NYSE Dow Jones finished today at:

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Stock market today: Wall Street leaps, nearly escapes its bear market after strong jobs report

Stocks rushed higher after a strong report on the U.S. job market eased Wall Street's worries about a possible recession. The S&P 500 jumped 1.5% Friday, while the Dow soared 701 points. The rally brought the S&P 500 nearly 20% above a low hit in October. It's on the edge of entering a new bull...

apnews.com

Stock market today: Wall Street leaps, nearly escapes its bear market after strong jobs report​

By STAN CHOE

Stocks rushed higher Friday after a strong report on the U.S. job market suggested a recession may not be as close as Wall Street had feared.

The S&P 500 leaped 1.5% for the latest surge in a rally that’s vaulted it nearly 20% since mid-October. That put Wall Street’s main measure of health on the edge of entering what’s called a “bull market” despite a long list of challenges.

The Dow Jones Industrial Average rallied 701 points, or 2.1%, while the Nasdaq composite gained 1.1%.

The indexes got a boost after a report showed employers unexpectedly accelerated their hiring last month. It’s the latest signal that the job market remains remarkably solid despite much higher interest rates, and it offers a hefty pillar of support for an economy that’s begun to slow.

Areas of the market that do best when the economy is healthy led a widespread rally, including stocks of industrial companies, energy producers and banks. Exxon Mobil rose 2.3% as prices for crude oil climbed on hopes that a resilient economy would burn more fuel.

Perhaps more importantly for markets, the Labor Department’s monthly jobs report also showed a slowdown in increases for workers’ pay even as hiring strengthened.

While that may discourage workers trying to keep up with prices at the register, investors believe slower wage gains will mean less upward pressure on inflation across the economy.

That in turn could allow the Federal Reserve to take it easier on its hikes to interest rates meant to lower inflation. High rates do that by slowing the economy and hurting investment prices, and they’ve already caused pain for the banking and manufacturing industries.

The unemployment rate also rose by more than expected last month, moving up to 3.7% from a five-decade low. That implies a bit more slack in the job market and seems to conflict with the gangbusters hiring numbers, whose data comes from a separate survey.

“The reality is probably somewhere in between,” said Brian Jacobsen, chief economist at Annex Wealth Management.

“One thing that is striking is that if you compare aggregate payrolls today to the pre-COVID trend, we still have more than a four million job hole to fill-in,” he said. “COVID led to strange times, a strange recovery and an even stranger slowdown.”

Following the report, traders were largely expecting the Fed to hold interest rates steady at its next meeting in two weeks. If it does, that would be the first time it hasn’t hiked rates in more than a year.

A pause on rate hikes would offer some breathing room for an economy that’s already seen manufacturing contract sharply for months. Higher rates have also hurt many smaller and mid-sized banks, in part because customers have pulled deposits in search of higher interest at money-market funds.

Several high-profile bank failures since March have shaken the market, leading Wall Street to hunt for other possible weak links. Several under the heaviest scrutiny rallied following the jobs report. PacWest Bancorp leaped 14.1%, for example, to trim its loss for the year to 66.6%.

But Fed officials have also warned recently that a pause on rate hikes in June wouldn’t necessarily mean the end to hikes.

Traders are increasingly expecting the Fed to follow up a June pause with a July hike to interest rates, according to data from CME Group. That helped push Treasury yields higher

The yield on the 10-year Treasury climbed to 3.69% from 3.60% late Thursday. It helps set rates for mortgages and other important loans.

The two-year Treasury yield, which moves more on expectations for Fed action, jumped to 4.50% from 4.34%.

Also helping to support Wall Street was the Senate giving final approval late Thursday to a deal that will allow the U.S. government to avoid a potentially disastrous default on its debt. The move was widely expected by investors, and the deal moves next to President Joe Biden for his signature.

Lululemon Athletica jumped 11.3% after it reported stronger profit for the latest quarter than expected, crediting accelerating sales trends in China and other factors. It also raised its forecast for results over the full year.

MongoDB soared 28% after the database company reported bigger profit than expected. The company said it’s confident it will benefit from the wave of enthusiasm around artificial intelligence that’s swept the business world.

A frenzy around AI has helped the S&P 500 climb to its highest levels since August. Nvidia, whose chips are helping to power the move into AI, has soared 169% this year, for example.

Outsized gains for Nvidia and a small group of other stocks have been the main reason the S&P 500 has gotten so close to escaping its bear market, which saw a drop of 25.4% in nine months from early January 2022 into October.

Just a couple handfuls of stocks have driven the bulk of the gains for the S&P 500, and critics say that means the index may not be as strong as it appears. Even though the S&P 500 is up 11.5% for the year so far, nearly half the stocks in the index have lost ground amid worries about falling profits, still-high inflation and much higher interest rates.

All told, the S&P 500 rose 61.35 Friday to 4,282.37. The Dow climbed 701.19 to 33,762.76, and the Nasdaq gained 139.78 to 13,240.77.

 

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ASX 200 expected to jump​

The Australian share market is expected to have an excellent session following a very strong finish to last week on Wall Street after a new US debt deal was signed. According to the latest SPI futures, the ASX 200 is expected to open the day 76 points or 1.1% higher on Monday.

Stocks rushed higher Friday after a strong report on the U.S. job market suggested a recession may not be as close as Wall Street had feared.

The S&P 500 leaped 1.5% for the latest surge in a rally that’s vaulted it nearly 20% since mid-October. That put Wall Street’s main measure of health on the edge of entering what’s called a “bull market” despite a long list of challenges.

The Dow Jones Industrial Average rallied 701 points, or 2.1%, while the Nasdaq composite gained 1.1%.

All told, the S&P 500 rose 61.35 Friday to 4,282.37. The Dow climbed 701.19 to 33,762.76, and the Nasdaq gained 139.78 to 13,240.77.

Market Watch

 

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Stock market today: Asian stocks rise after Wall St retreats on concern economy weakening

Asian stock markets are higher after Wall Street fell on concern the U.S. economy may be weakening following a report that showed growth in service industries slowing. Shanghai, Tokyo and Hong Kong rose. Sydney retreated. Oil prices declined. Wall Street’s benchmark S&P 500 index lost 0.2% after...

apnews.com

Stock market today: Wall Street slips after tepid report on economy​

By STAN CHOE

U.S. stocks drifted lower Monday to start what could be a quiet stretch following their best week since March.

The S&P 500 lost 8.58 points, or 0.2%, to 4,273.79. The Dow Jones Industrial Average fell 199.90, or 0.6%, to 33,562.86, while the Nasdaq composite slipped 11.34, or 0.1%, to 13,229.43.

The majority of stocks on Wall Street sank after a report showed growth fell short of economists’ forecasts for businesses in the construction, accommodation and other U.S. services industries last month. It was still a fifth straight month of expansion, though.

It’s the latest mixed reading for a U.S. economy that has defied forecasts for a recession but has begun to slow under the weight of higher interest rates.

“There’s this muddle-through environment that the market is starting to work through,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial.

Monday’s dip came after a weekslong rally carried Wall Street to its highest level since August. That was largely because a resilient job market has forced recession-callers to keep pushing out predictions for a downturn by another few months. Still, pressure remains on the economy from the squeeze of still-high inflation, interest rates and cracks in the U.S. banking system.

“The market is starting to build a degree of optimism that I think is warranted,” Saglimbene said. “Whether it comes to fruition remains to be seen.”

After helping to lead the market higher early in the day, a drop for heavyweight Apple helped drag the S&P 500 to its modest loss in the afternoon. It fell 0.8% after unveiling a long-rumored headset that will place its users between the virtual and real world. It will cost $3,500 when it’s released early next year.

In the oil market, crude gained after Saudi Arabia said it would cut back production in hopes of boosting its price. A barrel of U.S. crude rose 0.6% to $72.15, and a barrel of Brent crude, which is the international standard, climbed 0.8% to $76.71.

Both were close to $120 a year ago, and their prices have fallen on worries that a strapped global economy would burn less fuel.

Elsewhere, Wall Street was relatively quiet. This upcoming week is light on earnings reports and top-tier economic data. That leaves few clues for the dominant question hanging over the market: Which will come first, the economy falling into a recession or inflation easing enough for the Federal Reserve to cut interest rates?

That’s why much attention is on next week, when the government will release the latest monthly updates on inflation at the consumer and wholesale levels. It’s also when the Fed will meet next on interest rate policy. Traders are largely betting that it will stand pat on rates, which would mark the first meeting where it hasn’t hiked in more than a year.

The bet on Wall Street, though, is that it could resume hiking rates in July. The reason for such a pause would be to allow the Fed time to assess how its frenetic set of rate hikes over the last year have affected the economy

The goal of high rates is to lower inflation by slowing the entire economy and dragging down prices for stocks, bonds and other investments. With rates at their highest level since 2007, several high-profile U.S. bank failures since March have already shaken the market, while the manufacturing industry has been contracting for months.

Last week, though, data showed that U.S. employers unexpectedly accelerated their hiring in May, while increases in workers’ wages slowed to keep some pressure off inflation. That helped bring Wall Street to the edge of what’s called a “bull market.”

If the S&P 500 rises 0.4% more and finishes a day above 4,292.44, it will be more than 20% above where it was in mid-October. That would mean Wall Street’s main measure of health has transformed from its frigid “bear market,” when it fell more than 20% over nine months, into a powerful bull.

In the bond market, the yield on the 10-year Treasury fell to 3.68% from 3.70% late Friday. It helps set rates for mortgages and other loans that shape the economy’s strength.

The two-year Treasury, which moves more on expectations for the Fed, dropped to 4.45% from 4.51%. It had been higher earlier in the morning, before the weaker-than-expected report on the U.S. services industries thudded onto Wall Street.

In stock markets abroad, indexes were mostly lower in Europe. Japan’s Nikkei 225 jumped 2.2%, while gains in other Asian markets were more modest.

