NYSE Dow Jones finished today at:

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Stock market today: Asian shares track decline on Wall St as Japan cuts GDP estimate for 2nd quarter

Shares have fallen again in Asia after Japan reported its economy grew less than earlier estimated in the last quarter.

apnews.com

Wall Street stumbles in mixed trading as Big Tech stocks drop again​

By STAN CHOE

NEW YORK (AP) — Wall Street slipped in mixed trading Thursday as the threat of high interest rates continues to dog Big Tech stocks.

The S&P 500 fell 14.34, or 0.3%, to 4,451.14 for its third straight loss. The Nasdaq composite was hit particularly hard by the drop for tech stocks, and it sank 123.64, or 0.9%, to 13,748.83.

The Dow Jones Industrial Average held up better than the rest of the market because it has less of an emphasis on tech, and it rose 57.54 points, or 0.2%, to 34,500.73.

Stocks felt pressure from the bond market, where yields rose earlier in the week after a report showed stronger growth for U.S. services industries last month than economists expected. Yields remained high after a report on Thursday said fewer U.S. workers applied for unemployment benefits last week than expected.

While such reports are encouraging for the economy, indicating a long-predicted recession is not near, they could also keep conditions humming strongly enough to push upward on inflation.

The Federal Reserve has already hiked its main interest rate to the highest level in more than two decades in hopes of slowing the economy enough to drive inflation back down to its 2% target. It’s come close, and inflation has cooled from its peak above 9% last summer. But the worry is that the last percentage point of improvement may be the toughest for the Fed.

“Yes, the economy has slowed and inflation has cooled, but employment continues to be a thorn in the side of the Fed, which has made softening the jobs market the cornerstone of its inflation battle,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office.

High interest rates drag down on prices for every kind of stock. But they tend to most hurt stocks of technology companies and others bid up on expectations for high growth far in the future. Many of those stocks also tend to be the most influential on the S&P 500 because they’re the biggest.

Apple is the dominant force on Wall Street because it’s the most valuable stock, and it fell 2.9% to follow up on its 3.6% drop a day before.

Nvidia sank 1.7% to bring its loss for the week so far to 4.7%. It and a cohort of other stocks in the artificial-intelligence industry have soared this year on expectations that AI could mean explosive future growth in profits.

C3.ai tumbled 12.2% after it said late Wednesday that it no longer expects to be profitable in its final fiscal quarter of the year, as it invests more in opportunities around generative AI. Analysts also pointed to disappointing profit margin levels for the company during its latest quarter, which was the first of its fiscal year.

While the majority of stocks on Wall Street fell, several helped to limit the losses.

WestRock, a maker of containerboard and other packaging, rose 4.2% after Smurfit Kappa Group said it was in discussions to combine the two companies and keep its headquarters in Dublin, Ireland.

Power companies and other stocks seen as steadier investments also held up better than the rest of the market. Utility stocks in the S&P 500 rose 1.3% as a group. That was nearly double the gain of any of the other 10 sectors that make up the index.

In the bond market, the yield on the two-year Treasury initially jumped after the unemployment report but then eased as the day progressed. It slipped to 4.95% from 5.03% late Wednesday, but it remains above the 4.88% level where it started the week. The two-year Treasury yield tends to track expectations for the Fed.

Traders still mostly expect the Fed to stand pat on interest rates at its next meeting later this month. But they’re betting on a roughly 45% chance of another increase by the end of the year, according to data from CME Group.

The yield on the 10-year Treasury, which is the centerpiece of the bond market and helps set rates for mortgages and other important loans, fell to 4.24% from 4.30% late Wednesday.

In stock markets abroad, indexes fell in China following the latest set of discouraging data on the world’s second-largest economy. Hong Kong’s Hang Seng dropped 1.3%, and stocks in Shanghai fell 1.1% after a report said China’s exports fell from year-ago levels for the fourth straight month.

Its economic recovery has fallen well short of expectations after it removed anti-COVID restrictions. That has removed a big engine of growth for the global economy, but it’s also helped to take some pressure off inflation worldwide.

ASX 200 expected to edge higher​

The Australian share market looks set to end the week in a mildly positive fashion following a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 7 points or 0.1% higher this morning.
Wall Street slipped in mixed trading Thursday as the threat of high interest rates continues to dog Big Tech stocks.

The S&P 500 fell 14.34, or 0.3%, to 4,451.14 for its third straight loss. The Nasdaq composite was hit particularly hard by the drop for tech stocks, and it sank 123.64, or 0.9%, to 13,748.83.

The Dow Jones Industrial Average held up better than the rest of the market because it has less of an emphasis on tech, and it rose 57.54 points, or 0.2%, to 34,500.73.

Market Watch

 

[bigdog]

Stock market today: Wall Street closes its worst week in the last 3 with a quiet finish

Stocks drifted to a slightly higher close on Wall Street but still closed out their first losing week in the last three.

apnews.com

Wall Street closes its worst week in the last 3 with a quiet finish​

By STAN CHOE

Stocks edged higher on Friday, but not by enough to keep Wall Street from closing out its first losing week in the last three.

The S&P 500 ticked up 6.35 points, or 0.1%, to 4,457.49 after falling for three straight days. It lost 1.3% for the week, which was shortened by the Labor Day holiday.

The Dow Jones Industrial Average rose 75.86, or 0.2%, to 34,576.59, and the Nasdaq composite added 12.69, or 0.1%, to 13,761.53.

Those indexes also fell for the week because of worries that a too-warm economy will push the Federal Reserve to keep interest rates high for longer. Traders ratcheted back expectations for cuts to rates next year by the Fed, after reports showed the U.S. economy remains resilient despite much higher rates and struggles for other economies around the world.

Such data have pushed yields higher in the bond market, which hurts stock prices. But yields held relatively steady on Friday, helping to keep Wall Street quiet.

The yield on the 10-year Treasury inched up to 4.26% from 4.25% late Thursday. The two-year Treasury yield, which more closely tracks expectations for the Fed, rose to 4.97% from 4.95%.

Companies are basically done with reporting their earnings results for the spring, but a few on Friday made some of the largest moves.

Smith & Wesson Brands jumped 10.8% after the gun maker reported stronger results for the three months through July than analysts expected. The summer is usually a lean season for the company, but its sales rose 35% from a year earlier.

Kroger climbed 3.1% following its earnings report. The grocer’s results for the latest quarter topped analysts’ expectations, but its revenue fell short of expectations.

The company announced with Albertsons an agreement to sell some stores, private-label brands and other assets as they try to get approval from regulators for their proposed merger. Kroger also announced an agreement where it would pay more than $1.2 billion to settle the majority of claims related to opioids that could be brought against it by states, subdivisions and Native American tribes.

The upcoming week could be a busier one for markets globally. The centerpiece is likely the latest monthly update on inflation in the United States, due on Wednesday. Economists expect it to show prices at the consumer level were 3.6% higher in August than a year earlier.

Inflation has been generally cooling since peaking above 9% last summer, but the worry is the last bit of improvement to get to the Fed’s 2% target may prove the most difficult. That’s why strong economic reports recently have unsettled the market. They could be providing fuel for U.S. households to keep spending, which encourages companies to try to push prices up further.

High rates are supposed to slow the economy and hurt the job market, which should ultimately help undercut inflation. But the highest rates in more than two decades have yet to do that with great effect. The threat is that could push the Fed to raise rates again and at the very least to keep them high for longer than investors expect.

In conversations with clients, strategists at Bank of America say they’re hearing the belief that the Fed is done hiking rates and the acceptance that rates will stay higher for longer. “We disagree on the former and agree on the latter,” the strategists led by Mark Cabana wrote in a BofA Global Research report. “Both imply higher rates.”

Bank of America says the slow moderation of the job market could push the Fed to hike rates again in November. Most of Wall Street expects the Fed to stand pat on rates at its next meeting later this month.

Also coming next week will be a decision on rates by the European Central Bank and more data about China’s economy. China’s recovery since removing anti-COVID restrictions has fallen well short of expectations, which has removed a big driver of growth for the global economy but also helped to remove some upward pressure on inflation.

In stock markets abroad, Japan’s Nikkei 225 dropped 1.2% after a report showed the world’s third-largest economy grew at a 4.8% annual pace in the April-June quarter. That’s weaker than an earlier estimate of 6% growth.

Indexes were modestly lower across much of the rest of Asia, though higher across Europe.

 

[bigdog]

ASX 200 expected to rise​

The Australian share market looks set to open the week higher following a decent finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 4 points higher on Monday.

Stocks edged higher on Friday, but not by enough to keep Wall Street from closing out its first losing week in the last three.

The S&P 500 ticked up 6.35 points, or 0.1%, to 4,457.49 after falling for three straight days. It lost 1.3% for the week, which was shortened by the Labor Day holiday.

The Dow Jones Industrial Average rose 75.86, or 0.2%, to 34,576.59, and the Nasdaq composite added 12.69, or 0.1%, to 13,761.53.
Market Watch

 

[bigdog]

Stock market today: Asian shares mostly slide despite Big Tech rally on Wall Street

Asian shares are mostly lower despite a Big Tech rally on Wall Street, as investors look ahead to data on U.S. consumer prices set for later in the week.

apnews.com

Rising Big Tech stocks help Wall Street claw back half its loss from last week​

By STAN CHOE

A rally for Big Tech stocks on Monday helped Wall Street claw back about half its loss from last week.

The S&P 500 rose 29.97, or 0.7%, to 4,487.46, coming off its first losing week in the last three. The Dow Jones Industrial Average gained 87.13 points, or 0.3%, to 34,663.72, and the Nasdaq composite climbed 156.37, or 1.1%, to 13,917.89.

Like last week, some big technology-oriented stocks led the way. Tesla jumped 10.1%, Amazon climbed 3.5% and Meta Platforms rose 3.2%

Tech stocks were at the head of the line leading the market lower last week as yields climbed. Higher yields hurt all kinds of stocks, but high-growth stocks tend to be among the hardest hit. Yields rose last week after reports showed the U.S. economy remains stronger than expected, which could be adding more fuel to pressures keeping inflation high.

