NYSE Dow Jones finished today at:

[bigdog]

Asian shares fall as oil lingers above $120, yen sinks

Shares are mostly lower in Asia as investors watch for fresh signs of inflation. Crude oil prices hovered above $120 a barrel, adding to price pressures.

apnews.com

Stocks fall as choppy trading persists on Wall Street​

By DAMIAN J. TROISE

NEW YORK (AP) — Stocks fell broadly on Wall Street Wednesday, erasing most of their gains for the week, as investors were discouraged to see more evidence of inflation’s impact on businesses and another gloomy outlook on the global economy.

The losses follow several bumpy days for markets, with major indexes often lurching between gains and losses by the hour. The volatility persists as investors try to determine how rising interest rates and inflation will impact the economy.

The S&P 500 index fell 44.91 points, or 1.1%, to 4,115.77. The benchmark index managed to hold on to a slight gain for the week. It has notched losses for eight of the last nine weeks.

The Dow Jones Industrial Average fell 269.24 points, or 0.8%, to 32,910.90 and the Nasdaq fell 88.96 points, or 0.7%, to 12,086.27.

Banks and industrial companies were among the biggest weights on the broader market. Wells Fargo fell 1.8% and Union Pacific shed 3.1%. Some technology stocks also fell. Intel lost 5.3%.

Smaller company stocks fell more than the rest of the market. The Russell 2000 fell 28.56 points, or 1.5%, to 1,891.01.

Bond yields rose. The yield on the 10-year Treasury, which banks use to set rates on mortgages and other loans, rose to 3.02% from 2.97% late Tuesday

The big concerns on Wall Street remain rising inflation and whether the Federal Reserve’s shift to aggressively raise interest rates will help temper the impact or possibly push the economy into a recession.

“What investors need to realize is it’s going to be a long time until inflation numbers look good,” said Brian Levitt, global market strategist at Invesco. “What they need to focus on is whether it gets better or worse related to expectations.”

Inflation continues to sting businesses. Lawn care products company Scotts Miracle-Gro slumped 8.9% after slashing its profit forecast for the year because retailers aren’t replenishing orders as expected. Retailers have been warning that inflation is crimping sales as consumers shift to either spending on services or focusing on necessities rather than purchasing otherwise discretionary items, like electronics.

The impact from inflation has only been worsened by Russia’s invasion of Ukraine, which has put more pressure on energy and food prices since February. U.S. crude oil prices rose 2.3% on Wednesday and are up 63% for the year, while wheat prices are up 39% in 2022. Supply chains have also gotten tighter following a series of lockdowns for Chinese cities fighting COVID-19 cases.

“As long as commodity prices remain elevated, its going to be more difficult to see headline inflation come down,” Levitt said.

Greater inflation pressure from the conflict in Ukraine and lockdowns in China prompted the Organization for Economic Cooperation and Development to cut its forecast for economic growth, following several other international groups, including the World Bank, that expect inflation to have a lingering impact on economies around the world.

Treasury Secretary Janet Yellen, testifying before the the Senate Finance Committee on Tuesday, said she expects inflation to remain elevated and bringing that down is a top priority. 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’s goal is to slow economic growth enough to cushion inflation’s impact. Demand for goods had been outpacing supplies and production capacity through most of the post-pandemic recovery. But, investors are concerned that the Fed could go too far too fast in raising rates and nudge the U.S. economy into a recession, especially with economic growth already slowing.

Wall Street is closely watching economic data for signals that could prompt the Fed to potentially ease up on the size of its rate increases. 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 down 51 points or 0.7% to 7082 at 6.37am AEST

The S&P 500 index fell 44.91 points, or 1.1%, to 4,115.77. The benchmark index managed to hold on to a slight gain for the week. It has notched losses for eight of the last nine weeks.

The Dow Jones Industrial Average fell 269.24 points, or 0.8%, to 32,910.90 and the Nasdaq fell 88.96 points, or 0.7%, to 12,086.27.

Australian dollar -0.6% to 71.91 US cents at 6.45am AEST

Wall Street: S&P 500 -1.1%, Dow Jones -0.8%, Nasdaq -0.7%

Europe: Stoxx 50 -0.5%, FTSE -0.1%, DAX -0.8%, CAC -0.8%

Bitcoin -3.6% to $US30,231.24 on Bitstamp at 6.46am AEST

Spot gold -0.1% to $US1851.49 per ounce at 6.42am AEST

Brent crude +2.9% to $US124.04 at 6.34am AEST

US oil +2.7% to $US122.63 a barrel at 6.34am AEST

Iron ore -0.4% to $US145.34 per tonne (Tianjin)

10-year yield: US 3.02% Australia 3.54% Germany +1.35%

 

[bigdog]

Asian shares mixed after rate jitters tumble on Wall Street

Shares are mostly lower in Asia, with only Shanghai rising, after stocks tumbled on Wall Street on expectations central banks will focus on battling inflation with interest rate hikes.

apnews.com

Stocks tumble as rate pressures grow, inflation report looms​

By DAMIAN J. TROISE and STAN CHOE

NEW YORK (AP) — Stocks on Wall Street tumbled Thursday following the latest reminder that central banks now care more about fighting inflation than propping up markets.

The S&P 500 sank 2.4%, putting it on track for its ninth losing week in the last 10. The Dow Jones Industrial Average fell 1.9%, and the Nasdaq composite lost 2.7%.

Wall Street’s losses accelerated as the closing bell for trading approached, with traders scrambling to get in last moves ahead of a highly anticipated report on U.S. inflation due Friday morning. The S&P 500’s drop more than doubled in the final hour of trading.

The weakness for markets started on the other side of the Atlantic after the European Central Bank said it would raise interest rates next month for the first time in more than a decade. Another hike is set for September, possibly by double July’s increase, and the central bank will also halt its bond-buying program next month

It all marks a “sea change” in policy for the European Central Bank, according to Marilyn Watson, head of global fundamental fixed income strategy at BlackRock.

And it’s part of a growing global tide where central banks are removing the ultra-low interest rates that were meant to goose borrowing, economic growth and stock prices through the pandemic. Instead, they’ve swung their focus toward raising interest rates and making other moves to slow growth in order to knock down high inflation

The risk is that such moves could cause a recession if they’re too aggressive. Even if central banks can pull off the delicate balancing act and avoid a recession, higher interest rates put downward pressure on stocks and all kinds of investments regardless.

The wide expectation is that the Fed will raise its key interest rate next week by half of a percentage point, the second straight increase of double the usual amount. Investors expect a third to hit in July.

Where the Fed goes from there depends on inflation’s path, which is why Wall Street is so keyed in on the latest reading for the U.S. consumer price index, which is due Friday morning. Economists expect it to show inflation slowed a touch to 8.2% in May from 8.3% a month earlier.

Investors have been searching for signs that inflation may have already passed its peak, which would be good for markets because it could mean a less aggressive Fed. Speculation has been rising and falling that the Fed could take a pause on rate hikes at its September meeting, swaying with every data point on the economy. That in turn has made stocks particularly prone to big swings.

The S&P 500 lost 97.95 points to close at 4,017.82, while the Dow Jones Industrial Average fell 638.11 to 32,272.79 and the Nasdaq composite tumbled 332.05 to 11,754.23.

European stocks sank immediately following the European Central Bank’s announcement on rates, which came before U.S. markets opened. French stocks were down only slightly before the announcement, but the CAC 40 index fell to a 1.4% loss afterward. Germany’s DAX lost 1.7%

In the U.S., Treasury yields rose following the move from Amsterdam, though they wobbled a bit after that. The 10-year Treasury yield got as high as 3.09% before paring back to 3.04%, up from 3.02% late Wednesday.

A report showed that slightly more U.S. workers filed for unemployment last week than economists expected. That’s a potentially negative signal, but the overall number still remains low compared with history. Economists also said seasonal factors may have affected the most recent numbers, overstating some things due to the Memorial Day holiday.

Higher gasoline prices have been putting a tighter squeeze on both companies and households, upping the pressure on budgets. Crude oil prices were down modestly on Thursday, but they remain up by roughly 60% for the year. Much of the jump is due to Russia’s invasion of Ukraine.

Lockdowns in major Chinese cities because of COVID-19 have added more pressure to global supply chains, which in turn worsens inflation. But some of the impact could be easing. China reported its exports surged 17% over a year earlier in May, up from April’s 3.7% growth, as coronavirus precautions loosened in Shanghai and other cities.

Many investors are bracing for big swings in financial markets to continue given the deep uncertainties about where inflation and the Fed’s policies are heading. Stocks have been clawing back since hitting a bottom in the middle of last month, but the S&P 500 remains down 15.7% for the year so far.

“Even if the market bottomed in May, we will see another sell-off at some point,” Nancy Tengler, CEO of Laffer Tengler Investments, wrote in a research note, “and some of us will feel worse than we thought we could because we thought it was over.”

Market watch

ASX futures down 55 points or 0.8% to 6964 at 6.59am AEST

Stocks on Wall Street tumbled Thursday following the latest reminder that central banks now care more about fighting inflation than propping up markets.

The S&P 500 sank 2.4%, putting it on track for its ninth losing week in the last 10. The Dow Jones Industrial Average fell 1.9%, and the Nasdaq composite lost 2.7%.

Australian dollar -1.3% to 70.98 US cents at 6.42am AEST​

​

Wall Street: S&P 500 -2.4%, Dow Jones -1.9%, Nasdaq -2.8%​

​

Europe: Stoxx 50 -1.7%, FTSE -1.5%, DAX -1.7%, CAC -1.4%​

​

Bitcoin -0.5% to $US30,076.37 on Bitstamp at 6.45am AEST​

​

Spot gold -0.3% to $US1847.98 per ounce at 6.31am AEST​

​

Brent crude -0.5% to $US122.91 at 6.34am AEST​

​

US oil -0.6% to $US121.36 a barrel at 6.33am AEST​

​

Iron ore -1.2% to $US143.63 per tonne (Tianjin)​

​

10-year yield: US 3.04% Australia 3.60% Germany +1.42%​

 

[bigdog]

Stocks dive to another losing week as inflation worsens

Wall Street’s shuddering realization that inflation got worse last month, not better as hoped, sent markets reeling on Friday.

apnews.com

Stocks dive to another losing week as inflation worsens​

By STAN CHOE and DAMIAN J. TROISE

NEW YORK (AP) — Wall Street’s shuddering realization that inflation got worse last month, not better as hoped, sent markets reeling on Friday.

The S&P 500 sank 2.9% to lock in its ninth losing week in the last 10, and tumbling bond prices sent Treasury yields to their highest levels in years. The Dow Jones Industrial Average lost 2.7%, and the Nasdaq composite dropped 3.5%.

Wall Street came into Friday hoping a highly anticipated report would show the worst inflation in generations slowed a touch last month and passed its peak. Instead, the U.S. government said inflation accelerated to 8.6% in May from 8.3% a month before.

The Federal Reserve has already begun raising interest rates and making other moves in order to slow the economy, in hopes of forcing down inflation. Wall Street took Friday’s reading to mean the Fed’s foot will remain firmly on the brake for the economy, dashing hopes that it may ease up later this year.

“Inflation is hot, hot, hot,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments. “Basically, everything was up.”

The growing expectation is for the Fed to raise its key short-term interest rate by half a percentage point at each of its next three meetings, beginning next week. That third one in September had been up for debate among investors in recent weeks. Only once since 2000 has the Fed raised rates by that much, last month.