ASX 200 expected to tumble​

The Australian share market looks set to tumble this morning following a poor start to the week in the US. According to the latest SPI futures, the ASX 200 is poised to open the day 41 points or 0.6% lower.

On Wall Street, U.S. stocks drifted lower Monday to start what could be a quiet stretch following their best week since March.

The S&P 500 lost 8.58 points, or 0.2%, to 4,273.79. The Dow Jones Industrial Average fell 199.90, or 0.6%, to 33,562.86, while the Nasdaq composite slipped 11.34, or 0.1%, to 13,229.43


Market Watch

 

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Stock market today: Asian stocks mixed as Wall St inches toward bull market

Shares are mixed in Asia after a listless day on Wall Street amid a vacuum of market-moving data. The S&P 500 rose 0.2% Tuesday. The Dow Jones Industrial Average edged up by 10 points while the Nasdaq added 0.4%. Banks were some of the bigger gainers, recovering from their struggles earlier this...

apnews.com

Stock market today: Wall Street inches higher toward edge of bull market​

By STAN CHOE

NEW YORK (AP) — U.S. stocks drifted higher Tuesday amid a vacuum of market-moving data, nudging Wall Street closer to the edge of what’s called a bull market.

The S&P 500 rose 10.06 points, or 0.2%, to 4,283.85. It’s just 0.2% away from finishing a day 20% above where it was in mid-October, as a long-predicted recession has yet to hit and excitement around artificial intelligence has helped a select group of stocks to soar.

The Dow Jones Industrial Average edged up by 10.42, or less than 0.1%, to 33,573.28, while the Nasdaq composite rose 46.99, or 0.4%, to 13,276.42.

This week has few top-tier economic reports and corporate earnings updates to help Wall Street answer its main question. It wants to know which will happen first: a recession or inflation falling enough to get the Federal Reserve to start cutting interest rates, which have climbed so high they’ve hurt various parts of the economy.

That’s why next week looms large. The U.S. government will publish its latest monthly updates on inflation, and the Federal Reserve will meet on interest-rate policy. The bet on Wall Street is that the Fed may hold off on hiking rates, which would be the first time that’s happened in more than a year, but could resume raising rates in July.

“What you’re seeing in markets is a reaction to a Fed that’s likely to pause when the economy hasn’t yet fallen into recession,” said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management. “I think the unfortunate reality is for an overall recession.”

Some parts of the economy have already buckled under the weight of much higher interest rates, including manufacturing and the U.S. banking system. Schutte expects the job market to follow eventually, even if a report on Friday showed employers unexpectedly accelerated hiring last month.

“I think the Fed believes unless they create labor market slack, they’re still worried they have to do more” with rate increases to control inflation “because the labor market is too tight,” Schutte said. “I think that’s what we call a recession.”

Some of the day’s strongest action was in the cryptocurrency world after the Securities and Exchange Commission charged Coinbase with operating its trading platform as an unregistered national securities exchange, broker and clearing agency.

Shares of its parent, Coinbase Global, tumbled 12.1% after the SEC also accused it of being liable for some of Coinbase’s violations. Other charges focused on Coinbase’s staking-as-a-service program, where users get payments for their crypto almost like earning interest from a traditional bank savings account.

Coinbase criticized the SEC’s approach to crypto, saying “the solution is legislation that allows fair rules for the road to be developed transparently and applied equally, not litigation.”

A day earlier, the SEC filed 13 charges against another huge crypto trading platform, Binance, and its founder. Binance said it had been in discussions to reach a negotiated settlement to resolve the SEC’s investigations and said the SEC “has determined to regulate with the blunt weapons of enforcement and litigation rather than the thoughtful, nuanced approach demanded by this dynamic and complex technology.”

Elsewhere in markets, oil prices gave up some gains driven earlier in the week by Saudi Arabia’s announcement that it would cut production to boost crude’s price. A barrel of U.S. crude fell 41 cents to $71.74. A barrel of Brent crude, the international standard, sank 42 cents to $76.29.

Both were close to $120 a year ago but have fallen amid worries about a strapped global economy’s need for fuel.

On the winning side of Wall Street was Gitlab, which soared 31.2% after the software development platform gave a revenue forecast for the fiscal year that topped analysts’ expectations. It also said it expects to turn in a milder loss than Wall Street had forecast, as it benefits from a rush into artificial intelligence.

A frenzy around AI has helped a handful of stocks soar to immense gains this year, including Nvidia’s 164.5% surge. That’s helped drive much of the S&P 500′s gains in 2023, but it’s also caused critics to question whether a bubble is forming. They also say the furor around AI may be masking weakness underneath the S&P 500′s surface.

Even though the S&P 500 is nearing a bull market, almost as many stocks within it are down this year as up as worries remain about falling corporate profits, still-high inflation and much higher interest rates than a year ago.

Blunting some of that criticism, many banks rose Tuesday.

They’ve been under pressure because the Fed’s fastest flurry of rate hikes in decades has pushed some bank customers to pull their deposits and put them into money-market funds paying more in interest. At the same time, rate hikes have knocked down values of bonds and other investments banks made when rates were low.

The pressure has caused several high-profile bank failures and pushed Wall Street to punish stocks of other banks as it hunts for possible victims. Comerica rose 7.1% for the biggest gain in the S&P 500.

Some of the banks under the harshest scrutiny also climbed, including an 8.1% jump for PacWest Bancorp.

In the bond market, the yield on the 10-year Treasury slipped to 3.68% from 3.69% late Monday. It helps set rates for mortgages and other important loans.

In stock markets abroad, Australia’s S&P ASX 200 fell 1.2% after its central bank lifted its benchmark interest rate by 0.25 percentage points to 4.1% and warned further rises could follow.

ASX 200 expected to rebound​

The Australian share market looks set to rebound on Wednesday following a decent night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 24 points or 0.4% higher this morning.

U.S. stocks drifted higher Tuesday amid a vacuum of market-moving data, nudging Wall Street closer to the edge of what’s called a bull market.

The S&P 500 rose 10.06 points, or 0.2%, to 4,283.85. It’s just 0.2% away from finishing a day 20% above where it was in mid-October, as a long-predicted recession has yet to hit and excitement around artificial intelligence has helped a select group of stocks to soar.

The Dow Jones Industrial Average edged up by 10.42, or less than 0.1%, to 33,573.28, while the Nasdaq composite rose 46.99, or 0.4%, to 13,276.42.

Market Watch

 

[bigdog]

Stock market today: Asian shares slip following technology selloff on Wall Street

Asian shares have fallen after heavy selling of big-name tech stocks pushed benchmarks lower on Wall Street. Markets declined across the region and U.S. futures also were lower. Oil prices retreated. The declines came despite a sharp upward revision in Japan’s estimated economic growth for the...

apnews.com

Stock market today: Wall Street drifts as drops for tech overshadow gains elsewhere​

By STAN CHOE

NEW YORK (AP) — U.S. stocks drifted to a mixed finish Wednesday, as drops for Microsoft and other big-name tech stocks overshadowed gains across much of the rest of Wall Street.

The S&P 500 fell 16.33, or 0.4%, to 4,267.52 even though the majority of stocks within the index rose. The Dow Jones Industrial Average gained 91.74, or 0.3%, to 33,665.02, while the Nasdaq composite fell 171.52, or 1.3%, to 13,104.89.

Microsoft, Amazon, Nvidia and Alphabet all sank at least 3% and were the heaviest weights on the S&P 500. Because they’re some of Wall Street’s most valuable stocks, their movements pack extra punch on the index.

It’s a reversal from much of this year, where a narrow group of high-growth stocks led the way on hopes for easier interest rates from the Federal Reserve and excitement around artificial intelligence. But tech stocks are seen as some of the hardest hit by higher interest rates, and yields were on the rise in the Treasury market.

Yields climbed after the Bank of Canada raised its policy interest rates on Wednesday, surprising some investors after it had left rates steady since January. The Fed will make its own decision on rates next week.

Campbell Soup, meanwhile, sank 8.9% after reporting weaker revenue for the latest quarter than expected. It also gave a forecast for earnings that fell short of analysts’ expectations, as price increases push some customers to buy less.

But much of the rest of the market rose as the gains on Wall Street broaden out some. The Russell 2000 index of smaller stocks jumped 1.8% to continue its hot streak since a stronger-than-expected report on hiring last week suggested a recession may be further off than feared.

On the winning side of Wall Street was Dave & Buster’s, which jumped 18.3% after reporting stronger profit for the latest quarter than expected.

Brown-Forman rose 4% after the spirits company reported stronger profit than expected for the latest quarter, thanks in part to growth for its Woodford Reserve brand

The market in general has climbed for months thanks to a resilient economy that’s managed to defy predictions for a recession. But the threat still looms, and Wall Street is questioning which will come first: a recession or inflation falling enough to get the Federal Reserve to cut interest rates?

That’s why much of Wall Street’s focus is on next week. The U.S. government is scheduled to release the latest monthly updates on inflation at the consumer and wholesale levels. The Federal Reserve will also announce its latest move on interest rates Thursday.

The dominant expectation among traders is for the Fed to leave rates steady next week. That would mark the first meeting in more than a year where it hasn’t hiked rates. But traders still expect the Fed to resume raising rates in July.

That’s key because the goal of high interest rates is to corral high inflation by slowing the entire economy and hurting prices for stocks, bonds and other investments. The Fed has hiked its benchmark overnight interest rate to the highest level since 2007.

Pressure from high rates have already caused cracks in the U.S. banking and manufacturing industries, though the job market has remained remarkably solid.

One expected boost to the global economy has not come through, which has added to the pressure. In China, trade data pointed to a further slowing of the world’s second-largest economy.

China reported its exports fell 7.5% from a year earlier in May and imports were down 4.5%, adding to signs of a slowing of its economic recovery following the lifting in December of anti-COVID controls that disrupted travel and commerce.

