NYSE Dow Jones finished today at:

[mullokintyre]

It may be premature with only a third of top 500 co's reporting so far, but its going to require one hell of a turn around among the other contenders to change the direction.
Mick

 

[bigdog]

Stock market today: Most of Wall Street leaps in a widespread rally, from big stocks to small

Wall Street rallied following encouraging reports on inflation and on strong profits at 3M and other big U.S. companies.

apnews.com

Most of Wall Street leaps in a widespread rally, from big stocks to small​

By STAN CHOE
Updated 7:59 AM GMT+10, July 27, 2024

NEW YORK (AP) — A widespread rally swept Wall Street Friday, lifting far-reaching corners, to close a tumultuous week where stocks that had been left behind for much of this year’s record-setting run wrested the spotlight back from the market’s biggest stars.

The S&P 500 jumped 1.1% for its best day in seven weeks after 3M and several other big companies delivered better profits for the spring than analysts expected. The Dow Jones Industrial Average soared 654 points, or 1.6%, while the Nasdaq composite climbed 1%.

The market’s widespread gains included rallies for both Big Tech behemoths and smaller stocks. That’s a departure from recent trading, where a divide deepened between the handful of elite stocks that dominated the market for much of this year and almost everyone else.

Nvidia rose 0.7% to trim its loss for the week to 4.1%. Most of the other members of the small group of stocks known as the “Magnificent Seven” also climbed to claw back some of their losses from earlier in the week.

They were under pressure after the latest profit reports from Tesla and Alphabet raised worries that investors had gotten carried away in their frenzy around artificial-intelligence technology and taken Magnificent Seven prices too high. Because those seven stocks are so massive in size, they were the main reason the S&P 500 set dozens of all-time highs this year, and they masked weakness elsewhere in the market.

As those Big Tech stocks atop the market’s leaderboard tumbled, formerly downtrodden areas of the market turned higher, and that momentum kept rolling Friday. The Russell 2000 index of smaller stocks climbed 1.7% to bring its gain for the month so far to 10.4%. That towers over the roughly flat performance for the big stocks in the S&P 500.

Industrial companies and other businesses whose profits are closely tied to the strength of the economy also rallied. They had lagged earlier this year under the weight of high interest rates meant to get inflation under control.

Norfolk Southern rose 10.9% to erase what had been a loss for the year so far after the rail company reported better profit for the latest quarter than analysts expected. It got a boost from insurance payments related to last year’s disastrous East Palestine derailment. The company also made progress in reducing its expenses and improving efficiency.

3M leaped 23% after reporting stronger profit and revenue for the latest quarter than analysts expected. The company behind the Scotch-Brite and Nexcare brands also raised the bottom end of its forecasted range for profit for the full year of 2024.

Market watchers have been hoping for just such a broadening of gains because a market with many stocks rising is seen as healthier than one lifted by just a handful of dominating elites.

Stocks broadly got a boost from Friday’s latest update on inflation, which further cemented investors’ expectations for coming cuts to interest rates.

U.S. consumers paid prices in June that were 2.5% higher than a year earlier, down from May’s inflation rate of 2.6%, the Commerce Department said on Friday. That’s according to the personal consumption expenditures index, which the Federal Reserve pays more attention to than the consumer price index, or CPI.

With inflation resuming its slowdown following a discouraging start to the year, traders are banking on a 100% probability the Fed will begin easing its main interest rate in September, according to data from CME Group. The Fed has been keeping its federal funds rate at the highest level in more than two decades.

“Income growth is slow, spending growth is moderating, goods prices are in deflation, service price inflation is tame,” said Brian Jacobsen, chief economist at Annex Wealth Management. “If this doesn’t give the Fed confidence to cut, nothing will.”

The yield on the 10-year Treasury fell to 4.19% from 4.25% late Thursday and from 4.70% in April. That’s a significant move for the bond market and offers support for stock prices.

Among the other winners on Wall Street, where nearly 90% of the stocks in the S&P 500 rose, Deckers Outdoors climbed 6.3% after breezing past Wall Street’s earnings expectations on the strength of its Ugg and Hoka brands of footwear. The California company also raised its full-year profit forecast.

Newell Brands soared 40.5% after the owner of Coleman camping supplies and Sharpie markers easily topped analysts’ profit targets.

Among the relatively few stocks to drop was DexCom, which tumbled 40.7%. The diabetes care company reported stronger profit for the latest quarter than expected, but its revenue fell short of analysts’ expectations. So did its forecast for revenue in the current quarter.

All told, the S&P 500 rose 59.88 points to 5,459.10. The Dow rallied 654.27 to 40,589.34, and the Nasdaq composite climbed 176.16 to 17,357.88.

In stock markets abroad, stock indexes were higher across much of Europe and Asia. Japan’s Nikkei 225 was an outlier and slipped 0.5% amid expectations the Bank of Japan may raise interest rates at a policy meeting next week.

 

[bigdog]

ASX 200 expected to rise again​

The Australian share market looks set to rise again on Monday following a strong finish on Wall Street on Friday.

According to the latest SPI futures, the ASX 200 is expected to open the day 60 points or 0.75% higher.
A widespread rally swept Wall Street Friday, lifting far-reaching corners, to close a tumultuous week where stocks that had been left behind for much of this year’s record-setting run wrested the spotlight back from the market’s biggest stars.

The S&P 500 jumped 1.1% for its best day in seven weeks after 3M and several other big companies delivered better profits for the spring than analysts expected. The Dow Jones Industrial Average soared 654 points, or 1.6%, while the Nasdaq composite climbed 1%.

 

[bigdog]

Stock market today: Wall Street drifts to a mixed finish ahead of a frenetic week

U.S. stock indexes drifted to a mixed finish ahead of a week full of earnings reports from Wall Street’s most influential companies and a Federal Reserve meeting on interest rates.

apnews.com

Wall Street drifts to a mixed finish ahead of a frenetic week​

By STAN CHOE
Updated 7:18 AM GMT+10, July 30, 2024

NEW YORK (AP) — U.S. stock indexes drifted to a mixed finish Monday to kick off a week full of earnings reports from Wall Street’s most influential companies and a Federal Reserve meeting on interest rates.

The S&P 500 edged up by 4.44 points, or 0.1%, to 5,463.54, coming off its first back-to-back weekly losses since April. The Dow Jones Industrial Average slipped 49.41, or 0.1%, to 40,539.93, and the Nasdaq composite added 12.32, or 0.1%, to 17,370.20.