“No relief is in sight, but a lot can change between now and September,” Jacobsen said. “Nobody knows what the Fed will do in a few months including the Fed.”

The nation’s high inflation, plus the expectations for an aggressive Fed, have sent the two-year Treasury yield to its highest level since 2008 and the S&P 500 down 18.7% from its record set in early January. The worst pain has hit high-growth technology stocks, cryptocurrencies and other particularly big winners of the pandemic’s earlier days. But the damage is broadening out as retailers and others are warning about upcoming profits.

The S&P 500 fell 116.96 points to 3,900.86. Combined with its losses from Thursday, when investors were rushing to lock in final trades before the inflation report, it was the worst two-day stretch for Wall Street’s benchmark in nearly two years.

The Dow lost 880.00 points to 31,392.79, and the Nasdaq tumbled 414.20 to 11,340.02.

Stock prices rise and fall on two things, essentially: how much cash a company produces and how much an investor is willing to pay for it. The Fed’s moves on interest rates heavily influence that second part.

Since early in the pandemic, record-low interest rates engineered by the Fed and other central banks helped keep investment prices high. Now “easy mode” for investors is abruptly and forcefully getting switched off.

Not only that, too-aggressive rate hikes by the Fed could ultimately force the economy into a recession. Higher interest rates make borrowing more expensive, which drags on spending and investments by households and companies.

One of the fears among investors is that food and fuel costs may keep surging, regardless of how aggressively the Fed moves.

“The fact is that the Fed has very little ability to control food prices,” Rick Rieder, BlackRock’s chief investment officer of global fixed income said in a statement. He pointed instead to mismatches in supplies and demand, higher costs for energy and wages and the crisis in Ukraine, which is a major breadbasket for the world.

That raises the threat that central banks will overly tighten the brakes on the economy, as they push against a string “and essentially fall into a damaging policy mistake,” Rieder said.

The economy has already shown some mixed signals, and a report on Friday indicated consumer sentiment is worsening more than economists expected. Much of the souring in the University of Michigan’s preliminary reading was due to higher gasoline prices.

That adds to several recent profit warnings from retailers indicating U.S. shoppers are slowing or at least changing their spending because of inflation. Such spending is the heart of the U.S. economy.

The two-year Treasury yield zoomed to 3.05% following the inflation report from 2.83% late Thursday, a big move for the bond market. During the day, it touched its highest level since George W. Bush’s presidency, according to data from Tradeweb.

The 10-year yield was also up, but not quite as dramatically as the two-year yield, which is more influenced by expectations for Fed movements. The 10-year yield climbed to 3.15% from 3.04% and touched its highest level since 2018.

The narrowing gap between those two yields is a signal that investors in the bond market are more concerned about economic growth. Usually, the gap is wide, with 10-year yields higher because they require investors lock away their dollars for longer.

A two-year yield higher than the 10-year yield would be a signal to some investors that a recession may hit in a year or two.

“This market is to some degree in this no-man’s land, where you don’t have a really good definite signal that says get constructive and buy the market, but you don’t have solid information about a recession being more likely in order to get more defensive,” said Jason Pride, chief investment officer of private wealth at Glenmede.

Friday’s losses were widespread for the S&P 500, with more than 90% of stocks in the index dropping.

Big Tech stocks were some of the the heaviest weights amid broad losses for the biggest winners of the prior ultralow-rate era. Microsoft fell 4.5%, Amazon dropped 5.6% and Nvidia sank 6%.

 

[bigdog]

Asian benchmarks decline after bear market hits Wall Street

U.S. markets tumbled sharply before the opening bell Monday with the S&P 500 pointing to bear territory amid seeping pessimism over stubborn, four-decade high inflation.

apnews.com

Bear market hits Wall Street as stocks, bonds, crypto dive​

By STAN CHOE

NEW YORK (AP) — Wall Street tumbled into what’s called a bear market Monday after fears about a fragile economy and rising interest rates sent the S&P 500 more than 20% below its record set early this year.

The index sank 3.9% in the first chance for investors to trade after getting the weekend to reflect on the stunning news that inflation is getting worse, not better. The Dow Jones Industrial Average was briefly down more than 1,000 points before finishing with a loss of 876.

At the center of the sell-off again was the Federal Reserve, which is scrambling to get inflation under control. Its main method to do that is to raise interest rates in order to slow the economy, a blunt tool that risks a recession if used too aggressively.

With the Fed seemingly pinned into having to get more aggressive, prices fell in a worldwide rout for everything from bonds to bitcoin, from New York to New Zealand. Some of the sharpest drops hit what had been big winners of the easier low-rate era, such as high-growth technology stocks and other former darlings of investors. Tesla slumped 7.1%, and Amazon dropped 5.5%. GameStop tumbled 8.4%.

“The best thing people can do is to not panic and don’t sell at the bottom,” said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research, “and we’re probably not at the bottom.”

Some economists are speculating the Fed on Wednesday may raise its key rate by three-quarters of a percentage point. That’s triple the usual amount and something the Fed hasn’t done since 1994. Traders now see a 28% probability of such a mega-hike, up from just 3% a week ago, according to CME Group.

No one thinks the Fed will stop there, with markets bracing for a continued series of bigger-than-usual hikes. Those would come on top of some discouraging signals about the economy and corporate profits, including a record-low preliminary reading on consumer sentiment soured by high gasoline prices.

The economy is still holding up overall, but the danger is that the job market and other factors are so hot that they will feed into higher inflation. That’s why the Fed is in the midst of a whiplash pivot away from the record-low interest rates it engineered earlier in the pandemic, which propped up stocks and other investments amid hopes of juicing the economy.

Wall Street’s sobering realization that inflation is accelerating, not peaking, is also sending U.S. bond yields to their highest levels in more than a decade. The two-year Treasury yield shot to 3.36% from 3.06% late Friday in its second straight major move. It earlier touched its highest level since 2007, according to Tradeweb.

The 10-year yield jumped to 3.37% from 3.15%, and the higher level will make mortgages and many other kinds of loans more expensive. It touched its highest level since 2011.

The higher yields mean prices are tumbling for bonds, a relatively rare occurrence for them in recent decades. They’re also a particularly painful hit for older and more conservative investors who depend on them as the safer parts of their nest eggs.

The gap between the two-year and 10-year yields has also narrowed sharply, a signal of weakening optimism about the economy. When the two-year yield tops the 10-year, an unusual occurrence, some investors see it as a sign of a looming recession.

Some of the biggest hits came for cryptocurrencies, which soared early in the pandemic as ultralow rates encouraged some investors to pile into the riskiest investments. Bitcoin tumbled more than 14% from a day earlier and dropped below $23,400, according to Coindesk. It’s back to where it was in late 2020 and down from a peak of $68,990 late last year.

On Wall Street, the S&P 500 fell 151.23 points to 3,749.63 and dropped 21.8% below its record set early this year to put it into what investors call a bear market.

Bears hibernate, so bears 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, Stovall said.

The S&P 500 has lost nearly 9% in just three days. That’s its worst such stretch since the earliest days of the coronavirus crash in March 2020. The Dow lost 876.05, or 2.8%, to 30,516.74 on Monday, and the Nasdaq composite dropped 530.80, or 4.7% to 10,809.23.

The coronavirus crash in early 2020 was Wall Street’s last bear market, and it was an unusually short one that lasted only about a month. The S&P 500 got close to a bear market last month, but it didn’t finish a day below the 20% threshold.

Michael Wilson, a strategist at Morgan Stanley who’s been among Wall Street’s more pessimistic voices, is sticking with his view that the S&P 500 could fall further to 3,400 even if the U.S. economy avoids a recession over the next year.

That would mark another roughly 9% drop from the current level, and Wilson said it reflects his view that Wall Street’s earnings forecasts are still too optimistic, among other things.

With soaring price tags souring sentiment for shoppers, even higher-income ones, Wilson said in a report that “the next shoe to drop is a discounting cycle” as companies try to clear out built-up inventories.

Such moves would cut into their profitability, and a stock’s price moves up and down largely on two things: how much cash a company generates and how much an investor will pay for it.

Market watch
ASX futures down 178 points or 2.6% to 6636 at 6.49am AEST

Wall Street tumbled into what’s called a bear market Monday after fears about a fragile economy and rising interest rates sent the S&P 500 more than 20% below its record set early this year.

The index sank 3.9% in the first chance for investors to trade after getting the weekend to reflect on the stunning news that inflation is getting worse, not better. The Dow Jones Industrial Average was briefly down more than 1,000 points before finishing with a loss of 876.

Australian dollar down 1.9% to 69.24 US cents at 6.38am AEST

Wall Street: S&P 500 -3.9%, Dow Jones -2.8%, Nasdaq -4.7%

Europe: Stoxx 50 -2.7%, FTSE -1.5%, DAX -2.4%, CAC -2.7%

Bitcoin -14.7% to $US23,358.84 on Bitstamp at 6.49am AEST

Spot gold -2.7% to $US1820.69 per ounce at 6.37am AEST

Brent crude flat at $US122.05 at 6.37am AEST

US oil +0.1% to $US120.78 a barrel at 6.37am AEST

Iron ore -0.8% to $US140.34 per tonne (Tianjin)

10-year yield: US 3.36% Australia 3.67% Germany +1.63%

 

[bigdog]

https://apnews.com/article/stock-market-today-june-14-a5787764c28d57d02b9590b3ee3f4efa

Stocks dip deeper into bear market ahead of big Fed news

By STAN CHOE and DAMIAN J. TROISE

NEW YORK (AP) — Most stocks on Wall Street dipped Tuesday in their first trading after tumbling into a bear market on worries that high inflation will push central banks to clamp the brakes too hard on the economy.

The S&P 500 fell 14.15, or 0.4%, to 3,735.48 as investors braced for the Federal Reserve’s announcement on Wednesday about how sharply it will raise interest rates. It wobbled between losses and gains through the day after a couple big companies flexed financial strength with stronger profits and payouts to shareholders.

The Dow Jones Industrial Average fell 151.91 points, or 0.5%, to 30,364.83. The Nasdaq composite rose 19.12, or 0.2%, to 10,828.35 after swinging between a a loss of 0.7% and a gain of 1.1%.

Despite the swings, trading across markets was still calmer than during Monday’s worldwide rout, which sent the S&P 500 down 3.9%. Stocks fell more than 1% in Tokyo and Paris but rose that much in Shanghai. A measure of nervousness among investors on Wall Street eased, even as Treasury yields again pierced their highest levels in more than a decade.

“No one’s going to take meaningful positions today ahead of what could be a rip-roaring day” with the Fed’s announcement, said Katie Nixon, chief investment officer for Northern Trust Wealth Management.

Cryptocurrency prices continued to swing. They’ve been among the hardest-hit in this year’s sell-off for markets as the Federal Reserve and other central banks raise interest rates to rein in inflation and forcefully turn off the “easy mode” that helped prop up markets for years. Bitcoin was down nearly 5% in afternoon trading and sitting at $22,201, according to CoinDesk. It earlier fell to nearly 70% below its record of $68,990.90 set late last year.

Offering some support to the market was a report that showed inflation at the wholesale level was a touch lower in May than expected, though it remains very high. It could be an indication that wholesale inflation peaked in March, according to Jack Ablin, chief investment officer at Cresset Capital Management.

But economists said the data won’t keep the Federal Reserve from raising its key interest rate on Wednesday by a larger-than-usual amount. Investors are now mostly expecting the biggest increase since 1994, a hike of three-quarters of a percentage point, or triple the usual amount.