The decline in exports was the first year-on-year drop in in three months, with export volumes falling below their levels at the start of the year. “And with the worst yet to come for many developed economies, we think exports will decline further before bottoming out later this year,” Julian Evans-Pritchard of Capital Economics said in a commentary.

Stocks in Shanghai gained 0.1%, while Hong Kong’s Hang Seng rose 0.8%.

Tokyo’s Nikkei 225 index lost 1.8%, the sharpest decline in 12 weeks. Analysts said investors were selling to lock in recent gains since prices have risen to their highest level since the early 1990s.

In the bond market, the yield on the 10-year Treasury rose to 3.78% from 3.68% late Tuesday. It helps set rates for mortgages and other important loans.

The two-year yield, which moves more on expectations for the Fed, rose to 4.55% from 4.50%

ASX 200 expected to fall​

The Australian share market is expected to have a subdued session on Thursday after a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 13 points or 0.2% lower this morning.

U.S. stocks drifted to a mixed finish Wednesday, as drops for Microsoft and other big-name tech stocks overshadowed gains across much of the rest of Wall Street.

The S&P 500 fell 16.33, or 0.4%, to 4,267.52 even though the majority of stocks within the index rose. The Dow Jones Industrial Average gained 91.74, or 0.3%, to 33,665.02, while the Nasdaq composite fell 171.52, or 1.3%, to 13,104.89

Market Watch

 

[bigdog]

Stock market today: Asian shares mostly rise, lifted by bull market on Wall Street

Asian shares are trading mostly higher, led by a jump on the Tokyo Stock Exchange where share prices got a boost of optimism from a new bull market on Wall Street. U.S. futures edged lower and oil prices fell. Wall Street stocks rose just enough to enter a new bull market. The S&P 500 rose 0.6%...

apnews.com

Stock market today: Bulls run again on Wall Street as S&P 500 climbs 20% above October low​

By STAN CHOE

NEW YORK (AP) — Stocks rose just enough Thursday for Wall Street to barrel into a new bull market as the S&P 500 keeps rallying off its low from last autumn.

The index rose 0.6% to carry it 20% above a bottom hit in October. That means Wall Street’s main measure of health has climbed out of a painful bear market, which saw it drop 25.4% over roughly nine months.

The Dow Jones Industrial Average added 168 points, or 0.5%. The Nasdaq composite, meanwhile, led the market with a 1% rise. That’s been the norm so far this bull run, as chip maker Nvidia and a handful of other big tech stocks have been responsible for the lion’s share of Wall Street’s gains.

Declaring the end of a bear market may seem arbitrary, and different market watchers use different definitions, but it offers a useful marker for investors. It also provides a reminder that investors able to hold on through downturns have nearly always made back all their losses in S&P 500 index funds eventually.

Even though it was driven by so many superlatives — the worst inflation in generations and the fastest hikes to interest rates in decades, for example— this most recent bear market lasted only about nine months. It stretched from Jan. 3, 2022, when the S&P 500 set a record, until Oct. 12, when it hit bottom. That’s shorter than the typical bear market, and it also resulted in a shallower loss than average, according to data from S&P Dow Jones Indices.

“In hindsight, it might not look that bad, but it certainly feels bad in the moment,” said Brent Schutte, chief investment officer at Northwestern Mutual.

What made last year even more painful for investors is that both stocks and bonds lost money, he said, something that hasn’t happened in decades.

A good chunk of this bull market’s gains has been because the economy has refused to fall into a recession despite repeated predictions for one. It’s withstood the highest interest rates since 2007, three high-profile collapses of U.S. banks since March, another threat by the U.S. government of an economy-shaking default on its debt and a series of other challenges.

“Bottom line, the economy has been very resilient,” said Anthony Saglimbene, chief markets strategist at Ameriprise Financial.

“So much negativity was built into the market,” he said. “While it’s too early to know this for sure, stocks look like they’re doing what they normally do when all the negativity has been discounted into the stock market: They start moving higher in anticipation of better days ahead.”

Not only has the economy avoided a recession because of a remarkably solid job market and spending by consumers, hopes are also rising that the Fed may soon stop hiking interest rates.

High rates work to undercut inflation by slowing the entire economy and dragging on prices for stocks and other investments.

The broad expectation among traders is that the Fed will hold rates steady next week, which would mark the first meeting where it hasn’t raised rates in more than a year. While it may hike rates one more time in July, the hope on Wall Street is that it won’t go beyond that. Inflation has been coming down from its peak last summer.

But many challenges still remain for the stock market.

Chief among them is that no one can be sure when the Fed will stop hiking rates. Even if inflation has eased, it’s remained stubbornly above the Fed’s comfort level and still causes pain for all kinds of households, particularly ones with lower incomes.

That has some investors continuing to prepare for a coming recession, even if they keep pushing out predictions for when it will arrive by a few months.

“It’s been an odd and uneven recovery” coming out of the recession caused the COVID pandemic, Northwestern Mutual’s Schutte said. “It’s been an odd and even push into recession.”

Another warning sign for skeptics is how much of the S&P 500’s gains have been concentrated this year within just a handful of stocks.

Hopes for a pause by the Fed have helped big, high-growth stocks in particular. Investors see them benefiting the most from easier interest rates because that’s what’s happened in the past.

Add on top of that euphoria around artificial intelligence fanned by last month’s tremendous sales forecast by Nvidia, and just seven stocks have been responsible for the majority of the S&P 500’s gain this year.

Nvidia, Apple, Microsoft and other Big Tech giants have huge influence on the S&P 500 because they’re the biggest, and the index gives more weight to stocks based on their size. Nearly half the stocks in the S&P 500, meanwhile, are down for the year so far.

Thursday offered a good example. The biggest forces pushing the S&P 500 upward included Apple, Microsoft and Nvidia. Big Tech gained as expectations built for the Fed to take a pause on rates next week.

That was because a report showed the highest number of U.S. workers applied for unemployment benefits last week since October 2021. A cooling labor market could push against pressure that may have built for tougher policy after central banks in Canada and Australia hiked their own interest rates recently.

But the S&P 500 was nearly split between winners and losers. Smaller stocks in the Russell 2000 index, meanwhile, slipped 0.4%.

The arrival of a bull market also doesn’t mean the stock market has made it back to its prior heights. A 25% drop for the S&P 500 requires a 33% rally to follow in order to just get back to even.

All told, the S&P 500 rose 26.41 points to 4,293.93. The Dow gained 168.59 to 33,833.61, and the Nasdaq rose 133.63 to 13,238.52.

After the unemployment data hit the market, Treasury yields gave up gains from earlier in the morning. The yield on the 10-year Treasury fell to 3.71% from 3.78% late Wednesday. It helps set rates for mortgages and other important loans.

The two-year yield, which moves more on expectations for the Fed, fell to 4.53% from 4.55%.

ASX 200 expected to rebound​

The Australian share market looks set to end the week in a positive fashion following a solid night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 29 points or 0.4% higher this morning.

Stocks rose just enough Thursday for Wall Street to barrel into a new bull market as the S&P 500 keeps rallying off its low from last autumn.

The index rose 0.6% to carry it 20% above a bottom hit in October. That means Wall Street’s main measure of health has climbed out of a painful bear market, which saw it drop 25.4% over roughly nine months.

The Dow Jones Industrial Average added 168 points, or 0.5%. The Nasdaq composite, meanwhile, led the market with a 1% rise. That’s been the norm so far this bull run, as chip maker Nvidia and a handful of other big tech stocks have been responsible for the lion’s share of Wall Street’s gains.

All told, the S&P 500 rose 26.41 points to 4,293.93. The Dow gained 168.59 to 33,833.61, and the Nasdaq rose 133.63 to 13,238.52.


Market Watch

 

[bigdog]

ASX Australia Closed Monday for the Kings Birthday

Stock market today: Wall Street drifts higher, marking 4th winning week for S&P 500

Stocks drifted higher on Wall Street, giving the S&P 500 its fourth winning week in a row. The benchmark index edged up 0.1% Friday. The Dow Jones Industrial Average eked out a gain of 43 points, also 0.1%, and the Nasdaq composite rose 0.2%. Tesla was at the front of the market, rallying 4.1%...

apnews.com

Stock market today: Wall Street drifts higher, marking 4th winning week for S&P 500​

By DAMIAN J. TROISE and STAN CHOE

NEW YORK (AP) — Stocks inched higher Friday to close out a listless week for Wall Street, as investors wait for next week’s slate of potentially market-moving updates.

The S&P 500 rose 4.93, or 0.1%, to 4,298.86 to cap its fourth straight winning week. The Dow Jones Industrial Average added 43.17, or 0.1%, to 33,876.78, and the Nasdaq composite gained 20.62, or 0.2%, to 13,259.14.

Tesla was at the front of the market, rallying 4.1% after announcing General Motors electric vehicles will be able to use much of its extensive charging network beginning early next year. GM rose 1.1%.

Energy stocks fell along with the price of crude oil. Exxon Mobil slipped 0.7% and was one of the heavier weights on the market. Ski resort operator Vail Resorts dropped 7.1% after reporting weaker results for the latest quarter than analysts expected.

This week has been relatively quiet for markets, even with the benchmark S&P 500 index gaining enough Thursday to close 20% above its October low, entering a new bull market. More fireworks could arrive next week when the U.S. government releases the latest monthly updates on inflation at the consumer and wholesale levels. The Federal Reserve will also announce its latest move on interest rates.

So far, the economy has been able to avoid a recession even though the Fed has jacked rates up at a furious pace for more than a year in hopes of driving down inflation. The highest rates since 2007 have helped inflation come down some, but it’s still above everyone’s comfort level.

That means the big question on Wall Street is whether inflation will come down quickly enough for the Fed to take it easier on interest rates before high rates force the economy into a recession. A stronger-than-expected report on hiring last week raised hopes that the economy can slide through its troubles without a recession, but many other areas have already begun to crack.

