NYSE Dow Jones finished today at:

[bigdog]

Asian shares mostly rise ahead of key US inflation report

Asian shares are mostly higher, boosted by a rally on Wall Street, although investors kept their eyes on the upcoming U.S. consumer price data for signs of inflation.

apnews.com

Stocks rally ahead of hotly anticipated inflation report​

By STAN CHOE

Wall Street rose Monday as traders made their final moves ahead of a report that could show whether inflation is cooling in the right way or setting the market up for worse pain.

The S&P 500 climbed 1.1% in anticipation of Tuesday’s report on inflation at the consumer level across the country. The Dow Jones Industrial Average gained 376.66 points, or 1.1%, while the Nasdaq composite rose 1.5%.

Stocks were coming off their worst week in nearly two months, the latest stumble for a market that has struggled for more than a year on worries about high inflation and the Federal Reserve’s response to it. The Fed has aggressively hiked rates to their highest level since 2007 to drive down the worst inflation in generations. High rates can stamp out inflation, but they do so at the risk of sending the economy into a sharp recession and dragging on investment prices.

Economists expect Tuesday’s report to show inflation slowed to 6.2% in January. That would be down from 6.5% a month before and from a peak of more than 9% in the summer. Perhaps more important than the overall number is what the data show specifically about prices for services outside of housing, such as haircuts or airfares. Inflation has remained stubbornly high there, when it’s started to come down in other areas.

Worse-than-expected trends on inflation would raise worries that the Federal Reserve will stay firmer on rates than expected, which could mean more pain for Wall Street. Cooler-than-expected figures, meanwhile, could fan anew hopes that were rising earlier this year for the Fed to take it easier on rates.

Everyone agrees that inflation is heading in the right direction. The question is how quickly and steadily it will come down to the Fed’s target of 2%, and what that means for when the Fed will pause its hikes to rates and eventually begin cutting them.

Treasury yields jumped last week after investors pulled their forecasts for rates closer to the Fed’s. The central bank has been consistently saying it plans to keep rates higher for longer to ensure the job is done on inflation.

Yields were mixed Monday ahead of the inflation report. The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, dipped to 3.70% from 3.75% late Friday. The two-year yield, which tends to move more on expectations for the Fed, was at 4.54% and close to its highest since November.

All the worries about inflation and rates are happening against the backdrop of a decidedly lackluster earnings reporting season. Companies in the S&P 500 are on track to report a nearly 5% drop in earnings for the final three months of 2022, compared with a year earlier, according to FactSet.

By the count of strategists at Credit Suisse, this is shaping up to be the worst earnings reporting season outside of a recession in 24 years.

Pessimism is also building about earnings for the first three months of 2023, with forecasts coming down.

A continued decline in corporate earnings is one of the reasons strategists at Morgan Stanley are cautious about the rally stocks have made since the start of the year, even if they gave back some of it last week. The S&P 500 is up 7.8% for 2023 so far, though it remains stuck in its “bear market” after falling more than 20

% from its high last year.

“Price action is not reflective of the deteriorating fundamentals or the fact that the Fed is hiking during an earnings recession — drivers that should ultimately determine the lows for this bear market later this spring,” the strategists led by Michael Wilson wrote in a report. “Risk-reward is as poor as it’s been in our view.”

The bulk of earnings reports have already come in for this season, with big utility companies and retailers among the companies toward the tail end. This upcoming week will include reports from Southern Co., Coca-Cola and Kraft Heinz.

Fidelity National Information Services tumbled 12.5% despite reporting slightly stronger profit and revenue for its latest quarter than expected. FIS gave a forecast for 2023 results that fell short of Wall Street’s expectations, and it said it will spin off its Worldpay merchant business after acquiring it in a deal less than four years ago.

On the winning end was Henry Schein, a provider of health care products and services. It rose 3.2% after it announced a program to buy back up to $400 million of its stock. Investors like such programs because they put cash directly in the pockets of shareholders.

All told, the S&P 500 rose 46.83 points to 4,137.29, the Dow gained 376.66 to 34,245.93 and the Nasdaq climbed 173.67 to 11,891.79.

MARKET WATCH

The Australian share market looks set to rise on Tuesday following a strong night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 49 points or 0.67% higher.

Wall Street rose Monday as traders made their final moves ahead of a report that could show whether inflation is cooling in the right way or setting the market up for worse pain.

The S&P 500 climbed 1.1% in anticipation of Tuesday’s report on inflation at the consumer level across the country. The Dow Jones Industrial Average gained 376.66 points, or 1.1%, while the Nasdaq composite rose 1.5%.

The S&P 500 rose 46.83 points to 4,137.29, the Dow gained 376.66 to 34,245.93 and the Nasdaq climbed 173.67 to 11,891.79.

 

[bigdog]

Asian stocks fall after US inflation feeds rate hike fears

Asian stock markets have slipped after U.S. inflation edged down less than expected, fueling concern the Federal Reserve might think more interest rate hikes are needed.

apnews.com

Wall Street ends mixed after swerving on inflation report​

By STAN CHOE

Several sharp reversals for stocks left Wall Street mixed on Tuesday after a report showed inflation is continuing to slow, but perhaps not as quickly or as smoothly as hoped.

The S&P 500 finished the day virtually where it started, edging down by less than 0.1%, after swerving between gains and losses. The Dow lost 156 points, or 0.5%, while the Nasdaq went on the widest run. It finished 0.6% higher after ricocheting between a loss of 1.1% and a gain of 0.9%.

The action was more decisive in the bond market, where yields climbed as investors braced for the Federal Reserve to get firmer on interest rates to combat inflation.

The report was highly anticipated because inflation and the Federal Reserve’s response to it have been at the center of Wall Street’s struggles for more than a year. Inflation has been cooling since a summertime peak, and investors are trying to guess how quickly and smoothly a decline could happen to the Fed’s 2% target.

Tuesday’s report showed that inflation slowed to 6.4% in January from its peak of 9.1% in June. The hope on Wall Street has been for a continuing slowdown to get the Federal Reserve to pause its hikes to interest rates and perhaps begin contemplating cuts to them.

High rates can drive down inflation but also hurt investment prices and raise the risk of a severe recession. The Fed has already hiked its key short-term rate to a range of 4.50% to 4.75%, up from virtually zero a year ago.

Nearly half of January’s month-over-month inflation came from an area where Fed Chair Jerome Powell has said he sees easing pressure in the pipeline: housing and other shelter-related prices.

But on the downside for markets, the improvement in inflation wasn’t by as much as economists expected. That could encourage the Fed to be more aggressive on interest rates than it’s been saying. The Fed has indicated it envisions at least a couple more increases before holding rates at a high level for a while.

“While inflation is heading in the right direction, there is a long and bumpy road ahead to price stability,” said Andrew Patterson, senior economist at Vanguard.

Even after ignoring the effects of prices for food and energy, which can swing more sharply than others, what’s called “core inflation” was still slightly higher than expected last month.

Such strength “suggests that the Fed has a lot more work to do to bring inflation back to 2%,” said Maria Vassalou, co-chief investment officer of multi-asset solutions at Goldman Sachs Asset Management. “If retail sales also show strength tomorrow, the Fed may have to increase their funds rate target to 5.5% in order to tame inflation.”

Investors have been raising their forecasts for how high the Fed will take rates by the summer, and they’re now betting on a 19.2% probability that its key rate will top 5.5% in July. That’s up from just a 0.2% probability seen a month ago, according to CME Group.

In the end, several analysts said Tuesday’s inflation report confirms a cooling trend but doesn’t answer any big questions by itself.

“This inflation print served as a reminder to investors that the path to lower inflation is not as clear cut as previously thought and it is too early for the Fed to declare victory on inflation,” said Gargi Chaudhuri, head of iShares Investment Strategy, Americas.

The market’s expectations for the Fed have been driving yields higher in the bond market in particular. The two-year Treasury has shot to its highest level since November, egged on last week by a stronger-than-expected report on the U.S. jobs market.

The two-year yield rose to 4.61% from 4.52% late Monday. It initially zig-zagged up, down and back again after the release of the inflation report.

The 10-year yield, which helps set rates for mortgages and other loans, rose to 3.75% from 3.70%.

All the worries about inflation and rates are hanging over a market that’s already contending with a relatively lackluster earnings reporting season. Companies have been reporting weaker results as higher costs and interest rates eat into their profits.

Restaurant Brands International, which operates Burger King and Tim Hortons restaurants, fell 2.7% after reporting weaker earnings than expected.

Avis Budget Group, meanwhile, jumped 10.7% after easily topping analysts’ profit forecasts.

All told, the S&P 500 slipped 1.16 points to 4,136.13. The Dow fell 156.66 to 34,089.27, and the Nasdaq gained 68.36 to 11,960.15.

MARKET WATCH
The Australian share market looks set to edge higher on Wednesday following a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 1 point higher this morning.

Several sharp reversals for stocks left Wall Street mixed on Tuesday after a report showed inflation is continuing to slow, but perhaps not as quickly or as smoothly as hoped.

The S&P 500 finished the day virtually where it started, edging down by less than 0.1%, after swerving between gains and losses. The Dow lost 156 points, or 0.5%, while the Nasdaq went on the widest run. It finished 0.6% higher after ricocheting between a loss of 1.1% and a gain of 0.9%.

All told, the S&P 500 slipped 1.16 points to 4,136.13. The Dow fell 156.66 to 34,089.27, and the Nasdaq gained 68.36 to 11,960.15.

 

[bigdog]

Asian shares jump boosted by a strong reading on US retail

Asian shares are edging higher, cheered by a stronger reading than expected on U.S. retail sales that set off a Wall Street rally.

apnews.com

Stocks tick higher as hopes on economy joust rate fears​

By STAN CHOE

Stocks ticked higher on Wall Street Wednesday as hopes for a resilient economy jousted with worries about inflation following a much stronger reading than expected on U.S. retail sales.