ON Semiconductor helped lead the market with a jump of 11.5% after the supplier to the auto and other industries reported stronger profit for the spring than analysts expected. McDonald’s rose 3.7% despite reporting profit and revenue for the latest quarter that fell shy of forecasts. Analysts said its performance at U.S. restaurants wasn’t as bad as some investors had feared.

They helped offset slides for oil-and-gas companies, which were some of the heaviest weights on the market after the price of oil sank back toward where it was two months ago. ConocoPhillips lost 1.6%, and Exxon Mobil fell 1% amid worries about how much crude China’s faltering economy will burn.

Several of Wall Street’s biggest names are set to report their own results later this week: Microsoft on Tuesday, Meta Platforms on Wednesday and Apple and Amazon on Thursday. Their stock movements carry extra weight on Wall Street because they are among the market’s largest by total value.

Such Big Tech stocks drove the S&P 500 to dozens of records this year, in part on investors’ frenzy around artificial-intelligence technology, but they ran out of momentum this month amid criticism they’ve grown too expensive, and as alternatives began to look more attractive. Last week, investors found profit reports from Tesla and Alphabet underwhelming, which raised concerns that other stocks in what’s known as the “Magnificent Seven” group of Big Tech stocks could also fail to impress.

“AI hype days are over,” according to Bank of America strategists led by Savita Subramanian. “Time to show monetization.”

What’s helped support the U.S. stock market even as those Big Tech behemoths weakened has been strength from other areas that had been beaten down by high interest rates meant to get inflation under control. Smaller stocks in particular soared on expectations that slowing inflation will get the Federal Reserve to soon begin cutting interest rates.

That pattern unwound a bit on Monday, as the majority of Big Tech stocks rose while the smaller stocks in the Russell 2000 index slumped 1.1%. But the Russell 2000 is still up by a market-leading 9.2% for the month so far.

The Fed will hold its latest policy meeting on interest rates this week, and an announcement will come on Wednesday. Virtually no one expects a move then, but the widespread expectation is that it will begin easing at its following meeting in September.

Treasury yields held relatively steady in the bond market, and the yield on the 10-year Treasury slipped to 4.17% from 4.19% late Friday. It was as high as 4.70% in April.

In stock markets abroad, Japan’s Nikkei 225 index jumped 2.1%. Its central bank will also announce a decision on interest rates this week. Expectations are for it to raise rates.

Indexes rose 1.3% in Hong Kong and were roughly flat in Shanghai after official data on Saturday showed industrial profits rose 3.5% in the first half of 2024 from a year earlier. That was a glimmer of positive news following recent cuts to interest rates and other piecemeal stimulus that followed a top-level policy meeting of the ruling Communist Party earlier this month.

The FTSE 100 edged up by 0.1% in London ahead of a meeting for the Bank of England this week, where some investors expect to see a cut in interest rates.

ASX 200 expected to fall​

The Australian share market is expected to fall on Tuesday following a mixed start to the week on Wall Street.

According to the latest SPI futures, the ASX 200 is poised to open the day 55 points or 0.75% lower.

U.S. stock indexes drifted to a mixed finish Monday to kick off a week full of earnings reports from Wall Street’s most influential companies and a Federal Reserve meeting on interest rates.

The S&P 500 edged up by 4.44 points, or 0.1%, to 5,463.54, coming off its first back-to-back weekly losses since April. The Dow Jones Industrial Average slipped 49.41, or 0.1%, to 40,539.93, and the Nasdaq composite added 12.32, or 0.1%, to 17,370.20.

 

[bigdog]

Stock market today: Asian stocks are mostly higher as Bank of Japan raises benchmark rate

Asian stocks are mostly higher following a decision by the Bank of Japan to raise its benchmark interest rate.

apnews.com

Big Tech weakness holds back Wall Street even as most stocks rise​

By STAN CHOE
Updated 6:26 AM GMT+10, July 31, 2024

NEW YORK (AP) — More drops for Big Tech stocks dragged on Wall Street Tuesday, overshadowing gains for much of the U.S. stock market.

The S&P 500 slipped 0.5%, even though two out of every three stocks within the index rose. The Dow Jones Industrial Average rose 203 points, or 0.5%, and the Nasdaq composite sank 1.3%.

PayPal rose 8.6% and helped lead the market’s gainers after it topped analysts’ expectations for profit during the spring. It also raised its forecast for profit over the full year.

JetBlue Airways climbed 12.3% after reporting a profit for the spring, when analysts were expecting to see a loss. The airline also outlined ways it hopes to improve on-time performance and attract customers.

But a 0.9% slide for Microsoft nevertheless helped drag the S&P 500 lower as investors waited for its latest profit report, which arrived after trading finished for the day. Microsoft’s stock fell further in after-hours trading.

Most of the other stocks in the group that’s come to be known as the “Magnificent Seven” also fell Tuesday, including a 7% tumble for Nvidia. This handful of Big Tech stocks drove the S&P 500 to dozens of records this year, in part on investors’ frenzy around artificial intelligence technology. But they ran out of momentum this month amid criticism they had grown too expensive and expectations had run too high.

Last week, investors found profit reports from Tesla and Alphabet underwhelming, which raised concerns that other “Magnificent Seven” stocks could also fail to impress. Amazon, Apple and Meta Platforms will report their latest profit results in coming days. Their performance carries extra weight on the S&P 500 because they’re among the largest by value.

Helpfully for the market, other stocks have been rising up to cushion some of Big Tech’s recent softness, including smaller stocks and companies whose profits are closely tied to the strength of the economy. They rallied on hopes that inflation is slowing enough to get the Federal Reserve to soon begin cutting interest rates.

The Russell 2000 index of smaller stocks added 0.3% Tuesday to stretch its market-leading gain for the month to 9.5%.

Many along Wall Street expect this rotation from Big Tech to smaller stocks to continue, but more cautious voices are still urging skepticism.

“In our view, the recent rally is likely unsustainable as the fundamental support is lacking,” according to Austin Pickle, investment strategy analyst at Wells Fargo Investment Institute, who pointed to how more than 40% of small-cap companies aren’t making any profits, among other challenges.

Also helping to weigh on Wall Street Tuesday was Merck, which fell 9.8% despite reporting stronger results for the last quarter than expected. It gave a forecast for profit this year that fell short of analysts’ expectations, partly because of costs related to its buyout of Eyebiotech.

