NYSE Dow Jones finished today at:

[bigdog]

Asian stocks rise after Wall St slips closer to bear market

Asian stock markets are higher after Wall Street fell closer to bear territory, China cut a key interest rate and Japanese inflation rose.

apnews.com

Stocks end lower, nearing but not quite in a bear market​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Another volatile day on Wall Street ended with more losses for stocks Thursday, drawing the S&P 500 closer to its first bear market since the beginning of the pandemic.

The index, a benchmark for many funds, fell 0.6% after easing off a deeper stumble. The latest decline came a day after the S&P 500 had its biggest drop in nearly two years. It’s now down 18.7% from the record high it set early this year and is nearly at the 20% threshold that defines a bear market.

The Dow Jones Industrial Average fell 0.8% and the Nasdaq slipped 0.3%.

The indexes have remained mired in a deep slump as investors worry that the soaring inflation that’s hurting people shopping for groceries and filling their cars up is also walloping profits at U.S. companies. Target fell again, a day after losing a quarter of its value on a surprisingly large drop in earnings.

The latest pullback is further indication “that the market is trying to find direction,” said Lindsey Bell, chief markets and money strategist at Ally Invest. “There’s just still a significant amount of uncertainty, especially in regard to what the (Federal Reserve) is going to do, how that’s going to impact growth in the future, and additionally, where the heck is inflation going from here.”

The S&P 500 fell 22.89 points to 3,900.79. The Dow dropped 236.94 points to 31,253.13. The Nasdaq slid 29.66 points to 11,388.50. The three indexes are on pace to extend a string of at least six weekly losses.

Smaller company stocks held up better than the broader market. The Russell 2000 rose 1.38 points, or 0.1%, to 1,776.22.

Rising interest rates, high inflation, the war in Ukraine and a slowdown in China’s economy have caused investors to reconsider the prices they’re willing to pay for a wide range of stocks, from high-flying tech companies to traditional automakers. Investors have been worried that the soaring inflation that’s hurting people shopping for groceries and filling their cars up is also walloping company profits.

Target fell another 5.1% a day after losing a quarter of its value on a surprisingly weak profit report.

Wall Street is also worried about the Federal Reserve’s plan to fight the highest inflation in four decades. The Fed is raising interest rates aggressively and investors are concerned that the central bank could cause a recession if it raises rates too high or too quickly.

The 10-year Treasury pulled back to 2.85% from 2.88% late Wednesday, but it has been generally rising as investors prepare for a market with higher interest rates. That has also pushed up mortgage rates, which is contributing to a slowdown in home sales.

The pile of concerns on Wall Street has made for very choppy trading and big swings between gains and losses within any given day.

Technology stocks have been some of the most volatile holdings. The sector includes heavyweights like Apple that have lofty valuations, which tend to push the market more forcefully up or down. The sector has been hit especially hard by the Fed’s policy shift to raise interest rates. Low rates help support investments considered more risky, like tech stocks, and higher rates lessen the incentive to take that risk.

Technology stocks fell Thursday, accounting for a big share of the S&P 500′s drop. Cisco Systems slumped 13.7% after the seller of routers and switches cut its profit forecast amid supply chain constraints. Synopsis jumped 10.3% after the software company raised its financial forecasts for the year.

Household goods companies, grocery store operators and food producers fell broadly. General Mills fell 2.1% and Clorox fell 5.3%.

Retailers and other companies that rely on direct consumer spending mostly rose. Amazon added 0.2% and Expedia climbed 5.3%. Bath & Body Works slid 6.8% after cutting its profit forecast for the year.

With the S&P 500 closing moderately lower, the index is now closer to falling into a bear market. The last bear market happened just two years ago, following the onset of the virus pandemic.

Why use a bear to denote a market slump? Bears hibernate, so they represent a market that’s retreating, said Sam Stovall, chief investment strategist at CFRA. In contrast, Wall Street’s nickname for a surging stock market is a bull market, because bulls charge.

ASX 200 expected to fall​

The Australian share market looks set to end the week in the red following another poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 9 points or 0.1% lower this morning.

In the US, another volatile day on Wall Street ended with more losses for stocks Thursday, drawing the S&P 500 closer to its first bear market since the beginning of the pandemic.

The index, a benchmark for many funds, fell 0.6% after easing off a deeper stumble. The latest decline came a day after the S&P 500 had its biggest drop in nearly two years. It’s now down 18.7% from the record high it set early this year and is nearly at the 20% threshold that defines a bear market.

The Dow Jones Industrial Average fell 0.8% and the Nasdaq slipped 0.3%.

The S&P 500 fell 22.89 points to 3,900.79. The Dow dropped 236.94 points to 31,253.13. The Nasdaq slid 29.66 points to 11,388.50. The three indexes are on pace to extend a string of at least six weekly losses.

 

[bigdog]

Final-hour rally yanks Wall Street from maw of bear market

The S&P 500 ended 18.6% below the record high it set in early January. A 20% decline would have been considered the beginning of a bear market.

apnews.com

Final-hour rally yanks Wall Street from maw of bear market​

By DAMIAN J. TROISE and STAN CHOE

NEW YORK (AP) — Wall Street rumbled to the edge of a bear market Friday after another drop for stocks briefly sent the S&P 500 more than 20% below its peak set early this year.

The S&P 500 index, which sits at the heart of most workers’ 401(k) accounts, was down as much as 2.3% for the day before a furious comeback in the final hour of trading sent it to a tiny gain of less than 0.1%. It finished 18.7% below its record, set on Jan. 3. The tumultuous trading capped a seventh straight losing week, its longest such streak since the dot-com bubble was deflating in 2001.

Rising interest rates, high inflation, the war in Ukraine, and a slowdown in China’s economy are all punishing stocks and raising fears about a possible U.S. recession. Compounding worries is how the superhero that’s flown to Wall Street’s rescue in the most recent downturns, the Federal Reserve, looks less likely to help as it’s stuck battling the worst inflation in decades.

The S&P 500 finished the day up 0.57 points at 3,901.36. The Dow Jones Industrial Average swung from an early loss of 617 points to close 8.77 higher, or less than 0.1%, at 31,261.90. The Nasdaq composite trimmed a big loss to finish 33.88 points lower, or 0.3%, at 11,354.62.

Because the S&P 500 did not finish the day more than 20% below its record, the company in charge of the index says a bear market has not officially begun. Of course, the 20% threshold is an arbitrary number.

“Whether or not the S&P 500 closes in a bear market does not matter too much,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments. “A lot of pain has already been experienced.”

Many big tech stocks, seen as some of the most vulnerable to rising interest rates, have already fallen much more than 20% this year. That includes a 37.2% tumble for Tesla and a 69.1% nosedive for Netflix.

It’s a sharp turnaround from the powerful run Wall Street enjoyed after emerging from its last bear market in early 2020, at the start of the pandemic. Through it, the S&P 500 more than doubled, as a new generation of investors met seemingly every wobble with the rallying cry to “Buy the dip!”

“I think plenty of investors were scratching their heads and wondering why the market was rallying despite the pandemic,” Jacobsen said. “Now that the pandemic has hopefully mostly passed, I think a lot of investors are kicking themselves for not having gotten out on signs that the economy was probably slowing and the Fed was making its policy pivot.”

With inflation at its highest level in four decades, the Fed has aggressively turned away from keeping interest rates super-low in order to support markets and the economy. Instead it’s raising rates and making other moves in hopes of slowing the economy enough to tamp down inflation. The worry is if it goes too far or too quickly.

“Certainly the market volatility has all been driven by investor concerns that Fed will tighten policy too much and put the U.S. into a recession,” said Michael Arone, chief investment strategist at State Street Global Advisors.

Bond yields fell as recession worries pushed investors into Treasurys and other things seen as safer. The yield on the 10-year Treasury note, which helps set mortgage rates, fell to 2.78% from 2.85% late Thursday. Goldman Sachs economists recently put the probabilty of a U.S. recession in the next two years at 35%.

Inflation has been painfully high for months. But the market’s worries swung higher after Russia’s invasion of Ukraine sent prices spiraling further at grocery stores and gasoline pumps, because the region is a major source of energy and grains. The world’s second-largest economy, meanwhile, has taken a hit as Chinese officials locked down key cities in hopes of halting COVID-19 cases. That’s all compounded with some disappointing data on the U.S. economy, though the job market remains hot.