Besides helping to cause three-high profile U.S. banking failures since March, high interest rates have also pushed the manufacturing industry to shrink for months. The banking industry’s turmoil has also caused banks to make it tougher for customers to get loans, which adds more stress to the economy

“I can’t tell you precisely when this recession will come to roost, but it feels likes it’s coming,” said Amanda Agati, chief investment officer of PNC Asset Management Group. “And the market is not priced for it. I don’t want to be dramatic and say a day of reckoning is coming, but there will be a wakeup call.”

She’s expecting only a modest recession, not a deeply painful one like the downturns following the 2007-08 financial crisis and the 2020 onset of the COVID pandemic. But she is concerned by how high the stock market has climbed, driven in particular by just a small handful of stocks.

“This is the market thinking we’re going to muddle along and then the Fed is going to get out of the driver’s seat: The Fed is going to cut rates, and we’re going to power into 2024,” Agati said. “And I think that’s awfully delusional.”

She says rates could climb higher than Wall Street expects and stay high for longer than investors are forecasting because inflation has remained too stubbornly high.

The wide expectations among traders is that the Fed will hold interest rates steady at its meeting next week. If it does, that will be the first meeting where the Fed hasn’t hiked rates in more than a year. After that, the widespread bet is that the Fed may hike one more time in July before going on hold or even cutting rates by the end of the year.

Elsewhere on Wall Street, Adobe rose another 3.4% to add to its 5% leap from the day before following its announcement of a new artificial-intelligence offering for businesses. It joined a frenzy around AI that has sent a select group of stocks soaring, such as a 165% surge for chipmaker Nvidia so far this year.

Proponents say AI will be the next revolution to remake the economy, while critics say it’s inflating the next bubble.

In the bond market, the yield on the 10-year Treasury rose to 3.74% from 3.72% 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 4.62% from 4.52%.

 

[bigdog]

ASX Australia was closed yesterday for the Kings Birthday

Stock market today: Asia markets higher ahead of US inflation, Fed rates decision

Asian stock markets are mostly higher ahead of a U.S. inflation update and a Federal Reserve decision on another possible interest rate hike.

apnews.com

Stock market today: Wall Street rises, and S&P 500 hits highest level in more than a year​

By STAN CHOE

NEW YORK (AP) — Wall Street climbed Monday ahead of a big week for central banks around the world, vaulting the S&P 500 to its highest level in more than a year.

The benchmark index rose 40.07 points, or 0.9%, to 4,338.93 and its highest close since April 2022. The Dow Jones Industrial Average gained 189.55, or 0.6%, to 34,066.33, while the Nasdaq composite rallied 202.78, or 1.5%, to 13,461.92.

The U.S. stock market has been cruising on hopes the economy may avoid a recession and the Federal Reserve may soon take it easier on its hikes to interest rates. Traders are betting the Fed will hold rates steady at its next meeting, which concludes on Wednesday. That would be the first time it hasn’t hiked rates at a meeting in more than a year.

Investors see high-growth stocks as some of the biggest beneficiaries of lower rates, and they led the market Monday. Tech stocks alone accounted for more than half the S&P 500′s gain, powered by gains of at least 1.5% for both Microsoft and Apple.

Cruise operator Carnival, meanwhile, rode a 12.5% upswell as analysts upgraded its stock on signs demand remains steady for the industry and that pricing is holding up. It helped overshadow losses elsewhere in the market, including an 11.8% fall for Nasdaq, the exchange company that’s pushing more into technology. It said it would buy Adenza, a risk management and regulatory software provider, for $10.5 billion in cash and stock.

A halt or a pause by the Fed to rate hikes would give the economy and financial markets some breathing room. The Fed has already pulled rates to their highest level since 2007 in hopes of driving down inflation, and the increases have helped cause high-profile U.S. bank failures and a monthslong contraction in the manufacturing industry.

This week will also see the latest updates on inflation across the economy. On Tuesday, economists expect a report to show prices for consumers were 4.1% higher in May than a year earlier. That’s way above the Fed’s target of 2% inflation, but it would be down from 4.9% in April and a peak of more than 9% last June.

Because prices were already much higher a year ago due to the worst inflation in 40 years, further increases in upcoming months may not appear quite so dramatic. Inflation could fall to 3.2% in June, and the next two months could see one of the biggest drops in inflation over a two-month period over the last 70 years, according to Jonathan Golub, chief U.S. equity strategist at Credit Suisse.

But much of that easing would simply be because of how high prices had already climbed, and Wall Street traders are still bracing for the Fed to resume hiking rates in July. The question is how much further it will go beyond that.

The Fed is in a tight spot because any increases to rates could mean more pressure on the U.S. banking system. It’s still absorbing all the past rate increases, which have caused customers to yank bank deposits as they herd into higher-yielding money-market funds. Higher rates have also forced down the values of bonds banks bought when interest rates were low

“While incoming data point to resilience in activity and stickiness in inflation, the Fed appears to want additional time to monitor policy lags and regional bank stress,” Michael Gapen and other economists wrote in a BofA Global Research report.

They see a June pause by the Fed as a close call. Recent surprise hikes by central banks in Canada and Australia show a move higher could still happen, but Gapen said the Fed doesn’t usually hike rates when the widespread assumption on Wall Street is for a hold. That may change if Tuesday’s inflation report comes in hotter than expected.

Besides the Federal Reserve, central banks in Europe and Japan will also be meeting this week on interest rates.

In the bond market, the yield on the 10-year Treasury slipped to 3.73% from 3.74% late Friday. It helps set rates for mortgages and other important loans.

The two-year Treasury yield, which moves more on expectations for the Fed, fell to 4.57% from 4.60%.

In stock markets abroad, European indexes were modestly higher after Switzerland’s UBS said it has completed its takeover of embattled rival Credit Suisse in a government-arranged rescue combining the country’s two largest banks to safeguard the country’s reputation as a global financial center and choke off market turmoil.

In Asia, stock indexes were mixed.

ASX 200 expected to edge higer​

The Australian share market looks set to edge higher this morning after a strong start to the week in the US. According to the latest SPI futures, the ASX 200 is poised to open the day 25 points or 0.4% higher.

Wall Street climbed Monday ahead of a big week for central banks around the world, vaulting the S&P 500 to its highest level in more than a year.

The benchmark index rose 40.07 points, or 0.9%, to 4,338.93 and its highest close since April 2022. The Dow Jones Industrial Average gained 189.55, or 0.6%, to 34,066.33, while the Nasdaq composite rallied 202.78, or 1.5%, to 13,461.92.


Market Watch

 

[bigdog]

Stock market today: Asian stocks follow Wall St higher as US inflation cools

Asian stock markets have followed Wall Street higher after a cooler reading on U.S. inflation fueled hopes the Federal Reserve will postpone a possible interest rate hike.

apnews.com

Stock market today: Wall Street rises as inflation keeps cooling​

By STAN CHOE

NEW YORK (AP) — Stocks climbed Tuesday after a cooler reading on inflation cemented Wall Street’s bet that the Federal Reserve will hold off on hiking interest rates this week.

The S&P 500 rose 30.08 points, or 0.7%, to 4,369.01, its highest level since April 2022. The Dow Jones Industrial Average gained 145.79, or 0.4%, to 34,212.12, while the Nasdaq composite rallied 111.40, or 0.8%, to 13,573.32.

The U.S. stock market has been on a roll amid hopes the economy can avoid a severe recession and inflation can fall enough for the Federal Reserve to ease off its rate increases. Tuesday’s report showed that food, fuel and other prices for consumers were 4% higher in May than a year earlier, the latest slowdown from inflation’s peak of 9.1% last summer.

The data pushed traders to immediately amp up bets for the Fed on Wednesday to announce no change to interest rates. If it does, that would mark the first meeting in more than a year where it doesn’t hike rates.

The Fed has already pulled its benchmark short-term rate up to its highest level since 2007, which has slowed inflation but has also helped cause several U.S. bank failures and a contraction in the manufacturing industry.


Nvidia rallied 3.9% and was the strongest force pushing up the S&P 500, along with other technology stocks. Tech and other high-growth stocks are seen as some of the biggest beneficiaries of an ease up on rate hikes.

Nvidia has gotten an added boost from Wall Street’s recent frenzy around artificial intelligence, which has helped a select group of stocks soar to huge gains this year.

But unlike earlier this year, when a small cadre of stocks was responsible for most of the S&P 500’s gains, Tuesday’s climb was widespread, with four out of five stocks in the index rising.

Raw-material producers and industrial companies had some of the biggest gains in the S&P 500 amid hopes for a resilient economy. Miner Freeport-McMoRan rose 5.3%, and United Airlines climbed 3.7%, for example.

For all the optimism, though, much of Wall Street doesn’t believe the end has arrived yet for rate hikes. Many traders expect the Fed to resume raising rates in July, even if it holds steady this week.

Tuesday’s inflation report showed that overall inflation still too high, as are price gains underneath the surface. The Fed prefers to look at inflation after stripping out food, fuel and housing costs, hoping to get a better view of where the trend is heading. Such “supercore” inflation is still above the Fed’s comfort level.

The worry is that additional hikes by the Fed will mean more pressure on the U.S. banking system when it’s already cracked under higher rates. Bank customers are pulling deposits in search of higher yields at money-market funds. At the same time, higher rates are knocking down the values of bonds that banks bought and other investments they made when rates were low.

Three high-profile U.S. bank failures since March have shaken confidence in the system, causing some banks to toughen lending standards for households and businesses. That puts additional brakes on the economy, raising the risk of a recession.

Zions Bancorp. fell 1.6% after it appeared to cut its forecast for upcoming net interest income in an investor presentation.

Just two weeks remain until the start of the third quarter of the year. That’s notable because many investors came into this year predicting a recession would hit in the third quarter, yet the job market has remained remarkably resilient and propped up the economy.