This upcoming week will offer a huge data point for the Federal Reserve, which is weighing whether to keep raising interest rates in its effort to get inflation back to 2%. On Wednesday, the U.S. government will offer the latest monthly update on prices consumers are paying across the economy, and the forecast is they were 3.6% higher in August than a year earlier.

The Fed has already hiked its main interest rate to the highest level in more than two decades, and it has said it will make upcoming moves based on how inflation and other parts of the economy perform. Inflation has come down from last year’s peak above 9%, but economists warn the last bit of improvement to get to the Fed’s target could be the most difficult to achieve.

With Fed officials no longer giving speeches ahead of their meeting next week on interest rates, “the data will do all of the talking this week,” economists at Deutsche Bank said in a report.

Those economists say a report on Thursday about inflation at the wholesale level will be nearly as important as the data on inflation at the consumer level. High growth for wages in the health care industry could be pushing upward on inflation there, they say.

A separate report on Thursday will also show how much U.S. households spent at retailers last month. Strong spending there recently has helped the economy avoid a long-predicted recession. But it also could encourage companies to keep trying to raise prices, pushing upward on inflation.

Yields held relatively steady on Monday, with the 10-year Treasury yield up to 4.28% from 4.26% late Friday. The two-year Treasury yield, which moves more closely with expectations for the Fed, rose to 5.00% after drifting through the day, up slightly from 4.99% late Friday.

Most traders expect the Federal Reserve to leave rates where they are at its meeting next week, according to data from CME Group. But many are bracing for another possible hike by the end of this year, while paring expectations for cuts to rates next year.

On Wall Street, Charter Communications rose 3.2% after it announced a deal with The Walt Disney Co. to restore access to ESPN and other channels to its Spectrum video customers. Disney rose 1.2%.

Apple rose 0.7% ahead of a Tuesday event where it’s expected to release its latest iPhone model. How Apple performs has great consequence for the market because it’s the most valuable stock on Wall Street. That means its movements pack more weight on the S&P 500 and other indexes than any other stock.

Qualcomm rose 3.9% after it announced a deal to supply 5G equipment for Apple in its phone launches in 2024 through 2026.

Aerospace company RTX slumped 7.9% after it said a previously announced issue with its Pratt & Whitney aircraft engines could mean a hit of $3 billion to $3.5 billion over the next several years to its operating profit before taxes. It said it will remove up to 700 engines for shop visits in the next few years.

Hostess Brands jumped 19.1% after J.M. Smucker said it will buy the maker of Twinkies and HoHos in a cash-and-stock deal valued at $5.6 billion, including $900 million of net debt.

J.M. Smucker, whose brands run from Folgers to Smucker’s, slumped 7%.

Shares of Chinese e-commerce giant Alibaba that trade in the United States fell 1.5% after it said its former CEO, Daniel Zhang, would step down as head of its cloud-computing unit.

The company has been restructuring after setbacks from regulatory crackdowns on the technology and financial sectors.

In stock markets abroad, Japan’s Nikkei 225 fell 0.4% after Bank of Japan Gov. Kazuo Ueda reportedly hinted at possibly allowing interest rates to rise.

Stock indexes were mixed across the rest of Asia and higher in Europe.

ASX 200 expected to rise again

The Australian share market is set to rise on Tuesday following a strong start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 7 points or 0.1% higher.
A rally for Big Tech stocks on Monday helped Wall Street claw back about half its loss from last week.

The S&P 500 rose 29.97, or 0.7%, to 4,487.46, coming off its first losing week in the last three. The Dow Jones Industrial Average gained 87.13 points, or 0.3%, to 34,663.72, and the Nasdaq composite climbed 156.37, or 1.1%, to 13,917.89.

Like last week, some big technology-oriented stocks led the way. Tesla jumped 10.1%, Amazon climbed 3.5% and Meta Platforms rose 3.2%

Tech stocks were at the head of the line leading the market lower last week as yields climbed.


Market Watch

 

[bigdog]

https://www.usnews.com/news/us/articles/2023-09-12/stock-market-today-asian-shares-trade-mixed-after-big-tech-rally-on-wall-street

Stock Market Today: Wall Street Drifts Lower as Oil Prices Rise and Oracle Weighs on Tech Stocks​

A slide for technology stocks weighed on Wall Street as it prepped for a highly anticipated report on inflation due the next day

A slide for technology stocks weighed on Wall Street Tuesday as the market prepped for a highly anticipated report on inflation due the next day.

The S&P 500 lost 25.56 points, or 0.6%, to 4,461.90. The Dow Jones Industrial Average slipped 17.73, or 0.1%, to 34,645.99, and the Nasdaq composite dropped 144.28, or 1%, to 13,773.61.

Software giant Oracle helped lead the losses for tech stocks after reporting revenue for the latest quarter that fell just short of what analysts expected. Its stock tumbled 13.5%, even though its profit topped expectations. Oracle’s forecast for how much revenue it will make in the current quarter also wasn’t as strong as some analysts expected.

Apple dropped 1.8% after it unveiled the latest models of its phones and other devices. The stock had soared through much of this year, which is crucial for many investors because it has more sway than other stocks on the S&P 500 as Wall Street's most valuable company. But it’s been struggling since the end of July and has reported three straight quarters where its revenue fell from year-earlier levels.

Alphabet, meanwhile, fell 1.2% as an antitrust trial against Google opened in a federal courthouse. It’s the biggest such trial since regulators took Microsoft to court in 1998. The U.S. government is accusing Google of abusing its position as the world’s dominant search engine and forcing consumers to settle for inferior search results.

On the winning side of Wall Street, stocks of oil producers rallied as the price of crude climbed. Exxon Mobil rose 2.9% and was the strongest single force limiting the S&P 500's loss. Occidental Petroleum gained 4.1%. Oil prices have been climbing since the end of June after mostly falling for a year.

Stocks broadly have been see-sawing in recent weeks amid uncertainty about whether the Federal Reserve is done with its avalanche of hikes to interest rates. The central bank has already pulled its main interest rate to the highest level in more than two decades, as it tries to get inflation back down to its target of 2%.

High rates work to undercut inflation by slowing the entire economy and knocking down prices for stocks and other investments.
Several reports coming up this week could sway the Fed’s thinking. On Wednesday will come the latest monthly update on prices that U.S. consumers are paying across the country.

Economists expect it to show that prices were broadly 3.6% higher last month than a year earlier. Inflation has been mostly cooling since peaking above 9% last summer, but economists warn the last bit of improvement may be the most difficult to win.

On Thursday will come reports about inflation at the wholesale level and about sales at U.S. retailers. Strong spending by U.S. households has been a main driver keeping the U.S. economy humming, but it could also be encouraging companies to keep trying to raise their prices further.

Several strong reports on the economy recently have allayed worries about a painful recession, defying long-held predictions. But they also may be adding more fuel to pressures keeping inflation high, which could push the Fed to keep rates higher for longer.

Hopes for a resilient economy mean professional fund managers are globally feeling less pessimistic about stocks. The percentage of their investments in stocks is at a 17-month high, according to a survey by Bank of America, though managers are not going all-in and continue to keep a significant chunk of their portfolios in the safety of cash.

Sixty percent of fund managers say they think the Fed is done hiking rates, investment strategists led by Michael Hartnett wrote in a BofA Global Research report. That’s a sharp turnaround from July, when just 9% were saying that.

Traders overwhelmingly expect next week's meeting for Federal Reserve to end with interest rates staying where they are. But stronger-than-expected reports this upcoming week could sway things for later this year, where traders see a higher risk of another hike to rates.
Traders have also been paring expectations for cuts to interest rates that could occur next year.

In the bond market, the yield on the 10-year Treasury slipped to 4.27% from 4.29% late Friday. The two-year Treasury yield, which moves more on expectations for the Fed, rose to 5.03% from 4.99%.

In stock markets abroad, Japan’s Nikkei 225 jumped 1%, while indexes were weaker across much of the rest of Asia.

Stocks were mixed across Europe. Later this week, the European Central Bank will meet to decide what to do with interest rates for countries that use the euro currency.

ASX 200 expected to fall

The Australian share market looks set to fall on Wednesday following a poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 21 points or 0.25% lower this morning.

A slide for technology stocks weighed on Wall Street as it prepped for a highly anticipated report on inflation due the next day

A slide for technology stocks weighed on Wall Street Tuesday as the market prepped for a highly anticipated report on inflation due the next day.

The S&P 500 lost 25.56 points, or 0.6%, to 4,461.90. The Dow Jones Industrial Average slipped 17.73, or 0.1%, to 34,645.99, and the Nasdaq composite dropped 144.28, or 1%, to 13,773.61.


Market Watch

 

[bigdog]

Stock market today: Asian shares mostly higher after US inflation data ease rate hike worries

Shares are mostly higher in Asia after a highly anticipated report showed inflation accelerated across the U.S. in August, but not by much more than expected.

apnews.com

Wall Street churns to a mixed finish after highly anticipated inflation data​

By STAN CHOE

NEW YORK (AP) — Wall Street churned to a mixed finish on Wednesday after a highly anticipated report showed inflation accelerated across the country last month, but not by much more than expected.

The S&P 500 edged up by 5.54 points, or 0.1%, to 4,467.44 after flipping between small gains and losses a few times through the day. The Dow Jones Industrial Average dropped 70.46 points, or 0.2%, to 34,575.53, and the Nasdaq composite rose 39.97, or 0.3%, to 13,813.59.

The modest moves followed a shaky immediate reaction to the inflation report across financial markets, where bond yields and stock prices swung back and forth several times. The report said U.S. consumers paid prices last month that were 3.7% higher than a year earlier, up from July’s inflation rate of 3.2%.