The S&P 500 rose 0.3% after swinging from early losses to gains through the day. The Dow Jones Industrial Averaged edged up by 38 points, or 0.1%, while the Nasdaq composite rose a more forceful 0.9%.

Sales at U.S. retailers jumped by more last month than expected, even as shoppers contended with higher interest rates on credit cards and other loans. The surprising strength offers hope that the most important part of the U.S. economy, consumer spending, can stay afloat despite worries about a possible recession looming. It’s the latest piece of data to show the economy remains more resilient than feared.

At the same time, though, the strong buying potentially adds more fuel to inflation, which a report earlier this week showed is cooling by less than expected. Upward pressure on inflation could force the Federal Reserve to stay more aggressive in keeping interest rates high.

High rates can drive down inflation, but they also drag on investment prices and raise the risk of a painful recession.

“Will it lead to that traditional recession or a shallow recession, or will we power through it and have more strong growth with still-high rates?” asked Tom Hainlin, national investment strategist at U.S. Bank Wealth Management. “That’s still the unknown, which is how resilient can the consumer be in this higher for longer” rate environment.

“It seems like both consumers and corporate America came into this in pretty good shape and so far are holding out OK,” he said.

The worries about higher rates and a firmer Fed have been most evident in the bond market, where yields on Treasurys have jumped since a report two Fridays ago showed the U.S. job market remains stronger than expected.

The yield on the two-year Treasury, which tends to track expectations for the Fed, briefly jumped toward 4.70% and its highest level since November after the retail sales report, up from less than 4.60% overnight and from 4.62% late Tuesday. It then eased back to 4.60%.

The 10-year yield, which helps set rates for mortgages and other important loans, rose to 3.79% from 3.75% late Tuesday.

Following Tuesday’s data on inflation that was slightly hotter than expected, economists at Deutsche Bank raised their forecast for how high the Fed will take its key overnight interest rate. They now see it ultimately rising to 5.6%, up from their prior forecast of 5.1%.

The Fed has already pulled its overnight rate all the way to a range of 4.50% to 4.75%, up from virtually zero a year ago.

The Deutsche Bank economists said they still expect a recession, but that the near-term strength in the economy could push its timing into the last three months of the year, later than they earlier thought.

Many other traders have also been raising their forecasts for how high the Fed will ultimately take interest rates. They’ve also sharply reduced bets for the Fed to cut rates late this year.

Even still, stocks are hanging onto healthy gains for the year despite recent rockiness. The S&P 500 is up 8% as strong data build hope that the economy may be able to avoid a recession. Or, if one hits, perhaps it may be only a short and shallow one.

The next big milestone for the market will likely be the Fed’s meeting in late March, when policy makers will give their latest forecasts for where interest rates will be at the end of the year, Hainlin said. That could lead to choppy trading in markets until then, as investors try to guess which way it will go.

On Wall Street, shares of Airbnb jumped 13.4% Wednesday after reporting stronger profit and revenue for its latest quarter than analysts expected. It also said trends remain encouraging into the new year, and it gave a forecast for revenue that topped Wall Street’s.

On the losing end were stocks of energy producers, which fell 1.8% for the worst performance by far of the 11 sectors that make up the S&P 500.

One of the sharpest drops came from Devon Energy, which fell 10.5% after reporting weaker profit for the latest quarter than expected.

This earnings reporting season has been muted, with many companies reporting pressure on their profits from higher costs and interest rates.

All told, the S&P 500 gained 11.47 points to 4,417.60. The Dow rose 38.78 to 34,128.05, and the Nasdaq climbed 110.45 to 12,070.59.

In stock markets abroad, Turkey’s market jumped nearly 10% after trading reopened following a closure caused by the devastating earthquake in the region.

MARKET WATCH

The Australian share market is expected to rebound on Thursday following a relatively positive night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 36 points or 0.5% higher this morning.

Stocks ticked higher on Wall Street Wednesday as hopes for a resilient economy jousted with worries about inflation following a much stronger reading than expected on U.S. retail sales.

The S&P 500 rose 0.3% after swinging from early losses to gains through the day. The Dow Jones Industrial Averaged edged up by 38 points, or 0.1%, while the Nasdaq composite rose a more forceful 0.9%.

The S&P 500 gained 11.47 points to 4,417.60. The Dow rose 38.78 to 34,128.05, and the Nasdaq climbed 110.45 to 12,070.59.

 

[bigdog]

Asian shares skid after inflation report thumps Wall Street

Shares have slipped in Asia after benchmarks on Wall Street took their biggest hit in four weeks as investors registered disappointment over an inflation reading that came in hotter than expected.

apnews.com

Another disappointing inflation report thumps Wall Street​

By STAN CHOE

Wall Street tumbled Thursday, and stocks fell by the most in four weeks following more evidence that high inflation is staying stickier than expected.

The S&P 500 dropped 1.4% after a report said inflation at the wholesale level slowed by less last month than economists forecast. It echoed a report on prices at the consumer level from earlier this week that suggested inflation isn’t cooling as quickly and as smoothly as hoped.

The Dow Jones Industrial Average lost 431 points, or 1.3%, while the Nasdaq composite dropped 1.8%.

Stocks have been churning recently as worries about sticky inflation joust against data suggesting the economy remains more resilient than feared. The worry is that persistently high inflation will push the Federal Reserve to get even more aggressive on interest rates. Higher rates can drive down inflation but also drag on investment prices and raise the risk of a serious recession

Such fears have been most clear in the bond market, where yields have leaped this month as traders raise their forecasts for how high the Fed will take interest rates.

The yield on the two-year Treasury, which tends to track expectations for Fed action, rose to 4.67% from less than 4.60% before the inflation report’s release and from less than 4.10% earlier this month. It’s near its highest level since November, when the yield reached levels last seen in 2007.

Thursday’s inflation report showed that prices at the wholesale level were 6% higher last month than a year earlier. While that was a slowdown from December’s rate, it was worse than what economists expected. Perhaps more concerning was that inflation accelerated in January on a month-to-month basis even after stripping out prices for food, energy and other layers.

The inflation report thudded onto Wall Street along with a batch of other data painting a mixed picture of the economy.

Fewer workers applied for jobless benefits last week than expected, a sign that layoffs remain low across the economy. That’s good news for workers and another signal of strength for the job market, but the Fed worries it could also add upward pressure on inflation.

Other reports showed a measure of manufacturing activity in the mid-Atlantic region plunged this month, while homebuilders broke ground on fewer homes last month than economists expected.

Altogether, the reports cast some doubt on Wall Street’s hopes that the Federal Reserve could manage to slow the economy just enough to stamp out inflation but not so much that it creates a severe recession. Hopes for a “soft landing” for the economy nevertheless remain firmly in the market, with the S&P 500 still up 6.5% since the turn of the year.

“I would go further and say ‘no landing,’” said Nate Thooft, senior portfolio manager at Manulife Investment Management. “It’s almost as if there’s no softness perceived, or it’s so minimal that it’s not really viewed as recessionary at all.”

Those hopes have helped the stock market remain relatively resilient even as the bond market moves sharply on expectations for a firmer Fed.

Thooft said there’s a chance both markets could ultimately be proven correct, that the Fed could keep rates higher for longer while the economy avoids a recession, but he’s skeptical. He thinks what’s more likely is a shallow recession or slowdown in growth, but one that lasts longer than markets may be prepared for.

Recently, he was thinking weakness in the economy could last just a few months. But his expectations for a “higher-for-longer” Fed have him now thinking it could last up to a year.

Strong recent reports on inflation and the job market have forced Wall Street to align its forecasts for rates closer to the Fed’s. Earlier this year, there was a wide disconnect between them. Investors were broadly betting the Fed wouldn’t go as high as it was saying, while also holding out significant hopes for a cut to rates in the latter part of the year.

The fear now is that if inflation proves sticker than expected that the Fed may go beyond what it’s been prepping the market for.

Loretta Mester, president of the Federal Reserve Bank of Cleveland, said in a speech Thursday that she saw “a compelling economic case” at the Fed’s meeting earlier this month to raise rates by double what it ended up doing.

Big technology and high-growth stocks led the overall market lower Thursday in part because they’re seen as some of the most vulnerable to higher interest rates. In earlier years, their stocks shot higher in part because of record-low interest rates.

A 2.7% fall for Microsoft, 3.3% drop for Nvidia and 4.7% slide for Tesla were some of the heaviest weights on the S&P 500.

All told, the index fell 57.19 points to 4,090.41. The Dow fell 431.20 to 33,696.85, and the Nasdaq dropped 214.76 to 11,855.83

MARKET WATCH

The Australian share market looks set to fall on Friday following a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 18 points or 0.3% lower this morning.

The S&P 500 dropped 1.4% after a report said inflation at the wholesale level slowed by less last month than economists forecast. It echoed a report on prices at the consumer level from earlier this week that suggested inflation isn’t cooling as quickly and as smoothly as hoped.

The Dow Jones Industrial Average lost 431 points, or 1.3%, while the Nasdaq composite dropped 1.8%.

The S&P 500 fell 57.19 points to 4,090.41. The Dow fell 431.20 to 33,696.85, and the Nasdaq dropped 214.76 to 11,855.83

 

[bigdog]

Wall Street closes another bumpy week with a mixed finish

Wall Street closed another bumpy week with a mixed performance. The S&P fell 0.3% Friday after paring a bigger loss from the morning.

apnews.com

Wall Street closes another bumpy week with a mixed finish​

By STAN CHOE

Wall Street closed another bumpy week with a mixed performance on Friday amid worries that inflation is not cooling as quickly or as smoothly as hoped.

The S&P fell 0.3% after paring a bigger loss from the morning. The Dow Jones Industrial Average rose 129 points, or 0.4%, after coming back from an early loss of 179 points, while the Nasdaq composite fell 0.6%.