“Today, the recession has not arrived, and we are witnessing that reckoning in public market equity valuations via the recent rally,” said Alexandra Wilson-Elizondo, deputy chief investment officer of multi asset solutions at Goldman Sachs Asset Management.

But that doesn’t mean the economy is in the clear. “With inflation stubbornly high, we do see the business cycle eventually ending in recession, as the Fed will have to break the back of the labor market to make material progress toward their 2% target” on inflation, she said.

In the bond market, yields initially dropped after the inflation report, but later recovered. The yield on the 10-year Treasury rose to 3.83% from 3.74% late Monday. It helps set rates for mortgages and other important loans.

The two-year yield, which moves more on expectations for the Fed, rose to 4.69% from 4.58%.

In markets abroad, Hong Kong’s Hang Seng rose 0.6% after China’s central bank lowered its one-week lending rate for the first time since last summer. That appeared to reflect official concern about the health of China’s economic recovery after growth in factory and consumer activity weakened.

The support from the world’s second-largest economy helped to push up the price of crude oil, which has struggled over the last year on worries about weaker demand. A barrel of U.S. crude rose $2.30 to $69.42. Brent crude, the international standard, gained $2.45 to $74.29 per barrel.

ASX 200 expected to rise​

The Australian share market looks set to rise again on Wednesday following a decent night on Wall Street thanks to a lower than expected inflation reading. According to the latest SPI futures, the ASX 200 is expected to open the day 44 points or 0.6% higher this morning.

Stocks climbed Tuesday after a cooler reading on inflation cemented Wall Street’s bet that the Federal Reserve will hold off on hiking interest rates this week.

The S&P 500 rose 30.08 points, or 0.7%, to 4,369.01, its highest level since April 2022. The Dow Jones Industrial Average gained 145.79, or 0.4%, to 34,212.12, while the Nasdaq composite rallied 111.40, or 0.8%, to 13,573.32.


Market Watch

 

[bigdog]

Stock market today: Asia shares rise as Fed holds rates steady while hinting of hikes ahead

Asian shares are mostly higher after the U.S. Federal Reserve held interest rates steady. Benchmarks rose in Tokyo, Sydney, Hong Kong and Shanghai in morning trading, but fell in Seoul.

apnews.com

Stock market today: Wall Street swings to mixed close as Fed hints of rate hikes to come​

By STAN CHOE

NEW YORK (AP) — Wall Street swung to a mixed finish after the Federal Reserve hinted it may raise interest rates two more times this year, even as it held them steady Wednesday.

The S&P 500 finished the day 0.1% higher after pinballing between gains and losses following the Fed’s announcement. The Dow Jones Industrial Average dropped 232 points, or 0.7%, while the Nasdaq composite rose 0.4%.

The Fed closed its latest policy meeting by saying it would keep rates where they are, to give more time to see how its fusillade of hikes over the last 15 months is affecting the economy. It’s attempting the excruciating balancing act of slowing the economy just enough through rate increases to snuff out high inflation, but not so much as to break the job market and create a recession.

Standing pat would give the economy more time to absorb all the past rate hikes, and Fed Chair Jerome Powell said “ideally by taking a little more time, we won’t go well past the level where we need to go.” That would provide some breathing room for the economy and financial markets.

But at the same time, the majority of Fed policy makers also indicated Wednesday they expect its main interest rate to climb at least 0.50 percentage points by the end of the year. The federal funds rate is already at its highest level since 2007, in a range between 5% and 5.25%.

Even though inflation has slowed since last summer’s peak, Powell said there hasn’t been enough improvement in underlying trends to feel comfortable. He said one measure the Fed closely watches remains “far above our target and not really moving down. We want to see it moving down decisively, that’s all.”

Many traders on Wall Street came into Wednesday bracing for just one more hike this year, if any. The threat of a more aggressive Fed than expected initially sent prices tumbling for all kinds of investments.

“I do feel like things are slowly tightening, just not as fast as the Fed needs it to cause inflation to get down to their number,” said Brian Rehling, head of global fixed-income strategy at Wells Fargo Investment Institute. “The job market really has to weaken, that’s what the Fed needs.”

Brian Jacobsen, chief economist at Annex Wealth Management, said, “If they do restart their hikes and squeeze in not just one but two hikes this year, then they do risk bigger problems for the economy.”

In anticipation of future increases to rates, yields in the bond market rose following the Fed’s announcement. The 10-year yield climbed as high as 3.83% from 3.77% just before the Fed’s announcement.

It later receded to 3.79%, compared with 3.82% late Tuesday. That yield helps set rates for mortgages and other important loans.

The two-year Treasury yield, which moves more on expectations for the Fed, climbed to 4.68% from 4.67% late Tuesday and was as high as 4.78%.

Stock indexes initially sank in unison following the Fed’s announcement amid worries about higher rates, which not only slow the economy but also drag down prices of stocks, bonds and other investments.

But they pared their losses, and bond yields gave back gains as Powell spoke at a press conference, saying no decisions on upcoming rate hikes had been made and that the Fed’s next meeting in July is “live.”

“I just think the markets, and I think it’s incorrect, have a view that inflation is going to come down far enough that the Fed is going to capitulate” and halt its rate hikes and even begin cutting them, said Rehling of Wells Fargo Investment Institute. “I just don’t think that’s the case.”

“The market just wants to go up. I don’t know if people are just kind of tired of waiting for the recession, waiting for the downturn. I’m not sure what it is.”

Some of the sharpest drops in the stock market came from several health insurers after UnitedHealth Group flagged how many customers were getting knee procedures and other outpatient services done. That’s something that could raise costs for insurers, and UnitedHealth fell 6.4%. Humana dropped 11.2%.

Stocks of companies that make products used in hip replacements and other health procedures, meanwhile, were at the front of the market. Stryker rose 4.2%, and Boston Scientific gained 4.2%.

All told, the S&P 500 rose 3.58 points to 4,372.59. The Dow dropped 232.70 to 33,979.33, and the Nasdaq gained 53.16 to 13,626.48.

Wednesday marked the first time in more than a year where the Fed has not hiked rates at a meeting, after calls for a pause climbed as high rates have already caused damage in several corners of the economy.

Hikes to interest rates take a notoriously long time to take effect, and they can do so in unanticipated ways. Already, they’ve helped lead to three high-profile failures in the U.S. banking system, a monthslong contraction in the manufacturing industry and worries about a possible recession.

But inflation is still too high for comfort. It’s hurting all kinds of households, particularly those with lower incomes.

In stock markets abroad, indexes rose modestly in Europe and ended mixed across Asia. Japan’s Nikkei 225 rose 1.5%, continuing a strong run where it’s already jumped more than 28% this year.

ASX 200 expected to rise​

The Australian share market is expected to have a decent session on Thursday after a relatively 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% higher this morning.

Wall Street swung to a mixed finish after the Federal Reserve hinted it may raise interest rates two more times this year, even as it held them steady Wednesday.

The S&P 500 finished the day 0.1% higher after pinballing between gains and losses following the Fed’s announcement. The Dow Jones Industrial Average dropped 232 points, or 0.7%, while the Nasdaq composite rose 0.4%.

All told, the S&P 500 rose 3.58 points to 4,372.59. The Dow dropped 232.70 to 33,979.33, and the Nasdaq gained 53.16 to 13,626.48.


Market Watch

 

[bigdog]

Stock market today: Asian shares track Wall Street rally, Bank of Japan stands pat

Shares are mostly higher in Asia after a broad-based rally on Wall Street. Tokyo, Hong Kong, Shanghai and Sydney all logged moderate gains.

apnews.com

Stock market today: Wall Street jumps, and its winning streak kicks into a higher gear​

By STAN CHOE and DAMIAN J. TROISE

NEW YORK (AP) — Stocks swept higher Thursday, revving the longest rally for Wall Street in a year and a half into a higher gear.

The S&P 500 rallied 1.2% to reach heights untouched since April 2022. The Dow Jones Industrial Average climbed 428 points, or 1.3%, while the Nasdaq composite rose 1.1%.

Homebuilder Lennar helped lead the S&P 500 with a gain of 4.4% after reporting stronger profit and revenue for the latest quarter than expected. It also gave a better-than-expected forecast for upcoming deliveries, saying customers are accepting the “new normal” of higher interest rates.

The stock market is still absorbing the Federal Reserve’s warning from a day earlier that it could raise interest rates two more times this year in its battle against inflation. It’s already hiked its benchmark rate to the highest level since 2007, which has helped slow inflation somewhat but has also caused severe pain in some areas of the economy.

The Fed is trying to find the right level for rates where it can slow spending by Americans enough to get inflation under control but not so much that it causes a deep recession. Economic reports on Thursday offered a mixed picture of how that effort is going.

But for a market that’s been relentlessly rising, that was enough to firm hopes that the Fed may end up raising rates only once this year and that the economy can skirt a painful recession.

“Today’s mixed economic data probably won’t provide much clarity for investors wondering what to make of the Fed’s mixed message from Wednesday,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office.

Treasury yields fell immediately following the reports. In the stock market, meanwhile, a wide range of stocks climbed to quell some criticism that this year’s rally has been due to only a handful of companies benefitting from the frenzy around artificial intelligence.

“The Fed remains data and event dependent, so investors globally will need to be so as well,” said John Vail, chief global strategist at Nikko Asset Management.

Thursday’s headline economic report showed that sales at U.S. retailers unexpectedly strengthened last month, when economists were forecasting a drop. That could be a sign that spending by consumers overall is holding up despite more expensive rates on credit cards and other loans.

But underneath the surface, the numbers were a touch weaker than expected after ignoring sales of autos, fuel and some other areas. Those numbers feed into the U.S. government’s estimates for the overall economy’s growth.

A separate report said slightly more workers applied for unemployment benefits last week than expected. Though the number is still relatively low compared with history, a tick higher could be a sign that a remarkably resilient job market is finally starting to loosen following the Fed’s barrage of rate hikes since early last year.