Procter & Gamble slid 4.8% after beating forecasts for profit in the latest quarter but falling short on revenue. It was hurt by the effects of shifting foreign exchange rates on its international sales, and it expects that to remain a challenge in its upcoming fiscal year.

All told, the S&P 500 fell 27.10 points to 5,436.44. The Dow added 203.40 to 40,743.33, and the Nasdaq composite fell 222.78 to 17,147.42.

No one expects the Fed to cut interest rates this week, when it announces its decision on Wednesday. But the widespread expectation is that it will do so at its next meeting in September.

Expectations for a soon-to-be easier Fed have sent yields tumbling in the bond market, and they eased further Tuesday. The yield on the 10-year Treasury fell to 4.14% from 4.17% late Monday and from 4.70% in April.

Yields got a brief bump in the morning after a couple reports on the economy came in stronger than expected. One showed U.S. employers were advertising slightly more job openings at the end of June than economists expected. That’s a good signal for workers, but too much strength could put upward pressure on inflation.

A second report, meanwhile, said confidence among U.S. consumers is improving by more than economists expected. There, too, the hope is for a “Goldilocks” type of reading that’s neither so hot that it raises fears about reaccelerating inflation nor so cold that it warns of a possible recession.

In stock markets abroad, indexes were mixed across Asia and Europe ahead of decisions by central banks there that could shake things up.

Japan’s Nikkei 225 added 0.1% ahead of a meeting by the Bank of Japan, where the expectation is for an increase in interest rates.

The FTSE 100 in London slipped 0.2% ahead of a decision by the Bank of England that could feature a cut in rates.

Indexes were stronger in continental Europe after a report indicated that economic growth was a touch stronger than expected in the second quarter among the 20 countries that use the euro currency, according to official figures released Tuesday by European Union statistics agency Eurostat.

ASX 200 expected to rise​

The Australian share market looks set to rise on Wednesday despite a relatively poor session in the United States.

According to the latest SPI futures, the ASX 200 is expected to open the day 29 points or 0.35% higher.

More drops for Big Tech stocks dragged on Wall Street Tuesday, overshadowing gains for much of the U.S. stock market.

The S&P 500 slipped 0.5%, even though two out of every three stocks within the index rose. The Dow Jones Industrial Average rose 203 points, or 0.5%, and the Nasdaq composite sank 1.3%.

All told, the S&P 500 fell 27.10 points to 5,436.44. The Dow added 203.40 to 40,743.33, and the Nasdaq composite fell 222.78 to 17,147.42.

 

[bigdog]

Stock market today: S&P 500 jumps to best day in 5 months as tech rebounds, rate cuts come into view

Big technology stocks drove a rally for U.S. indexes, as Wall Street grew even more convinced long-sought cuts to interest rates will be arriving soon.

apnews.com

S&P 500 jumps to best day in 5 months as tech rebounds, rate cuts come into view​

By STAN CHOE
Updated 6:40 AM GMT+10, August 1, 2024

NEW YORK (AP) — Big technology stocks bounced back Wednesday and drove a rally for U.S. indexes, as Wall Street grew even more convinced long-sought cuts to interest rates will be arriving soon.

The S&P 500 jumped 1.6% for its best day since February. The Dow Jones Industrial Average rose 99 points, or 0.2%, and the Nasdaq composite soared 2.6%.

The widespread gains came as Treasury yields eased in the bond market after the Federal Reserve gave the clearest indication yet that it could begin lowering interest rates in September. Fed Chair Jerome Powell said policy makers are “getting closer to the point” of comfort about inflation where they could cut rates for the first time since COVID-19 crashed the economy.

“We think that the time is approaching,” Powell said. “And if we do get the data that we hope we get, then a reduction in our policy rate could be on the table at the September meeting.”

After the Fed voted to keep interest rates steady on Wednesday, as was widely expected, Powell spent much of an ensuing press conference discussing the risks of both moving too early or too late with rate cuts. One could allow inflation to reaccelerate, while the other could cause unnecessary pain for the economy and ultimately throw Americans out of their jobs.

After keeping its main interest rate at a two-decade high for roughly a year, speculation may rise that the Fed waited too long. That “has the potential to add to the stock market’s choppiness as we head toward what is historically its most volatile period,” said Chris Larkin, managing director of trading and investing at E-Trade from Morgan Stanley.

For Wednesday, though, the dominant mood on Wall Street was jubilance.

Advanced Micro Devices rallied 4.4% after reporting better profit and revenue for the latest quarter than analysts expected, thanks in part to accelerating artificial-intelligence business. That helped drive Nvidia, the chip company that’s become the poster child for Wall Street’s frenzy around AI, up 12.9% a day after it lost 7%.

How such Big Tech stocks perform matters a lot because they’re Wall Street’s most valuable companies, and that gives them the biggest sway on the S&P 500. A handful of these stocks, known as the “Magnificent Seven,” drove the U.S. stock market to dozens of records this year, even as many other stocks struggled under the weight of high interest rates. But they ran out of momentum this month amid criticism they had grown too expensive and expectations had run too high.

Such criticism hasn’t gone away, and Microsoft fell 1.1% despite reporting profit and revenue for the latest quarter that edged past analysts’ expectations. Growth in its Azure cloud-computing business fell a bit shy of analysts’ forecasts. That followed earlier profit reports from Tesla and Alphabet that investors found underwhelming, which raised concerns that other Magnificent Seven stocks could also fail to impress.

Meta Platforms rose 2.5% as investors waited for its profit report, which arrived after trading closed for Wednesday. Amazon and Apple will follow on Thursday, and each rose at least 1.5%.

Stronger-than-expected profit reports from companies outside the Magnificent Seven also helped lift the market.

Match Group jumped 13.2% after saying its user trends for Tinder are stabilizing and reporting results for the latest quarter that roughly matched analysts’ expectations.

DuPont rose 4.1% after delivering better profit and revenue than expected, thanks in part to a recovery for the electronics business, and the chemical giant raised its financial forecasts for the full year.

They helped offset a 3% drop for Altria Group after the maker of cigarettes and smoke-free products fell short of expectations for profit and revenue in its latest quarter.

All told, the S&P 500 rose 85.86 points to 5,522.30. The Dow gained 99.46 to 40,842.79, and the Nasdaq composite jumped 451.98 to 17,599.40.

