In recent news, CrowdStrike’s shares took a hit when it was revealed that Delta Airlines is seeking damages against both CrowdStrike and Microsoft following an outage that led to thousands of flight cancellations. This development caused CrowdStrike shares to drop by 5%, while Microsoft shares only slightly decreased. The outage occurred when a software update from CrowdStrike caused a major disruption in Microsoft systems, resulting in an estimated loss for Delta ranging from $350 million to $500 million. As a result, CrowdStrike’s shares have plummeted by more than 32% in July.
On another front, S3 Partners highlighted a growing trend in U.S. homebuilding stocks, attributing it to increased consumer housing demand driving long buying momentum and stock prices. The managing director of predictive analytics at S3 Partners, Ihor Dusaniwsky, noted a shift in short-selling activity due to mark-to-market losses, with short positions in homebuilding stocks losing nearly $1 billion on a year-to-date basis. The SPDR S&P Homebuilders ETF has shown significant growth in July and throughout 2024, surpassing the performance of the S&P 500.
Finally, UBS suggests that the tech sector may see a boost in support after a recent pullback, with their investment chief anticipating a potential entry point for investors as the sector regains momentum. Despite market volatility and a shift away from tech stocks, historical data suggests that the tech sector often experiences a bounce back following corrections. UBS sees this as a reentry opportunity, especially for tech companies with strong earnings growth prospects.