In manufacturing, the impact of higher rates has been more clear. The industry has been contracting for months, though it accounts for only a relatively small part of the economy.

One report Thursday said manufacturing activity in the mid-Atlantic region suffered its 10th straight month of contraction. Another, though, said sentiment among manufacturers in New York state unexpectedly improved this month

Treasury yields slumped after the reports. The yield on the 10-year Treasury fell to 3.72% from 3.79% late Wednesday. It helps set rates for mortgages and other important loans.

The two-year yield, which moves more on expectations for the Fed, fell to 4.64% from 4.69% late Wednesday.

Even though the Fed warned Wednesday that it may hike rates twice more this year, it also let a meeting pass without raising rates for the first time in more than a year. In another upside for markets, the Fed said it hasn’t made any final decision yet on whether to keep raising rates.

That helped the S&P 500 to close Thursday with a sixth straight gain, its longest winning streak since late 2021. The stock market has leaped nearly 24% since hitting a bottom last October, as the economy has so far avoided a recession and inflation has come down from its peak last summer.

The S&P 500 rose 53.25 points to 4,425.84. The Dow gained 428.73 to 34,408.06, and the Nasdaq climbed 156.34 to 13,782.82.

Much attention is on the Fed’s next meeting, which will run from July 25-26. The bet on Wall Street is that it will raise rates next month, but traders at the moment are mostly convinced that will be the last increase of the year, according to data from CME Group.

Before that meeting, relatively few high-profile economic reports will be arrive that could sway the Fed’s thinking. Among them are the next monthly updates on the job market and inflation at the consumer level. Companies will also begin reporting in early July how much profit they made during the spring.

The Fed isn’t alone in keeping the pressure up on interest rates in order to battle inflation. The European Central Bank raised rates on Thursday and pledged more may be on the way, including at its next meeting in July.

Asian stocks were mixed. Chinese indexes rose amid hopes for more stimulus from its central bank as the recovery from anti-COVID restrictions for the world’s second-largest economy stumbles. Such hopes also boosted prices for crude oil by more than 3%.

ASX 200 expected to rise again​

The Australian share market looks set to end the week in a positive fashion following a strong night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 29 points or 0.4% higher this morning.

Stocks swept higher Thursday, revving the longest rally for Wall Street in a year and a half into a higher gear.

The S&P 500 rallied 1.2% to reach heights untouched since April 2022. The Dow Jones Industrial Average climbed 428 points, or 1.3%, while the Nasdaq composite rose 1.1%.

The S&P 500 rose 53.25 points to 4,425.84. The Dow gained 428.73 to 34,408.06, and the Nasdaq climbed 156.34 to 13,782.82


Market Watch

 

[bigdog]

Stock market today: Wall Street slips, and its best week since March comes to a quiet close

Wall Street closed out its best week since March on a quiet note. The S&P 500 fell 0.4% Friday after wobbling up and down through the day.

apnews.com

Stock market today: Wall Street slips, and its best week since March comes to a quiet close​

By DAMIAN J. TROISE

NEW YORK (AP) — Wall Street closed out its best week since March with a quiet finish on Friday, and stocks drifted to modest losses.

The S&P 500 fell 16.25 points, or 0.4%, to 4,409.59 after wobbling through the day. It still closed out a fifth straight winning week for its longest such streak since November 2021, and it remains close to its highest level since April 2022.

The Dow Jones Industrial Average slipped 108.94, or 0.3%, to 34,299.12, and the Nasdaq composite fell 93.25, or 0.7%, to 13,689.57.

Humana dropped 3.9% for one of the S&P 500′s sharpest losses after becoming the latest health insurer to warn about rising costs because of pent-up demand for medical services. Health insurance giant UnitedHealth issued a similar warning earlier in the week.
Treasury yields rose. The yield on the 10-year Treasury note rose to 3.76% from 3.72% late Thursday.

The yield on the two-year Treasury, which moves more on expectations for the Federal Reserve, rose to 4.72% from 4.65%.

The Fed held its benchmark interest rate steady at its meeting this week, but warned that it could raise rates twice more this year. The central bank’s next meeting will run from July 25-26, and Wall Street is betting that it will raise rates. Traders are also mostly convinced that will be the last increase of the year, according to data from CME Group.

Before taking its pause this week, the Fed had raised interest rates at 10 straight meetings since March 2022. Its goal has been to slow the economy to cool inflation but not so much that it causes a recession.

“The idea that the Fed is pausing and taking time to see what the cumulative effect is on the economy from a policy standpoint, is the right move for them,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

The S&P 500 has ripped nearly 15% higher this year because of rising hopes that the Federal Reserve will end its hikes to interest rates soon as inflation cools and that the economy will avoid a severe recession. Most of Wall Street’s gains have come from big tech stocks, the ones that would benefit most from easier rates.

The Fed’s latest meeting was preceded on Tuesday by a report showing that inflation continued cooling in May.

A closely watched survey on Friday suggested U.S. consumers are also paring back their expectations for upcoming inflation. That’s key for the Federal Reserve, which doesn’t want high expectations for inflation to kick off a vicious cycle that worsens it. The preliminary reading from the University of Michigan’s survey also suggested consumer sentiment is strengthening more than expected.

Overall, investors contended with a mixed batch of economic updates this week. Sales at U.S. retailers unexpectedly strengthened in May.

The resilient employment market showed some signs of weakening as slightly more workers applied for unemployment last week than expected. The manufacturing industry, meanwhile, continued contracting under the impact of higher interest rates.

Wall Street has also been closely monitoring the latest statements from companies to get a better sense of where the economy is headed. Analysts have been warning of a potential recession this year, but the economy has so far been strong enough to resist. Several industries, though, have been warning about waning demand that could linger through the year.

Chemical company Cabot slumped 8.1% after it said soft demand worldwide, and especially in China, will hurt profits this year.
Software maker Adobe rose 0.9% after reporting solid financial results and raising its profit forecast.

Markets in Europe and Asia gained ground.

Investors have a considerably quieter week ahead, with just a few economic updates on the housing market. U.S. financial markets will be closed Monday in observance of Juneteenth.

 

[bigdog]

ASX 200 expected to edge lower​

The Australian share market is expected to give back some of Friday’s gains today following a poor finish to last week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 3 points lower on Monday.

Wall Street closed out its best week since March with a quiet finish on Friday, and stocks drifted to modest losses.

The S&P 500 fell 16.25 points, or 0.4%, to 4,409.59 after wobbling through the day. It still closed out a fifth straight winning week for its longest such streak since November 2021, and it remains close to its highest level since April 2022.

The Dow Jones Industrial Average slipped 108.94, or 0.3%, to 34,299.12, and the Nasdaq composite fell 93.25, or 0.7%, to 13,689.57.


Market Watch

 

[Skate]

The NYSE is closed on Monday, June 19, 2023, in recognition of Juneteenth National Independence Day
Juneteenth is a celebration of Black history and freedom whose celebration for years went relatively unnoticed by White Americans. It rose in prominence following 2020’s sweeping protests against racial injustice, when dozens of corporations moved to give their employees the day off. In 2021, Congress designated it a federal holiday.

Skate.

 

[bigdog]

The NYSE was closed on Monday, June 19, 2023, in recognition of Juneteenth National Independence Day (Thank you Skate)

Stock market today: Asian shares mostly slip after US markets were closed for a national holiday

Asian shares are mostly lower as some investors take a wait-and-see attitude after U.S. markets were closed for a national holiday.

apnews.com

Stock market today: World follows Wall St lower as Chinese leader meets top US diplomat​

By JOE McDONALD

BEIJING (AP) — Global stock markets followed Wall Street lower Monday after the top U.S. diplomat met China’s leader but the two sides gave no sign of progress on an array of conflicts.

London and Paris opened lower. Shanghai, Tokyo and Hong Kong retreated. U.S. markets are closed Monday for a holiday. Oil prices fell.

Wall Street’s benchmark S&P 500 index lost 0.4% on Friday after the Federal Reserve held its benchmark lending rate steady but warned it might be raised later if needed to cool inflation.

Xi Jinping met Secretary of State Antony Blinken after what the Chinese government said were “candid and in-depth” talks with foreign affairs officials at a time when relations are at their lowest point in decades. They indicated willingness to cooperate on major issues.

“Whether that will lead to any actual positive outcomes still awaits to be seen,” said Yeap Jun Rong of IG in a report. “Any inaction on that front could still see any optimism fizzle out eventually.”

In early trading, the FTSE 100 in London lost 0.4% to 7,608.25. The DAX in Frankfurt retreated 0.6% to 16,268.19 and the CAC 40 in Paris declined 0.5% to 7,345.33.

On Wall Street, futures for the S&P 500 and Dow Jones Industrial Average were off less than 0.1%.

On Friday, the Dow slipped 0.3% and the Nasdaq composite fell 0.7%.

The S&P 500 is near a 14-month high, having risen 15% this year.

In Asia, the Shanghai Composite Index lost 0.5% to 3,255.80 after Xi and Blinken met.

Xi said in a statement that the two sides “agreed to follow through the common understandings” he and President Joe Biden agreed to at a December meeting in Indonesia.

It gave no indication of progress on disputes about Taiwan, human rights, technology and security that have chilled relations and disrupted trade in semiconductors and some other goods.

The Nikkei 225 in Tokyo tumbled 1% to 33,370.42 and the Hang Seng in Hong Kong fell 0.6% to 19,912.89.

The Kospi in Seoul retreated 0.6% to 2,609.50 while Sydney’s S&P-ASX 200 gained 0.6% to 7,294.90.

India’s Sensex shed 0.3% to 63,224.32. New Zealand and Southeast Asian markets declined.

Last week, the Fed held its benchmark lending rate steady, the first time in 10 straight monthly meetings it hasn’t announced an increase.

The Fed warned, however, that it could raise rates as often as two more times this year. Wall Street is betting on a rate hike at its next meeting on July 25-26.