In the bond market, the yield on the 10-year Treasury eased to 4.05% from 4.14% late Tuesday. It’s been falling from 4.70% in April as a slowdown in inflation raised expectations for coming cuts to interest rates.

Yields fell in the morning after a report showed U.S. employers spent less in total pay and benefits for workers during the spring than economists expected. Another suggested hiring by employers outside the government was a touch weaker than expected.

While workers would surely like such numbers to be stronger, it could be the type of “Goldilocks” data that Wall Street is looking for: not so strong that it pushes upward on inflation but not so weak that it raises worries about a recession.

Some of Wednesday’s strongest action was in the oil market, where the price for a barrel of benchmark U.S. crude jumped about 4%. Hamas’s top political leader Ismail Haniyeh died in a predawn airstrike in the Iranian capital early Wednesday, Iran and the militant group said, blaming Israel for a shock assassination that could escalate conflict in the region and potential disrupt the flow of oil. There was no immediate comment from Israel.

In stock markets abroad, Japan’s Nikkei 225 rose 1.5% after the Bank of Japan raised its benchmark interest rate.

Indexes rallied 2.1% in Shanghai and 2% in Hong Kong after official data showed China’s July manufacturing activity contracted again, fueling expectations that Beijing will need to roll out more stimulus to counter a slowdown for the world’s second-largest economy.

Stock indexes also rose across Europe.

ASX 200 expected to rise​

The Australian share market looks set to rise again on Thursday following a very strong night on Wall Street.

According to the latest SPI futures, the ASX 200 is expected to open the day 17 points or 0.2% higher this morning.

Big technology stocks bounced back Wednesday and drove a rally for U.S. indexes, as Wall Street grew even more convinced long-sought cuts to interest rates will be arriving soon.

The S&P 500 jumped 1.6% for its best day since February. The Dow Jones Industrial Average rose 99 points, or 0.2%, and the Nasdaq composite soared 2.6%.

All told, the S&P 500 rose 85.86 points to 5,522.30. The Dow gained 99.46 to 40,842.79, and the Nasdaq composite jumped 451.98 to 17,599.40.

 

[bigdog]

Stock market today: Worries about the economy hit Wall Street, and the Dow drops nearly 500 points

U.S. stocks tumbled after weak data raised worries the Federal Reserve may have missed its window to cut interest rates before undercutting the economy’s growth.

apnews.com

Worries about the economy hit Wall Street, and the Dow drops nearly 500 points​

By STAN CHOE
Updated 7:30 AM GMT+10, August 2, 2024

NEW YORK (AP) — Just a day after rallying on hopes that the Federal Reserve is about to cut interest rates, U.S. stocks tumbled Thursday after weak data raised worries the Fed may have missed its window to do so before undercutting the economy’s growth.

The S&P 500 sank 1.4% after a report showed U.S. manufacturing activity is still shrinking, and its contraction is accelerating. Manufacturing has been one of areas of the economy hurt most by high rates, and the report from the Institute for Supply Management helped extinguish what had been gains for U.S. stock indexes early in the morning.

The Dow Jones Industrial Average dropped 494 points, or 1.2%, and had been down more than 700 points earlier in the day, while the Nasdaq composite sank 2.3%.

The action was even stronger in the bond market, where the yield on the 10-year Treasury tumbled below 4%, back to where it was in February. Besides the soft manufacturing data, reports earlier in the morning showed that the number of U.S. workers applying for jobless benefits hit its highest level in about a year and that productivity for U.S. workers improved during the spring.

Together, the data likely remove upward pressure on inflation and give more leeway for the Federal Reserve to cut interest rates. A day earlier, yields sank after Fed Chair Jerome Powell gave the clearest indication yet that inflation may have slowed enough for an easing of rates to begin in September.

But the data also raised worries that the Fed may have held rates too high for too long in its zeal to stifle inflation. The Fed has been keeping its main interest rate at a two-decade high for roughly a year, and that has made it more expensive to borrow to buy a house, car or anything on credit cards. And it could take months to a year for the full effects of a rate cut to filter out into the economy.

“Markets are thinking maybe the Federal Reserve should have cut yesterday,” according to Jamie Cox, managing partner for Harris Financial Group.

Stocks of companies whose profits are most closely tied to the economy’s strength had some of Wall Street’s sharper drops. Energy stocks in the S&P 500 fell 2.6%, for example, while industrial companies in the index weakened by 1.8%.

The small stocks in the Russell 2000 index dropped 3%. They had soared more than the rest of the market last month on hopes that the economy would remain solid as interest rates come down, a potent cocktail for them.

The weak economic numbers raise the stakes for an already highly anticipated employment report coming on Friday. Economists expect it to show a slight slowdown in U.S. hiring last month, and Wall Street’s hope is for a Goldilocks type of reading that is neither so hot that it puts upward pressure on inflation nor so cold that it worsens worries about a possible recession.

But the figures could be skewed by the effects of Hurricane Beryl, warns Kevin Khang, senior international economist at Vanguard. It could mean a headline number that looks worse than underlying fundamentals suggest.

The S&P 500 would have dropped even more Thursday if not for Meta Platforms. The company behind Facebook and Instagram climbed 4.8% after reporting profit and revenue for the latest quarter that topped analysts’ expectations.

Uncertainty was high heading into its report after other members of the highly influential group of stocks known as the “ Magnificent Seven ” had underwhelmed investors. This handful of Big Tech stocks drove the S&P 500 to dozens of records this year, in part on the frenzy around artificial-intelligence technology. But their momentum turned last month on worries investors had taken their prices too high and expectations for their profit gains had grown too difficult to meet.

Other technology companies got a less welcoming reception from investors. ARM Holdings delivered better profit and revenue for the latest quarter than expected, for example. But its U.S.-listed shares nevertheless tumbled 15.7%. The U.K. chip company did not increase its forecasts for revenue and profit this fiscal year, despite its strong numbers.

Amazon and Apple which like Meta Platforms are also members of the “Magnificent Seven,” were two of the heaviest weights on the S&P 500. Each fell at least 1.6% as investors waited for their latest profit reports, which arrived after trading ended for the day.

All told, the S&P 500 fell 75.62 points to 5,446.68. The Dow dropped 494.82 to 40,347.97, and the Nasdaq tumbled 405.25 to 17,194.15.

In the bond market, the yield on the 10-year Treasury slumped to 3.97% from 4.04% late Wednesday and from 4.70% in April.