Stocks have hit turbulence in February after shooting higher in January with hopes that cooling inflation could get the Federal Reserve to take it easier on interest rates and that the economy could avoid a severe recession. Reports recently have shown more strength than expected in everything from the job market to retail sales to inflation itself, raising worries that the Federal Reserve will have to get tougher on interest rates.

That’s forced a sharp recalibration on Wall Street as investors move their forecasts for rates closer to the “higher for longer” stance that the Federal Reserve has long been espousing. The hope is that high rates can drive down inflation, but they also hurt investment prices and risk causing a severe recession.

Economists at Goldman Sachs added one more hike by the Fed in June to their forecast, meaning they see its key short-term rate ultimately rising to a range of 5.25% to 5.50%. That rate was at virtually zero a year ago, and it hasn’t topped 5.25% since the dot-com bubble was deflating in 2001. It’s currently at a range of 4.50% to 4.75%.

The fear is that if inflation proves stickier than expected, it could push the Fed to get even more aggressive than it’s prepared the market for. Such movements have been most clear in the bond market, where yields have soared this month on expectations for a firmer Fed.

The two-year Treasury yield topped 4.70% in the morning, up from 4.62% late Thursday and from less than 4.10% earlier this month. It later pulled back to 4.61%. It has recently approached its heights from November, when it reached its highest point since 2007.

Still offering some support to the stock market are remaining hopes among investors that the economy can avoid a worst-case recession. Jobs are still plentiful, and shoppers are still spending to prop up the most important part of the economy, consumer spending. That’s helped the S&P 500 index hold onto a gain of 6.2% since the start of the year.

But critics say many of those areas also tend to be among the last to feel the effects of higher interest rates and may still crack. And the Fed has already raised rates by the most aggressive pace in decades.

“Fed tightening always ‘breaks’ something,” investment strategist Michael Hartnett wrote in a BofA Global Research report.

Complicating things are all the revisions and changes in methodology embedded in recent data reports on the economy, which may be clouding the signal they give, said Michael Green, chief strategist at Simplify Asset Management.

He’s also worried about how much of the high inflation sweeping the economy is the result of reduced competition as companies across industries consolidated, something that rate hikes by themselves can’t solve.

“We’ve created a feedback loop where the Fed will hike interest rates until they break something,” Green said. “Then the question is: How do they respond?”

Big technology and other high-growth companies have been taking the brunt of worries about the Fed because they’re seen as some of the most vulnerable to higher rates. Their stocks soared in earlier years in part because of record-low rates.

Microsoft fell 1.6% and Nvidia lost 2.8% for some of the heaviest weights on the S&P 500.

Energy stocks also tumbled as the price of oil weakened. Exxon Mobil fell 3.8%.

On the winning side was Deere, which gained 7.5% after reporting stronger profit for its latest quarter than analysts expected.

Altogether, the S&P 500 fell 11.32 points to 4,079.09. The Dow rose 129.84 to 33,826.69, and the Nasdaq fell 68.56 to 11,787.27.

In stock markets abroad, Hong Kong’s Hang Seng lost 1.3%. Losses were amplified by news that a major tech industry dealmaker, Bao Fan, apparently has gone missing.

Shares in one of China’s top investment banks, China Renaissance, plunged Friday after the company said in a filing to Hong Kong’s stock exchange that it had lost touch with Bao, its founder. Bao’s disappearance follows a crackdown on technology companies in the past two years that officials in China said had been wrapped up.

Stocks also mostly fell across Asian and European markets.

ALMOST A SEA OF RED BELOW!!!

 

[bigdog]

ASX 200 futures largely flat​

The Australian share market looks set to have a subdued session on Monday following another mixed finish to the week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day a single point lower this morning

Wall Street closed another bumpy week with a mixed performance on Friday amid worries that inflation is not cooling as quickly or as smoothly as hoped.

The S&P fell 0.3% after paring a bigger loss from the morning. The Dow Jones Industrial Average rose 129 points, or 0.4%, after coming back from an early loss of 179 points, while the Nasdaq composite fell 0.6%.

The S&P 500 fell 11.32 points to 4,079.09. The Dow rose 129.84 to 33,826.69, and the Nasdaq fell 68.56 to 11,787.27.

 

[bigdog]

NYSE was closed Monday February 20 for Washington's Birthday

World shares mostly higher as inflation worries dog Wall St

BANGKOK (AP) — Shares were mostly higher in Europe and Asia on Monday after Wall Street closed out another bumpy week marked by uneasiness over the outlook for inflation and interest rates. Germany's DAX gained 0.1% in early trading to 15,494.14 and the CAC 40 in Paris also was 0.1% higher, at...

apnews.com

World shares mostly higher as inflation worries dog Wall St​

By ELAINE KURTENBACH

Shares were mostly higher in Europe and Asia on Monday after Wall Street closed out another bumpy week marked by uneasiness over the outlook for inflation and interest rates.

Germany’s DAX gained 0.1% in early trading to 15,494.14 and the CAC 40 in Paris also was 0.1% higher, at 7,354.01. Britain’s FTSE 100 climbed 0.2% to 8,016.05. The futures for the S&P 500 and the Dow Jones Industrial Average were 0.1% lower.

U.S. markets will be closed for a holiday Monday.

China left its benchmark lending rate, the loan prime rate, unchanged as expected. The 1-year rate was kept at 3.65% while the 5-year rate is 4.3%.

In Asian trading, Hong Kong’s Hang Seng index gained 0.8% to 20,886.96 while the Shanghai Composite index jumped 2.1% to 3,290.34. Tokyo’s Nikkei 225 edged up 0.1% to 27,531.94.

India’s Sensex slipped 0.5% to 60,702.28. South Korea’s Kospi added 0.2% to 2,455.12 and Australia’s S&P/ASX 200 was up 0.1% at 7,351.50. Shares in Southeast Asian markets declined, apart from in Bangkok, where the SET gained 0.4%

Recent data have revived worries that inflation in the United States is not cooling as quickly as hoped. That has shaken hopes the Federal Reserve might take it easier on interest rate hikes and avoid tipping the economy into recession.

That has added to turbulence on Wall Street after the year started off with solid gains.

“There was not a lot of major news, but in the back of every traders’ mind was the thought that this whole ‘high inflation/Fed hiking’ scenario, may not actually be over as soon as many hoped,” Clifford Bennett, chief economist at ACY Securities, said in a commentary. “The troubles may be far from over.”

On Friday, the S&P fell 0.3% and the Dow industrials rose 0.4%. The Nasdaq composite fell 0.6%.

Reports recently have shown more strength than expected in everything from the job market to retail sales to inflation itself, raising worries that the Federal Reserve will have to get tougher on interest rates. That extra resilience has reassured investors that the economy may avoid a worst-case recession.

Jobs are still plentiful, and shoppers are still spending to prop up the most important part of the economy, consumer spending. That’s helped the S&P 500 index hold onto a gain of 6.2% since the start of the year.

The fear is that if inflation proves stickier than expected, it could push the Fed to get even more aggressive than it’s prepared the market for. Such movements have been most clear in the bond market, where yields have soared this month on expectations for a firmer Fed.

This week, an updated estimate Thursday of U.S. economic growth in October-December will provide more insight into how businesses and consumers are faring. The forecasts are that growth will have slowed to 2.8% or 2.9% from the previous quarter, down from 3.2%.

In other trading Monday, U.S. benchmark crude oil gained 74 cents to $77.29 per barrel in electronic trading on the New York Mercantile Exchange. It sank $2.19 on Friday to $76.55 per barrel.

Brent crude oil, the pricing basis for international trading, picked up 84 cents to $83.84 per barrel.

The U.S. dollar slipped to 134.27 Japanese yen from 134.28 yen. The euro rose to $1.0690 from $1.0681.

Market Watch

The Australian share market looks set to give back yesterday’s gains and more on Tuesday. According to the latest SPI futures, the ASX 200 is poised to open the day 29 points or 0.35% lower.

NYSE was closed Monday February 20 for Washington's Birthday

REST of WORLD

 

[bigdog]

Asian shares decline following Wall Street tumble

Asian shares have fallen after stocks tumbled on Wall Street as worries persist about higher interest rates and their tightening squeeze on the global economy.

apnews.com

Wall Street tumbles, Dow loses 697 on fears about high rates​

By STAN CHOE

Stocks tumbled to their worst day in two months Tuesday, buckling under worries about higher interest rates and their tightening squeeze on Wall Street and the economy.

The S&P 500 fell 2% for its sharpest drop since the market was selling off in December. The Dow Jones Industrial Average lost 697 points, or 2.1%, while the Nasdaq composite sank 2.5%.

Home Depot fell to one of the market’s larger losses after giving financial forecasts that fell short of Wall Street’s expectations. It dropped 7.1% despite reporting stronger profit for the last three months of 2022 than expected.

The retailer said it would spend $1 billion to increase wages for hourly U.S. and Canadian workers. That fed into broader worries for markets that rising costs for companies have been eating into profits, which are one of the main levers that set stock prices.

The other main lever is also looking precarious as interest rates continue to rise. When safe bonds are paying higher amounts of interest, they make stocks and other investments look less attractive. Why take a lot of risk on stocks if safer things are paying out more? Higher rates also raise the risk of a recession because they slow the economy in hopes of snuffing out inflation.

Rates and stock prices are high enough that strategists at Morgan Stanley say U.S. stocks look to be more expensive than at any time since 2007.

The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, leaped further to 3.95% from 3.82% late Friday. The two-year yield, which moves more on expectations for the Fed, rose to 4.72% from 4.62%. It’s close to its highest level since 2007.

“That is what’s weighing on the market,” said Keith Lerner, chief market strategist at Truist Advisory Services.

Yields have shot higher this month as Wall Street ups its forecasts for how high the Federal Reserve will take short-term interest rates in its efforts to stamp out inflation. The Fed has already pulled its key overnight rate up to a range of 4.50% to 4.75%, up from basically zero at the start of last year.