A week ago, such a mega-increase was seen as only a remote possibility, if one at all. But a market-bludgeoning report Friday on inflation at the consumer level has seemingly pinned the Fed into getting more aggressive. It showed inflation for the consumer price index got worse in May, instead of slowing as hoped.

“It’s really a split decision in terms of the market as to whether that will be a good thing or a bad thing,” Nixon said of a big rate increase. “It certainly opens the door to additional big hikes in the future.”

Treasury yields continued to climb, with the two-year yield touching its highest level since November 2007, before the financial crisis, according to Tradeweb. The 10-year yield during the day reached its higher

They also had a relatively reliable warning signal of recession in the bond market flashing on and off. In afternoon trading, the yield on the 10-year Treasury had climbed back above the two-year yield, at 3.47% versus 3.41%. That’s typically how things look in the bond market.

In the unusual circumstances where the two-year yield tops the 10-year yield, some investors see it as a sign that a recession may be hitting in about a year or two. It’s called an “inverted yield curve,” and it briefly flashed earlier in the day.

On Wall Street, Oracle soared 10.4% after it reported stronger revenue and earnings for its latest quarter than analysts expected. FedEx jumped 14.4% after it boosted its dividend payout by more than 50%.

It was the first trading for U.S. stocks after the S&P 500 closed Monday at 21.8% below its record set early this year. That put it in a bear market, which is what investors call a drop of 20% or more.

At the center of the sell-off is the Federal Reserve’s effort to control inflation by raising interest rates. The Fed is scrambling to get prices under control and its main method is to raise rates, but that is a blunt tool that could slow the economy too much and cause a recession.

“The real calm in today’s market is driven very significantly by the focus on this week’s Fed decision.” said Greg Bassuk, CEO of AXS Investments. “Today’s is either the calm before the storm or the calm that will hopefully represent an extended period of calm.”

Other central banks worldwide, including the Bank of England, have been raising rates as well, while the European Central Bank said it will do so next month and in September.

The war in Ukraine is sending oil and food prices sharply higher, fueling inflation and sapping consumer spending, especially in Europe. COVID infections in China, meanwhile, have led to some tough, business-slowing restrictions that threaten to restrain the world’s second-largest economy and worsen snarled supply chains.

The shift toward higher rates has reversed the spectacular rise for markets spurred by massive support from central banks after the pandemic hit in early 2020. The S&P 500 more than doubled from late March 2020 through its peak in January. It was the shortest bull market on record going back to 1929, which followed the shortest bear market on record, according to S&P Dow Jones Indices.

Higher rates typically make investors less willing to pay high prices for risky investments. That’s why some of the biggest stars of the earlier low-rate era have been some of the worst hit in this year’s rout, including bitcoin and high-growth technology stocks. Netflix is down more than 70% in 2022.

Market watch

ASX futures down 46 points or 0.7% to 6631 at 6.42am AEST

Most stocks on Wall Street dipped Tuesday in their first trading after tumbling into a bear market on worries that high inflation will push central banks to clamp the brakes too hard on the economy.

The Dow Jones Industrial Average fell 151.91 points, or 0.5%, to 30,364.83. The Nasdaq composite rose 19.12, or 0.2%, to 10,828.35 after swinging between a a loss of 0.7% and a gain of 1.1%.

Australian dollar -0.7% to 68.72 US cents at 6.53am AEST

Wall Street: S&P 500 -0.4%, Dow Jones -0.5%, Nasdaq +0.2%

Europe: Stoxx 50 -0.8%, FTSE -0.3%, DAX -0.9%, CAC -1.2%

Bitcoin -5.5% to $US21,969.12 on Bitstamp at 6.54am AEST

Spot gold -0.5% to $US1809.44 per ounce at 6.54am AEST

Brent crude -1.1% to $US120.93 at 6.43am AEST

US oil -1.7% to $US118.83 a barrel at 6.43am AEST

Iron ore -0.2% to $US140.09 per tonne (Tianjin)

10-year yield: US 3.47% Australia 3.95% Germany +1.74%

 

[bigdog]

Asian shares gain after Fed assurance on rates lifts Wall St

Asian stock markets were mixed while Europe opened higher Wednesday ahead of a Federal Reserve decision on how sharply to raise interest rates to cool U.S. inflation. Follow AP's live coverage.

apnews.com

Wall Street rallies in relief after Fed’s assurance on rates​

By STAN CHOE

NEW YORK (AP) — Wall Street rallied Wednesday following the Federal Reserve’s sharpest hike to interest rates since 1994, and its later assurance that such mega-hikes would not be common.

The S&P 500 climbed 54.51, or 1.5%, to 3,789.99 after whipping through roller-coaster trading immediately following the Fed’s latest move to fight inflation.

In equally topsy-turvy trading, Treasury yields eased in the bond market after Chair Jerome Powell seemed to soothe the market’s fears about an overly aggressive Fed by implying more modest rate increases may be coming later this year.

The Dow Jones Industrial Average swung between a gain of 647 points and a loss of nearly 180 before finishing with a gain of 303.70. It closed at 30,668.53, up 1%. The Nasdaq composite jumped 270.81, or 2.5%, to 11,099.15.

The market’s ebullience was a sharp turnaround from the worldwide rout that has dominated much of this year, which forced the S&P 500 into a bear market earlier this week. The fear has been that high inflation will push the Fed and other central banks to clamp the brakes too hard on the economy and create a recession. Wednesday’s gain was the first for the S&P 500 in six days.

Some analysts cautioned the rally could be short-lived given how deeply and broadly high inflation has seeped into the economy and how unsettlingly uncertain the future path is.

“Chair Powell painted as rosy a picture as could be painted, and to achieve that picture that he is laying out, that pathway, a lot has to go right,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management. “It’s a challenging path, and he acknowledged that.”

The Fed on Wednesday hiked its key short-term interest rate by three-quarters of a percentage point, triple the usual move. Powell said the Fed may consider another increase that big at its next meeting in July, but he also said such a hike is “an unusually large one” and not to expect it to be common.

The Fed is “not trying to induce a recession now, let’s be clear about that,” Powell said. He said Wednesday’s big increase was about the Fed speeding up the move to get interest rates back to normal, calling it “front-end loading.”

“He’s making it extremely clear to the market, to U.S. consumers, that the Fed takes this seriously and is doing whatever it takes to take inflation down and maintain price stability,” said Quincy Krosby, chief equity strategist for LPL Financial.

All kinds of investments, from bonds to bitcoin, have tumbled this year as high inflation forces central banks to swiftly remove supports propped underneath markets early in the pandemic.

Even if central banks pull off the delicate trick of slowing the economy just enough to stamp out inflation, without a recession, higher interest rates push down on prices for investments regardless. The hardest-hit have been the investments that soared the most in the easy-money era of ultralow interest rates, including high-growth technology stocks and cryptocurrencies.

Treasury yields this week shot to their highest levels in more than a decade on expectations for a more aggressive Fed, though they eased Wednesday following Powell’s comments. A disappointing report showing that sales at U.S. retailers unexpectedly slumped in May from April contributed.

The economy is still largely holding up amid a red-hot job market, but it has shown some signs of distress recently.

The two-year Treasury yield fell to 3.21% from 3.45% late Tuesday, with the biggest move happening after Powell said 0.75 percentage point rate hikes wouldn’t be common. The yield on the 10-year Treasury pulled back to 3.28% from 3.48%.

“The bond market right now is driving the broader market and that will continue,” said Jay Hatfield, CEO of Infrastructure Capital Advisors.

Cryptocurrency prices continued to sink, and bitcoin dropped as low as $20,087.90, nearly 71% below its record of $68,990.90 set late last year. It was down nearly 1% at $21,770 in afternoon trading, according to CoinDesk.

Powell said Wednesday the Fed is moving “expeditiously” to get rates closer to normal levels after last week’s stunning report that showed inflation at the consumer level unexpectedly accelerated last month. It dashed hopes on Wall Street that inflation may have already peaked.

More bad news came with a report on consumer sentiment showing households’ expectations for future inflation were rising, which could spark a vicious cycle that worsens it.

The war in Ukraine has helped send prices for oil soaring because the region is a major producer of energy. COVID infections in China, meanwhile, have led to the closure of factories and disrupted supply chains. It all helped pull the S&P 500 down more than 20% from its record set in early January, putting Wall Street into what investors call a bear market.

Many of those concerns are still around, which will likely keep markets volatile.

“Nothing has gone away, nothing looks like it is meaningfully closer to the end game,” said Ma of BMO Wealth Management. “It still seems like everything is at best highly uncertain.”

Stocks nevertheless also rose in Europe and parts of Asia Wednesday.

Germany’s DAX returned 1.4% after the European Central Bank called an unscheduled meeting to address worries that rising interest rates will cause turmoil in the continent’s bond market. The central bank did not give a detailed plan, but it said it would act if needed against “fragmentation” as yields for some European countries’ bonds rise much more than for others.

Stocks in Shanghai gained 0.5% after government data showed Chinese factory activity rebounded in May as anti-virus controls that shut down businesses in Shanghai and other industrial centers eased.

Market watch
ASX futures up 24 points or 0.4% to 6518 at 6.53am AEST

Wall Street rallied Wednesday following the Federal Reserve’s sharpest hike to interest rates since 1994, and its later assurance that such mega-hikes would not be common.

The S&P 500 climbed 54.51, or 1.5%, to 3,789.99 after whipping through roller-coaster trading immediately following the Fed’s latest move to fight inflation.

The Dow Jones Industrial Average swung between a gain of 647 points and a loss of nearly 180 before finishing with a gain of 303.70. It closed at 30,668.53, up 1%. The Nasdaq composite jumped 270.81, or 2.5%, to 11,099.15.


Australian dollar +1.9% to 70.04 US cents at 6.57am AEST

Wall Street: S&P 500 +1.5%, Dow Jones +1%, Nasdaq +2.50%

Europe: Stoxx 50 +1.6%, FTSE +1.2%, DAX +1.4%, CAC +1.4%

Bitcoin -1.6% to $US21,694.75 on Bitstamp at 7.01am AEST

Spot gold -0.5% to $US1809.44 per ounce at 6.54am AEST

Brent crude -2.6% to $US118.82 at 6.50am AEST

US oil -1.9% to $US115.82 a barrel at 6.50am AEST

Iron ore -2.1% to $US137.17 per tonne (Tianjin)

10-year yield: US 3.28% Australia 4.19% Germany +1.63%

 

[bigdog]

Asian stocks follow Wall St lower on economy fears

Asian stock markets are mostly lower after Wall Street fell on fears interest rate hikes will depress global economic activity. Tokyo, Seoul and Sydney fell.

apnews.com

Wall Street tumbles on fears for economy as more rates rise​

By STAN CHOE

NEW YORK (AP) — Stocks tumbled on Wall Street Thursday as worries roared back to the fore that the world’s fragile economy may buckle under higher interest rates.

The S&P 500 fell 3.3% in a widespread rout to more than reverse its blip of a 1.5% rally from a day before. Analysts had warned of more big swings given deep uncertainties about whether the Federal Reserve and other central banks can tiptoe the narrow path of hiking interest rates enough to get inflation under control but not so much that they cause a recession.

The Dow Jones Industrial Average lost 2.4% and was briefly down more than 900 points, while the Nasdaq composite sank 4.1%. It was the sixth loss for the S&P 500 in its last seven tries, and all but 3% of the stocks in the index dropped.