Traders are unified in their belief the Federal Reserve will cut its main interest rate in September. The only question is how many times it may cut this year and next.

Across the Atlantic, the Bank of England cut interest rates for the first time since the onset of the COVID-19 pandemic in early 2020. The FTSE 100 in London fell 1% after erasing an earlier gain, and stock indexes were also weaker across much of Europe and Asia.

Japan’s Nikkei 225 fell 2.5%. A day earlier, the Bank of Japan raised interest rates, a move that helps push up the value of the yen against the U.S. dollar. Such swings can hurt the profits of exporters, and Toyota’s stock tumbled 8.5% in Tokyo Thursday even though it reported a rise in profit.

ASX 200 expected to sink​

The Australian share market looks set to end the week with a heavy decline following a selloff in the United States.

According to the latest SPI futures, the ASX 200 is expected to open 144 points or 1.8% lower this morning.

Just a day after rallying on hopes that the Federal Reserve is about to cut interest rates, U.S. stocks tumbled Thursday after weak data raised worries the Fed may have missed its window to do so before undercutting the economy’s growth.

The S&P 500 sank 1.4% after a report showed U.S. manufacturing activity is still shrinking, and its contraction is accelerating. Manufacturing has been one of areas of the economy hurt most by high rates, and the report from the Institute for Supply Management helped extinguish what had been gains for U.S. stock indexes early in the morning.

The Dow Jones Industrial Average dropped 494 points, or 1.2%, and had been down more than 700 points earlier in the day, while the Nasdaq composite sank 2.3%.

All told, the S&P 500 fell 75.62 points to 5,446.68. The Dow dropped 494.82 to 40,347.97, and the Nasdaq tumbled 405.25 to 17,194.15.

 

[bigdog]

Stock market today: Dow drops 600 on weak jobs data as a global sell-off whips back to Wall Street

Stocks tumbled Friday on worries the U.S. economy could be cracking under the weight of high interest rates meant to whip inflation. The S&P 500 fell 1.8% Friday.

apnews.com

Dow drops 600 on weak jobs data as a global sell-off whips back to Wall Street​

By STAN CHOE
Updated 6:41 AM GMT+10, August 3, 2024

NEW YORK (AP) — Stocks tumbled Friday on worries the U.S. economy could be cracking under the weight of high interest rates meant to whip inflation.

The S&P 500 sank 1.8% for its first back-to-back losses of at least 1% since April. The Dow Jones Industrial Average dropped 610 points, or 1.5%, and the Nasdaq composite fell 2.4% as a sell-off for stocks whipped all the way around the world back to Wall Street.

A report showing hiring by U.S. employers slowed last month by much more than economists expected sent fear through markets, with both stocks and bond yields dropping sharply. It followed a batch of weaker-than-expected reports on the economy from a day earlier, including a worsening for U.S. manufacturing activity, which has been one of the areas hurt most by high rates.

It was just a couple days ago that U.S. stock indexes jumped to their best day in months after Federal Reserve Chair Jerome Powell gave the clearest indication yet that inflation has slowed enough for cuts to rates to begin in September.

Now, worries are rising the Fed may have kept its main interest rate at a two-decade high for too long. A rate cut would make it easier for U.S. households and companies to borrow money and boost the economy, but it could take months to a year for the full effects to filter through.

“The Fed is seizing defeat from the jaws of victory,” said Brian Jacobsen, chief economist at Annex Wealth Management. “Economic momentum has slowed so much that a rate cut in September will be too little and too late. They’ll have to do something bigger than” the traditional cut of a quarter of a percentage point “to avert a recession.”

Traders are now betting on a 70% probability that the Fed will cut its main interest rate by half a percentage point in September, according to data from CME Group. That’s even though Powell said Wednesday that such a deep reduction is “not something we’re thinking about right now.”

Of course, the U.S. economy is still growing, and a recession is far from a certainty. The Fed has been clear about the tightrope it’s walking since it started hiking rates sharply in March 2022: Being too aggressive would choke the economy, but going too soft would give inflation more oxygen.

While refusing to claim victory on either the jobs or the inflation fronts on Wednesday, before the discouraging economic reports hit, Powell said Fed officials “have a lot of room to respond if we were to see weakness” in the job market after hiking its main rate so high.

“Certainly today’s job data feeds the weakening economy narrative, but I believe the market is overreacting at this point and pricing too much in on rate cuts at this stage,” said Nate Thooft, senior portfolio manager at Manulife Investment Management. “Yes, the economy is weakening, but I am not convinced there is enough evidence that the data so far is a death knell for the economy.”

U.S. stocks had already appeared to be headed for losses Friday before the disappointing jobs report thudded onto Wall Street.

Several big technology companies turned in underwhelming profit reports, which continued a mostly dispiriting run that began last week with results from Tesla and Alphabet.

Amazon fell 8.8% after reporting weaker revenue for the latest quarter than expected. The retail and tech giant also gave a forecast for operating profit for the summer that fell short of analysts’ expectations.

Intel dropped even more, 26.1%, for its worst day in 50 years, after the chip company’s profit for the latest quarter fell well short of forecasts. It also suspended its dividend payment and forecast a loss for the third quarter, when analysts were expecting a profit.

Apple held steadier, up 0.7%, after reporting better profit and revenue than expected.

Apple and a handful of other Big Tech stocks known as the “ Magnificent Seven ” were the main reasons the S&P 500 set dozens of records this year, in part on a frenzy around artificial-intelligence technology. But their momentum turned last month on worries investors had taken their prices too high.

Friday’s losses for tech stocks dragged the Nasdaq composite 10% below its record set last month. That level of drop is what traders call a “correction.”

Helpfully for Wall Street, other areas of the stock market beaten down by high interest rates began rebounding sharply last month when tech stocks were regressing, particularly smaller companies. But they tumbled too Friday on worries that a fragile economy could undercut their profits.

The Russell 2000 index of smaller stocks dropped 3.5%, more than the rest of the market.

All told, the S&P 500 fell 100.12 points to 5,346.56. The Dow dropped 610.71 to 39.737.26, and the Nasdaq composite fell 417.98 to 16,776.16.

In the bond market, Treasury yields fell sharply as traders forecasted deeper cuts to rates coming from the Federal Reserve. The yield on the 10-year Treasury fell to 3.79% from 3.98% late Thursday and from 4.70% in April.