Several reports have come in recently to show the economy remains stronger than expected. Those allay fears that the economy may soon fall into a recession, which is a positive for the market. But on the negative side, they could also fuel upward pressure on inflation and give the Fed more reason to stick to the “higher for longer” campaign it’s been espousing for rates.

The latest evidence came from a preliminary report Tuesday that suggested business activity is gaining momentum. The services industry likely returned to growth last month and was at an eight-month high, according to S&P Global. Manufacturing, meanwhile, may still be contracting, but the reading hit a four-month high.

Such strength has caused the more pessimistic investors on Wall Street to keep their forecasts for a recession but move its timing later into the year.

The Fed said in December that its typical policy maker sees short-term rates rising to 5.1% by the end of this year with the earliest cut to rates happening in 2024. After earlier thinking the Fed would ultimately take it easier on rates than it was talking about, Wall Street has largely come into closer alignment with the Fed’s view

The worry is that the Fed could ratchet up its forecasts for rates further next month when it releases its latest projections for the economy. Besides showing more strength in the job market and retail sales than expected, recent reports have also suggested inflation is not cooling as quickly and as smoothly as hoped. Investors are also pushing back their forecasts for when the first cut to rates could happen.

Those worries have caused a stall for the strong rally by Wall Street to start the year. After earlier jumping as much as 8.9%, the S&P 500 is now clinging to a gain of 4.1% for the year so far.

Another threat for the market is that the Fed may not be as quick to cut rates in the face of economic weakness as it has in the past, said Truist’s Lerner.

“This is the first time in over a decade the Fed has had to worry about inflation,” he said. “What happened last year has created scar tissue that could keep rates higher for longer.”

“When we do have a downturn, the Fed is not going to be as aggressive as they have in the past. They may still be thinking about inflation.”

While the job market and consumer spending have been resilient in the face of higher interest rates, some pockets of the economy are showing more weakness. A report on Tuesday showed sales of previously occupied homes slowed to their slowest pace in more than a decade.

Homebuilder stocks fell after the report, including a 4.4% drop for D.R. Horton.

All told, the S&P 500 fell 81.75 points to 3,997.34. The Dow lost 697.10 to 33,129.59 and is down for the year to date. The Nasdaq fell 294.97 to 11,492.30.

In stock markets abroad, shares mostly fell after manufacturing indicators in Europe and Asia painted a mixed picture and Russian President Vladimir Putin accused Western countries of threatening Russia.

MARKET WATCH

The Australian share market looks set to fall again on Wednesday following a selloff on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 45 points or 0.6% lower this morning.

Stocks tumbled to their worst day in two months Tuesday, buckling under worries about higher interest rates and their tightening squeeze on Wall Street and the economy.

The S&P 500 fell 2% for its sharpest drop since the market was selling off in December. The Dow Jones Industrial Average lost 697 points, or 2.1%, while the Nasdaq composite sank 2.5%.

The S&P 500 fell 81.75 points to 3,997.34. The Dow lost 697.10 to 33,129.59 and is down for the year to date. The Nasdaq fell 294.97 to 11,492.30.

 

[bigdog]

Asian stocks rise after Wall St slides on rate hike fears

Asian stock markets are higher following Wall Street's biggest one-day decline in two months. Notes from a Federal Reserve meeting showed officials expect to keep interest rates high to fight stubborn inflation.

apnews.com

Stocks stall in mixed trading day after worst drop in months​

By STAN CHOE

Stocks stalled in mixed trading on Wednesday, a day after falling to their worst loss since December, as Wall Street prepares for interest rates to stay higher for longer.

The S&P 500 dipped 0.2% after drifting between small gains and losses through the day. The Dow Jones Industrial Average slipped 84 points, or 0.3%, while the Nasdaq composite edged up by 0.1%.

After leaping at the start of the year, stocks have hit a wall in February on worries that inflation may not be cooling as quickly or as smoothly as hoped. That has Wall Street upping its forecasts for how high the Federal Reserve will take interest rates, as well as for how long it will keep them at that level.

High rates can help drive down inflation, but they raise the risk of a recession because they slow the economy. They also hurt investment prices.

That recalibration by Wall Street, which earlier was betting that easing inflation would soon get the Fed to take it easier on interest rates, has caused yields in the Treasury market to shoot higher this month.

The yield on the 10-year Treasury is near its highest level since November. It pulled back a bit from its surge on Tuesday, dipping to 3.92% from 3.95%. That helped take some pressure off stocks on Wednesday

The two-year yield, which moves more on expectations for the Fed, fell to 4.69% from 4.73%. It’s also been near its highest level since November. If it tops that level, it would be at its highest since 2007.

Traders have in recent weeks called off bets that the Fed could cut rates later this year. Now they’re in closer alignment with what Fed officials have been telling the market for months, if not preparing for even more.

Investors are penciling in at least two more rate hikes of 0.25 percentage points. They’re even talking about the possibility that the Fed may consider going back to increases of 0.50 points.

The Fed has brought its main overnight rate up to a range of 4.50% to 4.75%, up from virtually zero at the start of last year, in its drive to stamp out high inflation. It’s also said it envisions no cuts to rates this year.

Minutes from the central bank’s last meeting showed policy makers still think inflation is too high and that interest rates need to rise further. “A few” officials even said they preferred raising rates by 0.50 percentage points at its last meeting, which was double the size of what the Fed actually did.

And that discussion came before a slew of stronger-than-expected reports arrived on the economy that could raise the pressure further on inflation. They included resilient readings on the job market, retail sales and inflation itself.

The disappearing hopes for a rate cut this year on Wall Street, along with rising expectations for how high rates will ultimately go, have dragged down the S&P 500′s gain for the year to 3.9%. Earlier this year, it was up as much as 8.9%.

“February is known as a hangover month,” said Ryan Detrick, chief market strategist at Carson Group. “After one of the best months we’ve seen, to have some indigestion shouldn’t surprise any investors. Now we’re starting to get some of that volatility and weakness.”

The Fed’s next move on rates will be next month. Traders see a roughly three-in-four chance that the Fed will raise rates by 0.25 points, according to CME Group. They see a 27% chance of a hike of 0.50 points. A month ago, traders were seeing a roughly one-in-five chance that the Fed wouldn’t raise rates at all in March.

A relatively lackluster earnings reporting season for big U.S. companies is winding down, and some of Wednesday’s biggest losers dropped despite reporting better results for the latest quarter than expected. That’s because investors have been putting more emphasis on what companies say about their upcoming results, with worries high about rising costs and inflation eating into profits.

Charles River Laboratories dropped 10.1% despite topping forecasts for the latest quarter. It said it received a U.S. Justice Department subpoena related to shipments of non-human primates that the company received from its supplier in Cambodia. The company said it voluntarily suspended such shipments, which pushed it to cut its forecast for revenue this upcoming year.

Keysight Technologies tumbled 12.7% for the largest loss in the S&P 500 despite also reporting stronger profit and revenue for the latest quarter than expected. Analysts pointed to its reporting of softer orders than forecast.

On the winning side was Diamondback Energy, which rose 2.3% after it reported a stronger profit for its latest quarter than analysts expected.

All told, the S&P 500 dipped 6.29 points to 3,991.05. The Dow lost 84.50 to 33,045.09, and the Nasdaq gained 14.77 to 11,507.07.

MARKET WATCH

The Australian share market is expected to fall again on Thursday following a relatively poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 20 points or 0.3% lower this morning.

Stocks stalled in mixed trading on Wednesday, a day after falling to their worst loss since December, as Wall Street prepares for interest rates to stay higher for longer.

The S&P 500 dipped 0.2% after drifting between small gains and losses through the day. The Dow Jones Industrial Average slipped 84 points, or 0.3%, while the Nasdaq composite edged up by 0.1%.

The S&P 500 dipped 6.29 points to 3,991.05. The Dow lost 84.50 to 33,045.09, and the Nasdaq gained 14.77 to 11,507.07.

 

[CityIndex]

Although FOMC Minutes supported the recent hawkish commentary from Fed officials, a late rally helped the S&P500 hold above its monthly pivot point and upward-slopping trendline on a closing basis.

All trading carries risk, but from a technical standpoint, this could indicate the index's ability to potentially form a swing low at the current level.

 

[bigdog]

Asia stocks mixed after Wall St breaks losing streak

Shares in Asia are mixed after Wall Street broke its longest losing streak since December with a modest rally led by tech stocks.

apnews.com

Stocks rise on Wall Street and break a 4-day losing streak​

By STAN CHOE

Stocks climbed Thursday after a see-saw day on Wall Street to break out of their longest losing streak since December.

The S&P 500 rose 0.5% for its first gain in five days. The Dow Jones Industrial Average gained 108 points, or 0.3%, while the Nasdaq composite added 0.7%.

Tech stocks helped lead the way after Nvidia reported better results for the latest quarter than expected. Its shares jumped 14% after it also gave a forecast for upcoming revenue that topped some analysts’ expectations. It cited recovering strength in video gaming and demand for artificial intelligence products.

It’s a turnaround for tech and high-growth stocks, which have struggled recently because of worries about rising interest rates. They’re seen as some of the most vulnerable as the Federal Reserve jacks rates higher in hopes of stamping out inflation.

High rates hurt prices for investments, particularly those seen as the riskiest, most expensive or whose big growth is furthest out in the future. They also raise the risk of a recession because they slow the economy.

After leaping in January, stocks broadly have slammed into a wall this month on worries that inflation isn’t cooling as quickly or as smoothly as hoped. A lengthening list of reports have shown the economy is in stronger shape than expected.

While that’s raised hopes about avoiding a recession in the near term, it’s also forced Wall Street to raise its forecasts for how high the Fed will take interest rates and then how long it will keep them there.

The latest economic data released on Thursday also suggested an economy with enough strength to encourage the Fed to press on with its “higher for longer” campaign on rates. The fear is that a strong economy could feed into upward pressure on inflation.

Fewer workers applied for unemployment benefits last week than expected, another indication that the job market remains resilient despite the fastest increase in rates in decades.