That’s discouraging for shoppers paying higher prices, but much of the acceleration was because of higher fuel costs, which can swing very sharply and quickly. Ignoring those, underlying inflation trends still look to be pointing toward continued moderation, economists said. Inflation has been generally cooling since peaking above 9% last year.

The inflation report was so highly anticipated because it will help steer what the Federal Reserve does next on interest rates. The Fed has already hiked its main rate to the highest level in more than two decades, which hurts prices for stocks and other investments, and the hope on Wall Street is that inflation has cooled enough for it to be done.

Wednesday’s data likely keeps the Fed on track to keep rates steady at its meeting next week, said Gargi Chaudhuri, head of iShares Investment Strategy, Americas. It could also mean trends continue in such a way that the Fed does not hike rates any more during this cycle.

But she also said expectations among traders on Wall Street for cuts to interest rates next year may be too aggressive. Such cuts can act like steroids for stocks and other investments, but inflation is still above the Fed’s target of 2%.

“If anything, higher headline inflation is proof that the Fed will need to keep rates higher for longer and that heavy rate cuts next year are mispriced,” Chaudhuri said.

Even though economists are willing to ignore fuel costs when looking at inflation to find the underlying trends, households and companies don’t get the same luxury.

Stocks of airlines were some of the biggest losers in the S&P 500 after a couple warned of the hit to profits they’re taking because of higher costs.

American Airlines cut its forecast for profits during the summer because fuel costs are running higher than it expected. It also had to pay about $230 million in retroactive pay to pilots after they ratified a new labor contract. Its stock fell 5.7%.

Spirit Airlines said it’s also paying higher fuel costs this summer than expected, roughly $3.06 per gallon instead of the $2.80 it had earlier forecast. It’s also been seeing steep discounting to fares during the last few weeks. That pushed it to cut its forecast for revenue during the third quarter, and its stock fell 6.3%.

Other airlines also sank, including declines of 3.8% for United Airlines and 2.8% for Delta Air Lines.

On the winning end of Wall Street were high-growth stocks that could be big beneficiaries if the Fed is indeed done hiking interest rates. High rates hurt all kinds of investments, but they often most hurt technology companies and others promising big growth far out in the future.

Amazon climbed 2.6% and was one of the strongest forces pushing upward on the S&P 500. Microsoft gained 1.3%, and Nvidia rose 1.4%.

Moderna rallied 3.2% after it reported encouraging results from a trial of a flu vaccine.

In the bond market, the yield on the 10-year Treasury edged down to 4.26% from 4.27% late Tuesday. It had swung as high as 4.34% immediately after the inflation report.

The two-year Treasury yield, which moves more on expectations for Fed action, slipped to 4.99% from 5.02% late Tuesday. It also leaped earlier and was as high as 5.07% a minute after the inflation report’s release, as traders digested the numbers.

The report said that prices paid by U.S. consumers rose 0.3% in August from July, after ignoring costs for food, gasoline and other energy prices that can swing quickly. That was a touch faster than the 0.2% month-over-month inflation rate that economists expected.

In markets abroad, stock indexes fell modestly across Asia and much of Europe.

ASX 200 expected to edge lower​

The Australian share market looks set to fall again on Thursday following a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 5 points or 0.1% lower this morning.

Wall Street churned to a mixed finish on Wednesday after a highly anticipated report showed inflation accelerated across the country last month, but not by much more than expected.

The S&P 500 edged up by 5.54 points, or 0.1%, to 4,467.44 after flipping between small gains and losses a few times through the day. The Dow Jones Industrial Average dropped 70.46 points, or 0.2%, to 34,575.53, and the Nasdaq composite rose 39.97, or 0.3%, to 13,813.59.


Market Watch

 

[bigdog]

Stock market today: Asian shares gain, led by China after Beijing eases required bank reserves

Asian shares are trading mostly higher, with solid gains for Chinese markets after the central bank eased the reserve requirements for banks.

apnews.com

Wall Street climbs, and Dow rises more than 300 points as stocks worldwide rally​

By STAN CHOE

Wall Street rose Thursday after a blizzard of reports suggested the U.S. economy is still humming, though inflation may be too.

The S&P 500 climbed 0.8% for its best day in two weeks. The Dow Jones Industrial Average rallied 331 points, or 1%, and the Nasdaq composite added 0.8%.

Some of the strongest action was in the bond market, where Treasury yields swung up and down several times. While the reports bolstered hopes the U.S. economy will avoid a deep recession, the strength underlying them could also add upward pressure on inflation.

One report said U.S. shoppers spent more at retailers last month than economists expected. Such spending has been a linchpin for the economy, but it could also encourage retailers to keep trying to raise prices further.

The strong spending is a result of a remarkably resilient job market, which has withstood a steep jump in interest rates. A separate report Thursday morning said fewer workers applied for unemployment benefits last week than expected, which implies the number of layoffs remains low.

A third report said prices getting paid at the wholesale level rose more last month than economists expected. That could be a discouraging signal for households if the higher-than-expected inflation gets passed on to shoppers at the consumer level.

To try to get inflation back down to its 2% target, the Federal Reserve has been increasing interest rates sharply since early last year. The hope on Wall Street is that a slowdown in inflation since last summer means the Fed is done with its rate hikes, which slow the economy and hurt investment prices.

Treasury yields initially jumped following Thursday’s reports on fears they could push the Fed to raise rates again or at least to keep rates higher for longer. But economists pointed out much of last month’s acceleration in wholesale inflation was due to higher fuel prices, which can shift direction sharply and quickly.

Ignoring those and other particularly volatile prices, underlying inflation trends in Thursday’s report were closer to economists’ expectations. That echoed a report from a day earlier on inflation at the consumer level, which showed overall inflation accelerated to 3.7% in August largely because of a leap in fuel prices.

After a few swings up and down through the day, the yield on the 10-year Treasury rose to 4.29%, up from 4.25% late Wednesday.

The two-year Treasury yield, which more closely tracks expectations for the Fed, also bounced around following the reports. It ended up rising to 5.00% from 4.98% late Wednesday.

Traders pared back expectations for the Fed to raise rates again some time this year, though they’re still betting on a roughly 40% chance of that, according to data from CME Group.

Hopes that the Fed may be done hiking rates may be overdone, warned Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office.

“The Fed is still likely to remain on hold next week, but if the economy continues to surprise to the upside, all bets are off as to what they’ll do after their final two policy meetings of the year,” he said.

In the stock market, shares of chip designer Arm Holdings jumped 24.7% in their debut. The strong welcome could be an encouraging signal for the IPO market, which has slowed since the stock market began tumbling early last year on fears about higher interest rates.

Stocks of energy producers also rose, thanks to another rally for oil prices. Crude has been climbing for months as oil-producing countries try to support its price by curtailing their supplies. A barrel of U.S. crude rose back above $90, helping ExxonMobil to climb 1.8% and Marathon Oil to rise 2.9%.

HP slumped 1.8% after Warren Buffett’s Berkshire Hathaway revealed it trimmed its stake in the personal computer and printer company. Berkshire still owns 115.5 million shares in HP after selling 5.5 million earlier this week.

Delta Air Lines, meanwhile, became the latest airline to cut its profit forecast because of higher costs. It said higher-than-expected costs for fuel and maintenance are cutting into its earnings, and its stock slipped 0.6%.

All told, the S&P 500 gained 37.66 points to 4,505.10. The Dow rose 331.58 to 34,907.11, and the Nasdaq climbed 112.47 to 13,926.05.

In stock markets abroad, indexes rose in Europe after the European Central Bank raised its key interest rate to a record high but also made statements seen as hinting that it won’t raise rates again for a while.

The hike is supposed to help undercut inflation among the countries that use the euro currency, but it adds pressure to an economy already seen at risk for a recession.

France’s CAC 40 rose 1.2%, and Germany’s DAX returned 1%.

Indexes also climbed across much of Asia, with Japan’s Nikkei 225 up 1.4%.

ASX 200 expected to jump​

The Australian share market looks set to end the week in a very positive fashion following a solid night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 88 points or 1.2% higher this morning.

Wall Street rose Thursday after a blizzard of reports suggested the U.S. economy is still humming, though inflation may be too.

The S&P 500 climbed 0.8% for its best day in two weeks. The Dow Jones Industrial Average rallied 331 points, or 1%, and the Nasdaq composite added 0.8%.

All told, the S&P 500 gained 37.66 points to 4,505.10. The Dow rose 331.58 to 34,907.11, and the Nasdaq climbed 112.47 to 13,926.05.


Market Watch

ALL GREEN EXCEPT NEW ZEALAND YESTERDAY

 

[bigdog]

Stock market today: Wall Street closes lower, giving S&P 500 another losing week

Stocks closed lower on Wall Street, giving the S&P 500 its second losing week in a row. The benchmark index lost 1.2% Friday.

apnews.com

Wall Street closes lower, giving S&P 500 another losing week​

By DAMIAN J. TROISE and ALEX VEIGA

Wall Street capped a choppy week of trading with a broad slide for stocks Friday, giving the S&P 500 its second losing week in a row.

The benchmark index fell 1.2%, its first loss in three days. The Dow Jones Industrial Average dropped 0.8% and the Nasdaq composite gave back 1.6%.

U.S. automaker stocks proved to be resilient after members of the United Auto Workers union walked off the job at several plants overnight. Ford slipped 0.1% and General Motors rose 0.9%. Shares in Stellantis gained 1.9% in trading on the Milan Stock Exchange in Italy.

The market posted some gains earlier this week following several healthy indicators on the economy. Wall Street has been watching economic updates ahead of the Federal Reserve’s interest rate policy meeting next week. The central bank is expected to hold interest rates steady after spending much of the last two years pushing rates higher in its bid to tame inflation.

Boosting market sentiment this week was a report Thursday that said U.S. shoppers spent more at retailers last month than economists expected. A separate report Thursday morning said fewer workers applied for unemployment benefits last week than expected.

A third report on Thursday said prices getting paid at the wholesale level rose more last month than economists expected. That could be a discouraging signal for households if the higher-than-expected inflation gets passed on to shoppers at the consumer level.