Adding pressure onto stocks have been signs that corporate profits are slowing and may finally be getting hurt by inflation. That means the pain has widened beyond tech and high-growth stocks to encompass more of Wall Street.

Retail giants Target and Walmart both had warnings this week about inflation cutting into finances. Discount retailer Ross Stores sank 22.5% on Friday after cutting its profit forecast and citing rising inflation as a factor.

“The latest earnings from retail companies finally signaled that U.S. consumers and businesses are being negatively impacted by inflation,” Arone said.

Although its source is different, the gloom on Wall Street is mirroring a sense of exasperation across the country. A poll from The Associated Press-NORC Center for Public Research released Friday found that only about 2 in 10 adults say the U.S. is heading in the right direction or the economy is good, both down from about 3 in 10 a month earlier.

Much of Wall Street’s bull market since early 2020 was the result of buying by regular investors, many of whom started trading for the first time during the pandemic. Alongside many cryptocurrencies, they helped drive darlings like Tesla’s stock higher. They even got GameStop to surge suddenly to such a high level that it sent shudders through professional Wall Street.

But these traders, called “retail investors” by Wall Street to differentiate them from big institutional investors, have been pulling back as stocks have tumbled. Individual investors have turned from a net buyer of stocks to a net seller over the last six months, according to a recent report from Goldman Sachs.

 

[bigdog]

ASX 200 expected to fall​

The Australian share market looks set to start the week in the red following a mixed night on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 15 points or 0.2% lower this morning.

On Wall Street, the S&P 500 finished the day up 0.57 points at 3,901.36. The Dow Jones Industrial Average swung from an early loss of 617 points to close 8.77 higher, or less than 0.1%, at 31,261.90. The Nasdaq composite trimmed a big loss to finish 33.88 points lower, or 0.3%, at 11,354.62.

Because the S&P 500 did not finish the day more than 20% below its record, the company in charge of the index says a bear market has not officially begun. Of course, the 20% threshold is an arbitrary number.

 

[bigdog]

Asian shares mostly lower as inflation worries cloud outlook

Asian shares are mostly lower as worries over inflation temper optimism over President Joe Biden’s remark that he was considering reducing U.S. tariffs on Chinese imports.

apnews.com

Wall Street ends higher following 7 straight weeks of losses​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Stocks closed broadly higher Monday, an upbeat start to the week on Wall Street after seven weeks of declines that nearly ended the bull market that began in March 2020.

The S&P 500 rose 1.9%, with technology and financial sector stocks doing much of the heavy lifting for the benchmark index. The Dow Industrial Average rose 2% and the Nasdaq climbed 1.6%.

The recent heavy selling on the market has primed traders to snap up big tech stocks and shares in other companies that had been high flyers before the market’s punishing skid, said Quincy Krosby, chief equity strategist for LPL Financial.

“What we’re seeing today is traders and investors coming in and taking advantage of the lower (price) levels,” she said. “This is the tug-of-war in the market between those saying the market has become attractively valued, versus those who are saying ‘not really,’ because it’s not factoring in much slower growth.”

The S&P 500 gained 72.39 points to 3,973.75. The Dow added 618.34 points to 31,880.24, and the tech-heavy Nasdaq picked up 180.66 points to 11,535.27.

Smaller company stocks also staged a rally. The Russell 2000 rose 19.50 points, or 1.1%, to 1,792.76.

Lingering concerns about inflation have been weighing on the market and have kept major indexes in a slump. The benchmark S&P 500 is coming off its longest weekly losing streak since the dot-com bubble was deflating in 2001. It came close to falling 20% from its peak earlier this year, which would put the index at the heart of most workers’ 401(k) accounts into a bear market.

Inflation’s impact on consumers and businesses has been the key worry for markets, along with the Federal Reserve’s attempt to temper that impact by aggressively raising interest rates. Inflation brought on by a big supply and demand disconnect has worsened because of Russia’s invasion of Ukraine and its impact on energy prices. Supply chains were further hurt by China’s recent series of lockdowns for several major cities facing rising COVID-19 cases.

Meanwhile, a series of disappointing earnings reports from key retailers last week raised concerns that consumers are tempering spending on a wide range of goods as they get squeezed by rising inflation.

Investors are worried that the central bank could go too far in raising rates or move too quickly, which could stunt economic growth and potentially bring on a recession. On Wednesday, investors will get a more detailed glimpse into the Fed’s decision-making process with the release of minutes from the latest policy setting meeting.

Wall Street will also get a few economic updates this week from the Commerce Department. On Thursday it will release a report on first-quarter gross domestic product and on Friday it will release data on personal income and spending for April.

Banks made strong gains along with rising bond yields Monday, which they rely on to charge more lucrative interest on loans. The yield on the 10-year Treasury rose to 2.86% from 2.77% late Friday. Bank of America rose 5.9%.

Technology stocks also did some heavy lifting. Apple rose 4% and Microsoft rose 3.2%. The sector has been choppy over the last few weeks and has prompted many of the market’s recent big swings.

VMware surged 24.8% following a report that chipmaker Broadcom is offering to buy the cloud-computing company. JPMorgan Chase jumped 6.2% after giving investors an encouraging update on its financial forecasts.

ASX 200 expected to rise​

The Australian share market looks set to push higher again on Tuesday following a strong start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 14 points or 0.2% higher.

On Wall Street, stocks closed broadly higher Monday, an upbeat start to the week on Wall Street after seven weeks of declines that nearly ended the bull market that began in March 2020.

The S&P 500 rose 1.9%, with technology and financial sector stocks doing much of the heavy lifting for the benchmark index. The Dow Industrial Average rose 2% and the Nasdaq climbed 1.6%.

The S&P 500 gained 72.39 points to 3,973.75. The Dow added 618.34 points to 31,880.24, and the tech-heavy Nasdaq picked up 180.66 points to 11,535.27.

 

[bigdog]

Slumping technology stocks pull Wall Street lower

Stocks fell in morning trading on Wall Street Tuesday, weighed down by a big decline in tech heavyweights over concerns about persistently rising inflation and its impact to their bottom lines.

apnews.com

Slumping technology stocks pull Wall Street lower​

By DAMIAN J. TROISE

NEW YORK (AP) — Stocks fell in morning trading on Wall Street Tuesday, weighed down by a big decline in tech heavyweights over concerns about persistently rising inflation’s impact to their bottom lines.

The S&P 500 index fell 2.1% as of 10:14 a.m. Eastern. The Dow Jones Industrial Average fell 351 points, or 1.1%, to 31,524 and the Nasdaq fell 3.6%.

A stark profit warning from Snapchat’s parent company spooked investors into dumping the stocks of major social media companies. Snap plummeted 39%, while Facebook’s parent, Meta, slumped 10%. Google’s parent fell 8%.

Technology and communications stocks, with their lofty values, tend to have an outsize influence on the market. The sectors have been responsible for much of the volatility the market has seen recenlty as well as a the broad decline the market’s major indexes have seen since early April as investors worry about the impact of rising inflation on businesses and consumers.

Retailers and companies that rely on direct consumer spending also fell sharply. Amazon shed 4.3% and Target fell 3.9%.

Bond yields fell. The yield on the 10-year Treasury fell to 2.75% from 2.86% late Monday.

Falling bond yields weighed on banks, which rely on higher yields to charge more lucrative interest on loans. Citigroup fell 1.9%

Household goods companies and utilities, which are considered less risky than other sectors, made gains.

The pile of concerns weighing on the market has pushed the benchmark S&P 500 to the brink of a bear market, which is when an index falls 20% from its most recent record high. It is down roughly 19% from its record high set earlier this year.

Inflation has been weighing on a wide range of industries in the form of higher raw materials costs and more costly labor. Many businesses have been raising prices on everything from food to clothing to offset the impact of higher costs, but the pressure has been increasing. Key retailers, including Target and Walmart have said that higher costs are squeezing operations. They also raised concerns that consumers are tempering spending on a wide range of goods.

Consumers were already getting squeezed by a supply and demand disconnect when Russia invaded Ukraine and prompted another jump in energy prices, including gasoline. The pain at the pump has cut into spending for many. Supply chain problems were worsened by China’s recent lockdown in several major cities as it deals with rising COVID-19 cases.