A separate report said the U.S. economy’s growth was likely a touch weaker in the last three months of 2022 than earlier estimated. But it still grew at a 2.7% annual rate.

Sam Stovall, chief investment strategist at CFRA Research, said stronger economic data going back to the jobs report at the start of the month pushed him to add one more rate hike to his forecast before the Fed takes a pause. He also pushed out how long he thinks it may take the S&P 500 to get to his target level of 4,575. Instead of thinking it could happen by the end of this year, he thinks it could be 12 months from now.

“The bond market has been pretty pessimistic right from the start, assuming that inflation would be higher for longer, that we do have the likelihood of a recession,” Stovall said.

“Our belief is that it probably won’t be a repeat of the Great Recession. In terms of timing, it could actually be fairly similar to the recession of 2001. It could end up being fairly short and happens 14 months after the start of the bear market” for stocks.

Wall Street’s heightened expectations for rates and the Fed have been most evident in the bond market, where Treasury yields have shot higher this month. They eased a bit on Thursday to take some of the pressure off stocks.

The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, dipped to 3.88% from 3.93% late Wednesday.

Earlier this week, it topped 3.95% as it raced toward its highest level since November.

On the losing end of Wall Street was Moderna, whose shares slid 6.7% after it reported its fourth-quarter profit tumbled 70% as COVID-19 vaccine sales fell and the drugmaker caught up on a royalty payment.

Domino’s Pizza dropped 11.7% despite reporting stronger profit than expected. Its revenue fell short of forecasts, and it lowered the top and bottom ends of its forecasted range for global sales growth in the next two to three years.

Lordstown Motors tumbled 11.4% to $1.09 after it said it’s temporarily halting production and deliveries of its Endurance electric pickup due to performance and quality issues with certain components.

All told, the S&P 500 rose 21.27 points to 4,012.32. The Dow added 108.82 to 33,153,91, and the Nasdaq climbed 83.33 to 11,590.40.

MARKET WATCH

The Australian share market looks set to edge higher on Friday following a volatile but positive night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 8 points higher this morning.

Stocks climbed Thursday after a see-saw day on Wall Street to break out of their longest losing streak since December.

The S&P 500 rose 0.5% for its first gain in five days. The Dow Jones Industrial Average gained 108 points, or 0.3%, while the Nasdaq composite added 0.7%.

The S&P 500 rose 21.27 points to 4,012.32. The Dow added 108.82 to 33,153,91, and the Nasdaq climbed 83.33 to 11,590.40.

 

[bigdog]

Stocks drop, send Wall Street to its worst week of the year

Stocks sank on Wall Street and closed out their worst week since early December. The S&P 500 fell 1.1% Friday to cap its third straight loss.

apnews.com

Stocks drop, send Wall Street to its worst week of the year​

By STAN CHOE

Another cold reminder that inflation remains hotter than hoped sent Wall Street skidding Friday, and stocks closed out their worst week since early December.

The S&P 500 fell 1.1% to cap its third straight weekly loss. The Dow Jones Industrial Average dropped as many as 510 points before closing down 336 points, or 1%, while the Nasdaq composite lost 1.7%.

Stocks have dropped through February as a stream of reports have shown everything from inflation to the job market to spending by shoppers is staying hotter than expected. That’s forced Wall Street to raise its forecasts for how high the Federal Reserve will have to take interest rates and then how long to keep them there.

Higher rates can drive down inflation, but they also raise the risk of a recession because they slow the economy. They likewise hurt prices for stocks and other investments.

The latest reminder came Friday after a report showed that the measure of inflation preferred by the Fed came in higher than expected. It said prices were 4.7% higher in January than a year earlier, after ignoring costs for food and energy because they can swing more quickly than others. That was an acceleration from December’s inflation rate, showing the wrong momentum, and it was higher than economists’ expectations for 4.3%.

It echoed other reports from earlier in the month that showed inflation at both the consumer and wholesale levels was higher than expected in January.

Other data Friday showed that consumer spending returned to growth in January, rising 1.8% from December. That’s pivotal because spending by consumers makes up the largest piece of the economy. A separate reading on sentiment among consumers came in slightly stronger than earlier thought, while sales of new homes improved a bit more than expected.

Such strength paired with the remarkably resilient job market raises hope that the economy can avoid a recession in the near term.

But it can also feed into upward pressure on inflation, and Wall Street worries it could push the Fed to raise rates even higher and keep them there even longer than it otherwise would.

“It puts the final nail in the coffin in the shift we’ve seen the last several weeks where the market has come around to what the Fed has been saying for a while: rates above 5% and there for longer,” said Ross Mayfield, investment strategy analyst at Baird.

After earlier doubting that the Fed would raise its key overnight rate as high as it was saying, and believing that it may even cut rates later this year, traders are increasing bets on the Fed’s rate rising to at least 5.25% and staying that high through the end of the year.

It’s currently in a range of 4.50% to 4.75%, and it was at virtually zero a year ago.

High rates and inflation increase the risk of a recession down the line, even if the most important part of the economy has been resilient.

“The consumer is hanging in there, but the consensus seems to be there’s a lot of trading down” by shoppers to less-expensive items, Mayfield said. “If you’re looking out a year and banking on the consumer sector to hang in there, every extra month it becomes a dicier proposition.”

He expects the economy’s growth to fall below its long-term trend if not fall into a minor recession, though he’s not anticipating a worst-case downturn.

Expectations for a firmer Fed have caused yields in the Treasury market to shoot higher this month, and they climbed further Friday.

The yield on the 10-year Treasury rose to 3.94% from 3.89% late Thursday. It helps set rates for mortgages and other important loans. The two-year yield, which moves more on expectations for the Fed, rose to 4.79% from 4.71% and is near its highest level since 2007.

Tech and high-growth stocks once again took the brunt of the pressure. Investments seen as the most expensive, riskiest or making their investors wait the longest for big growth are among the most vulnerable to higher rates.

Microsoft, Apple Amazon and Tesla all fell at least 1.8% and were the heaviest weights on the S&P 500 because their immense size gives them more sway on the index.

Software company Autodesk fell to the largest loss in the index, down 12.9% despite reporting stronger profit and revenue for the latest quarter than expected. Analysts said investors were disappointed with its forecasts for upcoming results.

Boeing lost 4.8% after it stopped deliveries of its 787 passenger jet because of questions around a supplier’s analysis of a part near the front of the plane.

All told, the S&P 500 fell 42.28 points to 3,970.04. The Dow dropped 336.99 to 32,816.92, and the Nasdaq fell 195.46 to 11,394.94.

Stock markets abroad also mostly fell, with a 1.8% drop for France’s main index and 1.7% fall in Hong Kong.

Japan’s Nikkei 225 was an outlier, rising 1.3%. The nominee to head the country’s central bank, economist Kazuo Ueda, told lawmakers he favors keeping Japan’s benchmark interest rate near zero to ensure stable growth. That’s despite Japan reporting its core consumer price index, excluding volatile fresh foods, rose the most in 41 years in January.

 

[Knobby22]

Stocks drop, send Wall Street to its worst week of the year

Stocks sank on Wall Street and closed out their worst week since early December. The S&P 500 fell 1.1% Friday to cap its third straight loss.

apnews.com

Stocks drop, send Wall Street to its worst week of the year​

By STAN CHOE

Another cold reminder that inflation remains hotter than hoped sent Wall Street skidding Friday, and stocks closed out their worst week since early December.

The S&P 500 fell 1.1% to cap its third straight weekly loss. The Dow Jones Industrial Average dropped as many as 510 points before closing down 336 points, or 1%, while the Nasdaq composite lost 1.7%.

Stocks have dropped through February as a stream of reports have shown everything from inflation to the job market to spending by shoppers is staying hotter than expected. That’s forced Wall Street to raise its forecasts for how high the Federal Reserve will have to take interest rates and then how long to keep them there.

Higher rates can drive down inflation, but they also raise the risk of a recession because they slow the economy. They likewise hurt prices for stocks and other investments.

The latest reminder came Friday after a report showed that the measure of inflation preferred by the Fed came in higher than expected. It said prices were 4.7% higher in January than a year earlier, after ignoring costs for food and energy because they can swing more quickly than others. That was an acceleration from December’s inflation rate, showing the wrong momentum, and it was higher than economists’ expectations for 4.3%.

It echoed other reports from earlier in the month that showed inflation at both the consumer and wholesale levels was higher than expected in January.

Other data Friday showed that consumer spending returned to growth in January, rising 1.8% from December. That’s pivotal because spending by consumers makes up the largest piece of the economy. A separate reading on sentiment among consumers came in slightly stronger than earlier thought, while sales of new homes improved a bit more than expected.

Such strength paired with the remarkably resilient job market raises hope that the economy can avoid a recession in the near term.

But it can also feed into upward pressure on inflation, and Wall Street worries it could push the Fed to raise rates even higher and keep them there even longer than it otherwise would.

“It puts the final nail in the coffin in the shift we’ve seen the last several weeks where the market has come around to what the Fed has been saying for a while: rates above 5% and there for longer,” said Ross Mayfield, investment strategy analyst at Baird.

After earlier doubting that the Fed would raise its key overnight rate as high as it was saying, and believing that it may even cut rates later this year, traders are increasing bets on the Fed’s rate rising to at least 5.25% and staying that high through the end of the year.

It’s currently in a range of 4.50% to 4.75%, and it was at virtually zero a year ago.

High rates and inflation increase the risk of a recession down the line, even if the most important part of the economy has been resilient.

“The consumer is hanging in there, but the consensus seems to be there’s a lot of trading down” by shoppers to less-expensive items, Mayfield said. “If you’re looking out a year and banking on the consumer sector to hang in there, every extra month it becomes a dicier proposition.”

He expects the economy’s growth to fall below its long-term trend if not fall into a minor recession, though he’s not anticipating a worst-case downturn.

Expectations for a firmer Fed have caused yields in the Treasury market to shoot higher this month, and they climbed further Friday.