In stock markets abroad, Japan’s Nikkei 225 dropped 5.8%. It’s been struggling since the Bank of Japan raised its benchmark interest rate on Wednesday. The hike pushed up the value of the Japanese yen against the U.S. dollar, which could hurt profits for exporters and deflate a boom in tourism.

Chinese stocks fell as investors registered disappointment with the government’s latest efforts to spur growth through various piecemeal measures, instead of hoped-for infusions of broader stimulus, while stock indexes dropped by more than 1% across much of Europe.

Commodity prices also had a rough ride this week. Oil prices leaped after the killings of leaders of Hamas and Hezbollah fueled fears that a widening conflict in the Middle East could disrupt the flow of crude.

But prices fell back Thursday and Friday on worries that a weakening economy would burn less fuel. A barrel of benchmark U.S. crude dropped back below $74 Friday after coming into the week above $77.

ALL RED FRIDAY!!

 

[bigdog]

ASX 200 expected to crash again​

The Australian share market looks set to crash again on Monday following another selloff on Wall Street on Friday.

According to the latest SPI futures, the ASX 200 is expected to open the day 115 points or 1.5% lower.

Stocks tumbled Friday on worries the U.S. economy could be cracking under the weight of high interest rates meant to whip inflation.

The S&P 500 sank 1.8% for its first back-to-back losses of at least 1% since April. The Dow Jones Industrial Average dropped 610 points, or 1.5%, and the Nasdaq composite fell 2.4% as a sell-off for stocks whipped all the way around the world back to Wall Street.

The Russell 2000 index of smaller stocks dropped 3.5%, more than the rest of the market.

All told, the S&P 500 fell 100.12 points to 5,346.56. The Dow dropped 610.71 to 39.737.26, and the Nasdaq composite fell 417.98 to 16,776.16.

 

[bigdog]

Japan's share benchmark soars nearly 11% a day after massive sell-offs that shook Wall Street

Nearly everything on Wall Street is tumbling as fear about a slowing U.S. economy worsens around the world.

apnews.com

Dow drops 1,000 points, and Japanese stocks suffer worst crash since 1987 as markets quake worldwide​

By STAN CHOE
Updated 7:12 AM GMT+10, August 6, 2024

NEW YORK (AP) — A scary Monday that started with a plunge abroad reminiscent of 1987 ’s crash swept around the world and pummeled Wall Street with more steep losses, as fears worsened about a slowing U.S. economy.

The S&P 500 dropped 3% for its worst day in nearly two years. The Dow Jones Industrial Average reeled by 1,033 points, or 2.6%, while the Nasdaq composite slid 3.4% as Apple, Nvidia and other Big Tech companies that used to be the stars of the stock market continued to wilt.

The drops were the latest in a global sell-off that began last week. Japan’s Nikkei 225 helped begin Monday by plunging 12.4% for its worst day since the Black Monday crash of 1987.

It was the first chance for traders in Tokyo to react to Friday’s report showing U.S. employers slowed their hiring last month by much more than economists expected. That was the latest piece of data on the U.S. economy to come in weaker than expected, and it’s all raised fear the Federal Reserve has pressed the brakes on the U.S. economy by too much for too long through high interest rates in hopes of stifling inflation.

Professional investors cautioned that some technical factors could be amplifying the action in markets, and that the drops may be overdone, but the losses were still neck-snapping. South Korea’s Kospi index careened 8.8% lower, and bitcoin dropped below $54,000 from more than $61,000 on Friday

Even gold, which has a reputation for offering safety during tumultuous times, slipped about 1%.

That’s in part because traders began wondering if the damage has been so severe that the Federal Reserve will have to cut interest rates in an emergency meeting, before its next scheduled decision on Sept. 18. The yield on the two-year Treasury, which closely tracks expectations for the Fed, briefly sank below 3.70% during the morning from 3.88% late Friday and from 5% in April. It later recovered and pulled back to 3.89%.

“The Fed could ride in on a white horse to save the day with a big rate cut, but the case for an inter-meeting cut seems flimsy,” said Brian Jacobsen, chief economist at Annex Wealth Management. “Those are usually reserved for emergencies, like COVID, and an unemployment rate of 4.3% doesn’t really seem like an emergency.”

Of course, the U.S. economy is still growing, the U.S. stock market is still up a healthy amount for the year and a recession is far from a certainty. The Fed has been clear about the tightrope it began walking when it started hiking rates sharply in March 2022: Being too aggressive would choke the economy, but going too soft would give inflation more oxygen and hurt everyone.

Goldman Sachs economist David Mericle sees a higher chance of a recession within the next 12 months following Friday’s jobs report. But he still sees only a 25% probability of that, up from 15%, in part “because the data look fine overall” and he does not “see major financial imbalances.”

Some of Wall Street’s recent declines may simply be air coming out of a stock market that romped to dozens of all-time highs this year, in part on a frenzy around artificial-intelligence technology. Critics have been saying for a while that the stock market looked expensive after prices rose faster than corporate profits.

“Markets tend to move higher like they’re climbing stairs, and they go down like they’re falling out a window,” according to JJ Kinahan, CEO of IG North America. He chalks much of the recent worries to euphoria around AI subsiding, with pressure rising on companies to show how AI is turning into profits, and “a market that was ahead of itself.”

The only way for stocks to look less expensive is either for prices to fall or for their profits to strengthen. Expectations are still high for the latter, with growth for S&P 500 profits this past quarter looking to be the strongest since 2021.

Professional investors also pointed to the Bank of Japan’s move last week to raise its main interest rate from nearly zero. Such a move helps boost the value of the Japanese yen, but it could also force traders to scramble out of deals where they borrowed money for virtually no cost in Japan and invested it elsewhere around the world.

Treasury yields also pared their losses Monday after a report said growth for U.S. services businesses was a touch stronger than expected. Growth was led by arts, entertainment and recreation businesses, along with accommodations and food services, according to the Institute for Supply Management.

Still, stocks of companies whose profits are most closely tied to the economy’s strength took sharp losses on the fears about a slowdown. The small companies in the Russell 2000 index dropped 3.3%, washing out what had been a revival for it and other beaten-down areas of the market.

Making things worse for Wall Street, Big Tech stocks tumbled as the market’s most popular trade for much of this year continued to unravel. Apple, Nvidia and a handful of other Big Tech stocks known as the “ Magnificent Seven ” had propelled the S&P 500 to record after record this year, even as high interest rates weighed down much of the rest of the stock market.