Wall Street is also worried about the Federal Reserve’s plan to fight inflation. The central bank is raising interest rates aggressively from historic lows, but investors are concerned that it could go too far in raising rates or move too quickly. That could slow down businesses and potentially bring on a recession. On Wednesday, investors will get a more detailed glimpse into the Fed’s decision-making process with the release of minutes from the latest policy meeting.

ASX 200 expected to rise​

The Australian share market looks set to push higher on Wednesday despite a poor night of trade in the US. According to the latest SPI futures, the ASX 200 is expected to open the day 11 points or 0.15% higher this morning.

On Wall Street, stocks fell in morning trading on Wall Street Tuesday, weighed down by a big decline in tech heavyweights over concerns about persistently rising inflation’s impact to their bottom lines.

The Dow Jones rose 0.15%, the S&P 500 fell 0.8%, and the Nasdaq tumbled 2.35%.

 

[Dona Ferentes]

I do like a good headline

Wall Street’s Crackle Popped by Snap​

https://www.sharecafe.com.au/2022/05/25/wall-streets-crackle-popped-by-snap/

 

[bigdog]

Asian stocks mixed after Fed confirms rate hike plans

Asian stock markets are mixed after notes from the Federal Reserve’s latest meeting confirmed expectations of more interest rate hikes but contained no surprises to rattle investors.

apnews.com

Stocks climb as Fed minutes show determination on rates​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Stocks ended broadly higher on Wall Street Wednesday after minutes from the Federal Reserve’s most recent meeting signaled the central bank intends to move “expeditiously” to raise interest rates back to more neutral levels in its fight to tame inflation.

The S&P 500 rose 0.9%, while the Dow Jones Industrial Average rose 0.6%. The Nasdaq climbed 1.5%. The indexes, which recovered after being in the red in the early going, are on pace for a weekly gain, despite more up-and-down trading this week.

The minutes from the Fed meeting earlier this month show most of the officials agreed that half-point increases to the Fed’s benchmark short-term rate “would likely be appropriate” at the central bank’s next two meetings, in June and July. Such an increase would be double the usual hike.

The central bank has begun raising interest rates in a bid to stamp out the highest inflation in four decades, so traders are keen to gain fresh insight into Fed officials’ thinking. Still, the Fed minutes didn’t reveal any major surprises.

“The market’s showing a relatively muted reaction to what was already embedded in the public sphere,” said Bill Northey, senior investment director at U.S. Bank Wealth Management.

The S&P 500 rose 37.25 points to 3,978.73. The Dow gained 191.66 points to 32,120.28. The Nasdaq rose 170.29 points to 11,434.74.

Small-company stocks rose far more than the rest of the market, a sign of bullishness on the economy. The Russell 2000 gained 34.34 points, or 2%, to 1,799.16.

The yield on the 10-year Treasury, which helps set mortgage rates, slipped to 2.75% from 2.76% late Tuesday.

The broader market remains volatile with investors on edge because of rising inflation and its impact on businesses and consumers. Investors are also concerned about the Fed’s aggressive plan to raise interest rates to fight inflation and hope the Fed won’t act so aggressively to slow the economy as to cause a recession.

Russia’s invasion of Ukraine in February added even more pressure to already rising energy costs, making inflation worse for both businesses and consumers. Supply chains became even tighter over the last month as China locked down several major cities to fight rising cases of COVID-19.

“The overarching theme, especially for the past few weeks, is that investors are increasingly cautious on growth and the economic outlook,” said Jason Draho, head of asset allocation for the Americas at UBS Global Wealth Management. “It’s one of the big reasons why you’re seeing the inability for the stock market to get any kind of momentum.”

At the May 3-4 meeting, the Fed raised its key interest rate by a half-percentage point, its most aggressive move since 2000. It also signaled further large rate hikes to come. To tame inflation, the Fed wants to cool spending and economic growth by making it more expensive for individuals and businesses to borrow.

The minutes revealed that many of the policymakers agreed that after a rapid series of rate increases in the coming months, they could “assess the effects” of their rate hikes and, depending on the economy’s health, adjust their policies.

The economy has showed more signs of showing, and financial markets have dropped sharply, since the Fed meeting.

The S&P 500 gained ground on Monday, but slipped again on Tuesday, dragged down by more losses in the technology sector. The S&P 500 is coming off of a seven-week losing streak that came close to ending the bull market for stocks that began in March 2020.

Retailers had some of the strongest gains after getting beaten down in recent days over concerns that soaring inflation was eating into their profits. Some of those concerns dissipated after the high-end department store operator Nordstrom reported higher sales and raised its profit forecast. It’s stock jumped 14%.

Technology stocks also helped lift the market. Microsoft rose 1.1%.

Several companies made strong gains after reporting solid financial results and giving investors strong forecasts, despite grappling with persistently rising inflation.

TurboTax software maker Intuit rose 8.2% after raising its profit and revenue forecasts for the year. Caleres, the owner of Famous Footwear, surged 29.9% after also raising its profit forecasts for the year.

Homebuilder Toll Brothers rose 8% after reporting strong profits just a day after that sector stumbled amid a disappointing government report on newly built home sales.

Wendy’s jumped 9.8% after Trian Fund Management, which already owns 19% of the company, said it was considering buying the rest of the company.

European markets were higher and Asian markets closed mostly higher.

ASX 200 expected to rise​

The Australian share market looks set to rise on Thursday following a positive night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 11 points or 0.15% higher this morning.

On Wall Street, stocks ended broadly higher on Wall Street Wednesday after minutes from the Federal Reserve’s most recent meeting signaled the central bank intends to move “expeditiously” to raise interest rates back to more neutral levels in its fight to tame inflation.

The S&P 500 rose 0.9%, while the Dow Jones Industrial Average rose 0.6%. The Nasdaq climbed 1.5%. The indexes, which recovered after being in the red in the early going, are on pace for a weekly gain, despite more up-and-down trading this week.

The S&P 500 rose 37.25 points to 3,978.73. The Dow gained 191.66 points to 32,120.28. The Nasdaq rose 170.29 points to 11,434.74.

 

[bigdog]

Asian shares' rise broadly cheered by US earnings, rally

Asian shares are gaining as investors cheered a strong set of earnings from retailers that has sent U.S. shares higher.

apnews.com

Better results from retailers help send stock market higher​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Stocks closed broadly higher on Wall Street Thursday as investors cheered a strong set of quarterly results from Macy’s and other retailers.

The S&P 500 rose 2% and is on pace for its first weekly gain after seven straight losses, its longest such stretch since 2001.

The Dow Jones Industrial Average rose 1.6% and the Nasdaq gained 2.7%. Smaller company stocks also made strong gains, a sign of bullishness on the economy.

Bond yields rose. The yield on the 10-year Treasury, which helps set interest rates on mortgages, rose to 2.75% from 2.74% late Wednesday.

Roughly 90% of the stocks in the S&P 500 rose, with technology companies, banks and retailers driving much of the rally. While trading has remained choppy this week, the market has mostly pushed higher, unlike the past five weeks, when the S&P 500 had a pullback of 2% or more at least one day each week.

“It’s nice to see a couple days in the green, and this might actually end up being the first week when we don’t have a humongous down day,” said Liz Young, head of investment strategy at SoFi. “But I wouldn’t declare premature victory and assume we’re in the clear.”

The S&P 500 rose 79.11 points to 4,057.84. The Dow added 516.91 points to 32,637.19, and the Nasdaq rose 305.91 points to 11,740.65.

The Russell 2000 index of smaller companies climbed 39.07 points, or 2.2%, to 1,838.24.

Retailers led the broader market higher Thursday. Macy’s surged 19.3% after it raised its profit forecast for the year following a strong first-quarter financial report. Dollar General vaulted 13.7% and Dollar Tree jumped 21.9% for the biggest gain in the S&P 500 after the discount retailers reported solid earnings and gave investors encouraging forecasts.

The retail sector is being closely watched by investors looking for more details on just how much pain inflation is inflicting on companies and consumers. Weak reports from the several big companies last week, including Target and Walmart, spooked an already volatile market.