The yield on the 10-year Treasury rose to 3.94% from 3.89% late Thursday. It helps set rates for mortgages and other important loans. The two-year yield, which moves more on expectations for the Fed, rose to 4.79% from 4.71% and is near its highest level since 2007.

Tech and high-growth stocks once again took the brunt of the pressure. Investments seen as the most expensive, riskiest or making their investors wait the longest for big growth are among the most vulnerable to higher rates.

Microsoft, Apple Amazon and Tesla all fell at least 1.8% and were the heaviest weights on the S&P 500 because their immense size gives them more sway on the index.

Software company Autodesk fell to the largest loss in the index, down 12.9% despite reporting stronger profit and revenue for the latest quarter than expected. Analysts said investors were disappointed with its forecasts for upcoming results.

Boeing lost 4.8% after it stopped deliveries of its 787 passenger jet because of questions around a supplier’s analysis of a part near the front of the plane.

All told, the S&P 500 fell 42.28 points to 3,970.04. The Dow dropped 336.99 to 32,816.92, and the Nasdaq fell 195.46 to 11,394.94.

Stock markets abroad also mostly fell, with a 1.8% drop for France’s main index and 1.7% fall in Hong Kong.

Japan’s Nikkei 225 was an outlier, rising 1.3%. The nominee to head the country’s central bank, economist Kazuo Ueda, told lawmakers he favors keeping Japan’s benchmark interest rate near zero to ensure stable growth. That’s despite Japan reporting its core consumer price index, excluding volatile fresh foods, rose the most in 41 years in January.

View attachment 153539

View attachment 153540

View attachment 153541

"He expects the economy’s growth to fall below its long-term trend if not fall into a minor recession, though he’s not anticipating a worst-case downturn."

That’s a downgrade and how often do we get what we expect?

 

[bigdog]

ASX 200 expected to tumble​

The Australian share market looks set to have a difficult session on Monday following a poor finish to the week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 51 points or 0.7% lower this morning.

Another cold reminder that inflation remains hotter than hoped sent Wall Street skidding Friday, and stocks closed out their worst week since early December.

On Friday, the S&P 500 fell 1.1% to cap its third straight weekly loss. The Dow Jones Industrial Average dropped as many as 510 points before closing down 336 points, or 1%, while the Nasdaq composite lost 1.7%.

The S&P 500 fell 42.28 points to 3,970.04. The Dow dropped 336.99 to 32,816.92, and the Nasdaq fell 195.46 to 11,394.94.

 

[bigdog]

Asian shares edge higher after slight gains on Wall Street

Shares have climbed in Asia after Wall Street benchmarks clawed back some losses from their worst week since early December.

apnews.com

Stocks steady themselves after Wall Street’s rout last week​

By STAN CHOE

Stocks steadied themselves Monday following Wall Street’s worst week since early December.

The S&P 500 rose 12.20 points, or 0.3% to 3,982.24 for just its second gain in the last seven days. The Dow Jones Industrial Average gained 72.17, or 0.2%, to 32,889.09, while the Nasdaq composite climbed 72.04, or 0.6%, to 11,466.98.

Stocks have struggled in February after a strong start to the year as reports have shown inflation and much of the overall economy are staying more resilient than expected. While the strong economic data calms fears that a recession may be imminent, it also has forced Wall Street to raise its forecasts for how high the Federal Reserve will take interest rates and how long it will keep them there.

High rates can drive down inflation, but they also raise the risk of a recession in the future because they slow the economy. They also hurt prices for stocks and other investments.

The heightened expectations for rates have been most evident in the bond market, where yields have shot higher in recent weeks. On Monday, the yield on the 10-year Treasury slunk back a bit, which eased some of the pressure on stocks.

The 10-year Treasury yield dipped to 3.92% from 3.95% late Friday. That yield helps set rates for mortgages and other important loans. The two-year yield, which moves more on expectations for the Fed, slipped to 4.79% from 4.81%. It’s near its highest level since 2007.

Yields eased after a report showed that orders for machinery, aircraft and other long-lasting manufactured goods fell by more than economists expected in January.

Economists have been expecting more softness in the economy after the Fed jacked up rates last year at the fastest pace in decades. But reports on everything from the job market to spending by consumers to inflation itself have been coming in firmer than expected over the last few weeks.

The fear is that if the economy stays on strong footing, it could feed into upward pressure on inflation. That’s why expectations on Wall Street have swung so hard, from earlier thinking the Fed could soon take it easier on interest rates to now believing it could raise them above 5.25%.

The Fed’s key overnight rate is now in a range of 4.50% to 4.75%, up from virtually zero at the start of last year.

Even Monday’s weaker-than-expected report on durable goods had some underlying strength. After ignoring transportation-related equipment, orders jumped last month to the biggest gain since March. It was much stronger than the drop that economists expected to see.

Economies around the world have remained more resilient than feared, with China loosening its business-damaging anti-COVID restrictions and Europe avoiding a worst-case energy crisis. That’s helped give the U.S. economy support, said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

He came into this year expecting a recession to hit in the early to middle parts of 2023, which could have encouraged the Fed to cut rates by the end of the year. Given all the strength, though, he now doesn’t expect a recession to hit until the second half of the year. That could encourage the Fed to keep hiking rates further as it tries to get inflation down to its 2% goal. It also likely removes the possibility of rate cuts this year.

Even with the worries about rates going higher than expected, the S&P 500 is still holding onto a gain of 3.7% for the year so far, and shoppers are still continuing to spend at stores. Both can add upward pressure on inflation.

“I’ll term it animal spirits, both in markets and consumers,” Samana said. “I think there’s a lot of speculation still going on in markets” with some of the riskiest bonds and stocks rallying in price. “And for consumers, somehow the consumer has brushed it aside and said it’s more difficult for me to consume but I’ll keep doing it.”

“We can call it persistence or stubbornness, but we’ve seen it both on the part of consumers and investors. And that’s made the Fed’s job much harder.”

On Wall Street, shares of Union Pacific jumped 10.1% for one of the market’s biggest gains after the railroad announced plans to replace its CEO later this year. The company has been under pressure from a hedge fund with a big ownership stake in it.

Most companies have already reported their results for the last three months of 2022, but a couple dozen companies in the S&P 500 are still scheduled to report this week.

They may offer a window into how well U.S. households are holding up amid higher interest rates and inflation. Advance Auto Parts, Kroger and Target are some of the companies on the schedule for this upcoming week.

Overall, this earnings reporting season has been lackluster. Companies in the S&P 500 are on track to report their first drop in earnings per share from a year earlier since the summer of 2020, according to FactSet.

ASX 200 expected to rebound​

The Australian share market looks set to bounce back on Tuesday following a decent start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 34 points or 0.5% higher.

NYSE Stocks steadied themselves Monday following Wall Street’s worst week since early December.

The S&P 500 rose 12.20 points, or 0.3% to 3,982.24 for just its second gain in the last seven days. The Dow Jones Industrial Average gained 72.17, or 0.2%, to 32,889.09, while the Nasdaq composite climbed 72.04, or 0.6%, to 11,466.98.


MARKET WATCH

 

[bigdog]

Asian shares trade mixed with earnings, regional tensions

Asian shares are trading mixed as investors watch for upcoming earnings reports and other indicators on how inflationary pressures might be denting global growth.

apnews.com

Wall Street closes out a chilling February with another dip​

By STAN CHOE

A frigid February for Wall Street closed out with more losses on Tuesday.

The S&P 500 fell 0.3% to lock in a loss of 2.6% for the month. The Dow Jones Industrial Average fell 232 points, or 0.7%, while the Nasdaq composite slipped 0.1%. Both also sank over the month.

After a strong start to the year bolstered by hopes that inflation was on the way down, Wall Street shifted into reverse in February. A stream of data showed inflation and the overall economy are remaining more resilient than expected. That’s forced investors to raise their forecasts for how high the Federal Reserve will take interest rates and how long it will keep them there.

High rates can drive down inflation, but they also raise the risk of a recession down the line because they hurt the economy. They also drag on prices for stocks and other investments.

After earlier this year hoping that the Fed could soon pause its aggressive hikes to interest rates, and maybe even begin cutting them late this year, traders have come around to believe the Fed’s long insistence that it plans to take rates higher for longer to ensure the job is done on inflation.

The Fed has said it wants rates to climb to a “sufficiently restrictive” level where the economy slows enough to get inflation down to its 2% goal.

“Everything is sort of churning,” said Thomas Martin, senior portfolio manager at Globalt Investments. “Right now, the economy is doing fairly well, but earnings estimates for 2023 for the S&P 500 are continuing to drift lower. So you’re still moving in a softening direction. It’s just: How close do you get to the ground?”

He has raised his forecast for how high the Fed will ultimately raise rates, but he also said it’s difficult to feel a great amount of certainty given all the push and pull.

“What everyone’s hoping for is that they are restrictive but not destructive,” Martin said of the Fed and rate hikes. “Where we end up, there’s just a wide range of outcomes.”

Many investors now see the Fed hiking its key overnight interest rate up to at least 5.25%, if not higher, and keeping it there through the end of the year. The Fed’s rate is currently set in a range of 4.50% to 4.75% after starting last year at virtually zero.

The heightened expectations for rates sent yields jumping in the bond market. The yield on the 10-year Treasury held steady at 3.92% Tuesday. It helps set rates for mortgages and other loans that shape the economy’s health, and still near its highest level since November.

The two-year yield, which moves more on expectations for Fed action, ticked up to 4.81% from 4.78%. It’s near its highest level since 2007.

Worries about rates have caused the S&P 500’s gain for the year to more than halve. It was up as much as 8.9% in early February, the day before a report showed U.S. employers hired nearly a third of a million more people in January than expected.

Such strength is good news for the economy and calms fears about a recession hitting imminently. But the Fed worries it could also feed into upward pressure on inflation. Not only are jobs still plentiful, U.S. households also increased their spending at stores and elsewhere in January.