A survey Friday suggested U.S. consumers are paring back expectations for upcoming inflation. The preliminary reading from the University of Michigan survey also suggested consumer sentiment is strengthening more than expected.

In energy markets, benchmark U.S. crude lost 16 cents to $71.77 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.16 on Friday to $71.78. Brent crude, the price basis for international oil trading, declined 17 cents to $76.44 per barrel in London. It gained 94 cents in the previous session to $76.61.

The dollar rose to 141.89 yen from Friday’s 141.80 yen. The euro fell to $1.0921 from $1.0943.

ASX 200 expected to rise again​

The Australian share market looks set to rise this morning despite a poor trading in the US on Friday. According to the latest SPI futures, the ASX 200 is poised to open the day 12 points or 0.2% higher.

Market Watch

The NYSE was closed on Monday, June 19, 2023,

Rest of World Trading

 

[bigdog]

Stock market today: Asian shares mostly lower, tracking Wall Street retreat

Shares are mostly lower in Asia after Wall Street benchmarks retreated following the S&P 500's rise to its highest level since the spring of last year.

apnews.com

Stock market today: Wall Street falls and takes a step back after its big rally​

By STAN CHOE

NEW YORK (AP) — Stocks pulled back Tuesday in their first trading after a five-week rally carried Wall Street to its highest level since the spring of last year.

The S&P 500 fell 20.88 points, or 0.5%, to 4,388.71. The Dow Jones Industrial Average dropped 245.25, or 0.7%, to 34,053.87, and the Nasdaq composite lost 22.28, or 0.2%, to 13,667.29.

The U.S. stock market took a step back following many steps forward on hopes the economy can avoid a recession and inflation is easing enough for the Federal Reserve to stop raising interest rates soon. A frenzy around artificial intelligence has also vaulted a select group of tech stocks to huge gains.

Those hopes are battling against worries that stubborn inflation will force the Fed to keep interest rates higher for longer, which could grind down the economy. With some of the easiest improvements in year-over-year inflation soon to be lapped, a tougher road may be ahead for both the economy and financial markets.

“Leaning on the lessons of the 1970s, the Fed is right to be cautious, even if that represents an inconvenient truth for stock investors,” said Lisa Shalett, chief investment officer of Morgan Stanley Wealth Management.

During the 70s, inflation remained high for much longer than hoped, forcing the Fed to ultimately drive the economy into a painful recession by sharply hiking interest rates.

In China, meanwhile, the world’s second-largest economy is stumbling in its recovery following the relaxation of anti-COVID restrictions.

Stocks in Hong Kong tumbled 1.5% Tuesday after China’s central bank cut interest rates by less than some investors had hoped. Stocks in Shanghai slipped 0.5% amid disappointment Chinese authorities didn’t do more to support one of the world’s main drivers of economic growth.

One of China’s biggest corporations, Alibaba Group, also fell after it shook up its top management and announced a new chief executive officer. Its stock trading in the U.S. dropped 4.5%.

Tuesday marked the first trading for Wall Street following a meeting between Chinese leader Xi Jinping and U.S. Secretary of State Antony Blinken. It yielded no signs of progress from either of the world’s largest economies on Taiwan, human rights, technology and other issues of contention.

Most of Wall Street fell, with four out of five stocks in the S&P 500 lower.

Worries about the global economy’s strength dragged down prices for crude oil and stocks of companies that pull it from the ground. Energy stocks fell 2.3% for the largest loss among the 11 sectors that make up the S&P 500. Exxon Mobil fell 2.3%, and Chevron lost 2.3%.

Ball Corp., which makes aluminum cans and other products, dropped 4.2%. It said Tuesday that it’s considering options for its aerospace business but that “there is no certainty that any formal decision will be made.” Its stock had jumped 7.2% Friday following a report that it was looking to sell the unit.

On the winning side was Dice Therapeutics, which soared 37.2% after Eli Lilly said it would buy the biopharmaceutical company for $2.4 billion in cash. Lilly added 0.9%.

Homebuilders rose after a report showed that U.S. homebuilders broke ground on many more sites last month than economists expected. The number of building permits, an indication of future activity, also accelerated faster than expected.

PulteGroup rose 1.9%, and D.R. Horton gained 1.6%.

In the bond market, the yield on the 10-year Treasury fell to 3.71% from 3.77% late Friday. It helps set rates for mortgages and other important loans.

The two-year yield, which moves more on expectations for the Fed, slipped to 4.68% from 4.72%.

This upcoming week doesn’t have many potentially market-moving events coming off a Monday closure in observance of the Juneteenth national holiday.

Fed Chair Jerome Powell will testify before Congress on Wednesday and Thursday. Last week, the Federal Reserve held its benchmark lending rate steady, the first time in more than a year that it didn’t announce an increase. But it also warned it could raise rates twice more this year.

The Bank of England will meet on interest-rate policy Thursday. Central banks around the world are heading in diverging directions as they battle inflation amid worries about a pressured global economy.

ASX 200 expected to fall​

The Australian share market appears to have run out of steam on Wednesday. According to the latest SPI futures, the ASX 200 is expected to open the day 29 points or 0.4% lower this morning. This follows a poor night on Wall Street.

Stocks pulled back Tuesday in their first trading after a five-week rally carried Wall Street to its highest level since the spring of last year.

The S&P 500 fell 20.88 points, or 0.5%, to 4,388.71. The Dow Jones Industrial Average dropped 245.25, or 0.7%, to 34,053.87, and the Nasdaq composite lost 22.28, or 0.2%, to 13,667.29.

Market Watch

 

[bigdog]

Stock market today: Asian shares mixed after Fed chair inflation comments

Asian shares are trading mixed, echoing the Wall Street trend, after the Federal Reserve chair made comments that indicated inflation still isn't under control.

apnews.com

Stock market today: Drops for tech stocks sap more momentum from Wall Street’s rally​

By STAN CHOE

NEW YORK (AP) — Drops for technology stocks left Wall Street mixed Wednesday and sapped more momentum from its five-week rally.

The S&P 500 fell 23.02, or 0.5%, to 4,365.69. It was a third straight pullback for the index after it rallied last week to its highest level in more than a year.

Weakness for high-growth stocks hit the Nasdaq composite in particular, and it lost 165.09, or 1.2%, to 13,502.20. Still, roughly as many stocks rose as fell on Wall Street, and the Dow Jones Industrial Average dropped by a milder 102.35 points, or 0.3%, to 33,951.52.

Wall Street had been on a tear this year, with the S&P 500 up nearly 14% amid hopes that inflation is coming down quickly enough for the Federal Reserve to stop hiking interest rates soon. That would take pressure off the economy and could allow it to avoid a recession. Some analysts say the rally ran too far, too fast while inflation has remained stubbornly high, which could force the Fed to keep rates higher for longer.

Fed Chair Jerome Powell said Wednesday that “the process of getting inflation back down to 2% has a long way to go.” He said again that a couple more rate increases may be on the way, though the speed of the hikes is likely to slow after moving at a furious speed since early last year.

“Given how far we’ve come, it may make sense to move rates higher but to do so at a more moderate pace,” he said in testimony before a House of Representatives committee. He likened it to slowing from 75 miles per hour on a highway to 50 and then even slower as the destination nears.

High rates have already helped cause three high-profile failures in the U.S. banking system. The banking industry remains under pressure, even after the federal government acted quickly to provide support.

Smaller and regional banks account for about 50% of U.S. commercial and industrial lending, according to Ann Miletti, head of active equity at Allspring Global Investments. And pressure on these banks would make it tougher for smaller and midsized businesses to get loans, which would hurt the economy.

Miletti said she’s leaning toward the probability of a coming U.S. recession because of how much the Fed has already raised rates in such a short time. She said the recession may not be very deep, but it could still last longer than many predict.

“Inflation is retreating,” she said, “but it won’t be a smooth decline.”

In the bond market, yields pared their gains from earlier in the morning. The yield on the 10-year Treasury was holding steady at 3.72%. It helps set rates for mortgages and other important loans

The two-year Treasury yield, which moves more on expectations for the Fed, rose to 4.71% from 4.69% late Tuesday.

Higher interest rates drag on all kinds of stocks, bonds and other investments. But high-growth stocks tend to be some of the hardest hit, and several Big Tech stocks were among the heaviest weights on the market.

Nvidia fell 1.7%, giving back some of its spectacular gains from earlier this year driven by Wall Street’s frenzy around the artificial-intelligence industry. The chip maker is still up nearly 195% for the year so far after saying AI would result in a tremendous leap in its revenue.

Tesla dropped 5.5%, and Microsoft lost 1.3%.

FedEx fell 2.5% after its forecast for upcoming earnings looked low against some analysts’ expectations. That was despite reporting stronger profit for the latest quarter than Wall Street forecast.

On the winning side of Wall Street, Dollar Tree rose 4.6% after it stuck with its forecast for earnings this fiscal year.

Energy stocks also climbed along with oil prices. Exxon Mobil rose 1.1%, and Baker Hughes gained 2.3%.

In markets abroad, stocks continued to tumble in China amid worries about a stumbling recovery for the world’s second-largest economy. The Hang Seng in Hong Kong fell 2% for its second straight sharp drop after the Chinese government cut some interest rates by less than some investors had hoped.

Stocks in Shanghai fell 1.3%, and South Korea’s Kospi sank 0.9%.

In Europe, stock indexes were modestly lower.

The FTSE 100 in London dipped 0.1% after a U.K. report on inflation came in hotter than expected. That raised speculation that the Bank of England will hike interest rates again at its meeting Thursday.

ASX 200 expected to fall​

The Australian share market is expected to have a subdued session on Thursday after a disappointing night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 10 points or 0.1% lower this morning.

Drops for technology stocks left Wall Street mixed Wednesday and sapped more momentum from its five-week rally.

The S&P 500 fell 23.02, or 0.5%, to 4,365.69. It was a third straight pullback for the index after it rallied last week to its highest level in more than a year.