“We’re not convinced that we’re completely out of the woods here,” said Philip Orlando, chief equity market strategist at Federated Hermes. “There were a lot of negative reports last week and what those companies have talked about is what is going on through the economy.”

Inflation is at a four-decade high and businesses have been raising costs on everything from food to clothing to offset higher costs. The impact from Russia’s invasion of Ukraine worsened inflation pressures by fueling higher energy and key food commodity costs. Supply chain problems worsened in the wake of China’s lockdown for several major cities as it tried to contain COVID-19 cases.

Consumers have been resilient about spending, but the pressure from inflation remains persistent and could be prompting a pullback or shift in spending from more expensive things to necessities.

The broad gains on Thursday follow a late push for markets on Wednesday prompted by details from the Federal Reserve’s latest meeting, which confirmed expectations of more interest rate hikes.

Investors have been uneasy over the impact of higher interest rates in the United States and other Western economies that are meant to cool surging inflation. The key concern is whether the Fed can temper inflation without crimping economic growth to the point that the U.S. falls into a recession.

“The Fed’s got to be really aggressive here and job number one is to stuff the inflation genie back in the bottle and I don’t believe the market has fully priced that in,” Orlando said.

Technology stocks also rose. TurboTax maker Intuit rose 4.6%. Companies in the sector, with their lofty stock values, tend to push the market harder up or down.

Airline stocks rallied on encouraging summer travel forecasts. Southwest Airlines rose 6% and JetBlue rose 3.4%.

U.S. crude oil prices rose 3.4% and are up more than 55% for the year.

ASX 200 expected to jump​

The Australian share market looks set to end the week on a positive note following a solid night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 69 points or 1% higher this morning.

In the US, stocks closed broadly higher on Wall Street Thursday as investors cheered a strong set of quarterly results from Macy’s and other retailers.

The S&P 500 rose 2% and is on pace for its first weekly gain after seven straight losses, its longest such stretch since 2001.

The Dow Jones Industrial Average rose 1.6% and the Nasdaq gained 2.7%. Smaller company stocks also made strong gains, a sign of bullishness on the economy.

 

[bigdog]

Wall Street breaks 7-week losing streak, longest since 2001

Stocks rose on Wall Street Friday and closed higher for the week, breaking a seven-week losing streak, the longest such stretch since 2001.

apnews.com

Wall Street breaks 7-week losing streak, longest since 2001​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Technology companies led a broad rally for stocks Friday as Wall Street notched its best week in 18 months. The gain broke a seven-week losing streak for the market, the longest such stretch since 2001.

The S&P 500 rose 2.5% and finished 6.6% higher for the week, its best weekly gain since November 2020. The Dow Jones Industrial Average rose 1.8% and the tech-heavy Nasdaq gained 3.3%.

The strong finish for the week came as investors received potentially encouraging news about inflation. The Commerce Department said that inflation rose 6.3% in April from a year earlier, the first slowdown since November 2020 and a sign that high prices may finally be moderating, at least for now.

The report was released as Wall Street looks for any signal that inflation could be easing, while trying to figure out just how low stocks might sink.

“At this point that’s all the market needs,” said Ross Mayfield, investment strategy analyst at Baird. “It’s definitely one of the signs you would want to see.”

The S&P 500 ended 100.40 points higher at 4,158.24. The Nasdaq rose 390.48 points to 12,131.13. It was the third straight gain for both indexes. The Dow rose 575.77 points to 33,212.96, its sixth-straight gain.

Smaller company stocks also gained ground. The Russell 2000 rose 49.66 points, or 2.7%, to 1,887.90.

The broader market has been in a slump for nearly two months as concerns about inflation and rising interest rates pile up. Investors were spooked last week by disappointing reports from key retailers, including Walmart and Target, which stoked fears about rising inflation hitting profit margins and crimping consumer spending.

Trading remained choppy throughout the week, though the market mostly pushed higher, as retailers including Macy’s and Dollar General released encouraging earnings reports and financial updates.

Retailers were among the biggest gainers Friday as investors continued reviewing the latest round of earnings to get a better sense of just how much pain rising inflation is inflicting on businesses and consumers. Beauty products company Ulta Beauty surged 12.5% for the biggest gain in the S&P 500 after raising its profit forecast for the year. Amazon rose 3.7%.

Disappointing financial updates and earnings weighed on several companies. Clothing retailer American Eagle fell 6.6% after reported weak first-quarter earnings.

Inflation is at a four-decade high and has been persistently squeezing businesses. Higher costs prompted companies to raise prices on everything from food to clothing to protect their margins and consumers remained resilient. Russia’s invasion of Ukraine worsened the inflation picture by pushing global energy and food prices even higher.

U.S. crude oil prices were relatively stable, but are up nearly 60% in 2022. Wheat prices are up about 50% and corn prices are up 30% this year.

Supply chain problems at the heart of rising inflation were worsened in the wake of China’s lockdown for several major cities.

The extra inflation squeeze has made it even more difficult for businesses to offset costs and is seemingly prompting a shift in consumer spending away from expensive items and toward necessities. It has also raised concerns that the Federal Reserve may have an even more difficult time trying to temper the impact from inflation.

The Fed is aggressively raising interest rates to fight inflation, but investors are worried that it could potentially push the economy into a recession if it moves too aggressively.

The yield on the 10-year Treasury, which helps set mortgage rates, slipped to 2.74% from 2.75% late Thursday.

 

[bigdog]

The NYSE will be Closed on Monday, May 30 For Memorial Day holiday

The Australian share market looks set to start the week with a strong gain following a very positive night on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 83 points or 1.15% higher this morning.

Technology companies led a broad rally for stocks Friday as Wall Street notched its best week in 18 months. The gain broke a seven-week losing streak for the market, the longest such stretch since 2001.

The S&P 500 rose 2.5% and finished 6.6% higher for the week, its best weekly gain since November 2020. The Dow Jones Industrial Average rose 1.8% and the tech-heavy Nasdaq gained 3.3%.

 

[bigdog]

The USA NYSE was Closed on Monday, May 30 For Memorial Day holiday

Global stocks rise after Wall St breaks string of declines

BEIJING (AP) — Global stocks and U.S. futures rose Monday after Wall Street rebounded from a seven-week string of declines and China eased anti-virus curbs on business activity in Shanghai and Beijing.

apnews.com

Global stocks rise after Wall St breaks string of declines​

By JOE McDONALD

BEIJING (AP) — Global stocks and U.S. futures rose Monday after Wall Street rebounded from a seven-week string of declines and China eased anti-virus curbs on business activity in Shanghai and Beijing.

London and Frankfurt opened higher. Shanghai, Tokyo and Hong Kong advanced. Oil stayed above $110 per barrel.

The future for Wall Street’s S&P 500 index was 0.9% higher after the benchmark on Friday ended up 6.6% for the week after surging inflation declined. U.S. markets are closed Monday for a holiday.

“Markets rallied into the long weekend, providing a positive tone at the start of this week,” ING economists said in a report.

In early trading, the FTSE 100 in London gained 0.4% to 7,613.78 and the DAX in Frankfurt advanced 0.7% to 14,564.68. The CAC 40 in Paris rose 0.8% to 6,565.13.

On Wall Street, the Dow Jones Industrial Average future was up 0.7%.

On Friday, the S&P gained 2.5%, propelled by gains for tech companies.

Investors were relieved after Commerce Department data showed U.S. inflation, which has prompted the Federal Reserve to raise interest rates, decelerated to 6.3% over a year earlier in April, its first decline in 17 months.

Markets are worried about whether the Fed can control inflation that is running at a four-decade high without tipping the biggest global economy into recession.

The U.S. market has been in a slump for the past two months over fears about interest rate hikes that might slow economic activity, and the impact of Russia’s war on Ukraine and a Chinese economic slowdown.

Crude oil prices are up nearly 60% this year due to fears about disruptions in supplies from Russia, the second-biggest global exporter. Wheat prices are up about 50% and corn prices are up 30%.

The Dow rose 1.8% and the Nasdaq, dominated by tech stocks, gained 3.3%.

In Asia, the Shanghai Composite Index rose 0.6% to 3,149.06 after more factories and shops in Beijing and Shanghai were allowed to reopen.

The Nikkei 225 in Tokyo surged 2.2% to 27,369.43 and the Hang Seng in Hong Kong gained 2.1% to 21,123.93. The Kospi in South Korea advanced 1.2% to 2,669.66.