Meanwhile, a closely-watched survey from the University of Michigan showed consumer sentiment slipped a bit in September. The latest reading, though, shows that overall sentiment remains strong. It also said consumers lowered their expectations for inflation in the year ahead to 3.1%, which is the lowest reading since March 2021.

“Things were fairly in line from a data perspective,” said Matthew Stucky, senior portfolio manager at Northwestern Mutual Wealth Management. “Really, the market is laser-focused on what’s going to impact Federal Reserve activity.”

The central bank raised rates aggressively through 2022 and 2023 in an effort to tame inflation, but it maintained interest rate levels at its last meeting. Inflation has generally been easing back to the central bank’s target of 2%.

“A lot of the optimism about the Fed pausing is priced into markets,” Stucky said.

Inflation at the consumer level edged higher than expected in August, but high gasoline prices were the biggest driver. Oil prices have been climbing over the summer after Saudi Arabia decided to maintain production cuts. That raised concerns about gasoline prices rising and stoking inflation.

Investors are overwhelmingly betting that the Fed will hold interest rates steady when it closes a two-day meeting on Wednesday. They also expect the central bank could hold rates steady for the rest of the year. The Fed has said it remains willing to continue raising rates if it seems necessary to continue fighting inflation.

All the sectors in the S&P 500 ended in the red Friday, with technology stocks the biggest drag on the index. Microsoft fell 2.5% and chipmaker Nvidia slid 3.7%.

Retailers also weighed down the index. Amazon fell 3%, Home Depot dropped 2.5% and Lowe’s Co. slumped 4.7%.

All told, the S&P 500 lost 54.78 points to 4,450.32. It’s up just under 16% so far this year.

The Dow fell 288.87 points to 34,618.24. The Nasdaq, which is heavily weighted with technology stocks, slid 217.72 points to 13,708.33.

Bond yields gained ground. The yield on the 10-year Treasury, which influences interest rates on mortgages and other loans, rose to 4.33% from 4.29% late Thursday. The yield on the 2-year Treasury held steady at 5.02%.

 

[bigdog]

ASX 200 expected to tumble​

The Australian share market looks set to open the week deep in the red following a shocking finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 41 points or 0.6% lower on Monday.
Wall Street capped a choppy week of trading with a broad slide for stocks Friday, giving the S&P 500 its second losing week in a row.

The benchmark index fell 1.2%, its first loss in three days. The Dow Jones Industrial Average dropped 0.8% and the Nasdaq composite gave back 1.6%.

All told, the S&P 500 lost 54.78 points to 4,450.32. It’s up just under 16% so far this year.

The Dow fell 288.87 points to 34,618.24. The Nasdaq, which is heavily weighted with technology stocks, slid 217.72 points to 13,708.33

MARKET WATCH

 

[bigdog]

Stock market today: Asian shares weaker ahead of Federal Reserve interest rate decision

Asian shares are mostly weaker in cautious trading ahead of the Federal Reserve’s looming decision on interest rates. Oil prices rose.

apnews.com

Wall Street drifts ahead of Fed’s next meeting on interest rates​

By STAN CHOE

U.S. stocks drifted in quiet trading Monday, as Wall Street made few big moves overall in advance of the Federal Reserve’s next meeting on interest rates.

The S&P 500 edged up by 3.21 points, or 0.1%, to 4,453.53, coming off its second straight losing week. The Dow Jones Industrial Average rose 6.06, or less than 0.1%, to 34,624,30, and the Nasdaq composite added 1.90, or less than 0.1%, to 13,710.24.

Stocks have been see-sawing since early August on uncertainty about whether the Fed is finally done with its drastic hikes to interest rates. Higher rates have helped cool inflation from its peak last summer, but they also hurt prices for stocks and other investments while slowing the economy.

Traders almost universally expect the Fed to keep rates steady at its meeting this week, which ends Wednesday. More attention will be on the forecasts Fed officials will publish about where they expect interest rates, the economy and the job market to head in upcoming years.

One of the first the market will fixate on is how high officials at the Fed see its main interest rate rising this year. Traders are betting on a roughly 40% chance the Fed will raise rates again in either November or December, according to data from CME Group.

But just as much attention will be on what Fed officials say about next year, when investors expect the Fed to begin cutting interest rates. Investors crave such cuts, which typically loosen up financial conditions and give boosts to financial markets. The big question is by how much the Fed could cut.

Economists at Goldman Sachs expect Fed officials to indicate a full percentage point of cuts next year, after raising rates one more time this year to a range of 5.50% to 5.75%.

Fears are strong that rates may have to stay higher for longer in order to get inflation fully down to the Fed’s 2% target. While underlying trends on inflation continue to improve mostly, a recent upswell in oil prices has complicated things

A barrel of U.S. crude rose 71 cents to $91.48 Monday. That’s up from less than $70 in July. Brent crude, the international standard, rose 0.5% to $94.43 per barrel.

Higher prices for gasoline and other fuel were a big reason that inflation consumers are feeling accelerated last month to 3.7% from 3.2%.

The rise in fuel prices, along with worries about rates staying higher for longer, have helped push up Treasury yields across the bond market.

The 10-year Treasury yield edged down to 4.31% from 4.33% late Friday. It’s been mostly climbing since sitting around 3.40% in May.

The two-year Treasury yield, which more closely follows expectations for the Fed, held steady a 5.04%.

Worries about a possible recession also continue to hang around, even though they’ve diminished with successive reports showing the economy and job market continue to hum.

One worrying factor is where bond yields are, with two-year and other shorter-term yields continuing to remain higher than longer-term yields. That’s an unusual occurrence that has often preceded recessions in the past.

Another warning signal comes from the leading economic indicators index, which looks at new orders for manufacturers, consumer expectations for business conditions and other factors that could show where the economy is heading.

When its six-month annualized rate-of-change contracts 3% or more, it’s always been associated with a recession, according to Doug Ramsey, chief investment officer of The Leuthold Group.

It’s been 15 months since the most recent such warning of a recession triggered in June 2022. In the past, the longest stretch between such a trigger and a recession was the 16 months before the Great Recession. If this matches that one, it could imply a recession beginning in October, Ramsey says.

On Wall Street, Clorox dropped 2.4% after it said a cybersecurity attack caused widespread disruptions to its business. It’s still measuring the damage, but it said it expects it to be material on upcoming results. Clorox also said it believes the unauthorized activity has been contained.

Ford and General Motors were falling as a limited strike by the United Auto Workers carried into another day. Ford fell 2.1%, and General Motors slipped 1.8%.

Stocks of energy producers, meanwhile, helped to lead the market because of the rise in oil. Exxon Mobil gained 0.8%, and Marathon Petroleum rose 1.6%.

In stock markets abroad, the Hang Seng index in Hong Kong fell 1.4% following reports over the weekend that police had detained staff at the wealth management business of troubled real estate developer China Evergrande.

Indexes fell across much of the rest of Asia, as well as in Europe.

ASX 200 expected to fall again​

The Australian share market is set to fall on Tuesday despite a mildly positive start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 21 points or 0.3% lower.

U.S. stocks drifted in quiet trading Monday, as Wall Street made few big moves overall in advance of the Federal Reserve’s next meeting on interest rates.

The S&P 500 edged up by 3.21 points, or 0.1%, to 4,453.53, coming off its second straight losing week. The Dow Jones Industrial Average rose 6.06, or less than 0.1%, to 34,624,30, and the Nasdaq composite added 1.90, or less than 0.1%, to 13,710.24.


MARKET WATCH

 

[bigdog]

Stock market today: Asian shares decline ahead of Fed decision on rates

Asian shares are mostly lower as markets await a decision by the Federal Reserve on interest rates. Trade data for Japan showed exports fell 0.8% last month from a year earlier, marking a second straight month of declines.

apnews.com

Wall Street slips ahead of Fed decision on rates​

By STAN CHOE

U.S. stocks edged lower, and yields climbed on Tuesday as Wall Street waits for the Federal Reserve’s latest decision on interest rates.

The S&P 500 slipped 9.58 points, or 0.2%, to 4,443.95. The Dow Jones Industrial Average dropped 106.57, or 0.3%, to 34,517.73, and the Nasdaq composite lost 32.05, or 0.2%, to 13,678.19.

Stocks have been see-sawing for weeks on uncertainty about whether the Fed is done with its market-shaking hikes to interest rates. By pulling its main interest rate to the highest level in more than two decades, the Fed has helped inflation to cool from its peak last year but at the cost of hurting prices for investments and damaging some corners of the economy.

The Fed began its latest meeting on interest rates Tuesday, with an announcement scheduled for Wednesday. The overwhelming expectation is for the Fed to announce no change to rates. More focus will be on updated projections Fed officials give for where they see rates heading in upcoming years.

Traders are split on whether the Fed may raise rates again this year, but they’re largely expecting the Fed to begin cutting rates next year. Such cuts can act like steroids for financial markets, giving a lift to all kinds of investments.

Optimists say inflation has come down enough for the Fed to cut rates meaningfully next year, while the economy continues to hum due to a solid job market. Others say the Fed may need to keep rates higher for longer than investors expect to get inflation down to its 2% target, while the threat of a recession still looms.

A soft landing, where inflation gets back to the Fed’s target without the economy having to suffer a painful recession, “is still possible, but not probable in our view,” according to Joe Davis, chief global economist and head of Vanguard’s investment strategy group.

A risk remains that the Fed could misread a temporary slowdown in inflation as having accomplished its mission, which could lead to a cycle reminiscent of the late 1960s where inflation reaccelerates, the Fed hikes rates further and a recession eventually hits.

High rates have already hit the manufacturing and housing industries. A report Tuesday showed that homebuilders broke ground on fewer new homes in August than economists expected. The 11.3% drop from July’s level was much worse than the 0.8% forecasted. But activity for building permits, a possible indicator of future activity, rose more than expected.