Now the S&P 500 is hanging onto a gain of 3.4% for the year.

Reports on the economy released Tuesday showed some slight cracks. One said that confidence among U.S. consumers unexpectedly fell in February. Another said that manufacturing in the Chicago region weakened by more than expected.

All the worries have come across a backdrop of falling earnings for big corporations. S&P 500 companies are in the midst of reporting their first decline in profits from year-earlier levels since 2020, when the pandemic was choking the economy, according to FactSet.

Most companies have already reported their results for the last three months of 2022, but several big-name retailers are still on the schedule for this week.

Among them was Target, which on Tuesday reported better profit and revenue than expected for the latest quarter. But it also echoed some other retailers in giving a cautious forecast for upcoming results as U.S. households contend with still-high inflation. Its stock rose 1%

On the losing end was Norwegian Cruise Line. It tumbled 10.2% after reporting a bigger loss for the latest quarter than expected. It also gave profit forecasts for the upcoming quarter and year that fell short of Wall Street’s.

All told, the S&P 500 fell 12.09 points to 3,970.15. The Dow fell 232.39 to 32,656.70, and the Nasdaq dropped 11.44 to 11,455.54.

ASX 200 expected to fall​

The Australian share market looks set to fall on Wednesday despite it being a reasonably positive night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 21 points or 0.3% lower this morning.

A frigid February for Wall Street closed out with more losses on Tuesday.

The S&P 500 fell 0.3% to lock in a loss of 2.6% for the month. The Dow Jones Industrial Average fell 232 points, or 0.7%, while the Nasdaq composite slipped 0.1%. Both also sank over the month.

The S&P 500 fell 12.09 points to 3,970.15. The Dow fell 232.39 to 32,656.70, and the Nasdaq dropped 11.44 to 11,455.54.

MARKET WATCH

 

[bigdog]

Asian stocks mixed after Wall St falls on inflation fears

Asian stock markets are mixed after signs of enduring upward pressure on American prices added to expectations of higher interest rates for longer.

apnews.com

Stocks slip as stubborn inflation raises rate expectations​

By STAN CHOE

Most stocks marched lower Wednesday as stubbornly sticky inflation has Wall Street bracing for interest rates to stay higher for longer.

The S&P 500 fell 0.5% in its first trading after coming off a frigid February. The Dow Jones Industrial Average edged up by 5 points, or less than 0.1%, while the Nasdaq composite fell 0.7%.

After a hot start to the year, the stock market has struggled as data piled up to show inflation and the overall economy are remaining more resilient than expected. That forced many investors to delay their forecasts for a recession to later in the year, while also raising their expectations for how high the Federal Reserve will take interest rates.

Higher rates can drive down inflation, but they hurt the economy by making borrowing more expensive and raise the risk of a recession later on. They also drag down on prices for stocks and other investments.

Wall Street got another reminder of inflation’s stubbornness from the latest report to show that U.S. manufacturing is weakening. A report from the Institute for Supply Management said that a measure of prices paid rose in February and hit its highest level since September.

“The biggest risk to markets is an economy that stagnates yet continues to struggle with nagging inflation pressures,” said Jeffrey Roach, chief economist for LPL Financial, in a note to investors.

The market’s expectations have firmed for the Fed to stay aggressive in order to ensure inflation falls toward its 2% goal. Traders have pulled back bets that the central bank could cut rates later this year, and some have increased bets it may reaccelerate the pace of its hikes later this month.

The widespread expectation is now for the Fed to take its key overnight rate to at least 5.25% by June. Some bets are also calling for the rate to top 5.50%, its highest level since 2001. The rate is currently in a range of 4.50% to 4.75% after starting last year at basically zero.

Treasury yields rose immediately after the release of the manufacturing data. They had shot higher in February as expectations rose for the Fed and rates.

Several big-name retailers have already offered discouraging forecasts for the upcoming year given the challenges U.S. households are facing because of high inflation and other factors.

Kohl’s fell 1.9% after it joined them. It also said it swung to a surprise loss for the three months through Jan. 28.

Ross Stores edged up 0.1% after spending most of the day lower despite reporting better profit and revenue for the latest quarter than expected. It gave a forecast for profit this upcoming year that fell short of Wall Street’s expectations.

Its CEO, Barbara Rentler, said the company wanted to be conservative given so much uncertainty about the economy and world. She said high inflation is continuing to hit low to moderate-income customers.

Vaccine company Novavax tumbled 25.9% after it warned there’s “substantial doubt” about its ability to stay in business over the next year. It reported a net loss of $657.9 million for the last year.

Lowe’s fell 5.6% for one of the largest losses in the S&P 500 after it reported weaker revenue for the latest quarter than expected.

On the winning side was First Solar, which jumped 15.7% after it reported stronger results for the latest quarter than expected and continued bookings for the future.

All told, the S&P 500 fell 18.76 points to 3,951.39. The Dow rose 5.14 to 32,661.84, and the Nasdaq fell 76.06 to 11,379.48.

Stock markets overseas were strong following some encouraging data on the world’s second-largest economy.

Hong Kong’s Hang Seng index jumped 4.2% and stocks in Shanghai gained 1% after reports on manufacturing in China showed a strong recovery after anti-virus controls were lifted late last year. That followed a slump in activity that dragged last year’s economic growth to 3%, China’s second-lowest level since at least the 1970s.

In the bond market, the yield on the 10-year U.S. Treasury rose to 3.99% from from 3.93% late Tuesday. It helps set rates for mortgages and other loans that shape the economy, and it’s near its highest level since November after topping 4% earlier in the day.

The two-year yield, which moves more on expectations for the Fed, rose to 4.89% from 4.82%

ASX 200 expected to fall again​

NYSE Most stocks marched lower Wednesday as stubbornly sticky inflation has Wall Street bracing for interest rates to stay higher for longer.

The S&P 500 fell 0.5% in its first trading after coming off a frigid February. The Dow Jones Industrial Average edged up by 5 points, or less than 0.1%, while the Nasdaq composite fell 0.7%.

The S&P 500 fell 18.76 points to 3,951.39. The Dow rose 5.14 to 32,661.84, and the Nasdaq fell 76.06 to 11,379.48.

The Australian share market is expected to fall gain on Thursday following a poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 1 points lower this morning.

MARKET WATCH

 

[bigdog]

Asian stocks follow Wall St up on interest rate hopes

Asian stock markets have followed Wall Street higher after a Federal Reserve official raised hopes the U.S. central bank might not step up its anti-inflation fight as much as feared.

apnews.com

Stocks climb to send Wall Street to first gain in 3 days​

By STAN CHOE and DAMIAN J. TROISE

Stocks rose Thursday for their first gain in three days, even as bond yields climbed to tighten the squeeze on Wall Street.

The S&P 500 rose 29.96 points, or 0.8%, to 3,981.35 after erasing a morning loss. The Dow Jones Industrial Average added 341.73, or 1%, to 33,003.57, while the Nasdaq composite gained 83.50, or 0.7%, to 11,462.98.

Stocks flipped from losses to gains after a Federal Reserve official made comments that raised hopes the central bank may not ramp up its fight against inflation as aggressively as feared. That countered recent talk from other officials who raised worries about much bigger increases to interest rates following several hotter-than-expected reports on the economy.

Raphael Bostic, president of the Federal Reserve Bank of Atlanta, told reporters that for now he still supports lifting the Fed’s key overnight rate to a range of 5% to 5.25%, up from its current 4.50% to 4.75%. That’s lower than a good chunk of investors on Wall Street are forecasting.

“That’s what gave the market a little hope, that there is a voice not saying to raise the terminal rate,” or where the Fed will ultimately stop hiking rates, said Brent Schutte, chief investment officer at Northwestern Mutual Wealth, “because a lot of the other people who talk seem like they’re constantly saying: ‘Elevator Up.’”

Higher rates can drive down inflation because they slow the economy, but they also raise the risk of a recession down the line. They likewise hurt prices for stocks and other investments.

“This is where we’re at now,” Schutte said. “We’re making policy based upon — and the market is moving off — every month’s data rather than people paying attention to the trend. And these things get revised. That’s why it’s so volatile.”

The mood was more dour in the morning after a report showed fewer workers applied for unemployment benefits last week for a third straight week. It’s the latest data to show the job market remains more resilient than expected, even though the Federal Reserve has jacked up interest rates at the fastest pace in decades.

While that’s good news for workers and calms fears about a recession in the near term, the fear is that a too-strong jobs market could add upward pressure to inflation. Inflation has recently been more stubborn to cool than expected.

A separate report Thursday showed labor costs were higher than earlier reported for the last three months of 2022, while productivity was revised down. Both could also add pressure on inflation. It follows other reports over the last month showing overall job growth, spending by consumers and inflation at multiple levels of the economy all remain higher than expected.

“The economy is pretty healthy and from a spending perspective that actually provides a lot of support for earnings estimates ticking up,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. “The other side of that though is that the Fed sees it too and the market sees that the Fed is seeing it.”

The strong economic reports have forced Wall Street to raise its forecasts for how high the Fed will ultimately take interest rates. It also means a delay in any hopes for upcoming cuts to rates.

The swing has been clear in the bond market, where Treasury yields have shot higher. The yield on the 10-year Treasury rose to 4.06% from 4.00% late Wednesday and from less than 3.40% earlier this year. It helps set rates for mortgages and other loans that shape the economy, and it’s near its highest level since November.

The two-year yield, which moves more on expectations for the Fed, rose to 4.90% from 4.88% and is close to its highest level since 2007.

“We’re all sitting around waiting to see what the level is where they cause the economy to break, and at that point it will unfortunately be too late,” Northwestern Mutual Wealth’s Schutte said of the Fed and interest rates.

Shares of Salesforce soared 11.5% for one of the market’s biggest gains after it topped forecasts for profit and revenue last quarter. It also gave a stronger-than-expected forecast for upcoming results

Expectations have been coming down recently for profits at big U.S. companies given still-high inflation and interest rates. But several joined Salesforce in rising Thursday after posting encouraging results.

