest level since 2018 outside the pandemic.
Jeffry Bartash of MarketWatch noted that the hiring slowdown is making it increasingly difficult for job seekers to find new employment, extending periods of unemployment for many.
ConclusionThursday’s market action highlighted the complexities of investor sentiment amid tariff uncertainties and rising bond yields. While the Dow inched higher, the broader market struggled for direction, with Electronic Arts weighing heavily on the tech sector. As traders await Trump’s Davos address and clarity on his tariff policies, volatility remains a key feature in both equity and bond markets.
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