On Wall Street, shares of Instacart climbed 12.3% in their first day of trading. The company raised $660 million in its initial public offering, which priced the stock at $30 per share.

It arrived on the heels of another highly anticipated IPO by chip designer Arm Holdings. The offerings could mark a warming environment for IPOs, which fell off sharply after stocks tumbled last year with worries about higher interest rates. Arm jumped in its first day of trading on Thursday but has since followed that with three days of losses.

The Walt Disney Co. fell 3.6% for one of the largest losses in the S&P 500 after it announced a big investment plan for its theme parks and cruise lines. It plans to double its investment in its parks, experiences and products business to $60 billion over the next 10 years versus the prior decade.

Shares of AutoZone slipped 1.9% despite its reporting stronger profit for the latest quarter than analysts expected. The auto parts retailer said growth in its domestic commercial business was weaker during the quarter than expected.

On the winning end of Wall Street was U.S. Steel, which rose 3.7% It said it expects to deliver strong results for the summer, above what analysts were expecting. That’s even with the impact on steel demand expected because of the limited strike by the United Autoworkers against Detroit’s Big 3 automakers.

Ford and General Motors held steadier after falling a day earlier, as the strike against them continues. The leader of the UAW said late Monday its limited strike could expand unless “serious progress” toward a new labor deal is made by Friday at noon. Ford rose 1.8%, and GM rose 1.9%.

In the bond market, the yield on the 10-year Treasury rose to 4.36% from 4.30% late Monday. It’s near its highest level since 2007.

The two-year Treasury yield, which moves more on expectations for the Fed, rose to 5.11% from 5.05%.

Yields have been climbing with expectations that rates may stay higher for longer, as well as with crude oil prices.

The price for a barrel of benchmark U.S. crude swung through the day, rising more than 1% at one point before ending the day down 28 cents at $91.20. It’s climbed roughly 13% this year as oil-producing countries curtail some production in hopes of boosting its price.

Brent crude, the international standard, fell 9 cents to $94.34 per barrel.

In stock markets abroad, indexes were mixed across Asia and Europe.

ASX 200 expected to fall again​

The Australian share market looks set to fall again on Wednesday following another subdued night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 16 points or 0.22% lower this morning.

U.S. stocks edged lower, and yields climbed on Tuesday as Wall Street waits for the Federal Reserve’s latest decision on interest rates.

The S&P 500 slipped 9.58 points, or 0.2%, to 4,443.95. The Dow Jones Industrial Average dropped 106.57, or 0.3%, to 34,517.73, and the Nasdaq composite lost 32.05, or 0.2%, to 13,678.19.


MARKET WATCH

 

[eskys]

MARKETS​

• S&P 500 finished lower but well off session lows of -0.64%
• Bond yields faced upward pressure from hotter-than-expected Canadian inflation
• US 2-year yield hit a session high of 5.11% – A level not seen since June 2007
• US 10-year yield advanced 5 bps to 4.36% – Highest since November 2008
• Market’s path of least resistance continues to lean on bearish factors such as surging yields, higher oil prices, negative seasonality trends, US government shutdown risk and ongoing UAW auto strikes
• Fed widely expected to pause at tomorrow’s meeting but maintain hawkish higher-for-longer messaging
• S&P 500 marks 100 days without 1.5% drop, first time since 2018 (Bloomberg)
• Hedge funds bets could spark turmoil in US Treasuries, BIS warns (FT)
• Plenty of startups looking at IPOs, but few prepared to go (Bloomberg)
• Saudi energy minister says oil cuts not about 'jacking up prices' (FT)

STOCKS​

• Ford faces possible worker strike on both sides of US-Canada border (FT)
• Stellantis could close 18 US facilities under latest UAW deal (CNBC)
• Amazon considers new subscription offerings in healthcare, grocery (Insider)
• Instacart prices shares at $30 as IPO marks warms up (FT)
• Disney plans to double spending on parks and cruises, shares fall (CNBC)

CENTRAL BANKS​

• Fed set to hold interest rates but leave tightening in play (FT)
• Fed faces obstacles from UAW worker strike, possible government shutdown and resumption of student loan repayments (Reuters)
• ECB to keep rates at 4% as long as needed, Villeroy says (Bloomberg)
• RBA discussed raising rates again in September, opted to pause (Bloomberg)

ECONOMY​

• Canada inflation jumps, October rate hike bets rise (Reuters)
• OECD raises 2023 global growth outlook but cuts 2024 (Reuters)
• Eurozone August inflation revised slightly down(Reuters)
• US national debt tops US$33 trillion for first time ever (NY Times)
• US housing starts hit 3-year low, surge in permits point to strength (Reuters)

 

[bigdog]

Stock market today: Asian shares track Wall Street's slump after Fed says rates may stay high in '24

Asian shares are lower, tracking a slump on Wall Street after the Federal Reserve said it may not cut interest rates next year by as much as it earlier thought.

apnews.com

Wall Street falls after the Federal Reserve warns rates may stay higher in 2024​

By STAN CHOE

NEW YORK (AP) — U.S. stocks slumped Wednesday after the Federal Reserve said it may not cut interest rates next year by as much as it earlier thought, regardless of how much Wall Street wants it.

The S&P 500 fell 41.75, or 0.9%, to 4,402.20. The Dow Jones Industrial Average lost 76.85, or 0.2%, to 34,440.88, and the Nasdaq composite dropped 209.06, or 1.5%, to 13,469.13.

The Fed held its main interest rate steady at its highest level in more than two decades, as was widely expected from its latest meeting. Officials also indicated they may raise the federal funds rate one more time this year, as the Fed tries to get inflation back down to its target of 2%. Fed Chair Jerome Powell said it’s close to hitting the peak on rates, if not there already.

Perhaps most importantly for the market, Fed officials suggested they may cut rates in 2024 by only half a percentage point from where they’re expected to end this year. That’s less than the full percentage point of cuts they were penciling in as of June. That could be a negative for Wall Street, where investors crave rate cuts because of the boost they typically give to all kinds of investments.

Stocks initially held relatively steady following the release of the Fed’s forecasts, before sliding later in the afternoon.

“As you move further and further away from the meeting, the message may sink in,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. “We very much expect the markets to be knocked a little bit off their axis by this.”

With oil prices rising and possibly helping to keep inflation high, Samana said he’s not surprised the Fed indicated it may need to keep rates higher for longer. He sees few avenues to get inflation down to the Fed’s goal without a recession, which would hurt the country but also remove upward pressures on inflation.

Powell, though, stressed that forecasts about where rates and other indicators are heading could change as more data come in. He said because the Fed has already moved rates up very high very quickly, it now has the ability to take more time before making upcoming moves.

“Forecasters are a humble lot, with much to be humble about,” Powell said.

Treasury yields rose in the bond market after the Fed released its projections. They had already been climbing for months after strong reports on the U.S. economy suggested the Fed may need to keep interest rates higher for longer in order to fully drive down pressures on inflation.

The yield on the 10-year Treasury rose to 4.39% from less than 4.32% shortly before the Fed’s announcement and from 4.37% late Tuesday. It’s back to where it was in 2007.

The two-year Treasury yield, which more closely tracks expectations for Fed action, jumped to 5.18% from 5.04% shortly before the Fed’s announcement.

“Future meetings will be a tug-of-war between markets who want cuts and a Fed that is scared its job isn’t done,” said Brian Jacobsen, chief economist at Annex Wealth Management.

“The Fed is projecting it will hit its unemployment rate and inflation targets in 2026,” he said. “Markets are more impatient than that. One year is an eternity to traders, let alone two years.”

High rates hurt prices for all kinds of investments, and high-growth companies are typically among the hardest hit. Big Tech stocks were the heaviest weights on the S&P 500, and Microsoft, Apple and Nvidia all fell at least 2%.

Stocks of several companies who just recently sold their stock on public markets for the first time also fell. Instacart dropped 10.7% as it gave back some of its gains from its first day of trading as a public stock.

Arm Holdings, another company recently off a highly anticipated initial public offering of stock, also fell. It lost 4.1%.

Shares of Klaviyo, which helps advertisers market over email and text messaging, rose 9.2% in their first day of trading.

On the winning side of Wall Street, shares of Textron climbed 4.9% for the biggest gain in the S&P 500 after it announced a deal where NetJets has the option to purchase up to 1,000 of its Citation business jets over the next 15 years.

Beauty products company Coty climbed 4.4% after it raised its forecasts for the year due to strong demand for its new Burberry Goddess fragrance and other products.

In stock markets abroad, the FTSE 100 in London rose 0.9% after a report showed U.K. inflation fell unexpectedly in August to its lowest level since Russia launched its invasion of Ukraine.

Indexes were mostly weaker in Asia after data showed Japanese exports fell from year-ago levels for the second straight month. Exports to China sank 11%, as the world’s second-largest economy continues to underperform expectations.

Officials in Beijing acknowledged challenges in boosting growth but told reporters they were confident that a recovery was underway and that they had the capacity to ensure stability in financial markets.

Japan’s Nikkei 225 fell 0.7%, Hong Kong’s Hang Seng dropped 0.6% and stocks in Shanghai slipped 0.5%.

ASX 200 expected to fall​

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

U.S. stocks slumped Wednesday after the Federal Reserve said it may not cut interest rates next year by as much as it earlier thought, regardless of how much Wall Street wants it.

The S&P 500 fell 41.75, or 0.9%, to 4,402.20. The Dow Jones Industrial Average lost 76.85, or 0.2%, to 34,440.88, and the Nasdaq composite dropped 209.06, or 1.5%, to 13,469.13.


Market Watch

 

[bigdog]

Stock market today: Asian shares mixed after interest rates-driven sell-off on Wall Street

Asian shares are mixed after another slump on Wall Street driven by expectations for U.S. interest rates to stay high well into next year.

apnews.com

Stocks drop in an ugly day as allure grows to buy a Treasury bill and chill​

By STAN CHOE

Wall Street fell sharply Thursday in an ugly day for stocks worldwide on expectations that U.S. interest rates will stay high well into next year.