Sydney’s S&P-ASX 200 was 1.4% higher at 7,286.60.

India’s Sensex added 1.8% to 55,856.06. New Zealand and Southeast Asia markets gained.

More factories, shops and other businesses are allowed to reopen this week in Shanghai and in the Chinese capital, Beijing, after authorities declared outbreaks under control. The Shanghai city government promised rent and tax cuts, faster approvals for construction projects and more subsidies for electric car purchases.

In energy markets, benchmark U.S. crude rose 44 cents to $115.53 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oils, advanced 48 cents to $116.04 per barrel in London.

The dollar edged up to 127.34 yen from Friday’s 127.10 yen. The euro rose to $1.0766 from $1.0733.


The NYSE was Closed on Monday, May 30 For Memorial Day holiday

Rest of World on Monday

ASX 200 expected to edge lower​

The Australian share market looks to have run out of steam and is expected to edge lower on Tuesday. According to the latest SPI futures, the ASX 200 is poised to open the day 8 points or 0.1% lower.

Wall Street was closed for a public holiday, but European markets charged higher on news that China is relaxing its COVID restrictions.

 

[bigdog]

Asian shares mixed after stocks retreat on Wall Street

Shares are mixed in Asia after a wobbly day on Wall Street closed out the rocky month of May. Tokyo and Sydney rose while Hong Kong and Shanghai declined.

apnews.com

Stocks slip on Wall Street as messy May comes to a close​

By STAN CHOE and ALEX VEIGA

NEW YORK (AP) — Stocks closed lower Tuesday and the market eked out a tiny gain for May, a fitting end to a tumultuous month as worries about a possible recession, inflation and rising interest rates bruised Wall Street.

The S&P 500 fell 0.6%, having recouped about half of its loss from earlier in the day. The Dow Jones Industrial Average fell 0.7%, while the Nasdaq composite slid 0.4%. Both also pared some of their losses after falling at least 1.4%.

Such swings should perhaps be no surprise given Wall Street’s action this month, amid some of the wildest trading since the early days of the pandemic. The S&P 500 finished the month with a gain of less than 0.1%, which followed an 8.8% slump in April. The index is now 13.9% below its record set early this year. But the slight move for the month belies sharp lurches down and up that shook investors along the way.

Through mid-May, the S&P 500 tumbled to seven straight losing weeks for its longest such streak since the dot-com bubble was deflating two decades ago. Slowing data on the U.S. economy heightened worries that high inflation will force the Federal Reserve to raise interest rates so aggressively that it will cause a recession.

Some high-profile retailers also said inflation is eating into their profits, adding more urgency to the concerns. They all combined to bring Wall Street to the brink of what’s called a bear market, where the S&P 500 was on the verge of closing more than 20% below its record.

“Outside of a peace agreement in Ukraine, it’s difficult to construct a case for more than a bear market rally,” which would be just a temporary turn higher for stocks, Morgan Stanley strategists led by Michael Wilson wrote in a report. They said that the more stock prices rise, the more likely the Federal Reserve will be to hike interest rates.

The S&P 500 fell 26.09 points to 4,132.15, while the Dow lost 222.84 points at 32,990.12. The Nasdaq dropped 49.74 points to 12,081.39.

Smaller company stocks feel more than the broader market. The Russell 2000 slid 23.85 points, or 1.3%, to 1,864.04.

Trading has been turbulent in recent weeks amid worries about a possible recession, inflation and rising interest rates.

Highlighting the worries about inflation, oil prices briefly rose Tuesday after the European Union agreed to block the majority of oil imports from Russia because of its invasion of Ukraine. Benchmark U.S. crude ended up falling 0.3% to settle at $114.67 per barrel. Brent crude, the international standard, rose 1% to settle at $122.84 per barrel.

The jump of more than 50% for oil prices so far this year has been a big contributor to the very high inflation sweeping the world. Earlier Tuesday, a report showed inflation in the 19 countries that use the euro currency hit 8.1% in May, the highest level since records began in 1997.

In the U.S., President Joe Biden met with Federal Reserve Chairman Jerome Powell as soaring inflation continues to carve up Americans’ earnings.

The meeting, marked the first since Biden renominated Powell to lead the central bank and weeks after the Senate confirmed a second term.

“My plan to address inflation starts with simple proposition: Respect the Fed, respect the Fed’s independence,” Biden said.

Stocks have managed to avoid a full-blown bear market, at least so far, with the S&P 500 yet to close more than 20% below its record. The S&P 500 is coming off its best week in a year and a half, in part on hopes that inflation may have hit its peak and will begin moderating. Speculation has grown that the Fed may consider a pause in rate hikes at its September meeting.

Relaxing anti-COVID restrictions in China have also helped, easing some of the worries about the world’s second-largest economy and about more snarls to global supply chains.

China’s factory activity contracted again in May, but it’s almost back to growing. More factories, shops and other businesses are being allowed to reopen this week in Shanghai and in the Chinese capital, Beijing, after authorities declared outbreaks under control.

Stocks in Shanghai and Hong Kong rose more than 1%.

On Wall Street, health care, technology and energy stocks were among the biggest drags on the market. UnitedHealth Group fell 2%, Adobe dropped 2.7% and Chevron slid 2%.

Some areas of the stock market that have been particularly hard hit this year also climbed, including internet-related stocks. Amazon rose 4.4%, and the Class A shares of Google’s parent company gained 1.1%.

U.S. Treasury yields rose following reports showing confidence among U.S. consumers was higher than economists expected and home prices rose more than forecast.

The yield on the 10-year Treasury climbed to 2.85% from 2.75% late Friday.

Starting on Wednesday, the Fed will begin allowing some of the trillions of dollars’ worth of Treasurys and other bonds that it amassed through the pandemic to roll off its balance sheet. Such a move should put upward pressure on longer-term Treasury yields, and it’s one of the ways the Fed is trying to stamp out inflation by slowing the economy.

ASX 200 expected to fall again​

The Australian share market looks set to extend its losses on Wednesday following a poor night of trade in the US. According to the latest SPI futures, the ASX 200 is expected to open the day 34 points or 0.5% lower this morning.

On Wall Street, stocks closed lower Tuesday and the market eked out a tiny gain for May, a fitting end to a tumultuous month as worries about a possible recession, inflation and rising interest rates bruised Wall Street.

The S&P 500 fell 0.6%, having recouped about half of its loss from earlier in the day. The Dow Jones Industrial Average fell 0.7%, while the Nasdaq composite slid 0.4%. Both also pared some of their losses after falling at least 1.4%.

The S&P 500 fell 26.09 points to 4,132.15, while the Dow lost 222.84 points at 32,990.12. The Nasdaq dropped 49.74 points to 12,081.39

 

[bigdog]

https://www.usnews.com/news/business/articles/2022-06-01/asian-shares-mixed-after-stocks-retreat-on-wall-street

Stocks Slide as Strong Economic Data Raises Rate Worries​

By STAN CHOE and ALEX VEIGA, AP Business Writers

A swift jump in Treasury yields rattled Wall Street Wednesday, weighing down stock indexes at the start of another month in what’s been a turbulent year.

The S&P 500 ended 0.7% lower after an early morning gain quickly gave way to choppy trading. The Dow Jones Industrial Average slid 0.5% and the Nasdaq fell 0.7%.

Stocks began their slide immediately after the release of several reports on the U.S. economy, including one showing manufacturing growth was stronger last month than expected. That bolstered investors' expectations for the Federal Reserve to continue raising interest rates aggressively to slow the economy in hopes of reining in inflation.

“Investors are worried about the Fed meeting coming up, and because inflation is expected to remain stubbornly elevated the Fed probably won’t get away with front-end loading the rate tightening cycle and then pausing in the fall,” said Sam Stovall, chief investment strategist at CFRA.

The S&P 500 fell 30.92 points to 4,101.23. The Dow gave up 176.89 points to 32,813.23, after losing an early gain of 282 points. The Nasdaq composite slid 86.93 points to 11,994.46. It also ended in the red after giving up an early 1.3% gain.

Smaller company stocks also lost ground. The Russell 2000 index dropped 9.22 points, or 0.5%, to 1,854.82.