Wall Street fell with stocks across Europe after central banks there followed up on the Federal Reserve’s big interest-rate hike on Wednesday. The Bank of England raised its key rate for the fifth time since December, though it opted for a more modest increase of 0.25 percentage points than the 0.75-point hammer brought by the Fed.

Switzerland’s central bank, meanwhile, raised rates for the first time in years, a half-point hike. Taiwan’s central bank raised its key rate by an eighth of a point. Japan’s central bank began a two-day meeting, though it’s held out on raising rates and making other economy-slowing moves that investors call “hawkish.”
https://apnews.com/article/congress...gun-violence-750c7300a713085e3c897ec9cc1421ee
Such moves and expectations for plenty more have sent investments tumbling this year, from bonds to bitcoin. Higher interest rates slow the economy by design, in hopes of stamping out inflation. But they’re a blunt tool that can choke off the economy if used too aggressively.

“Another concern is that with the change in policy, there’s been weakening economic data already,” said Bill Northey, senior investment director at U.S. Bank Wealth Management. “That raises the odds of a recession in the latter part of 2022 into 2023.”

President Joe Biden told The Associated Press on Thursday that he saw reasons for optimism about the economy and that a recession is “not inevitable.”

The worries dragged the S&P 500 into a bear market earlier this week, meaning it had dropped more than 20% from its peak. It’s now 23.6% below its record set early this year and back to where it was in late 2020. That effectively erases 2021, which was one of the best years for Wall Street since the turn of the millennium.

The S&P 500 fell 123.22 points to 3,666.77. The Dow lost 741.46 to 29,927.07, and the Nasdaq dropped 453.06 to 10,646.10. Thursday’s biggest losses hit the stocks of the smallest companies, a signal of pessimism about the economy’s strength. The Russell 2000 index of smaller stocks sank 81.30, or 4.7%, to 1,649.84.

Not only is the Federal Reserve hiking short-term rates, it also this month began allowing some of the trillions of dollars of bonds it purchased through the pandemic to roll off its balance sheet. That should put upward pressure on longer-term interest rates. It’s another way central banks have been ripping away supports they earlier propped underneath markets to juice the economy.

The U.S. economy is still holding up, driven in particular by a strong jobs market. Fewer workers filed for unemployment benefits last week than a week before, a report showed on Thursday. But more signs of trouble have been emerging.

On Thursday, one report showed homebuilders broke ground on fewer homes last month. Rising mortgage rates resulting directly from the Fed’s moves are digging into the industry. A separate reading on manufacturing in the mid-Atlantic region also unexpectedly fell.

“Corporate earnings estimates have not yet changed to reflect some of the softening economic data and that could lead to the second leg of this repricing,” Northey said.

Treasury yields swung sharply on Thursday, with the 10-year yield down to 3.23% from 3.39% late Wednesday. It had climbed as high as 3.48% in the morning, near its highest level since 2011.

Higher rates have been delivering the hardest hits this year to the investments that soared the most through the easy, ultralow rates of earlier in the pandemic, which now look to be among the most expensive and risky investments. That includes bitcoin and high-growth technology stocks.

Big Tech stocks were among the heaviest weights on the market Thursday, but the sharpest losses hit stocks whose profits depend more on the strength of the economy and whether customers can keep up their purchases amid the highest inflation in decades.

Cruise operators Norwegian Cruise Line Holdings, Royal Caribbean Group and Carnival all lost more than 11%.

It’s all a sharp turnaround from a day earlier, when stocks rallied immediately after the Fed’s biggest hike to rates since 1994. Analysts said investors seemed to latch onto a comment from Fed Chair Jerome Powell, who said mega-hikes of three-quarters of a percentage point would not be common.

Powell said Wednesday the Fed is moving “expeditiously” to get rates closer to normal levels after last week’s stunning report that showed inflation at the consumer level unexpectedly accelerated last month, which dashed hopes that inflation may have already peaked.

The Fed is “not trying to induce a recession now, let’s be clear about that,” Powell said. He called Wednesday’s big increase “front-end loading.”

“Despite their assurance, it’s unclear to me whether the Fed has the tools they say they do to tamp down prices,” said Jason Brady, CEO of Thornburg Investment Management. He also said that even after its mega-hike on Wednesday, which was triple the usual amount, “the Fed is still behind.”

Market watch

ASX futures down 127 points or 2% to 6333 at 6.46am AEST

Stocks tumbled on Wall Street Thursday as worries roared back to the fore that the world’s fragile economy may buckle under higher interest rates.

The S&P 500 fell 3.3% in a widespread rout to more than reverse its blip of a 1.5% rally from a day before. Analysts had warned of more big swings given deep uncertainties about whether the Federal Reserve and other central banks can tiptoe the narrow path of hiking interest rates enough to get inflation under control but not so much that they cause a recession.

The Dow Jones Industrial Average lost 2.4% and was briefly down more than 900 points, while the Nasdaq composite sank 4.1%. It was the sixth loss for the S&P 500 in its last seven tries, and all but 3% of the stocks in the index dropped.

• Australian dollar +0.6% to 70.46 US cents at 6.53am AEST
• Wall Street: S&P 500 -3.3%, Dow Jones -2.4%, Nasdaq -4.1%
• Europe: Stoxx 50 -3%, FTSE -3.1%, DAX -3.3%, CAC -2.4%
• Bitcoin -4.9% to $US20,665.43 on Bitstamp at 6.54am AEST
• Spot gold +1.3% to $US1857.04 per ounce at 6.50am AEST
• Brent crude +0.6% to $US119.25 at 6.39am AEST
• US oil +1.5% to $US117.04 a barrel at 6.39am AEST
• Iron ore +0.5% to $US137.85 per tonne (Tianjin)
• 10-year yield: US 3.18% Australia 3.99% Germany +1.71%

 

[bigdog]

U.S. markets will be closed Monday in observance of the Juneteenth holiday.

Wall Street closes worst week since 2020 with slight gain

NEW YORK (AP) — Wall Street closed out its most punishing week since the 2020 coronavirus crash with a meandering day of trading Friday that left it a bit higher. The S&P 500 rose 8.07 points, or 0.2%, to 3,674.84 after waffling between modest losses and gains for most of the day.

apnews.com

Wall Street closes worst week since 2020 with slight gain​

By DAMIAN J. TROISE and STAN CHOE

NEW YORK (AP) — Wall Street closed out its most punishing week since the 2020 coronavirus crash with a meandering day of trading Friday that left it a bit higher.

The S&P 500 rose 8.07 points, or 0.2%, to 3,674.84 after waffling between modest losses and gains for most of the day. The Dow Jones Industrial Average dipped 38.29, or 0.1%, to 29,888.78, while the Nasdaq composite climbed 152.25, or 1.4%, to 10,798.35.

The relatively quiet trading capped a brutal, tumultuous week for Wall Street. The S&P 500 lost 5.8% for its tenth drop in the last 11 weeks. That’s its worst week since March 2020, when stocks were in free-fall as the global economy suddenly shut down at the onset of the pandemic.

Markets around the world have been shuddering as investors adjust to the bitter medicine of higher interest rates that the Federal Reserve and other central banks are increasingly doling out. Higher rates can bring down inflation, but they also risk a recession by slowing the economy and push down on prices for stocks, bonds, cryptocurrencies and other investments.

“Any lack of clarity or lack of confidence in the Federal Reserve is going to create a lot of volatility in the market,” said Megan Horneman, chief investment officer at Verdence Capital Advisors.

The S&P 500 remains in a bear market after it earlier this week dropped more than 20% below its record. It’s now 23.4% below its all-time high set in January and is back to where it was in late 2020.

“There’s a lot of uncertainty right now about the timing of a recession, but the risks are clearly rising,” Horneman said.

On Wednesday, the Fed hiked its key short-term interest rate by triple the usual amount for its biggest increase since 1994. It could consider another such mega-hike at its next meeting in July, but Fed Chair Jerome Powell said increases of three-quarters of a percentage point would not be common.

The Fed has also just begun allowing some of the trillions of dollars of bonds it purchased through the pandemic to roll off its balance sheet. That should put upward pressure on longer-term interest rates and is another way central banks are yanking supports earlier propped underneath markets to bolster the economy.

The Fed’s moves are happening as some discouraging signals have emerged about the economy, even if the jobs market remains solid. The latest was a report on Friday showing the nation’s industrial production was weaker last month than expected. Other disappointing data, including sagging spending at retailers and soured consumer sentiment, have raised concerns the Fed’s actions could wind up being too aggressive.

Powell will testify before Congress this upcoming week on monetary policy, and what he says is sure to guide trading. The testimony is scheduled for Wednesday and Thursday, which could mean more steep swings for Wall Street.

In the six days since a game-changing report showed U.S. inflation is accelerating, not easing as investors had hoped, the S&P 500 has had three days where it tumbled at least 2.9%. That’s happened only five other times total in the last year.

For Friday at least, trading was calm as Treasury yields eased further from their highest levels in more than a decade and a measure of nervousness on Wall Street sank.

The yield on the 10-year Treasury pulled back to 3.23% from 3.30% late Thursday and from a peak of nearly 3.50% earlier in the week.

Higher yields have been pounding all kinds of investments this year, but the harshest pain has hit cryptocurrencies, high-growth technology stocks and others that flew the highest in the earlier, easier days of ultralow rates.

Gains for technology stocks on Friday helped the Nasdaq lead the market. Amazon climbed 2.5%, and Nvidia rose 1.8%.

Other stocks hit particularly hard Thursday on worries about a possible recession and inflation overwhelming consumers also bounced back. Norwegian Cruise Line rose 10.1%, and American Airlines Group gained 6.4%. Both were still down more than 12% for the week, though.

Stocks of smaller companies, which tend to move more with expectations for the strength of the U.S. economy, also did better than the rest of the market. The Russell 2000 index of smaller stocks rose 15,86, or 1%, to 1,665.69. But it also was still down much more for the week at 7.5% than the broader market.

U.S. markets will be closed Monday in observance of the Juneteenth holiday.

 

[bigdog]

U.S. markets will be closed Monday in observance of the Juneteenth holiday.

Market watch

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 19 points or 0.3% lower this morning. On Wall Street, the Dow Jones was down 0.1%, the S&P 500 was up 0.2%, and the Nasdaq jumped 1.4%.

Australian dollar -0.3% to 69.14 US cents at 6.41am AEST

Wall Street: S&P 500 +0.2%, Dow Jones -0.1%, Nasdaq +1.4%

Europe: Stoxx 50 +0.3%, FTSE -0.4%, DAX +0.7%, CAC -0.1%

Bitcoin at $US20,490.26 on Bitstamp at 6.43am AEST

Spot gold -1% to $US1839.39 per ounce on Saturday

Brent crude -5.6% to $US113.12 on Saturday

US oil -6.8% to $US109.56 a barrel at 6.39am AEST

Iron ore -1.6% to $US135.69 per tonne (Tianjin)

10-year yield: US 3.23% Australia 4.13% Germany +1.65%

 

[bigdog]

U.S. markets were closed Monday in observance of the Juneteenth holiday.

World shares mixed; bitcoin holds steady near $20,000

TOKYO (AP) — European benchmarks were higher Monday after most Asian markets retreated, while the price of bitcoin hovered near $20,000. U.S. futures advanced and oil prices fell back early Monday.

apnews.com

World shares mixed; bitcoin holds steady near $20,000​

By YURI KAGEYAMA

TOKYO (AP) — European benchmarks were higher Monday after most Asian markets retreated, while the price of bitcoin hovered near $20,000.