The S&P 500 lost 1.6% for its worst day since March. That followed a drop of 0.9% from Wednesday after the Federal Reserve indicated it may cut interest rates next year by just half of what it had earlier predicted. The Fed has already hiked its main interest rate to levels unseen since 2001, which helps slow inflation but at the cost of hurting investment prices.

High-growth stocks are typically among the hardest hit by high rates, and Big Tech stocks took the brunt of the pain for a second straight day. The Nasdaq composite dropped 1.8% as Amazon fell 4.4%, Nvidia dropped 2.9% and Telsa lost 2.6%. The Dow Jones Industrial Average dropped 370 points, or 1.1%

Stock prices tend to fall when rates rise because stocks are riskier investments. Why stomach the chance of their big swings when Treasurys are paying more in interest than before? And they’re paying much more.

A 10-year Treasury is offering a yield of 4.48%, up from 4.40% late Wednesday and from only 0.50% three years ago. It’s near its highest level since 2007.

The two-year Treasury yield, meanwhile, wavered following some mixed reports on the economy. It slipped to 5.14% from 5.17% late Wednesday after climbing earlier in the morning.

One report showed fewer U.S. workers applied for unemployment benefits last week than expected. It was the lowest number since January and the latest signal of a remarkably resilient job market.

Such a solid labor market helps calm worries about a possible recession. But it may also give U.S. households fuel to keep spending, which could encourage companies to try to raise prices further and keep upward pressure on inflation. That in turn could give the Fed more reason to keep rates higher for longer.

A separate report, meanwhile, suggested manufacturing in the mid-Atlantic region is contracting by much more than economists expected. A third report showed sales of previously occupied U.S. homes were weaker last month than economists expected.

Manufacturing and the housing industry have felt the sting of higher interest rates in particular and have struggled more than the broad job market.

Interest rates may stay high if the Federal Reserve follows through on the latest forecasts from its policy-making officials.

Policy makers have indicated they could raise the federal funds rate one more time this year, and then cut it by only half a percentage point from there through 2024. Three months ago, Fed officials were forecasting a full percentage point of cuts could be the most likely path. They want to ensure inflation gets back down to the Fed’s target of 2%.

Wednesday’s projections may be an indication that “raises the bar for rate cuts next year,” according to Goldman Sachs economist David Mericle. He pushed out his forecast for the first cut in interest rates to the final three months of 2024, after earlier thinking it could happen during the spring.

He sees the Fed on a path where it can “simply wait until something goes wrong and then deliver either small cuts in response to a smaller growth threat, similar to the insurance cuts of 2019, or substantial cuts in response to a full recession,” he wrote in a report.

During 2019, the Fed cut interest rates amid fears that high rates could help send the economy into a recession as trade tensions flared around the world.

High rates slow the economy by design and raise the pressure across the financial world. Earlier this spring, they helped lead to three high-profile collapses of U.S. banks. They also hurt prices for all kinds of investments. The hardest hit tend to be those bid up on hopes for big growth far out in the future. That’s why tech stocks often swing in particular with expectations for rates.

Cisco Systems also took a hit after it said it would buy Splunk, a cybersecurity company, for roughly $28 billion in cash. Cisco fell 3.9%, while Splunk jumped 20.8%.

On the winning side of Wall Street, FedEx rose 4.5% after it reported stronger profit for the latest quarter than analysts expected.

All told, the S&P 500 fell 72.20 points to 4,330.00 and is back to where it was in June. The Dow dropped 370.46 to 34,070.42, and the Nasdaq lost 245.14 to 13,223.98.

London’s FTSE 100 slipped 0.7% after the Bank of England left interest rates steady. The expectation had been for another rate hike, but a surprising report this week showed a drop in U.K. inflation.

Stock markets elsewhere around the world were much weaker.

Japan’s Nikkei 225 fell 1.4%, South Korea’s Kospi dropped 1.7% and France’s CAC 40 lost 1.6%.

New Zealand’s benchmark index held steadier after figures released Thursday by Statistics New Zealand indicated the economy expanded at a 3.2% annual pace in the April-June quarter. Finance Minister Grant Robertson said the economy was turning a corner and growing at twice the rate predicted by economists.

ASX 200 expected to sink again​

The Australian share market looks set to end the week with another sizeable decline following a selloff on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 97 points or 1.4% lower this morning.
Wall Street fell sharply Thursday in an ugly day for stocks worldwide on expectations that U.S. interest rates will stay high well into next year.

The S&P 500 lost 1.6% for its worst day since March. That followed a drop of 0.9% from Wednesday after the Federal Reserve indicated it may cut interest rates next year by just half of what it had earlier predicted. The Fed has already hiked its main interest rate to levels unseen since 2001, which helps slow inflation but at the cost of hurting investment prices.

High-growth stocks are typically among the hardest hit by high rates, and Big Tech stocks took the brunt of the pain for a second straight day. The Nasdaq composite dropped 1.8% as Amazon fell 4.4%, Nvidia dropped 2.9% and Telsa lost 2.6%. The Dow Jones Industrial Average dropped 370 points, or 1.1%

All told, the S&P 500 fell 72.20 points to 4,330.00 and is back to where it was in June. The Dow dropped 370.46 to 34,070.42, and the Nasdaq lost 245.14 to 13,223.98.

Market Watch

ALL RED YESTERDAY

 

[bigdog]

Stock market today: Wall Street closes its worst week in six months with more losses

Wall Street wheezed to more losses as it limped to the finish of its worst week in six months. The S&P 500 slipped 0.2% Friday after a late-day swoon erased a modest gain it had held for most of the day.

apnews.com

Wall Street closes its worst week in six months with more losses​

By STAN CHOE

Wall Street wheezed to more losses Friday as it limped to the finish of its worst week in six months.

The S&P 500 slipped 9.94 points, or 0.2%, to 4,320.06 after a late-day swoon erased a modest gain it had held for most of the day. It capped an ugly slide caused by Wall Street’s growing understanding that interest rates likely won’t come down much anytime soon.

The Dow Jones Industrial Average fell 106.58 points, or 0.3%, to 33,963.84, and the Nasdaq composite dipped 12.18, or 0.1%, to 13,211.81.

Pressure has built on Wall Street as yields in the bond market climbed to their highest levels in more than a decade. They’d been rising for months and accelerated this week after the Federal Reserve indicated it’s unlikely to cut its main interest rate by as much in 2024 as investors had hoped. The federal funds rate is at its highest level since 2001, which grinds down on investment prices as it undercuts high inflation.
Yields eased a bit Friday, which helped the S&P 500 stabilize somewhat following its 1.6% drop a day before, which was its worst since March. The yield on the 10-year Treasury fell to 4.44% from 4.50% late Thursday. It’s still near its highest level since 2007.

The two-year Treasury yield, which moves more closely with expectations for the Fed, dipped to 5.10% from 5.15%.

When bonds are paying more in interest, investors are less willing to pay high prices for stocks. High rates hit particularly hard on stocks seen as the most expensive or forcing investors to wait the longest for big growth in the future.

Recently, that’s meant particular pain for big technology stocks. Nvidia trimmed its loss for the week to 5.2% after rising 1.4% Friday. The Nasdaq composite, which is full of tech and other high-growth stocks, slumped 3.6% for its worst week since March.

A couple tech-oriented companies got better news Friday after U.K. regulators gave a preliminary approval to Microsoft’s restructured $69 billion deal to buy video game maker Activision Blizzard. It would be one of the largest tech deals in history, and shares of Activision Blizzard rose 1.7%.

Microsoft fell 0.8%.

Shares of automakers were mixed after the United Autoworkers said it will expand its strike by walking out of 38 General Motors and Stellantis plants in 20 states. The union did not broaden its limited strike against Ford, which it said has met some of the union’s demands in talks this week.

Ford rose 1.9%. General Motors fell 0.4%, and Stellantis rose 0.1%.

Auto workers are looking for raises in pay and other benefits, and a prolonged strike could put upward pressure on inflation if shortages send prices higher. The strikes are just one among a long list of challenges looming over the economy, including a possible U.S. government shutdown, the upcoming resumption of student-loan repayments and shaky economies around the world.

Hanging above them all is the realization sinking in on Wall Street that interest rates may be staying higher for longer.

The Fed indicated Wednesday it may raise its main interest rate one more time this year. From there, the most commonly predicted path by Fed officials would be half a percentage point of cuts in 2024 from a level of 5.50% to 5.75%. Three months ago, Fed officials were thinking a full percentage point of cuts may be the likeliest outcome.

High rates drag down inflation by intentionally slowing the economy and denting prices for investments. They also take a notoriously long time to take full effect and can cause damage in unexpected, far-ranging corners of the economy. Earlier this year, high rates helped lead to three high-profile collapses of U.S. banks.

Economists have been pushing out their forecasts for the first cut to interest rates by the Fed next year. EY Chief Economist Gregory Daco, for example, now expects 0.75 percentage points of cuts in 2024, down from his earlier forecast for a full percentage point.

He says recent reports showing a cooldown in the job market suggest the economy may experience a “controlled landing” from high inflation, instead of the hard landing of a severe recession that some investors fear will result from interest rates staying higher for longer.

A report on Friday suggested business activity across the economy is stagnating. A preliminary measure of output compiled by S&P Global slipped to a seven-month low as businesses in services industries lost momentum. Demand was muted for both services and manufacturing providers.

In stock markets abroad, Chinese indexes rose following a report by Bloomberg saying regulators are considering allowing foreigners to own more shares. The report cited unnamed people “familiar with the matter.”

Also on Friday, the U.S. Treasury Department and China’s Ministry of Finance launched a pair of economic working groups in an effort to ease tensions and deepen ties between the nations.

Hong Kong’s Hang Seng jumped 2.3%, while stocks in Shanghai rose 1.5%. Indexes elsewhere in Asia were lower, while European stocks were mixed.