Daily market swings have become routine on Wall Street amid worries that too-aggressive rate hikes by the Fed may force the economy into a recession. Even if it can avoid choking off the economy, higher rates put downward pressure on stocks and other investments regardless. High inflation is meanwhile eating into corporate profits, while the war in Ukraine and business-slowing, anti-COVID-19 restrictions in China have also weighed on markets.

The Fed has signaled it may continue raising its key short-term interest rate by double the usual amount at upcoming meetings in June and July. Speculation built last week that the Fed may consider a pause at its September meeting, which helped stocks to rise. But such hopes diminished after Wednesday's manufacturing report from the Institute for Supply Management.

It showed U.S. manufacturing growth accelerated last month, contrary to economists’ expectations for a slowdown. A separate report said that the number of job openings across the economy ticked a bit lower in April but remains much higher, at 11.4 million, than the number of unemployed people.

Following the reports, traders are now betting on a 60% probability that the Fed will raise its benchmark short-term rate to a range of 2.25% to 2.50% at its September meeting. A week ago, the majority of bets was on a lower level, at a range of 2% to 2.25%, according to CME Group.

The yield on the two-year Treasury, which tends to follow expectations for Fed moves, jumped with those expectations. It rose to 2.66%, up from 2.56% just before the manufacturing report’s release.

Wednesday also marks the start of the Fed’s program to pare back some of the trillions of dollars of Treasurys and other bonds that it amassed through the pandemic. Such a move should put upward pressure on longer-term rates.

The 10-year Treasury yield rose to 2.92% from 2.84% just before the report’s release.

Airlines and stocks of other travel-related companies were some of Wednesday's biggest losers on Wall Street amid worries that inflation is slicing away their earnings.

Delta Air Lines, for example, said it expects to see fuel costs of $3.60 to $3.70 per gallon this quarter, up from its prior forecast of up to $3.35. Even outside of fuel, Delta said expenses could soar up to 22% above 2019 levels on a per-seat basis. That’s up from an earlier forecast of 17%,
Delta’s stock fell 5.2% even though it also said revenue trends are strengthening. With passengers paying higher fares, Delta said it may get a key revenue measure fully back to 2019 levels.

Norwegian Cruise Line and United Airlines each lost 4.5%.

On the winning side were energy stocks, which rose with the price of crude oil. ConocoPhillips gained 3%, and Exxon Mobil rose 1.9% as a barrel of benchmark U.S. crude rose 0.5% to settle at $115.26. Brent crude, the international standard, added 0.6% to $116.29.

The biggest gain in the S&P 500 came from Salesforce.com, which reported stronger profit for the latest quarter than analysts expected and raised its forecast for the year. Its stock rose 9.9%.

ASX 200 expected to fall​

The Australian share market looks set to fall on Thursday following a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 56 points or 0.8% lower this morning.

On Wall Street, the S&P 500 ended 0.7% lower after an early morning gain quickly gave way to choppy trading. The Dow Jones Industrial Average slid 0.5% and the Nasdaq fell 0.7%.

The S&P 500 fell 30.92 points to 4,101.23. The Dow gave up 176.89 points to 32,813.23, after losing an early gain of 282 points. The Nasdaq composite slid 86.93 points to 11,994.46. It also ended in the red after giving up an early 1.3% gain

Stocks began their slide immediately after the release of several reports on the U.S. economy, including one showing manufacturing growth was stronger last month than expected. That bolstered investors' expectations for the Federal Reserve to continue raising interest rates aggressively to slow the economy in hopes of reining in inflation.

 

[bigdog]

https://www.usnews.com/news/business/articles/2022-06-02/asia-shares-slide-across-board-amid-rate-hike-covid-worries

Stocks Shake off a Wobbly Start on Wall Street, End Higher​

The stock market shook off a wobbly start and ended broadly higher Thursday, marking its first gain in this holiday-shortened week.

By DAMIAN J. TROISE and ALEX VEIGA, AP Business Writers
NEW YORK (AP) — Stocks on Wall Street overcame a shaky start to close broadly higher Thursday, as the major indexes more than made up for their losses earlier in the holiday-shortened week.

The S&P 500 rose 1.8%, with more than 85% of the stocks in the benchmark index notching gains. The Dow Jones Industrial Average rose 1.3%, while the Nasdaq climbed 2.7%.

Technology stocks accounted fore a big share of the gains as Microsoft erased an early loss. Bond yields eased.
Trading has been choppy in recent days as investors remain worried about inflation and the interest rate increases the Federal Reserve is using to fight it. Thursday's market rally may have been spurred, in part, by a report showing private sector hiring that came in well below economists' forecasts.

“The private payroll report was pretty weak," said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management. “It’s maybe one of those environments where people are looking for weak data that gives them some hope that the Fed will pause (rate hikes) in September.”

The S&P 500 rose 75.59 points to 4,176.82. The index has risen 7.1% since coming to the edge of a bear market two weeks ago.

The Dow added 435.05 points to 33,248.28, while the Nasdaq gained 322.44 points at 12,316.90.

Rising energy prices have been feeding inflation, which is already at its highest levels in four decades. U.S. gasoline prices hit another record high Thursday, with the average price at the pump costing $4.71 per gallon, according to motoring club federation AAA.
Investors remain focused on the balance between inflation, rising interest rates and economic growth. The Federal Reserve is being closely watched as it tries to temper the impact from inflation by raising interest rates from historic lows during the pandemic.

Several economic reports on Wednesday bolstered expectations for the Fed to keep raising interest rates aggressively. Wall Street is concerned that the Fed could slow economic growth too much and potentially send the economy into a recession.

But on Thursday, payroll processor ADP reported that hiring by private U.S. companies rose just 128,000 in May. That's well below the 302,000 hires economists expected, according to FactSet.

Wall Street will get another glimpse into the health of the broader economy on Friday when the Labor Department releases its employment report for May. The jobs market had initially been slow to recover from the impact of the virus pandemic, but has bounced back strongly with low unemployment and plentiful job postings.

Meanwhile high inflation is eating into corporate profits, while the war in Ukraine and COVID-19 restrictions in China have also weighed on markets.

Technology stocks, whose lofty values tend to give the broader market a harder push higher or lower, accounted for a big share of the rally Thursday. Chipmaker Nvidia jumped 6.9% and software maker Adobe rose 5.5%.

Communications stocks, companies that rely on direct consumer spending and some big industrial firms gained ground. Facebook parent Meta Platforms rose 5.4%, Expedia Group added 6.3% and Boeing climbed 7.5%.

Small company stocks rose, signaling confidence about economic growth. The Russell 2000 gained 42.85 points, or 2.3%, to 1,897.67.
Bond yields were relatively stable. The yield on the 10-year Treasury, which helps set interest rates on mortgages and other loans, fell to 2.91% from 2.93% from late Wednesday.

Energy stocks fell. Chevron slipped 0.2%.

Investors continue monitoring corporate earnings and financial updates. Microsoft rose 0.8%, recovering from an early slide, after cutting its financial forecasts for the current quarter. The software pioneer cited unfavorable changes in exchange rates. Online pet store Chewy surged 24.2% after reporting strong earnings.

ASX 200 expected to jump​

The Australian share market looks set to end the week on a positive following a strong night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 80 points or 1.1% higher this morning.

In the US, the stock market shook off a wobbly start and ended broadly higher Thursday, marking its first gain in this holiday-shortened week.

The S&P 500 rose 1.8%, with more than 85% of the stocks in the benchmark index notching gains. The Dow Jones Industrial Average rose 1.3%, while the Nasdaq climbed 2.7%.

 

[bigdog]

Stocks sink as Wall Street eyes downside of solid jobs data

Stocks ended another bumpy week with more losses Friday as investors considered the downside of the still-strong U.S. jobs market.

apnews.com

Stocks sink as Wall Street eyes downside of solid jobs data​

By STAN CHOE and DAMIAN J. TROISE

NEW YORK (AP) — U.S. stocks fell broadly Friday and pulled major indexes into the red for the week as Wall Street focused on the downside of the still-strong U.S. jobs market.