U.S. futures advanced and oil prices fell back early Monday.

The price of the world’s most popular cryptocurrency remained near the psychological benchmark of $20,000 after bouncing during the weekend. At one point, bitcoin plunged nearly 10% to under $18,600, according to the cryptocurrency news site CoinDesk.

As of 0500 ET (0900 GMT) Monday, it was at $20,650.56.

France’s CAC 40 gained 0.2% to 5,893.20. Germany’s DAX added 0.2% to 13,150.16. Britain’s FTSE 100 rose 0.5% to 7,049.87. U.S. markets are closed Monday for the Juneteenth holiday. The future for the Dow industrials was up 0.4% while that for the S&P 500 gained 0.5%.

As expected, China kept its 1-year and 5-year loan prime rates unchanged.

Given China’s struggle to bring outbreaks under control and its already faltering economy, “rate cuts in the coming months are still likely as we expect the economic recovery to be slow under the COVID-zero policy. After this rate pause, the government should hand out more fiscal stimulus,” Iris Pang, chief economist Greater China at ING, said in a commentary.

Japan’s benchmark Nikkei 225 slid 0.7% to finish at 25,771.22. Australia’s S&P/ASX 200 slipped 0.6% to 6,433.40. South Korea’s Kospi dropped 2.0% to 2,391.03. Hong Kong’s Hang Seng edged up 0.4% to 21,163.91, while the Shanghai Composite was little changed, inching down less than 0.1% to 3,315.43.

Two of the world’s three biggest economies, China and Japan, are not engaged in raising interest rates, unlike the U.S. Federal Reserve and central banks in many other countries. Worries that the global economy might slip into recession if planners push ahead too aggressively with interest rate hikes and other moves to tighten monetary policy have caused markets to backtrack after share prices soared thanks to massive support during the pandemic.

Last week, Japan’s central bank stuck to its near zero interest rate policy despite concerns over the weakening yen.

The U.S. dollar was trading at 134.76 Japanese yen, down from 135 yen late Friday. The euro cost $1.0525, up from $1.0489.

Testimony on monetary policy by Federal Reserve Chair Jerome Powell before the Senate Banking Committee and the House Financial Services Panel is set for later this week.

Markets are bracing for a world with higher interest rates, led by the moves by the Federal Reserve. Higher rates can bring down inflation, but they also risk a bringing on a recession by slowing the economy. They also tend to hurt prices for stocks, cryptocurrencies and other investments.

Last week, the Fed hiked its key short-term interest rate by triple the usual amount for its biggest increase since 1994. It could consider another such mega-hike at its next meeting in July. A report last week on the U.S. economy also showed that industrial production was weaker last month than expected.

In energy trading, benchmark U.S. crude lost 42 cents to $109.14 a barrel in electronic trading on the New York Mercantile Exchange. It plunged $7.26 to $107.99 a barrel on Friday. Brent crude, the international standard, fell $1.35 to $111.77 a barrel.

U.S. markets were closed Monday in observance of the Juneteenth holiday.

REST OF WORLD TRADING

Market watch
ASX futures up 45 points or 0.7% to 6386 at 6.20am AEST

Australian dollar +0.3% to 69.52 US cents at 6.38am AEST

Wall Street closed

Europe: Stoxx 50 +0.9%, FTSE +1.5%, DAX +1.1%, CAC +0.6%

Bitcoin -0.6% to $US20,301.06 on Bitstamp at 6.41am AEST

Spot gold -1% to $US1839.39 per ounce on Saturday

Brent crude +0.9% to $US114.13 at 3.29am AEST

US oil +0.7% to $US110.27 a barrel at 4.10am AEST

Iron ore last traded at $US135.69 per tonne (Tianjin)

10-year yield: US 3.23% Australia 4.06% Germany +1.74%

 

[bigdog]

Asian shares mostly lower despite Wall St rally; eyes on Fed

Asian shares are mostly lower as markets shrug off a Wall Street rally and await the congressional testimony of Federal Reserve Chair Jerome Powell.

apnews.com

Wall Street ends broadly higher after sharp losses last week​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Stocks finished broadly higher on Wall Street Tuesday, clawing back some of the ground they lost in their worst weekly drop since the beginning of the pandemic.

The rally to start the holiday-shortened week came as investors look ahead to what Federal Reserve Chair Jerome Powell will tell Congress on Wednesday, the first of two days of testimony as part of the central bank’s semi-annual monetary policy report. Last week, the Fed hiked its key short-term interest rate by the most since 1994, the central bank’s latest effort to tame the worst inflation in 40 years.

The S&P 500 rose 2.4%, recouping about 40% of its losses last week. More than 85% of the stocks in the benchmark index gained ground. The Dow Jones Industrial Average rose 2.1% and the Nasdaq climbed 2.5%.

“This is a little more of an oversold bounce that the market is looking at and trying to figure out what is the path the Federal Reserve is actually going to navigate,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.

Technology stocks had some of the strongest gains. Apple rose 3.3% and Microsoft rose 2.5%.

Retailers, health care companies and banks also made solid gains. Kellogg rose 2% after the maker of Frosted Flakes and Rice Krispies said it would split into three companies. Spirit Airlines jumped 7.9% after JetBlue sweetened its buyout offer for the budget airline.

European markets ended mostly higher, while Asian markets closed mixed overnight. The yield on the 10-year Treasury rose to 3.30% from 3.23% late Friday. Markets were closed Monday for the observation of Juneteenth.

All told, the S&P 500 rose 89.95 points to 3,764.79. The index remains stuck in a slump, though, along with every other major index, and is still down 21.5% from the record high it set in January. It’s posted a weekly loss in 10 out of the last 11 weeks.

The Dow rose 641.47 points to 30,530.25, while the Nasdaq added 270.95 points to 11,069.30.

Smaller company stocks also gained ground. The Russell 2000 rose 28.34 points, or 1.8%, to 1,694.03.

Stocks have been mostly sliding in recent weeks as investors adjust to higher interest rates that the Federal Reserve and other central banks are increasingly doling out. The aggressive rate hikes are part of a plan to temper record-high inflation, but investors are worried that the Fed risks slowing economic growth too much and bringing on a recession.

The worries over inflation and interest rates have been worsened by a spike in energy prices following Russia’s invasion of Ukraine. The price of U.S. crude oil rose 1% to settle at $110.65 per barrel Tuesday. It’s up about 52% for the year. That has taken a bigger bite out of people’s wallets at the gas pump and is prompting a slowdown in spending elsewhere.

The lingering list of worries has made for an extremely turbulent market. Daily swings between gains and losses has been common and major indexes have sometimes shifted between sharp gains and losses on an hourly basis.

“In these kinds of markets, you just get bigger volatility in both directions,” said Ross Mayfield, investment strategist at Baird. “The entire market is being shaped by the Fed and inflation numbers.”

Last week, the Fed hiked its key short-term interest rate by triple the usual amount. It has also just begun allowing some of the trillions of dollars of bonds it purchased through the pandemic to roll off its balance sheet. That should put upward pressure on longer-term interest rates and is another way central banks are yanking supports earlier propped underneath markets to bolster the economy.

The Fed’s moves are happening as some discouraging signals have emerged about the economy, including sagging spending at retailers and soured consumer sentiment. The National Association of Realtors on Tuesday reported that sales of previously occupied U.S. homes slowed for the fourth consecutive month. The housing market, a crucial part of the economy, is slowing as homebuyers face record high prices and sharply higher home financing costs than a year ago following a rapid rise in mortgage rates.

Wall Street will be closely listening for clues about the Fed’s plans for possible additional rate hikes when Powell speaks before Congress this week. The central bank could consider another such mega-hike at its next meeting in July, but Powell has said increases of three-quarters of a percentage point would not be common.

Market watch

ASX futures up 44 points, or 0.7% to 6459 at 6.41am AEST

Stocks finished broadly higher on Wall Street Tuesday, clawing back some of the ground they lost in their worst weekly drop since the beginning of the pandemic.

The S&P 500 rose 2.4%, recouping about 40% of its losses last week. More than 85% of the stocks in the benchmark index gained ground. The Dow Jones Industrial Average rose 2.1% and the Nasdaq climbed 2.5%.

Australian dollar +0.3% to 69.71 US cents at 6.51am AEST

Wall Street S&P 500 +2.5%, Dow Jones +2,2%, Nasdaq +2.5%

Europe: Stoxx 50 +0.7%, FTSE +0.4%, DAX +0.2%, CAC +0.8%

Bitcoin +2% to $US20,819.04 on Bitstamp at 6.55am AEST

Spot gold -0.3% to $US1833.23 per ounce at 6.51am AEST

Brent crude +0.7% to $US114.93 at 6.38am AEST

US oil +1% to $US110.65 a barrel at 4.29am AEST

Iron ore -1.6% to $US133.47 per tonne (Tianjin)

10-year yield: US 3.28% Australia 4.06% Germany +1.76%

 

[bigdog]

Asian stocks mixed after Wall St declines on growth worries

Asian stock markets are mixed after Wall Street edged lower amid fears higher interest rates will chill global economic activity.

apnews.com

US stocks give up afternoon gains and end slightly lower​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — A choppy day of trading on Wall Street ended with a modest pullback for stocks Wednesday, the latest bout of volatility for the market amid concerns about inflation and uncertainty over whether rising interest rates will help or hinder the economy.

The indexes were on pace for a modest gain before slipping into the red in the final minutes of trading. The S&P 500 dropped 0.1%, with the stocks in the benchmark index about evenly split between gainers and decliners. The Dow Jones Industrial Average gave up 0.2% and the Nasdaq fell 0.1%.

Energy companies helped pull the market lower after the price of U.S. crude oil fell 4%. Technology companies also lost ground, which helped keep gains in health care, real estate and other sectors in check.

Investors closely watched testimony to Congress from Federal Reserve Chair Jerome Powell. He reaffirmed the central bank’s determination to raise interest rates and slow inflation.

The choppy trading followed a solid rally on Tuesday in what has been a turbulent period for the broader market, with daily and sometimes hourly swings from sharp gains to losses. The benchmark S&P 500 is currently in a bear market, which means it has dropped more than 20% from its most recent high, which was in January. It has also fallen in 10 of the last 11 weeks, but is holding on to gains so far for this week

Much of the market’s decline has been tied to concerns about rising inflation and the Federal Reserve’s plan to aggressively raise interest rates in order to temper inflation’s impact on consumers and businesses.

“There have been some new hurdles put in front of us,” said Sylvia Jablonski, chief investment officer at Defiance ETFs. As a result, she said, many investors are “sitting on the sidelines.”

The S&P 500 fell 4.90 points to 3,759.89. The index bounced between a gain of 1% and a loss of 1.3% throughout the day.

The Dow dropped 47.12 points to 30,483.13, while the tech-heavy Nasdaq slipped 16.22 points to 11,053.08.

Smaller company stocks also fell moderately. The Russell 2000 index slid 3.75 points, or 0.2%, to 1,690.28.

Bond yields mostly fell. The yield on the 10-year Treasury note, which helps set mortgage rates, fell to 3.16% from 3.30% late Tuesday. Markets in Europe and Asia also fell.

On Wednesday, Powell underscored the Fed’s determination to raise interest rates high enough to slow inflation, a commitment that has fanned concerns that the central bank’s fight against surging prices could tip the economy into recession. Powell is addressing Congress this week, starting with the Senate Banking Committee on Wednesday.