Macy’s rose 11.1% after reporting stronger profit and revenue for the holidays than analysts expected. It also gave a forecasted range for earnings this year that was above some analysts’ expectations.

It ran counter to several other big retailers that have offered discouraging forecasts recently given the struggles of some U.S. households amid still-high inflation.

On the losing side was Telsa, which sank 5.9%. It said its next generation of vehicles will cost half as much but provided few details about its design in a presentation to investors.

ASX 200 expected to rise​

The Australian share market looks set to end the week on a positive note. According to the latest SPI futures, the ASX 200 is expected to open 28 points or 0.35% higher this morning.

NYSE stocks rose Thursday for their first gain in three days, even as bond yields climbed to tighten the squeeze on Wall Street.

The S&P 500 rose 29.96 points, or 0.8%, to 3,981.35 after erasing a morning loss. The Dow Jones Industrial Average added 341.73, or 1%, to 33,003.57, while the Nasdaq composite gained 83.50, or 0.7%, to 11,462.98


MARKET WATCH

 

[bigdog]

Stocks jump as Wall Street cruises to best day since January

Stocks rallied to send Wall Street to its best day in six weeks. The S&P 500 rose 1.6% Friday to cap its first winning week in the last four as relaxing yields in the bond market took some pressure off Wall Street.

apnews.com

Stocks jump as Wall Street cruises to best day since January​

By STAN CHOE

NEW YORK (AP) — Stocks rallied Friday to send Wall Street to its best day in six weeks.

The S&P 500 rose 1.6% to cap its first winning week in the last four as relaxing yields in the bond market took some pressure off Wall Street. It’s found some stability following a swift rise and fall to start the year.

The Dow Jones Industrial Average climbed 387 points, or 1.2%, while the Nasdaq composite jumped 2%.

The central guidepost moving markets recently has been where inflation is heading and what the Federal Reserve will do about it.

“I’d love to talk about other things, but the only things that matter are the Fed and trajectory of inflation,” said Amanda Agati, chief investment officer of PNC Asset Management.

Early in the year, Wall Street rallied on hopes that cooling inflation would get the Fed to take it easier on its hikes to interest rates. Such increases can drive down inflation by slowing the economy, but they also raise the risk of a recession later on and hurt prices for investments.

Last month, momentum swung and stocks fell after reports on the economy came in hotter than expected. They included data on the jobs market, consumer spending and inflation itself at multiple levels

The strong data raised concerns about continued upward pressure on inflation. That forced Wall Street to abandon hopes for rate cuts this year and raise its expectations for how high rates would go.

On Friday, more data showed up to show the economy is in better shape than thought: Growth for services industries last month was a touch stronger than economists expected. That’s a good sign for the economy and helps calms worries about an imminent recession, particularly when manufacturing has been struggling. But it also could add pressure on inflation.

Instead of sending stocks lower and yields higher, as stronger-than-expected data did much of last month, markets reacted in the opposite way.

The yield on the 10-year Treasury fell back to 3.96% from 4.06% late Thursday. It’s a respite from its shot higher over the last month as expectations rose for a firmer Fed.

Underneath the surface of the services report were some potentially encouraging bits for inflation. Prices are still rising for prices paid by services organizations, but the growth decelerated in February.

“We started off the year with a delusional, deranged or even unhinged market rally that just made no sense at all,” Agati said. “That delusion is still sitting in the background clearly, even though we are starting to get some of that reality check.”

She sees the Fed having to take interest rates even higher than the market is expecting because of how stubborn inflation has been. With corporate profits on the way down, and her expectation for even more declines because of a mild to moderate recession, she sees the stock market grinding lower before plateauing for a while and then gradually rising again, reminiscent of the shape of a bathtub.

“It’s going to be a more extended tightening cycle,” Agati said. “Investors are so conditioned to high volatility and warp speed, they want everything to happen immediately. You see the market trying to price it in in one shot. It’s just going to take longer for the Fed to get out of the driver’s seat.”

The next move by the Fed on interest rates is scheduled for later this month. Before then, reports on the strength of the job market and on inflation will likely have big impacts on the market and expectations for what the Fed will do.

Last month, it dialed down the size of its rate increases and highlighted progress being made in the battle to get inflation lower. It also earlier suggested just two more increases to rates may be on the way. But the strong reports since then have raised worries that the Fed could not only hike at least three more times but also could dial back up the size of the increases.

All the worries have come while expectations for corporate profits have been swinging lower. Still-high inflation and rates are eating into earnings for big companies. Retailers in particular have been saying they see some of their customers struggling

Costco Wholesale on Friday reported stronger profit for its latest quarter than expected, but its revenue fell short of forecasts. Its stock fell 2.1%.

Shares of Silvergate Capital, a bank for crypto companies, swung sharply a day after more than halving. Crypto companies have been cutting off business with the bank, which warned earlier this week that it won’t be able to file its annual report with regulators in time and that it could be “less than well-capitalized.” After swinging from losses to gains, it ended the day 0.9% higher.

On the winning side was Cooper Cos., a medical device maker that reported stronger profit and revenue than Wall Street expected. It climbed 7.3%.

Broadcom gained 5.5% after it also beat expectations for quarterly profit and revenue.

All told, the S&P 500 rose 64.29 points to 4,045.64. The Dow gained 387.40 to 33,390.97, and the Nasdaq jumped 226.02 to 11,689.01.

 

[farmerge]

When I checked the mark

Stocks jump as Wall Street cruises to best day since January

Stocks rallied to send Wall Street to its best day in six weeks. The S&P 500 rose 1.6% Friday to cap its first winning week in the last four as relaxing yields in the bond market took some pressure off Wall Street.

apnews.com

Stocks jump as Wall Street cruises to best day since January​

By STAN CHOE

NEW YORK (AP) — Stocks rallied Friday to send Wall Street to its best day in six weeks.

The S&P 500 rose 1.6% to cap its first winning week in the last four as relaxing yields in the bond market took some pressure off Wall Street. It’s found some stability following a swift rise and fall to start the year.

The Dow Jones Industrial Average climbed 387 points, or 1.2%, while the Nasdaq composite jumped 2%.

The central guidepost moving markets recently has been where inflation is heading and what the Federal Reserve will do about it.

“I’d love to talk about other things, but the only things that matter are the Fed and trajectory of inflation,” said Amanda Agati, chief investment officer of PNC Asset Management.

Early in the year, Wall Street rallied on hopes that cooling inflation would get the Fed to take it easier on its hikes to interest rates. Such increases can drive down inflation by slowing the economy, but they also raise the risk of a recession later on and hurt prices for investments.

Last month, momentum swung and stocks fell after reports on the economy came in hotter than expected. They included data on the jobs market, consumer spending and inflation itself at multiple levels

The strong data raised concerns about continued upward pressure on inflation. That forced Wall Street to abandon hopes for rate cuts this year and raise its expectations for how high rates would go.

On Friday, more data showed up to show the economy is in better shape than thought: Growth for services industries last month was a touch stronger than economists expected. That’s a good sign for the economy and helps calms worries about an imminent recession, particularly when manufacturing has been struggling. But it also could add pressure on inflation.

Instead of sending stocks lower and yields higher, as stronger-than-expected data did much of last month, markets reacted in the opposite way.

The yield on the 10-year Treasury fell back to 3.96% from 4.06% late Thursday. It’s a respite from its shot higher over the last month as expectations rose for a firmer Fed.

Underneath the surface of the services report were some potentially encouraging bits for inflation. Prices are still rising for prices paid by services organizations, but the growth decelerated in February.

“We started off the year with a delusional, deranged or even unhinged market rally that just made no sense at all,” Agati said. “That delusion is still sitting in the background clearly, even though we are starting to get some of that reality check.”

She sees the Fed having to take interest rates even higher than the market is expecting because of how stubborn inflation has been. With corporate profits on the way down, and her expectation for even more declines because of a mild to moderate recession, she sees the stock market grinding lower before plateauing for a while and then gradually rising again, reminiscent of the shape of a bathtub.

“It’s going to be a more extended tightening cycle,” Agati said. “Investors are so conditioned to high volatility and warp speed, they want everything to happen immediately. You see the market trying to price it in in one shot. It’s just going to take longer for the Fed to get out of the driver’s seat.”

The next move by the Fed on interest rates is scheduled for later this month. Before then, reports on the strength of the job market and on inflation will likely have big impacts on the market and expectations for what the Fed will do.

Last month, it dialed down the size of its rate increases and highlighted progress being made in the battle to get inflation lower. It also earlier suggested just two more increases to rates may be on the way. But the strong reports since then have raised worries that the Fed could not only hike at least three more times but also could dial back up the size of the increases.

All the worries have come while expectations for corporate profits have been swinging lower. Still-high inflation and rates are eating into earnings for big companies. Retailers in particular have been saying they see some of their customers struggling

Costco Wholesale on Friday reported stronger profit for its latest quarter than expected, but its revenue fell short of forecasts. Its stock fell 2.1%.

Shares of Silvergate Capital, a bank for crypto companies, swung sharply a day after more than halving. Crypto companies have been cutting off business with the bank, which warned earlier this week that it won’t be able to file its annual report with regulators in time and that it could be “less than well-capitalized.” After swinging from losses to gains, it ended the day 0.9% higher.

On the winning side was Cooper Cos., a medical device maker that reported stronger profit and revenue than Wall Street expected. It climbed 7.3%.

Broadcom gained 5.5% after it also beat expectations for quarterly profit and revenue.

All told, the S&P 500 rose 64.29 points to 4,045.64. The Dow gained 387.40 to 33,390.97, and the Nasdaq jumped 226.02 to 11,689.01.


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When I checked the markets this morning, pleasantly surprised to see that Honkers, Nikki and Americana all shaded a lovely green and healthy to boot. Now will the baby that is the follow the leader the ASX be doing the same on Monday????????????????