But Big Tech’s momentum turned last month on worries investors had taken their prices too high and expectations for future growth are becoming too difficult to meet. A set of underwhelming profit reports that began with updates from Tesla and Alphabet added to the pessimism and accelerated the declines.

Apple fell 4.8% Monday after Warren Buffett’s Berkshire Hathaway disclosed that it had slashed its ownership stake in the iPhone maker.

Nvidia, the chip company that’s become the poster child of Wall Street’s AI bonanza, fell even more, 6.4%. Analysts cut their profit forecasts over the weekend for the company after a report from The Information said Nvidia’s new AI chip is delayed. The recent selling has trimmed Nvidia’s gain for the year to nearly 103% from 170% in the middle of June.

Another Big Tech titan, Alphabet, fell 4.4% after a U.S. judge ruled Google’s search engine has been illegally exploiting its dominance to squash competition and stifle innovation.

All told, the S&P 500 fell 160.23 points to 5,186.33. The Dow sank 1,033.99 to 38,703.27, and the Nasdaq composite tumbled 576.08 to 16,200.08.

Worries outside corporate profits, interest rates and the economy are also weighing on the market. The Israel-Hamas war may be worsening, which beyond its human toll could cause sharp swings for the price of oil. That’s adding to broader worries about potential hotspots around the world, while upcoming U.S. elections could further scramble things.

Wall Street has been concerned about how policies coming out of November could impact markets, but the sharp swings for stock prices could affect the election itself.

The threat of a recession is likely to put Vice President Kamala Harris on the defensive. But slower growth could also further reduce inflation and force former President Donald Trump to pivot from his current focus on higher prices to outlining ways to revive the economy.

“It comes down to jobs,” said Quincy Krosby, chief global strategist for LPL Financial. Jobs drive spending by U.S. consumers, which in turn is the biggest part of the U.S. economy.

“When we get to election day, the unemployment rate is going to be extremely important.”

ASX 200 expected to fall again​

The Australian share market is expected to fall again on Tuesday following a very bad start to the week on Wall Street.

According to the latest SPI futures, the ASX 200 is poised to open the day 27 points or 0.3% lower.

A scary Monday that started with a plunge abroad reminiscent of 1987 ’s crash swept around the world and pummeled Wall Street with more steep losses, as fears worsened about a slowing U.S. economy.

The S&P 500 dropped 3% for its worst day in nearly two years. The Dow Jones Industrial Average reeled by 1,033 points, or 2.6%, while the Nasdaq composite slid 3.4% as Apple, Nvidia and other Big Tech companies that used to be the stars of the stock market continued to wilt.

The drops were the latest in a global sell-off that began last week. Japan’s Nikkei 225 helped begin Monday by plunging 12.4% for its worst day since the Black Monday crash of 1987.

All told, the S&P 500 fell 160.23 points to 5,186.33. The Dow sank 1,033.99 to 38,703.27, and the Nasdaq composite tumbled 576.08 to 16,200.08.


Market Watch

ASX futures down 27 points or 0.3%

• Australian dollar down 0.3% to 64.95 US cents at 6.55am AEST
• Wall Street: S&P 500 -3%, Dow Jones -2.6%, Nasdaq -3.4%
• Europe: Stoxx 50 -1.5%, FTSE -2%, DAX -1.8%, CAC -1.4%
• Bitcoin -8.5% to $US54,047 on Bitstamp at 6.57am AEST
• Spot gold -1.4% to $US2409.58 per ounce at 6.57am AEST
• US oil +0.4% to $US73.81 a barrel at 6.45am AEST
• Brent crude +0.5% to $US77.16 a barrel at 6.45am AEST
• Iron ore -0.3% to $US103.55 per tonne (Singapore 62% grade)
• 10-year yield: US 3.78% Australia 4.05% Germany 2.18%

​

 

[bigdog]

Calm returns to Wall Street, and stocks bounce back after their worst drop in nearly 2 years

Stocks rose on Wall Street as calm returned to the market a day after its worst drop in nearly two years.

apnews.com

Calm returns to Wall Street, and stocks bounce back after their worst drop in nearly 2 years​

By STAN CHOE
Updated 7:16 AM GMT+10, August 7, 2024

NEW YORK (AP) — A rising tide swept stocks higher, and calm returned to Wall Street after Japan’s market soared earlier Tuesday to claw back much of the losses from its worst day since 1987.

The S&P 500 climbed 1% to break a brutal three-day losing streak. It had tumbled a bit more than 6% on a raft of concerns, including worries the Federal Reserve had pressed the brakes too hard for too long on the U.S. economy through high interest rates in order to beat inflation.

The Dow Jones Industrial Average rose 294 points, or 0.8%, while the Nasdaq composite gained 1%. Stocks of all kinds climbed in a mirror opposite of the day before, from smaller companies that need U.S. households to keep spending to huge multinationals more dependent on the global economy.

Stronger-than-expected profit reports from several big U.S. companies helped drive the market. Kenvue, the company behind Tylenol and Band-Aids, jumped 14.7% after reporting stronger profit than expected thanks in part to higher prices for its products. Uber rolled 10.9% higher after easily topping profit forecasts for the latest quarter.

Caterpillar climbed 3% after the maker of heavy machinery reported stronger earnings than expected.

The whiplash moves for financial markets globally have been the result of several technical factors, not just worries ignited by several weaker-than-expected reports on the U.S. economy, in what strategists at Barclays called “a perfect storm” for causing extreme market moves. One is centered in Tokyo, where a favorite trade for hedge funds and other investors began unraveling last week after the Bank of Japan made borrowing more expensive by raising interest rates above virtually zero.

That scrambled trades where investors had borrowed Japanese yen at low cost and invested the cash elsewhere around the world. The resulting exits from those investments may have helped accelerate the declines for markets around the world.

Japan’s Nikkei 225 jumped 10.2% Tuesday to claw back much of its 12.4% sell-off the day before, which was its worst since the Black Monday crash of 1987. Stocks in Tokyo rebounded as the value of the Japanese yen stabilized against the U.S. dollar following several days of sharp gains.

“The speed, the magnitude and the shock factor clearly demonstrate” how much of the moves were driven by how traders were positioned, according to the strategists at Barclays led by Stefano Pascale and Anshul Gupta.

Still, some voices along Wall Street are continuing to urge caution.