“We’re not trying to provoke and don’t think that we will need to provoke a recession,” Powell said. “But we do think it’s absolutely essential that we restore price stability, really for the benefit of the labor market as much as anything else.”

Powell’s testimony came a week after the Fed raised its benchmark interest rate by three quarters of a percentage point, its biggest hike in nearly three decades. With inflation worsening, the Fed’s policymakers also forecast a more accelerated pace of rate hikes this year and next than they had predicted three months ago, with its key rate reaching 3.8% by the end of 2023. That would be its highest level in 15 years.

The Fed’s moves are happening as some discouraging signals have emerged about the economy, including sagging spending at retailers and soured consumer sentiment. The worries over inflation and interest rates have been worsened by a spike in energy and other key commodity prices following Russia’s invasion of Ukraine.

Record high gas prices have been taking a bigger bite out of consumers’ wallets and prompting a slowdown in spending elsewhere. That has prompted President Joe Biden to call on Congress to suspend federal gasoline and diesel taxes for three months, a move meant to ease financial pressures at the pump.

Inflation is at a four-decade high in the U.S. and has been prompting businesses to raise prices on everything from food to clothing. Consumer spending remained strong through most of the pandemic, but has been falling amid tighter pressure from inflation. Inflation is hitting records globally. Britain’s inflation reached a 40-year high of 9.1% in the 12 months to May.

Wall Street remains concerned about the Fed’s aggressive policy raising the risk of a recession, but Powell said another risk involves high inflation becoming entrenched in the economy if the central bank doesn’t take appropriate steps.

“We cannot fail on that task,” he said. “We have to get back to 2% inflation.”

Market watch

A choppy day of trading on Wall Street ended with a modest pullback for stocks Wednesday, the latest bout of volatility for the market amid concerns about inflation and uncertainty over whether rising interest rates will help or hinder the economy.

The indexes were on pace for a modest gain before slipping into the red in the final minutes of trading. The S&P 500 dropped 0.1%, with the stocks in the benchmark index about evenly split between gainers and decliners. The Dow Jones Industrial Average gave up 0.2% and the Nasdaq fell 0.1%.

 

[bigdog]

Asian shares gain, tracking Wall Street advance

Shares are higher in Asia, tracking gains on Wall Street, where the market is headed for its first weekly gain after three weeks of punishing losses.

apnews.com

Wall Street shakes off a midday stumble and ends higher​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Stocks shook off a midday slump and ended higher Thursday, keeping the market on track for its first weekly gain after three weeks of punishing losses.

Trading was wobbly throughout the day as investors remained focused on another round of testimony before Congress by Federal Reserve Chair Jerome Powell. Speaking before a House committee, Powell again stressed that the Fed hopes to rein in the worst inflation in four decades without knocking the economy into a recession, but acknowledged “that path has gotten more and more challenging.”

The S&P 500 ended 1% higher after having been down as much as 0.4%. The Dow Jones Industrial Average rose 0.6% and the Nasdaq gained 1.6%.

Technology and health care stocks drove much of the rally, outweighing losses in energy and financial companies. Bond yields mostly fell. Oil prices also fell.

Trading has been turbulent in recent weeks as investors try to determine whether a recession is looming. The benchmark S&P 500 is currently in a bear market. That means it has dropped more than 20% from its most recent high, which was in January. The index has fallen for 10 of the last 11 weeks.

“The market was poised for a bounce,” said Quincy Krosby, chief equity strategist for LPL Financial. “The catalyst for today’s market has been that oil prices have come down.”

The S&P 500 rose 35.84 points to 3,795.73. The index is up 3.3% so far this week. The Dow gained 194.23 points to 30,677.36. The Nasdaq added 179.11 points to 11,232.19.

Smaller company stocks also gained ground. The Russell 2000 rose 21.40 points, or 1.3%, to 1,711.67.

The Federal Reserve is attempting to temper inflation’s impact with higher interest rates, but Wall Street is worried that it could go too far in slowing economic growth and actually bring on a recession.

Powell has previously acknowledged that a recession is ”certainly a possibility” and that the central bank is facing a more challenging task amid the war in Ukraine essentially pushing oil and other commodity prices even higher and making inflation even more pervasive.

On Thursday, Powell stressed: “I don’t think that a recession is inevitable.” He also acknowledged that the Fed’s tools to combat inflation are blunt and risk causing damage to the economy.

Encouragingly for the Fed, many households and businesses still seem to expect inflation to eventually come back down. If that were to change, it could spark a self-fulfilling vicious cycle that only worsens inflation.

“Our whole framework is about keeping inflation expectations well and truly anchored,” he said Thursday. Powell emphasized the importance of getting inflation down to the Fed’s goal of 2%. “We can’t fail on this,” he said.

Powell spoke to Congress a week after the Fed raised its benchmark interest rate by three quarters of a percentage point, its biggest hike in nearly three decades. Fed policymakers also forecast a more accelerated pace of rate hikes this year and next than they had predicted three months ago, with its key rate to reach 3.8% by the end of 2023. That would be its highest level in 15 years.

Earlier Thursday the Labor Department said fewer Americans applied for jobless benefits last week, though it was slightly more than economists expected. The solid job market is a relatively bright point in an otherwise weakening economy, with consumer sentiment and retail sales showing increasing damage from inflation.

Companies are signaling slower-than-expected growth, however, according to surveys from IHS Markit. While weak economic data is discouraging for the broader economy, it could also mean that the economy is already slowing enough to allow the Fed to ease up on its planned rate hikes.

Inflation remains stubbornly high, squeezing consumers with higher prices on everything from food to clothing. That has pressured people to shift spending from big ticket items like electronics to necessities. The pressure has been worsened by record-high gasoline prices that show no sign of abating amid a supply and demand disconnect.

Big technology and health care companies did much of the heavy lifting. Microsoft rose 2.3% and Johnson & Johnson rose 2.2%. Energy stocks fell as the price of U.S. crude oil dropped 1.8%. Valero fell 7.6%.

Bond yields fell significantly. The yield on the 10-year Treasury note, which helps set mortgage rates, fell to 3.09% from 3.15% late Wednesday.

Market watch

In New York, stocks shook off a midday slump and ended higher Thursday, keeping the market on track for its first weekly gain after three weeks of punishing losses

The S&P 500 ended 1% higher after having been down as much as 0.4%. The Dow Jones Industrial Average rose 0.6% and the Nasdaq gained 1.6%

 

[bigdog]

Stocks rally, driving Wall Street to a rare winning week

Stocks rallied on Wall Street Friday, sending the S&P 500 up 3.1% for its best gain in two years. The benchmark index also ended the week 6.4% higher, erasing the brutal loss it took a week earlier.

apnews.com

Stocks rally, driving Wall Street to a rare winning week​

By STAN CHOE and ALEX VEIGA

Stocks racked up more gains on Wall Street Friday, as the S&P 500 had its best day in two years and just its second winning week in the last 12 to provide a bit of relief from the market’s brutal sell-off this year.

The benchmark index rose 3.1%, with technology and banks leading the broad rally. The S&P 500 notched a 6.4% gain for the week, erasing the brutal loss it took a week earlier, though it’s still close to 20% below its record set early this year.

The Dow Jones Industrial Average rose 2.7% and the tech-heavy Nasdaq ended 3.3% higher. Both indexes also posted a weekly gain that more than made up for their losses last week.

Stocks rallied this week as pressure from rising Treasury yields lets up somewhat and investors speculate the Federal Reserve may not have to be as aggressive about raising interest rates as earlier thought as it fights to control inflation.

The gains are a reprieve from Wall Street’s tumble through most of the year, caused by the Fed’s and other central banks’ slamming into reverse on the tremendous support fed into markets through the pandemic. In hopes of beating down punishingly high inflation, central banks have raised interest rates and made other moves that hurt prices for investments and threaten to slow the economy enough to cause a recession. More such moves are sure to come.

“It has been a good week,” said Randy Frederick, managing director of trading & derivatives at Charles Schwab. “It’s rare. At least in 2022, we’ve had only a couple of weeks where we ended up net positive. It looks pretty similar to what we saw right around the end of May, and that one of course fizzled out.”

The S&P 500 rose 116.01 points to 3,911.74. The Dow climbed 823.32 points to 31,500.68. The Nasdaq rose 375.43 points to 11,607.62.

Smaller company stocks also rallied. The Russell 2000 rose 54.06 points, or 3.2%, to 1,765.74.

Parts of the U.S. economy are still red-hot, particularly the jobs market, but some discouraging signals have emerged recently. A report on Friday confirmed sentiment among consumers sank to its lowest point since the University of Michigan began keeping records, hurt in particular by high inflation. Another lowlight this week suggested the U.S. manufacturing and services sectors aren’t as strong as economists thought.

Such weakening data raise worries about the strength of the economy. But they also can be good for financial markets, as paradoxical as that may seem.

They could mean less upward pressure on inflation, which would ultimately mean the Federal Reserve doesn’t have to raise rates so aggressively. And interest rates drive trading for everything from stocks to cryptocurrencies.

“We have seen a cooling off in a lot of areas, certainly. Gasoline purchases are down, housing prices appear to be cooling across the board,” Frederick said. “To me all of this speaks to the fact what the Fed is doing now appears to at least be having some impact. Now, whether or not it’s sufficient to bring inflation down, I don’t think we know yet.”

One nugget in the consumer sentiment report could carry particular weight for markets. It showed consumers’ expectations for inflation over the long run moderated to 3.1% from a mid-month reading of 3.3%. That’s crucial for the Fed because expectations for higher inflation in the future can trigger buying activity that inflames inflation further in a self-fulfilling, vicious cycle.

Last week, the Fed hiked its key short-term rate by the biggest margin in decades and said another such increases could be coming, though they wouldn’t be common.

Over the last week, investors have been modestly ratcheting back their expectations for how high the Fed will hike interest rates into early next year.

That’s helped yields in the Treasury market recede. The yield on the two-year Treasury, which tends to move with expectations for the Fed’s actions, dropped back to 3.06% from more than 3.40% in the middle of last week.

The yield on the 10-year Treasury, which forms the bedrock for the world’s financial system, rose to 3.13% on Friday from 3.07% late Thursday. But it also has moderated after hitting 3.48% last week.

It started the year just a bit above 1.50%.

A separate economic report on Friday showed sales of new homes unexpectedly accelerated last month. But the trend for housing has largely been lower because it’s at the leading edge of the Fed’s hikes.

More expensive mortgage rates are hurting the industry, and a separate report earlier this week showed sales of previously occupied homes slowed last month.

Rising mortgage rates pushed LendingTree, the online marketplace that helps people find mortgages and other loans, to warn Friday that it expects to report weaker revenue for the second quarter than earlier forecast. Its stock fell 7.9%.

The vast majority of Wall Street was heading the opposite direction. More than 95% of the stocks in the S&P 500 closed higher.

Travel-related stocks were among the biggest gainers Friday. Cruise operator Carnival rose 12.4% after it reported weaker results for its most recent quarter than analysts expected, but also said that booking trends are improving. Royal Caribbean jumped 15.8% for the biggest gain in the S&P 500. United Airlines rose 7.5%, while Wynn Resorts climbed 12.1%.

 

[bigdog]

Stocks racked up more gains on Wall Street Friday, as the S&P 500 had its best day in two years and just its second winning week in the last 12 to provide a bit of relief from the market’s brutal sell-off this year.

The benchmark index rose 3.1%, with technology and banks leading the broad rally. The S&P 500 notched a 6.4% gain for the week, erasing the brutal loss it took a week earlier, though it’s still close to 20% below its record set early this year.