A report showed employers hired more workers last month than economists expected. While that’s a good sign for the economy amid worries about a possible recession, many investors saw it keeping the Federal Reserve on its path to hiking interest rates aggressively. Such moves would slow the economy in hopes of ultimately knocking down high inflation, and the Fed risks causing a recession if it moves too quickly or too far. In the meantime, higher interest rates put downward pressure on stocks and other investments.

The S&P 500 index fell 68.28 points, or 1.6%, to 4,108.54. It’s a reversal from Thursday’s market movements, when a narrower report on the U.S. jobs market came in weaker than expected. That bolstered speculation the Fed may consider a pause in raising rates later this year, and the hopes for a less-aggressive Fed sent stocks jumping.

The slide on Friday also dragged the benchmark S&P 500 into its eighth weekly loss in the last nine. The outlier in that stretch was last week, when stocks roared in part on speculation that the Fed would consider a pause in rate hikes in September.

The Dow Jones Industrial Average fell 348.58 points, or 1%, to 32,899.70. The Nasdaq fell 304.16 points, or 2.5%, to 12,012.73.

Bitcoin also fell, while a measure of worry in the stock market rose, even though some glass-half-full signals for inflationary pressures were buried within the jobs data.

Friday’s comprehensive report from the U.S. government showed employers added 390,000 jobs last month, better than expectations for 322,500. That sent Treasury yields climbing, though they initially wobbled as investors moved from one knee-jerk reaction to another following the report’s release.

The yield on the two-year Treasury, which tends to move with expectations for Fed action, rose to 2.68% from 2.62% just before the report’s release. The 10-year yield, which tracks expectations for longer-term growth and inflation, rose to 2.95% from 2.91% after earlier climbing as high as 2.99%.

The report did contain some signals analysts said could ultimately get the Fed to be less aggressive, and the mixed data could lead markets to swing through Friday. Big daily reversals have become the norm recently as Wall Street struggles to handicap how aggressive the Fed will be.

Average wages for workers were a touch weaker in May than economists expected. While that’s discouraging for people watching prices at the grocery store and gasoline pump jump more than their paychecks, it could mean less future pressure on inflation across the economy. Plus, the nation’s job growth decelerated last month, even if it was better than expectations.

“The employment situation remains solid for the economy, but there are some signs of slowing,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments. “The signs aren’t clear and convincing enough to suggest the Fed needs to pause yet, but a lot can change over the next few months.”

More than four out of five stocks in the S&P 500 fell amid the worries about rising rates, with the heaviest losses hitting technology stocks
and other big winners of the prior low-rate world.

Tesla tumbled 9.2% after U.S. safety regulators said more than 750 owners have complained about cars suddenly stopping on roadways for no apparent reason while operating on thier partially automated driving systems. A report also said Tesla is considering layoffs amid concerns by its CEO, Elon Musk, about the economy. Because Tesla is the fifth-biggest company in the S&P 500, its movements carry a heavier weight on the index.

Companies from Walmart to Delta Air Lines have recently warned how inflation is eating into their profits, which has upped the pressure on markets because stock prices tend to track profits over the long term. The warnings are layering on top of the market’s worries about Russia’s invasion of Ukraine and about business-slowing, anti-COVID measures in China.

“There are just so many uncertainties,” said John Lynch, chief investment officer for Comerica Wealth Management. “You can’t put Ukraine on a spreadsheet and you can’t put lockdowns in China on a spreadsheet.”

JPMorgan Chase’s CEO, Jamie Dimon, said earlier this week that he’s preparing his company for a possible economic “hurricane,” highlighting less economic support from the U.S. government and Federal Reserve, as well as the war in Ukraine.

 

[bigdog]

Market watch​

ASX futures down 32 points, or 0.4% to 7210 on Saturday

Australian dollar at 72.12 US cents at 7.12am AEST Wall Street: S&P 500 -1.6%, Dow Jones -1.1%, Nasdaq -2.5% Europe: Stoxx 50 -0.3%, FTSE -1%, DAX -0.2%, CAC -0.2% Bitcoin +0.2% to $US29,815.89 on Bitstamp at 7.19am AEST Spot gold -0.9% to $US1851.19 per ounce on Saturday Brent crude +1.8% to $US119.72 on Saturday US oil +1.7% to $US118.87 a barrel on Saturday Iron ore +1.2% to $US144.02 per tonne (Tianjin)

 

[noirua]

• The U.S. Savings Rate has fallen to its lowest level in 12 years as consumers struggle to keep up with inflation.
• $6.5 trillion of U.S. government bonds are maturing and will probably need to be rolled forward at significantly higher rates.
• Panelists at the World Economic Forum voiced concern over the challenges the global economy is facing.

 

[bigdog]

Asian markets mixed after Wall St bond sell-off

Asian stock markets are mixed following a bond sell-off on Wall Street amid anxiety about higher U.S. interest rates.

apnews.com

Wall Street ticks higher as recession watch remains murky​

By DAMIAN J. TROISE and STAN CHOE

NEW YORK (AP) — U.S. stocks ticked higher Monday as Wall Street keeps wrestling with whether the economy will successfully avoid a recession amid rising interest rates and high inflation.

The S&P 500 rose 12.89 points, or 0.3%, to 4,121.43 after swinging through another day of erratic moves, in what’s become the norm for markets. The Dow Jones Industrial Average edged up 16.08, or less than 0.1%, to 32,915.78, and the Nasdaq composite gained 48.64, or 0.4%, to 12,061.37.

Stocks started the day with bigger gains, and the S&P 500 was up as much as 1.5%, with the Nasdaq briefly up nearly 2%. But they fell back as Treasury yields continued to climb, putting downward pressure on stocks. When safe bonds are paying more in interest, investors are usually less willing to pay high prices for stocks, which are riskier.

The yield on the 10-year Treasury jumped back above 3% to 3.04%, up from 2.95% late Friday. It’s moving toward its levels from early and mid-May, when it reached its highest point since 2018 amid expectations for the Federal Reserve to raise interest rates aggressively in order to rein in the worst inflation in decades.

Such moves will slow the economy by design, and investors are trying to guess beforehand whether the Fed will move so aggressively or so quickly that it will cause a recession.

Economists at Goldman Sachs said in a research note they still see the Fed and its chair, Jerome Powell, on course to walk the line successfully and engineer what’s called a “soft landing” for the economy. That was more encouraging than some of the warnings that dragged on markets last week, including one from JPMorgan Chase CEO Jamie Dimon, who said he’s preparing for an economic “hurricane.”

The number of job openings has started to decline, which could reduce some of the pressure pushing wages and inflation higher. Snarled supply chains around the world have also improved, though the Goldman Sachs economists led by Jan Hatzius still see a 35% risk of a U.S. recession within the next two years.

“To say that markets are likely to remain rangebound is often a cliché, but we think it currently has more content than normal because Chair Powell is so intently focused on the role of financial conditions in delivering a soft landing,” Hatzius wrote.

As it measures financial conditions, the Fed looks at how prices are behaving in stock and bond markets. The S&P 500 is close to where it was a month ago, churning as investors put on and take off bets that the Fed may take a pause later this year in its sharp hikes to interest rates. But stocks have endured big day-to-day and even hour-to-hour swings through that stretch, and the S&P 500 remans 13.5% below where it began the year.

Wall Street’s gains to start the week followed up on strength for European and Asian stock markets after Chinese authorities relaxed some COVID-related restrictions. Diners returned to restaurants in Beijing for the first time in more than a month, for example. That eased concerns tough anti-virus measures will slow the world’s second-largest economy and further hinder global supply chains

Stocks in Shanghai rose 1.3%, Hong Kong’s Hang Seng jumped 2.7% and Germany’s DAX returned 1.3%.

On Wall Street, companies in the solar power industry were some of the biggest gainers after President Joe Biden ordered emergency measures to increase U.S. manufacturing of solar panels and exempted panels from Southeast Asia from tariffs for two years.

Enphase Energy jumped 5.4%, and SolarEdge Technologies rose 2.9%.

Amazon was one of the biggest forces pushing the S&P 500 higher. It rose 2% after splitting its stock, 20-for-1. Such a move lowers its stock price and makes it more affordable to some smaller-pocketed investors, all while leaving its total value alone.

Spirit Airlines rose 7% after JetBlue Airways boosted its buyout offer in the bidding war for the discount carrier.