5 DAY

 

[divs4ever]

Stock market today: Wall Street closes its worst week in six months with more losses

Wall Street wheezed to more losses as it limped to the finish of its worst week in six months. The S&P 500 slipped 0.2% Friday after a late-day swoon erased a modest gain it had held for most of the day.

apnews.com

Wall Street closes its worst week in six months with more losses​

By STAN CHOE

Wall Street wheezed to more losses Friday as it limped to the finish of its worst week in six months.

The S&P 500 slipped 9.94 points, or 0.2%, to 4,320.06 after a late-day swoon erased a modest gain it had held for most of the day. It capped an ugly slide caused by Wall Street’s growing understanding that interest rates likely won’t come down much anytime soon.

The Dow Jones Industrial Average fell 106.58 points, or 0.3%, to 33,963.84, and the Nasdaq composite dipped 12.18, or 0.1%, to 13,211.81.

Pressure has built on Wall Street as yields in the bond market climbed to their highest levels in more than a decade. They’d been rising for months and accelerated this week after the Federal Reserve indicated it’s unlikely to cut its main interest rate by as much in 2024 as investors had hoped. The federal funds rate is at its highest level since 2001, which grinds down on investment prices as it undercuts high inflation.
Yields eased a bit Friday, which helped the S&P 500 stabilize somewhat following its 1.6% drop a day before, which was its worst since March. The yield on the 10-year Treasury fell to 4.44% from 4.50% late Thursday. It’s still near its highest level since 2007.

The two-year Treasury yield, which moves more closely with expectations for the Fed, dipped to 5.10% from 5.15%.

When bonds are paying more in interest, investors are less willing to pay high prices for stocks. High rates hit particularly hard on stocks seen as the most expensive or forcing investors to wait the longest for big growth in the future.

Recently, that’s meant particular pain for big technology stocks. Nvidia trimmed its loss for the week to 5.2% after rising 1.4% Friday. The Nasdaq composite, which is full of tech and other high-growth stocks, slumped 3.6% for its worst week since March.

A couple tech-oriented companies got better news Friday after U.K. regulators gave a preliminary approval to Microsoft’s restructured $69 billion deal to buy video game maker Activision Blizzard. It would be one of the largest tech deals in history, and shares of Activision Blizzard rose 1.7%.

Microsoft fell 0.8%.

Shares of automakers were mixed after the United Autoworkers said it will expand its strike by walking out of 38 General Motors and Stellantis plants in 20 states. The union did not broaden its limited strike against Ford, which it said has met some of the union’s demands in talks this week.

Ford rose 1.9%. General Motors fell 0.4%, and Stellantis rose 0.1%.

Auto workers are looking for raises in pay and other benefits, and a prolonged strike could put upward pressure on inflation if shortages send prices higher. The strikes are just one among a long list of challenges looming over the economy, including a possible U.S. government shutdown, the upcoming resumption of student-loan repayments and shaky economies around the world.

Hanging above them all is the realization sinking in on Wall Street that interest rates may be staying higher for longer.

The Fed indicated Wednesday it may raise its main interest rate one more time this year. From there, the most commonly predicted path by Fed officials would be half a percentage point of cuts in 2024 from a level of 5.50% to 5.75%. Three months ago, Fed officials were thinking a full percentage point of cuts may be the likeliest outcome.

High rates drag down inflation by intentionally slowing the economy and denting prices for investments. They also take a notoriously long time to take full effect and can cause damage in unexpected, far-ranging corners of the economy. Earlier this year, high rates helped lead to three high-profile collapses of U.S. banks.

Economists have been pushing out their forecasts for the first cut to interest rates by the Fed next year. EY Chief Economist Gregory Daco, for example, now expects 0.75 percentage points of cuts in 2024, down from his earlier forecast for a full percentage point.

He says recent reports showing a cooldown in the job market suggest the economy may experience a “controlled landing” from high inflation, instead of the hard landing of a severe recession that some investors fear will result from interest rates staying higher for longer.

A report on Friday suggested business activity across the economy is stagnating. A preliminary measure of output compiled by S&P Global slipped to a seven-month low as businesses in services industries lost momentum. Demand was muted for both services and manufacturing providers.

In stock markets abroad, Chinese indexes rose following a report by Bloomberg saying regulators are considering allowing foreigners to own more shares. The report cited unnamed people “familiar with the matter.”

Also on Friday, the U.S. Treasury Department and China’s Ministry of Finance launched a pair of economic working groups in an effort to ease tensions and deepen ties between the nations.

Hong Kong’s Hang Seng jumped 2.3%, while stocks in Shanghai rose 1.5%. Indexes elsewhere in Asia were lower, while European stocks were mixed.

View attachment 162813
View attachment 162814



5 DAY View attachment 162818

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View attachment 162815

interesting ...

the NASDAQ and S&P were green when i looked early in the morning

 

[bigdog]

ASX 200 expected to fall​

The Australian share market looks set to open the week lower following a poor finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 18 points or 0.25% lower on Monday.

Wall Street wheezed to more losses Friday as it limped to the finish of its worst week in six months.

The S&P 500 slipped 9.94 points, or 0.2%, to 4,320.06 after a late-day swoon erased a modest gain it had held for most of the day. It capped an ugly slide caused by Wall Street’s growing understanding that interest rates likely won’t come down much anytime soon.

The Dow Jones Industrial Average fell 106.58 points, or 0.3%, to 33,963.84, and the Nasdaq composite dipped 12.18, or 0.1%, to 13,211.81.

Market Watch

 

[bigdog]

Stock market today: Asian shares dip with eyes on China economy, US shutdown

Asian shares are mostly sinking over worries about a possible U.S. government shutdown and the troubled Chinese economy.

apnews.com

Wall Street recoups some of last week’s loss but still on pace for an ugly month​

By STAN CHOE

NEW YORK (AP) — Wall Street clawed back some of its steep losses from last week, but September is still on track to be its worst month of the year despite Monday’s gains.

The S&P 500 rose 17.38, or 0.4%, to 4,337.44, coming off its worst week in six months. The Dow Jones Industrial Average edged up by 43.04, or 0.1%, to 34,006.88, and the Nasdaq composite gained 59.51, or 0.5%, to 13,271.32.

Oil-related stocks led the way, as Exxon Mobil rose 1.1% and ConocoPhillips gained 1.6%. As a group, energy stocks in the S&P 500 climbed nearly twice as much as any of the other 11 sectors that make up the index.

While crude oil prices were mixed Monday, they’ve leaped sharply since the early summer.

Oil’s jump has helped to hurt Wall Street broadly, where the realization is sinking in that the Federal Reserve will likely keep interest rates high well into next year. The Fed is trying to ensure high inflation gets back down to its target, and it said last week it will likely cut interest rates in 2024 by less than earlier expected. Its main interest rate is at its highest level since 2001.

The growing understanding that rates will stay higher for longer has pushed yields in the bond market up to their highest levels in more than a decade. That in turn makes investors less willing to pay high prices for all kinds of investments, particularly those seen as the most expensive or making their owners wait the longest for big growth.

The yield on the 10-year Treasury rose to 4.53% from 4.44% late Friday and is near its highest level since 2007. That’s up sharply from about 3.50% in May and from 0.50% about three years ago.

“Stocks digest gradual, growth driven increases in interest rates far better than rapid increases driven by other factors such as inflation or Fed policy,” Goldman Sachs strategists led by David Kostin wrote in a report.

Higher yields are at the head of a long line of concerns weighing on Wall Street. Not only have oil prices jumped by $20 per barrel since June, economies around the world are looking shaky. The resumption of U.S. student-loan repayments may also weaken what’s been the U.S. economy’s greatest strength, spending by households.

In the near term, the U.S. government may be set for another shutdown amid more political squabbles on Capitol Hill. But Wall Street has managed its way through previous shutdowns, and “history shows that past ones haven’t had much of an impact on the market,” according to Chris Larkin, managing director of trading and investing at E-Trade from Morgan Stanley.

On Wall Street, Amazon rose 1.7% and was the strongest single force pushing up on the S&P 500. The company announced an investment of up to $4 billion in Anthropic, as it takes a minority stake in the artificial intelligence startup. It’s the latest Big Tech company to pour money into AI in the race to profit from opportunities that the latest generation of the technology is set to fuel.

Stocks of media and entertainment companies were mixed after unionized screenwriters reached a tentative deal on Sunday to end their historic strike. No deal yet exists for striking actors.

Netflix rose 1.3%, while The Walt Disney Co. slipped 0.3%. Warner Brothers Discovery dropped 4% for the day’s largest loss in the S&P 500.

Also on the losing end of Wall Street were stocks of travel-related companies, which slumped under the weight of worries about higher fuel costs. Southwest Airlines sank 2%, and Norwegian Cruise Line fell 3.1%.

In stock markets abroad, indexes slumped across Europe and much of Asia. France’s CAC 40 fell 0.8%, and Germany’s DAX lost 1%.

In China, troubled property developer China Evergrande sank nearly 22% after announcing it was unable to raise further debt due to an investigation into one of its affiliates. That might imperil plans for restructuring its more than $300 billion in debt.

China’s faltering economic recovery has already removed a big engine of growth for the world.

Hong Kong’s Hang Seng lost 1.8%, while stocks in Shanghai fell 0.5%.

ASX 200 expected to edge lower​

The Australian share market is set to fall on Tuesday despite a positive start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 7 points or 0.10% lower
.
Wall Street clawed back some of its steep losses from last week, but September is still on track to be its worst month of the year despite Monday’s gains.

The S&P 500 rose 17.38, or 0.4%, to 4,337.44, coming off its worst week in six months. The Dow Jones Industrial Average edged up by 43.04, or 0.1%, to 34,006.88, and the Nasdaq composite gained 59.51, or 0.5%, to 13,271.32.