The Dow Jones Industrial Average rose 2.7% and the tech-heavy Nasdaq ended 3.3% higher. Both indexes also posted a weekly gain that more than made up for their losses last week.

 

[bigdog]

Asian shares track Wall St drop as inflation fears drag on

Shares have retreated in Asia after another broad decline on Wall Street as markets remain gripped by uncertainty over inflation, rising interest rates and the potential for a recession.

apnews.com

Wall Street ends mixed after a day of wavering up and down​

By DAMIAN J. TROISE and ALEX VEIGA

Wall Street capped a wobbly day of trading with a mixed finish Monday, giving back some of the market’s gains following a rare winning week.

The S&P 500 slipped 0.3% after shifting between small gains and losses throughout the day. The Dow Jones Industrial Average slipped 0.2% and the Nasdaq fell 0.7%. Shares in small companies rose, while more stocks rose than fell on the New York Stock Exchange.

Declines in technology and communication stocks, and in several big retailers and travel-related companies, weighed on the market. Those losses checked gains in energy stocks and elsewhere.

The market’s uneven finish comes after stocks closed out last week with solid gains and the S&P 500 posted its best day in two years Friday. Stocks rallied last week as pressure from rising Treasury yields let up somewhat and investors speculated the Federal Reserve may not have to be as aggressive about raising interest rates as earlier thought as it fights to control inflation

Treasury yields rose again Monday. The rebound in stocks last week was largely seen as a reaction to a wave of selling that some market strategists say was perhaps overdone, leaving the market ripe for a rebound.

“There’s quite a bit of noise going on as we get to quarter’s end,” said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management.

“So, it really wasn’t surprising for us to see a bounce last week.” On the other hand, Hainlin said, “we would view that as not necessarily an indication that fundamentally things have gotten better.”

The S&P 500 fell 11.63 points to 3,900.11. The Dow dropped 62.42 points to 31,438.26, and the Nasdaq slid 83.07 points to 11,524.55.

Smaller company stocks bucked the broader market’s decline. The Russell 2000 rose 6.01 points, or 0.3%, to 1,771.74.

European markets also ended mixed. Asian markets closed higher overnight.

Technology and communication stocks were among the biggest drag on the market. Microsoft fell 1%, while Electronic Arts slid 3.5%.

Several big retailers and travel-related companies also fell. Amazon and Carnival each fell 2.085%.

Those losses checked gains elsewhere in the market, including energy stocks, which rose as the price of U.S. crude oil climbed 1.8%. Exxon Mobil rose 2.5%.

Robinhood Markets jumped 14% following a published report suggesting that cryptocurrency exchange FTX is considering buying the popular trading app company. In May, FTX CEO Samuel Bankman-Fried bought a 7.6% stake in Robinhood, according to a filing with U.S. regulators.

Robinhood shot to fame for its easy-to-use trading app, which brought a new generation of investors to the stock market, perhaps most famously with the meme-stock frenzy that sent GameStop soaring early last year. Crypto has become a major part of its business.

Treasury yields rose. The yield on the 10-year Treasury note, which helps set mortgage rates, rose to 3.20% from 3.12% late Friday.

The market rally last week was welcome relief in the midst of a deep slump for Wall Street as investors worry about the path of inflation and whether rising interest rates will temper the impact to businesses and consumers or push the economy into a recession.

The Federal Reserve and other central banks have been aggressively raising interest rates in a sharp turnaround from maintaining ultra-low rates during the virus pandemic that helped support the economy. It’s a delicate balance for the Fed, which hopes to cool off the economy, but not so much that it actually contracts. Higher interest rates, though, also hurt prices for investors and have prompted much of the year’s sell-off.

Investors have favorably viewed recent reports showing weak consumer sentiment and economic growth because that raises the possibility that the Fed will ease off its plan for aggressive rate hikes as economic growth slows.

Wall Street will have a few more reports this week that could provide more insight into inflation, economic growth and the Fed’s path ahead.

On Tuesday, business group The Conference Board will release its consumer confidence report for June. Spending and confidence held up well through most of the post-pandemic recovery, even as inflation rose. But record high gas prices and an overall tighter squeeze from inflation have been eating away at wallets and prompting many to shift or cut back spending.

Part of push behind inflation’s tighter squeeze was Russia’s invasion of Ukraine in February. That sent energy prices soaring. U.S. crude oil prices are up more than 40% for the year. Prices for wheat and corn have also surged.

Conferring by video link with Ukrainian President Volodymyr Zelenskyy, Group of Seven leaders were finalizing a deal to seek a price cap on Russian oil, raise tariffs on Russian goods and impose other new sanctions.

Russia may have also defaulted on its foreign debt for the first time since the 1917 Bolshevik Revolution, further alienating the country from the global financial system.

Investors will get another update on U.S. economic growth on Wednesday when the Commerce Department releases a report on first-quarter gross domestic product.

Wall Street capped a wobbly day of trading with a mixed finish Monday, giving back some of the market’s gains following a rare winning week.

The S&P 500 slipped 0.3% after shifting between small gains and losses throughout the day. The Dow Jones Industrial Average slipped 0.2% and the Nasdaq fell 0.7%. Shares in small companies rose, while more stocks rose than fell on the New York Stock Exchange.

Declines in technology and communication stocks, and in several big retailers and travel-related companies, weighed on the market. Those losses checked gains in energy stocks and elsewhere.

 

[bigdog]

Asian shares track Wall St drop as inflation fears drag on

Shares have retreated in Asia after another broad decline on Wall Street as markets remain gripped by uncertainty over inflation, rising interest rates and the potential for a recession.

apnews.com

Stocks slide on Wall Street as inflation worries persist​

By DAMIAN J. TROISE and ALEX VEIGA

Stocks closed broadly lower on Wall Street Tuesday, after a discouraging snapshot of U.S. consumer confidence stoked investors’ worries about the risk that sharply higher interest rates and pervasive inflation could trigger a recession.

The S&P 500 ended 2% lower, reversing a 1.2% gain from earlier in the day. The Dow Jones Industrial Average fell 1.6% and the Nasdaq composite ended 3% lower.

Roughly 85% of the stocks in the benchmark S&P 500 closed in the red. Technology, communications and health care stocks accounted for a big share of the decline. Retailers and other companies that rely on direct consumer spending also helped pull the index lower. Energy stocks, the only sector in the index to notch gains this year, rose as crude oil prices headed higher.

The indexes got off to a solid start, but the gains faded by midday after the Conference Board reported that its consumer confidence index fell in June to its lowest level in more than a year. The decline was driven largely by concerns over inflation, including rising prices for gas and food. The results were also much weaker than economists expected.

“Confidence is going to continue to shrink as long as inflation remains high,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “It all comes back to inflation, it’s ultimately driving reaction from the Fed and impacting the market and consumer confidence.”

The S&P 500 fell 78.56 points to 3,821.55, while the Dow dropped 491.27 points to 30,946.99. The tech-heavy Nasdaq slid 343.01 points to 11,181.54.

Smaller company stocks also fell. The Russell 2000 gave up 32.90 points, or 1.9%, at 1,738.84. The indexes are all on pace to for losses of 6% or more in June.

Investors face a pervasive list of concerns centering around rising inflation squeezing businesses and consumers. Supply chain problems that have been at the root of rising inflation were made worse over the last several months by increased restrictions in China related to COVID-19.

Businesses have been raising prices on everything from food to clothing. Russia’s invasion of Ukraine in February put even more pressure on consumers by raising energy prices and pumping gasoline prices to record highs.

Consumers were already shifting spending from goods to services as the economy recovered from the pandemic’s impact, but the intensified pressure from inflation has prompted a sharper shift from discretionary items like electronics to necessities.

Stubborn inflation pressures have driven a stark shift in policy from central banks, which are raising rates to try and temper inflation after years of holding rates down to help economic growth.

Now, they are trying to slow economic growth, but investors are worried that they could go too far and actually push the economy into a recession as key economic indicators are already showing a slowdown in things like retail sales.

“The market might be getting spooked by the speed with which consumers are losing confidence, and that it could possibly upend a soft landing” for the economy, said Sam Stovall, chief investment strategist at CFRA

Investors are awaiting remarks expected for midweek by central bank leaders including Fed Chair Jerome Powell and European Central Bank chief Christine Lagarde. They will also get another update on U.S. economic growth on Wednesday when the Commerce Department releases a report on first-quarter gross domestic product.

Wall Street is also preparing for the latest round of corporate earnings in the next few weeks, which will help paint a clearer picture of how companies are dealing with the squeeze from rising costs and consumers curtailing some spending.

Athletic footwear and apparel giant Nike fell 7% after giving investors a cautious update on the potential hit to revenue because of lockdowns in China. The company relies on China for roughly 17% of its revenue, according to FactSet.

Wynn Resorts rose 3.2% and Las Vegas Sands added 4%. The companies, which have major gambling businesses in China, got a boost after China eased a quarantine requirement for people arriving from abroad.

Technology and communications companies were among the biggest losers Tuesday. Microsoft fell 3.2% and Apple dropped 3%. Google parent Alphabet slid 3.3%.

Energy stocks made solid gains as U.S. crude oil prices rose 2%. Hess rose 5.6% for the biggest gain in the S&P 500.

The yield on the 10-year Treasury note, which helps set mortgage rates, held steady at 3.19%. Overseas markets rose

Stocks closed broadly lower on Wall Street Tuesday, after a discouraging snapshot of U.S. consumer confidence stoked investors’ worries about the risk that sharply higher interest rates and pervasive inflation could trigger a recession.

The S&P 500 ended 2% lower, reversing a 1.2% gain from earlier in the day. The Dow Jones Industrial Average fell 1.6% and the Nasdaq composite ended 3% lower.

 

[bigdog]

Asia stocks mixed after Wall St down, China manufacturing up

Asian stock markets are mixed after the U.S. economy contracted and China reported stronger factory activity.

apnews.com

US stocks slip, on track for 4th monthly loss this year​

By DAMIAN J. TROISE and ALEX VEIGA

Stock indexes on Wall Street ended mostly lower Wednesday after another choppy day of trading as the market heads toward its fourth monthly loss this year.

The S&P 500 ended 0.1% lower after shifting between small gains and losses. The Dow Jones Industrial Average eked out a 0.3% gain, while the Nasdaq composite slipped less than 0.1%.

Trading has been volatile all week amid growing signs the economy could be in for a recession under the pressure of stubbornly high inflation and sharply higher interest rates.

Investors snapped up U.S. government bonds, sending yields lower. The yield on the 10-year Treasury, which influences rates on mortgages and other consumer loans, fell to 3.10% from 3.20% late Tuesday, a big move.

“Lower yields because we’ve got more economic risk is not a good thing for the market,” said Willie Delwiche, investment strategist at All Star Charts. “It’s on the bulls to prove that they can sustain some strength beyond a few days or a one-week rally.”

The S&P 500 slipped 2.72 points to 3,818.83. With one day left to go in June, the benchmark index is down 7.6% for the month and down 20% for the year.

The Dow rose 82.32 points to 31,029.31, while the Nasdaq dropped 3.65 points to 11,177.89

Small company stocks fell sharply in a signal that investors were worried about economic growth. The Russell 2000 slid 19.47 points, or 1.1%, to 1,719.37.

The government reported that the economy shrank at a 1.6% annual pace in the first three months of the year, its third and final estimate for GDP in the first three months of 2022. That figure was in line with previous estimates, and economists expect growth to resume later this year.