On the losing side was Twitter, which slipped 1.5% after Tesla CEO Elon Musk threatened to call off his deal to buy the company, saying Twitter was refusing to hand over data. Musk has been complaining about how many of Twitter’s users are actually bots and fake accounts. Shares of Tesla rose 1.6%.

Big swings could still be ahead for Wall Street this week, particularly on Friday when the U.S. government releases its latest monthly update on inflation.

Market watch​

ASX futures down 3 points to 7209 at 6.39am AEST U.S. stocks ticked higher Monday as Wall Street keeps wrestling with whether the economy will successfully avoid a recession amid rising interest rates and high inflation. The S&P 500 rose 12.89 points, or 0.3%, to 4,121.43 after swinging through another day of erratic moves, in what’s become the norm for markets. The Dow Jones Industrial Average edged up 16.08, or less than 0.1%, to 32,915.78, and the Nasdaq composite gained 48.64, or 0.4%, to 12,061.37.

Australian dollar -0.2% to 71.94 US cents at 6.50am AEST Wall Street: S&P 500 +0.1%, Dow Jones +0.3%, Nasdaq +0.4% Europe: Stoxx 50 +1.5%, FTSE +1%, DAX +1.3%, CAC +1% Bitcoin +4.9% to $US31,423.77 on Bitstamp at 6.53am AEST Spot gold -0.5% to $US1842.08 per ounce at 6.47am AEST Brent crude +0.1% to $US119.88 at 6.39am AEST US oil +0.1% to $US118.94 a barrel at 6.39am AEST Iron ore +0.6% to $US144.81 per tonne (Tianjin) 10-year yield: US 3.04% Australia 3.48% Germany +1.32%

 

[Dona Ferentes]

Today, Amazon is doing something it hasn’t done since the dot-com bubble…

A stock split.

If you own Amazon, for every one share you had on Friday, you now have 20 shares. This does not change the value of your investment. If you have an apple pie and split it into 20 pieces, you still have the same amount of pie.

So, don’t panic if you own Amazon and notice the stock has “dropped” from around $2,400 to around $120. You haven’t lost any money, and Amazon’s business hasn’t changed. You just own more, smaller pieces of the company

• So, why is Amazon bothering to split its stock?

The first reason is to get more individual investors to buy it. With the growth of no-fee trading platforms like Robinhood, more Millennials and Gen Z’ers are dropping their pennies into the market. Many of these newbie investors aren’t working with much capital. Robinhood says its median account size is $240. So, a stock split allows more people with small accounts to buy shares.

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The second reason to split a stock is employee compensation. Amazon has 1.6 million employees. Last year it doled out $12 billion in stock-based compensation. Of course, many of Amazon’s employees are not eligible for this. But a lower stock price makes the situation easier for the company to manage.

• The third reason to split a stock comes back to passive indexing.

Or more specifically, the oldest index in the world—the Dow Jones Industrial Average.

The Dow is a basket of 30 blue-chip stocks. It’s weighted differently than other indices. The S&P 500 and the Russell 2000 weight companies by market capitalization. But the Dow weights companies solely on stock price.

Despite its size, Amazon is not in the Dow. However, its more palatable post-split price may boost its chances of getting a spot. That, in turn, would help support a higher stock price.

Amazon has sunk 22% in the past 12 months. Yes, it’s a massive company. We all order off its site. And it’s investing “through its income statement,” which depresses current earnings.

But would you call it a bargain? On a trailing 12-month basis, operating cash flow was $39 billion. That’s before $63 billion in major capital expenditures. So, at today’s prices, the stock is trading for 30 times operating cash flow.

The only part of Amazon that’s making much money is Amazon Web Services, or AWS. It accounted for 74% of operating earnings last year. Meanwhile, Amazon’s international retail business lost money. And its North American retail business put up a razor thin 2.5% operating margin

 

[bigdog]

Asian shares mostly higher after wobbly rally on Wall St

Shares are mostly higher in Asia after U.S. stocks rallied. Hong Kong shares surged on heavy buying of technology shares.

apnews.com

Stocks rally as uncertainties keep Wall Street wobbly​

By DAMIAN J. TROISE and STAN CHOE

NEW YORK (AP) — U.S. stocks rallied Tuesday as Treasury yields eased, but Wall Street remains wobbly as investors wait for more clarity on where interest rates, inflation and the economy are heading.

The S&P 500 climbed 39.25 points, or 1%, to 4,160.68 after reversing a morning loss of 1%. The Dow Jones Industrial Average rose 264.36 points, or 0.8%, to 33,180.14 after it also bounced between losses and gains throughout the day. The Nasdaq composite gained 113.86 points, or 0.9%, to 12,175.23.

Gains by Apple, Microsoft and other technology stocks were some of the biggest forces lifting the market. They benefited from a drop in Treasury yields, with the 10-year yield falling back below 3%. Lower yields in recent years have emboldened investors to pay higher prices for stocks, particularly companies that are growing quickly.

Stocks of energy producers also jumped as oil prices rose to roughly $120 per barrel, up more than 55% for the year so far. Exxon Mobil climbed 4.6%, and ConocoPhillips added 4.5%.

Kohl’s soared 9.5% after the department store chain said it’s in advanced talks to sell itself for about $8 billion to Vitamin Shoppe owner Franchise Group. Jam maker J.M. Smucker rose 5.7% after reporting stronger earnings than analysts expected.

Wall Street started the day pessimistic, and stocks initially fell after Target warned of lower profit margins as it slashes prices to clear out inventory. The retail giant sank 2.3% after it announced moves it said were needed to keep up with customers’ changing behaviors. Across the country, shoppers are spending more at restaurants and on travel than on sprucing up their homes as they did earlier in the pandemic.

Other retailers got caught in the downdraft, and Walmart fell 1.2%.

Worries were also stoked by the World Bank sharply cutting its forecast for economic growth this year. It pointed to Russia’s war against Ukraine and the prospect of widespread food shortages, raising the potential return of “ stagflation,” a toxic mix of high inflation and sluggish growth unseen for more than four decades.

The economy’s fragility has been atop Wall Street’s mind this year amid worries about interest-rate hikes coming from the Federal Reserve. The central bank is moving aggressively to stamp out the worst inflation in decades, but it risks choking off the economy if it moves too far or too quickly.

The Fed is widely expected to raise its key short-term interest rate by half a percentage point at its meeting next week. That would be the second straight increase of double the usual amount, and investors expect a third in July.

The Fed is not alone in reining in the massive support thrown at the economy and financial markets during the pandemic. Australia’s central bank surprised investors Tuesday by raising interest rates by half a percentage point.

Even if central banks pull off the delicate act of slowing the economy enough to halt inflation but not so much as to cause a recession, markets face other challenges.

“Rising rates and slowing growth are not a supportive environment for investors, so it is unlikely that equity or fixed income returns will match the stimulus-fueled returns of the past two years,” Gargi Chaudhuri, head of iShares investment strategy, Americas, said in a report. She said she thinks the U.S. will avoid a recession.

Treasury yields have largely climbed through this year with expectations for a more aggressive Fed. They moderated a bit on Tuesday, though.

The yield on the 10-year Treasury fell back to 2.98% from 3.03% late Monday. The two-year yield, which more closely tracks expectations for Fed action, dipped more modestly to 2.72% from 2.73%.

Markets could remain erratic until more clarity emerges over inflation and the economy. The next big update on inflation arrives Friday, when the U.S. government releases its latest reading on the consumer price index.

Market watch

ASX futures up 48 points or 0.7% to 7149 at 6.41am AEST

Australian dollar +0.6% to 72.33 US cents at 6.38am AEST​

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Wall Street: S&P 500 +1%, Dow Jones +0.8%, Nasdaq +0.9%​

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Europe: Stoxx 50 -0.8%, FTSE -0.1%, DAX -0.7%, CAC -0.7%​

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Bitcoin -0.3% to $US31,282.20 on Bitstamp at 6.39am AEST​

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Spot gold +0.6% to $US1852.60 per ounce at 6.35am AEST​

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Brent crude +1.3% to $US121.04 at 6.24am AEST​

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US oil +1.2% to $US119.94 a barrel at 6.24am AEST​

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Iron ore +0.7% to $US145.88 per tonne (Tianjin)​

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10-year yield: US 2.98% Australia 3.55% Germany +1.29%​