Weakness for high-growth stocks hit the Nasdaq composite in particular, and it lost 165.09, or 1.2%, to 13,502.20. Still, roughly as many stocks rose as fell on Wall Street, and the Dow Jones Industrial Average dropped by a milder 102.35 points, or 0.3%, to 33,951.52.

Market Watch

 

[bigdog]

Stock market today: Asian shares sink as central banks crank interest rates still higher

Asian shares have fallen sharply after several central banks around the world cranked interest rates higher in their fight against inflation.

apnews.com

Stock market today: Wall Street drifts as central banks keep cranking interest rates higher​

By DAMIAN J. TROISE

NEW YORK (AP) — Stocks drifted to a mixed finish on Wall Street Thursday as central banks around the world keep cranking interest rates higher in their fight against inflation.

The S&P 500 rose 16.20, or 0.4%, to 4,381.89, even though the majority of stocks fell. A rebound for technology stocks helped to overshadow losses elsewhere in the market and keep the benchmark index afloat.

The gains for high-growth stocks also drove the Nasdaq composite to a market-leading gain of 128.41 points, or 1%, to 13,630.61. The Dow Jones Industrial Average fell 4.81, or less than 0.1%, to 33,946.71.

The Bank of England hiked its main interest rate by a bigger margin than expected to a 15-year high. Central banks in Norway, Switzerland and Turkey also raised borrowing rates.

In the United States, meanwhile, Federal Reserve Chair Jerome Powell reiterated his belief that inflation is still too high and that further increases to rates may be necessary.

The Fed held interest rates steady at its last meeting after raising rates aggressively throughout 2022 and into 2023 to tame painfully high inflation. Inflation has cooled somewhat since last summer, but the Fed has signaled it may raise rates two more times this year as it tries to push inflation down to its stated goal of 2%.

Powell testified before a Senate committee Thursday, a day after appearing before a House of Representatives committee.

Central banks worldwide have been raising interest rates to make borrowing more difficult and slow economic growth in order to stifle inflation. The strategy risks going too far in stalling growth and dragging economies into a recession. Economists and analysts have been warning that the U.S. could slip into a recession before 2023 ends, but resilient consumer spending and a strong jobs market have been bolstering the economy.

High interest rates, though, have already slowed manufacturing and other parts of the U.S. economy. They’ve also helped cause three high-profile failures in the U.S. banking system. The banking industry remains under pressure, even after the federal government acted quickly to provide support.

Bond yields rose. The yield on the 10-year Treasury rose to 3.79% from 3.73% late Wednesday. It helps set rates for mortgages and other important loans.

Stock indexes in Europe fell following the most recent rate increases. Britain’s FTSE 100 slipped 0.8%. The latest interest rate increase from the Bank of England marked its 13th hike in a row in its effort to combat stubbornly high inflation.

France’s CAC 40 shed 0.8% and Germany’s DAX fell 0.2%.

Markets in Asia were mixed. Hong Kong and Shanghai were closed for the Dragon Boat Festival, a national holiday.

The U.S. stock market has been “taking a little bit of a breather” following a five-week rally, said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. The big focus in the coming weeks will likely be any economic data, including a big report on inflation next week, that could give investors a better sense of how the Fed will proceed.

“The Fed is pretty close to done, if not done already,” he said. “The stock market is in a holding pattern waiting to see new economic data and the Fed’s reaction.”

The Labor Department reported Thursday that the number of Americans applying for unemployment benefits remained elevated last week, a possible sign that the Fed’s rate hikes are beginning to cool a surprisingly resilient labor market.

In the housing industry, sales of previously occupied homes strengthened last month to top economists’ expectations for a slide.

Several companies made big moves on a mix of news. Spirit Aerosystems, a major supplier to the world’s largest aircraft manufacturers, slumped 9.4%. It is suspending operations at a critical Kansas plant after union workers there rejected a proposed four-year contract and authorized a strike.

Office furniture maker Steelcase rose 8.1% after reporting stronger financial results for the latest quarter than expected.

ASX 200 expected to edge lower​

The Australian share market looks set to end the week in a subdued fashion despite a reasonably solid night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 7 points or 0.1% lower this morning.

Stocks drifted to a mixed finish on Wall Street Thursday as central banks around the world keep cranking interest rates higher in their fight against inflation.

The S&P 500 rose 16.20, or 0.4%, to 4,381.89, even though the majority of stocks fell. A rebound for technology stocks helped to overshadow losses elsewhere in the market and keep the benchmark index afloat.

The gains for high-growth stocks also drove the Nasdaq composite to a market-leading gain of 128.41 points, or 1%, to 13,630.61. The Dow Jones Industrial Average fell 4.81, or less than 0.1%, to 33,946.71.


Market Watch

 

[bigdog]

Stock market today: Wall Street falls to close out its first losing week in the last six

Another drop for stocks helped drag Wall Street to its first losing week in the last six. The S&P 500 closed 0.8% lower Friday, pulling back further from last week when it reached its highest level in more than a year.

apnews.com

Stock market today: Wall Street falls to close out its first losing week in the last six​

By STAN CHOE

NEW YORK (AP) — Another drop for stocks on Friday helped drag Wall Street to its first losing week in the last six.

The S&P 500 fell 33.56, or 0.8%, to 4,348.33, pulling back further from last week when it reached its highest level in more than a year. The Dow Jones Industrial Average dropped 219.28, or 0.6%, to 33,727.43, and the Nasdaq composite sank 138.09, or 1%, to 13,492.52.

Overseas markets also fell, while crude oil prices slipped amid worries that a stressed global economy may burn less fuel.

Europe’s economy appears to be weaker than expected, according to a preliminary report measuring manufacturing and services businesses. That added to the week’s hesitance in markets, caused by a crank higher in interest rates by central banks around the world as they try to get high inflation under control. High rates drive down inflation by slowing the economy, which raises the risk of a recession

High interest rates in the United States have already dragged manufacturing and other industries into contraction, while also helping to cause several failures in the banking system that rattled confidence. Federal Reserve Chair Jerome Powell said this week that even though his central bank didn’t raise rates last week, it could still push through a couple more hikes by the end of this year.

Critics have also said the U.S. stock market was due for a breather after it climbed too far, too fast following a rally of more than 20% since mid-October. The S&P 500 just broke its longest weekly winning streak since November 2021.

Much of the exuberance was because the U.S. economy had managed to avoid a recession, even though the Fed hiked rates at a breakneck pace since early 2022. The job market in particular has remained remarkably solid.

Wall Street’s hope has been that slowing inflation could get the Fed to take it easier on rates, while a small cadre of stocks soared to incredible heights amid a frenzy around artificial-intelligence technology.

Wall Street traders for the most part are still expecting fewer rate hikes this year than what the Fed has suggested. They may once again be underestimating the Fed’s resolve, economist Ethan Harris wrote in a BofA Global Research report.

“Early in the hiking cycle, the focus was on avoiding a recession,” he said. “However, with persistently high inflation, the focus has shifted from erring on the side of doing too little to doing too much.”

A preliminary report on Friday indicated the overall U.S. economy is continuing to grow, even though manufacturing is shrinking and its output fell to a five-month low.

“The question remains as to how resilient service sector growth can be in the face of the manufacturing decline and the lagged effect of prior rate hikes,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. “Any further rate hikes will of course have a further dampening effect on this sector which is especially susceptible to changes in borrowing costs.”

A slower economy could mean pressure on demand for energy, and the price for a barrel of benchmark U.S. oil fell 35 cents to $69.16 after paring earlier, sharper losses. Brent crude, the international standard, dipped 29 cents to $73.85 per barrel.

On Wall Street, tech companies were hit hard. Higher interest rates hurt all kinds of investments, from stocks to bonds to crypto, but high-growth stocks tend to be among the most impacted.

A 1.4% drop for Microsoft and 3% fall for Tesla were the two heaviest weights on the S&P 500. Nvidia, one of the biggest beneficiaries of the AI boom, fell 1.9% and was the third-heaviest weight on the index. It’s still up nearly 189% for the year so far.

On the winning side of the stock market Friday was CarMax. It jumped 10.1% after reporting much stronger profit for the latest quarter than analyst expected.

Coinbase rose 6.9% after winning a Supreme Court case. The crypto trading platform wanted to keep a dispute with a customer in arbitration, a process that many companies prefer over lawsuits in courts.

In European stock markets, Germany’s DAX lost 1%, and France’s CAC 40 fell 0.6%. The FTSE 100 in London slipped 0.5%.

On Thursday, the Bank of England hiked its main interest rate by a bigger margin than expected to a 15-year high. It was the central bank’s 13th straight increase. Central banks in Norway, Switzerland and Turkey also raised borrowing rates.

In Asia, Hong Kong’s Hang Seng lost 1.7%. Stocks have slid there as China’s economic recovery stumbles following the relaxation of anti-COVID restrictions.

Japan’s Nikkei 225 dropped 1.5% after its inflation rate came in higher than expected. That added to expectations that its central bank might adjust policies that have kept interest rates ultralow. The Bank of Japan has kept its benchmark interest rate below zero to encourage more investment and spending.

In the bond market, yields dropped as investors looked for safer places to park cash amid worries about the economy. The yield on the 10-year Treasury fell to 3.73% from 3.79% late Thursday. It helps set rates for mortgages and other important loans.

 

[bigdog]

ASX 200 expected to fall again​

The Australian share market is expected to open the week lower following a poor finish to last week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 16 points or 0.2% lower on Monday.

On Friday, another drop for stocks on Friday helped drag Wall Street to its first losing week in the last six.

The S&P 500 fell 33.56, or 0.8%, to 4,348.33, pulling back further from last week when it reached its highest level in more than a year. The Dow Jones Industrial Average dropped 219.28, or 0.6%, to 33,727.43, and the Nasdaq composite sank 138.09, or 1%, to 13,492.52.


Market Watch