Investors have been closely watching economic data as they try to determine how deeply inflation is hurting consumers and businesses, while also keeping an eye on the Federal Reserve’s aggressive shift to raise interest rates.

The central bank is raising rates in an attempt to slow economic growth enough to temper inflation, but Wall Street is wary that the Fed could go too far and push the economy into a recession. Those concerns have been heightened by a series of reports showing a slowdown in retail sales and other indicators.

Consumers were held up as being resilient in the face of rising prices earlier this year, but that sentiment has faded, said Liz Ann Sonders, chief investment strategist at Charles Schwab. The latest GDP revision shows that consumer spending, which accounts for about two-thirds of economic output, was substantially weaker than the government had calculated earlier, growing at a 1.8% annual pace instead of the 3.1% it estimated in May.

“Not only is recession the base case, but I think it already may have begun,” Sonders said.

Fed Chair Jerome Powell, speaking Wednesday at a European Central Bank forum in Sintra, Portugal, repeated his hope that the Fed can achieve a so-called soft landing: raising interest rates just enough to slow the economy and rein in surging consumer prices without causing a recession and sharply raising the unemployment rate

But, he said the path to achieving that goal has become more difficult and there’s “no guarantee″ the central bank can tame runaway inflation without hurting the job market.

Lingering supply problems and a sharp jump in demand as the pandemic faded sparked a rise in inflation. It has grown worse through the year as supply chain problems worsened following new lockdowns in China to help control COVID-19 cases. Russia’s invasion of Ukraine in February sent energy prices higher and resulted in record high gasoline prices that have been eating away at consumers’ wallets.

Consumers have shifted spending from discretionary items like electronics to necessities as inflation grows hotter. A weaker-than-expected consumer confidence reading on Tuesday revealed that persistently high inflation was making Americans more pessimistic about both the present and future.

Impacts from the shift in spending is a key focus for investors as companies start to report their latest financial results. Cheerios maker General Mills climbed 6.3% for the biggest gain in the S&P 500 after reporting solid financial results and giving investors an encouraging forecast.

Gains in health care and technology companies helped lift the market. Eli Lilly rose 1.7% and Microsoft added 1.5%.

Energy stocks fell as the price of U.S. crude oil dropped 1.8%. Exxon Mobil slid 3.7%.

Industrial firms and retailers also kept the market’s gains in check. FedEx fell 2.6% and Target slipped 1.8%.

Bed Bath & Beyond plunged 23.6% after reporting a far bigger loss than analysts expected and replacing its CEO.

Cruise lines were among the biggest decliners in the S&P 500. Carnival slid 14.1%, Royal Caribbean dropped 10.3% and Norwegian Cruise Line fell 9.3%.

Stock indexes on Wall Street ended mostly lower Wednesday after another choppy day of trading as the market heads toward its fourth monthly loss this year.

The S&P 500 ended 0.1% lower after shifting between small gains and losses. The Dow Jones Industrial Average eked out a 0.3% gain, while the Nasdaq composite slipped less than 0.1%.

The S&P 500 slipped 2.72 points to 3,818.83. With one day left to go in June, the benchmark index is down 7.6% for the month and down 20% for the year.

Trading has been volatile all week amid growing signs the economy could be in for a recession under the pressure of stubbornly high inflation and sharply higher interest rates.

 

[bigdog]

Asian shares mostly lower after pessimistic 'tankan' survey

Asian benchmarks are mostly lower, echoing a decline on Wall Street, after a quarterly report by Japan’s central bank rekindled worries about the world’s third largest economy.

apnews.com

Stocks slump, closing out worst quarter since early 2020​

By DAMIAN J. TROISE and ALEX VEIGA

Wall Street racked up more losses for stocks Thursday, as the market closed out its worst quarter since the onset of the pandemic in early 2020.

The S&P 500 fell 0.9%, its fourth consecutive drop. The benchmark index is now down 21% since it hit an all-time high at the beginning of the year. It entered a bear market earlier in June.

All told, the S&P 500′s performance in the first half of 2022 was the worst since the first six months of 1970.

“And in 1970 there was a solid rebound after that first half decline,” said Lindsey Bell, chief markets and money strategist at Ally Invest. “This time around, the impact of the Fed, the impact of inflation and the uncertainty of where growth goes from here is really weighing on investors’ minds. ... We just don’t know when the clouds of uncertainty are going to start to clear.”

The market’s steep decline this year has all but wiped out its gains from 2021, what was a banner year for the market as it emerged from its previous bear market in early 2020

Rising inflation has been behind much of the slump for the broader market this year as businesses raise prices on everything from food to clothing and consumers are squeezed tighter. Inflation remains stubbornly hot, according to a series of recent economic updates.

The Federal Reserve and other central banks have been aggressively raising interest rates to try and slow economic growth in order to cool inflation. Higher rates can bring down inflation, but they also risk a recession by slowing the economy too much. They also push down on prices for stocks, bonds, cryptocurrencies and other investments.

“What the market is trying to assess is when does it seem as if the Fed is going to have what it needs to ascertain that inflation is plateauing,” said Quincy Krosby, chief equity strategist for LPL Financial.

The S&P 500 fell 33.45 points to 3,785.38 Thursday. It lost 16.4% in the April-June quarter, its biggest quarterly decline since it slumped 20% in the first three months of 2020, when the pandemic upended the global economy in a matter of weeks.

The Dow Jones Industrial Average fell 253.88 points, or 0.8%, to 30,775.43. The Nasdaq slid 149.16 points, or 1.3%, to 11,028.74.

Small company stocks also fell. The Russell 2000 lost 11.38 points, or 0.7%, to 1,707.99.

The yield on the 10-year Treasury, which helps set mortgage rates, fell to 3.01% from 3.09% late Wednesday.

Technology companies were among the biggest weights on the market, as investors continued to favor utilities and other traditional defensive stocks. Apple fell 1.8%, while Exelon rose 2.2%.

Retailers and other companies that rely directly on consumer spending also posted some of the biggest losses, as they have all year. Amazon slipped 2.5% and Best Buy shed 2.9%.

Investors got another update on inflation Thursday. A measure of inflation that is closely tracked by the Fed rose 6.3% in May from a year earlier, unchanged from its level in April. The report from the Commerce Department also said that consumer spending rose at a sluggish 0.2% rate from April to May

The update follows a worrisome report earlier this week showing that consumer confidence slipped to its lowest level in 16 months. The government has also reported that the U.S. economy shrank 1.6% in the first quarter and weak consumer spending was a key part of that contraction.

The situation has become even more complicated following added supply chain problems because of COVID-19 lockdowns in China and Russia’s invasion of Ukraine. The war in Ukraine prompted a surge in oil prices this year that resulted in record high gasoline prices.

The OPEC oil cartel and allied producing nations decided Thursday to increase production of crude oil, but the amount will likely do little to relieve high gasoline prices at the pump and energy-fueled inflation plaguing the global economy.

“There’s no doubt this has been a difficult two quarters for the market, the U.S. economy, the U.S. consumer, and for the Fed’s job to control and curtail inflationary pressure,” Krosby said. “And yet, as we get into the beginning of the second half, so far companies have been managing and it’s the guidance they offer that is going to help set the tone over the next couple of weeks.”

Wall Street racked up more losses for stocks Thursday, as the market closed out its worst quarter since the onset of the pandemic in early 2020.

The S&P 500 fell 0.9%, its fourth consecutive drop. The benchmark index is now down 21% since it hit an all-time high at the beginning of the year. It entered a bear market earlier in June.

All told, the S&P 500′s performance in the first half of 2022 was the worst since the first six months of 1970.

 

[bigdog]

Wall Street closes higher but still ends week in the red

Stocks shook off a morning slump and ended higher Friday, but not enough to erase their losses for the week.

apnews.com

Wall Street closes higher but still ends week in the red​

By DAMIAN J. TROISE and ALEX VEIGA

Stocks on Wall Street shook off a downbeat start and ended broadly higher Friday, though the rebound was not enough to erase their losses for the week.

The S&P 500 rose 1.1% after having been down 0.9% in the early going. The gain snapped a four-day losing streak for the benchmark index, which still posted its fourth losing week in the last five.

The Dow Jones Industrial Average rose 1%, while the tech-heavy Nasdaq gained 0.9% after a sell-off in technology stocks eased.

The latest choppy trading comes a day after the S&P 500 closed out its worst quarter since the onset of the pandemic in early 2020. Its performance in the first half of 2022 was the worst since the first six months of 1970.

The S&P 500 has been in a bear market since last month, meaning an extended decline of 20% or more from its most recent peak. It’s now down 20.2% from the peak it set at the beginning of this year.

Bond yields fell significantly. The yield on the 10-year Treasury, which helps set mortgage rates, fell to 2.89% from 2.97% Thursday. The yield on the 2-year Treasury slipped to 2.83% from 2.92%

The market’s deep slump this year reflects investors’ anxiety over surging inflation and the possibility that higher interest rates could bring on a recession

“What we’re seeing today is reflective of really what we’re going to see here in July, which is continued pressure on the markets, unless we see outsized economic reports on jobs or inflation, or some more meaningful change in Fed policy,” said Greg Bassuk, CEO at AXS Investments.

The S&P 500 rose 39.95 to 3,825.33. Roughly 85% of the stocks in the index finished higher.

The Dow gained 321.83 points to 31,097.26, while the Nasdaq rose 99.11 points to 11,127.85. The Russell 2000 index of smaller companies rose 19.77 points, or 1.2%, to 1,727.76.

The market’s latest gyrations precede a long holiday weekend. Financial markets in the U.S. will be closed on Monday for Independence Day.

Wall Street remains concerned about the risk of a recession as economic growth slows and the Federal Reserve aggressively hikes interest rates. The Fed is raising rates to purposefully slow economic growth to help cool inflation, but could potentially go too far and bring on a recession.

Economic data over the last few weeks has shown that inflation remains hot and the economy is slowing. The latter has raised hopes on Wall Street that the Fed will eventually ease off its aggressive push to raise rates, which have been weighing on stocks, especially pricier sectors like technology. Analysts don’t expect much of a rally for stocks until there are solid signs that inflation is cooling.

The latest economic update on Friday for the manufacturing sector shows a continued slowdown in growth in June that was sharper than economists expected. On Thursday, a report showed that a measure of inflation that is closely tracked by the Fed rose 6.3% in May from a year earlier, unchanged from its level in April.

Earlier this week, a worrisome report showed that consumer confidence slipped to its lowest level in 16 months. The government has also reported that the U.S. economy shrank at an annual rate of 1.6% in the first quarter and weak consumer spending was a key part of that contraction

Kohl’s dove 19.6% after the department store’s potential sale fell apart amid the shaky retail environment as consumers lose confidence and cut spending. Kohl’s had entered exclusive talks with Franchise Group, the owner of Vitamin Shop and other retail outlets, for a deal that was potentially worth about $8 billion.

Other retailers, restaurant chains and companies that rely on direct consumer spending helped lead the market rally. Amazon rose 3.2%, Home Depot gained 1.8% and Starbucks rose 3.8%.

Banks and health care stocks also notched gains. Wells Fargo rose 1.9% and Johnson & Johnson closed 1.1% higher.

Technology stocks largely bounced back from their broad morning slump, though many still closed lower. Chipmaker Micron slid 3% after giving investors a disappointing profit forecast amid concerns about falling demand. That weighed heavily on other chipmakers. Nvidia fell 4.2% and Qualcomm lost 3.3%.