Market Watch

 

[bigdog]

Stock market today: Asian shares mostly lower after Wall Street retreat deepens

Shares in Asia are mostly lower after Wall Street’s ugly September got even worse, with benchmarks dropping back to where they were in June.

apnews.com

Wall Street falls sharply as its September slump gets even worse​

By STAN CHOE

Wall Street’s ugly September got even worse Tuesday, as a sharp drop for stocks brought them back to where they were in June.

The S&P 500 tumbled 1.5% for its fifth loss in the last six days. The Dow Jones Industrial Average dropped 388 points, or 1.1%, and the Nasdaq composite lost 1.6%.

September has brought a loss of 5.2% so far for the S&P 500, putting it on track to be the worst month of the year by far, as the realization sets in that the Federal Reserve will indeed keep interest rates high for a long time. That growing understanding has sent yields in the bond market to their highest levels in more than a decade, which in turn has undercut prices for stocks and other investments.

Treasury yields rose again Thursday following a mixed batch of reports on the economy.

The yield on the 10-year Treasury edged up to 4.55% from 4.54% late Monday and is near its highest level since 2007. It’s up sharply from about 3.50% in May and from 0.50% about three years ago.

The rise in yields means bonds “now seem reasonable after a long time, but stocks still do not,” according to strategists at Barclays led by Ajay Rajadhyaksha.

One economic report on Tuesday showed confidence among consumers was weaker than economists expected. That’s concerning because strong spending by U.S. households has been a bulwark keeping the economy out of a long-predicted recession.

A separate report said sales of new homes across the country slowed by more last month than economists expected, while a third report suggested manufacturing in Maryland, the Virginias and the Carolinas may be steadying itself following a more than yearlong slump.

While housing and manufacturing have felt the sting of high interest rates, the economy overall has held up well enough to raise worries that upward pressure still exists on inflation. That pushed the Fed last week to say it will likely cut interest rates by less next year than earlier expected. The Fed’s main interest rate is at its highest level since 2001 in its drive to get inflation back down to its target.

Besides high interest rates, a long list of other worries is also tugging at Wall Street. The most immediate is the threat of another U.S. government shutdown as Capitol Hill threatens a stalemate that could shut off federal services across the country.

Wall Street has dealt with such shutdowns in the past, and stocks have historically been turbulent in the runup to them, according to Lori Calvasina, strategist at RBC Capital Markets.

After looking at the seven shutdowns that lasted 10 days or more since the 1970s, she found the S&P 500 dropped an average of roughly 10% in the three months heading into them. But stocks managed to hold up rather well during the shutdowns, falling an average of just 0.3%, before rebounding meaningfully afterward.

Besides the threat of higher interest rates for longer, Wall Street is also contending with higher oil prices, shaky economies around the world, a strike by U.S. auto workers that could put more upward pressure on inflation and a resumption of U.S. student-loan repayments that could dent spending by households.

On Wall Street, the vast majority of stocks fell Tuesday under such pressures, including 90% of those within the S&P 500.

Big Tech stocks tend to be among the hardest hit by high rates, and they were the heaviest weights on the index. Apple fell 2.3% and Microsoft lost 1.7%.

Amazon tumbled 4% after the Federal Trade Commission and 17 state attorneys general filed an antitrust lawsuit against it. They accuse the e-commerce behemoth of using its dominant position to inflate prices on other platforms, overcharge sellers and stifle competition.

Cintas dropped 5.3% for the largest loss in the S&P 500. The provider of employee uniforms, mops, fire extinguishers and other services reported stronger profit for its latest quarter than analysts expected. It also raised its forecast for profit for the full fiscal year, but still within a range that many analysts earlier expected.

Stocks fell in markets around the world, with indexes lower across Asia and much of Europe.

Japan’s Nikkei 225 fell 1.1%, South Korea’s Kospi dropped 1.3% and Hong Kong’s Hang Seng lost 1.5%.

In China, concerns continued over heavily indebted real estate developer Evergrande. The property market crisis there is dragging on China’s economic growth and raising worries about financial instability.

France’s CAC 40 fell 0.7%, and Germany’s DAX lost 1%.

Crude oil prices rose, adding to worries about inflation. A barrel of benchmark U.S. crude climbed 71 cents to $90.39. Brent crude, the international standard, added 67 cents to $93.96 per barrel.

ASX 200 expected to fall again​

The Australian share market looks set to fall again on Wednesday following a very poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 24 points or 0.3% lower this morning.

Wall Street’s ugly September got even worse Tuesday, as a sharp drop for stocks brought them back to where they were in June.

The S&P 500 tumbled 1.5% for its fifth loss in the last six days. The Dow Jones Industrial Average dropped 388 points, or 1.1%, and the Nasdaq composite lost 1.6%.

September has brought a loss of 5.2% so far for the S&P 500, putting it on track to be the worst month of the year by far, as the realization sets in that the Federal Reserve will indeed keep interest rates high for a long time. That growing understanding has sent yields in the bond market to their highest levels in more than a decade, which in turn has undercut prices for stocks and other investments.

On Wall Street, the vast majority of stocks fell Tuesday under such pressures, including 90% of those within the S&P 500.


Market Watch

 

[bigdog]

Stock market today: Asian shares fall over China worries, Seoul trading closed for a holiday

Asian shares were mostly lower Thursday in subdued trading on looming worries about China property woes.

apnews.com

Wall Street yo-yos to a mixed close as oil and bond markets raise the pressure​

By STAN CHOE

Wall Street yo-yoed to a mixed finish Wednesday after rising oil prices and bond yields cranked up the pressure even higher on the stock market.

After taking several U-turns through the day, the S&P 500 inched up by 0.98, or less than 0.1%, to 4,274.51 and remains near its lowest level since June. The Dow Jones Industrial Average slipped 68.61 points, or 0.2%, to 33,550.27 after earlier bouncing between a gain of 112 points and a loss of 312. The Nasdaq composite rose 29.24, or 0.2%, to 13,092.85.

September is on track to be the S&P 500’s worst month of the year as the stock market tries to absorb a leap by Treasury yields to heights unseen in more than a decade. High yields mean bonds are paying more in interest, which makes investors less willing to pay high prices for stocks and other riskier investments.

The yield on the 10-year Treasury rose further Wednesday, to 4.61% from 4.55%. That’s up from about 3.50% in May and from just 0.50% early in the pandemic. It’s soared as Wall Street increasingly accepts a new normal where interest rates will stay high for longer.

After more than a decade where the Federal Reserve would quickly cut rates in order to help the economy, still-high inflation is now discouraging the Fed from lowering rates. Its main interest rate is already at its highest level since 2001, and the Fed indicated last week it will cut rates in 2024 by less than earlier expected.

Strategists at Bank of America say yields could keep rising. Even if the Fed is close to done with hiking its overnight interest rate, it could hold the rate there for a long time.

It’s all brought an end to the old era of investing, where the mantra was “There Is No Alternative” to stocks because bonds were paying such scant yields. With bonds now paying much more and providing real alternatives, stock prices could feel downward pressure for a while.

Even so, the “Fed won’t be overly reactive” to drops in stock prices because the overall economy remains solid, the strategists led by Mark Cabana wrote in a BofA Global Research report.

A report on Wednesday said orders for long-lasting manufactured goods were stronger last month than economists expected. It’s the latest signal that the overall economy remains solid despite much higher interest rates.

The upside of such strength means the economy has avoided a long-predicted recession. But it could also keep enough upward pressure on inflation to encourage the Fed to keep rates high.

Recent jumps in oil prices have likewise turned up the heat on inflation, and crude climbed further Wednesday.

Benchmark U.S. crude rallied $3.29 to settle at $93.68 per barrel, up from less than $70 in June. It’s threatening to top $100 again for the first time since the summer of 2022. Brent crude, the international standard, also rose.

Crude’s spurt helped stocks in the oil and gas industries to some of the market’s most significant gains. Marathon Oil rose 4.2%, and Devon Energy climbed 4%

Costco Wholesale was another winner, rising 1.9% after it reported stronger profit for the latest quarter than analysts expected.

On the losing end of Wall Street was NextEra Energy Partners, which fell 20.1%. The partnership cut its growth forecast for how much it will distribute to unit holders, citing the burden of higher interest rates.

Besides high interest rates, a long list of other worries is also tugging at financial markets. The most immediate is the threat of another U.S. government shutdown as Capitol Hill threatens a stalemate that could shut off federal services across the country as soon as this weekend.

Stock prices have managed through past shutdowns relatively well, but conditions may be a little different this time. Economists at Goldman Sachs expect all data reports from the federal government to be postponed during a shutdown. That could complicate things for the Federal Reserve, which has said repeatedly it will make its upcoming decisions on interest rates based on what reports say about inflation and the job market.

Several highly influential reports are supposed to come in the coming weeks. The next monthly jobs report is due on Oct. 6, and two big inflation reports are due the following week.

Other threats looming over Wall Street include shaky economies around the world, a strike by U.S. auto workers that could put more upward pressure on inflation and a resumption of U.S. student-loan repayments that could dent spending by households.

Stock markets in Asia gained ground, and markets in Europe slipped.

Indexes rose 0.8% in Hong Kong and 0.2% in Shanghai even though concerns remain high about a faltering economic recovery and troubles for Chinese property developers, including the heavily indebted Evergrande.

ASX 200 expected to fall again​

The Australian share market looks set to fall again on Thursday following 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.

Wall Street yo-yoed to a mixed finish Wednesday after rising oil prices and bond yields cranked up the pressure even higher on the stock market.

After taking several U-turns through the day, the S&P 500 inched up by 0.98, or less than 0.1%, to 4,274.51 and remains near its lowest level since June. The Dow Jones Industrial Average slipped 68.61 points, or 0.2%, to 33,550.27 after earlier bouncing between a gain of 112 points and a loss of 312. The Nasdaq composite rose 29.24, or 0.2%, to 13,092.85.

September is on track to be the S&P 500’s worst month of the year as the stock market tries to absorb a leap by Treasury yields to heights unseen in more than a decade. High yields mean bonds are paying more in interest, which makes investors less willing to pay high prices for stocks and other riskier investments.


Market Watch