Barry Bannister, chief equity strategist at Stifel, is warning more drops could be ahead because of a slowing U.S. economy and sticky inflation. He’s forecasting both will be worse in the second half of this year than what much of Wall Street expects, while saying a measure of how expensive the U.S. stock market is still looks “frothy” when compared with bond yields and other financial conditions.

The stock market’s “dip is not a blip,” he warned in a report, and called it “too soon to jump back in.”

He had been predicting a coming “correction” in U.S. stock prices for a while, including an acknowledgement in July that his initial call was early. That was a couple days before the S&P 500 set its latest all-time high and then began sinking.

While fears are rising about a slowing U.S. economy, it is still growing, and many economists see a recession in the next year or so as unlikely. The U.S. stock market is also still up a healthy amount for the year so far, and the Federal Reserve says it has ample room to cut interest rates to help the economy if the job market weakens significantly.

The S&P 500 has romped to dozens of all-time highs this year and is still up nearly 10% so far in 2024, in part due to a frenzy around artificial-intelligence technology. Critics have been saying that euphoria has sent stock prices too high in many cases.

They’ve pointed in particular to Nvidia, Apple and the other handful of Big Tech stocks in the “Magnificent Seven” that were the main reason the S&P 500 set so may records this year. They helped overshadow weakness across other areas of the stock market, which were struggling under the weight of high interest rates.

A set of underwhelming profit reports recently, kicked off by Tesla and Alphabet, added to the pessimism and dragged Big Tech stocks lower. Nvidia dropped nearly 19% from the start of July through Monday on such concerns, but it rose 3.8% Tuesday and was one of the strongest forces pushing upward on the market.

Apple, though, slipped another 1% and was the heaviest weight on the market.

All told, the S&P 500 rose 53.70 points to 5,240.03. The Dow added 294.39 to 38,997.66, and the Nasdaq gained 166.77 to 16,366.85.

In the bond market, Treasury yields climbed to claw back some of their sharp drops since April, which were driven by rising expectations for coming cuts to interest rates by the Federal Reserve.

The yield on the 10-year Treasury rose to 3.88% from 3.78% late Monday. It had briefly dropped below 3.70% during Monday when fear in the market was spiking and investors were speculating the Federal Reserve could even have to call an emergency meeting to cut interest rates quickly.

ASX 200 expected to fall​

The Australian share market looks set fall on Wednesday despite a good session in the United States.

According to the latest SPI futures, the ASX 200 is expected to open the day 19 points or 0.2% lower.

A rising tide swept stocks higher, and calm returned to Wall Street after Japan’s market soared earlier Tuesday to claw back much of the losses from its worst day since 1987.

The S&P 500 climbed 1% to break a brutal three-day losing streak. It had tumbled a bit more than 6% on a raft of concerns, including worries the Federal Reserve had pressed the brakes too hard for too long on the U.S. economy through high interest rates in order to beat inflation.

The Dow Jones Industrial Average rose 294 points, or 0.8%, while the Nasdaq composite gained 1%. Stocks of all kinds climbed in a mirror opposite of the day before, from smaller companies that need U.S. households to keep spending to huge multinationals more dependent on the global economy.

All told, the S&P 500 rose 53.70 points to 5,240.03. The Dow added 294.39 to 38,997.66, and the Nasdaq gained 166.77 to 16,366.85.

 

[bigdog]

Wall Street slips after a morning rally evaporates as some of the market's AI darlings drop

U.S. stocks slumped after a morning rally evaporated, but the losses weren’t as bad as the manic moves that wracked markets worldwide over the last week.

apnews.com

Wall Street slips after a morning rally evaporates as some of the market’s AI darlings drop​

By STAN CHOE
Updated 7:13 AM GMT+10, August 8, 2024

NEW YORK (AP) — U.S. stocks slumped Wednesday after a morning rally evaporated, but the losses on Wall Street weren’t as bad as the manic moves that wracked markets worldwide over the last week.

The S&P 500 slipped 0.8% after an earlier jump of 1.7% petered out. The Dow Jones Industrial Average fell 234 points, or 0.6%, while the Nasdaq composite dropped 1%.

Stocks swung lower as Nvidia, one of Wall Street’s most influential companies, went from a morning gain of 4.4% and pushing strongly upward on the S&P 500 to a loss of 5.1% that made it the index’s heaviest weight. Nvidia and other Big Tech stocks have been struggling the last month on worries their prices shot too high amid Wall Street’s frenzy around artificial-intelligence technology.

A profit report from Super Micro Computer, whose stock more than quadrupled in less than three months to start the year, helped further mar excitement around AI. Even though its revenue soared 143% in the latest quarter, profit for the company that sells server and storage systems used in AI and other computing fell short of analysts’ heightened expectations. Its stock tumbled 20.1%

Still, other signals in the market showed less fear than in prior days when sharp losses cascaded globally. The S&P 500 is coming off a 1% rally that broke a brutal three-day losing streak where it tumbled a bit more than 6%.

Several reasons were likely behind the slide for markets worldwide, and one of them centered in Japan seems to be calming. The Bank of Japan raised its main interest rate a bit last week in a small move that sent aftershocks worldwide. It scrambled a favorite trade among some hedge funds and other investors, who borrowed money for very cheap in Japanese yen and then invested it elsewhere around the world.

Speaking to business leaders in the northern island of Hokkaido, Shinichi Uchida, deputy governor of the Bank of Japan, acknowledged the recent market turmoil, which was also triggered in part by concerns about the slowing U.S. economy.

Japan’s central bank can afford to wait, he said, and “will not raise its policy interest rate when financial and capital markets are unstable.” He also said he believed the U.S. economy would have a “soft landing” and avoid a recession, even if fears have risen the Federal Reserve has kept interest rates too high for too long in hopes of stifling inflation.

The Japanese promise offered a balm for markets, nervous about additional moves by the Bank of Japan, which only recently ended its yearslong campaign to keep interest rates below zero.

But it also highlights how risks may remain, suggesting there’s still room left for the popular “carry” trade to unwind and that some hedge funds and other investors may “still remain offsides,” according to John Lynch, chief investment officer for Comerica Wealth Management.

Japan’s rate hike last week sent the value of the Japanese yen soaring, and the resulting exit of investments by those hedge funds likely slapped turbochargers onto market losses, including Monday’s drop for the Nikkei 225. That was its worst since the Black Monday crash of 1987.

The value of the Japanese yen is one of the first things Darrell Cronk, chief investment officer for Wealth & Investment Management at Wells Fargo, checks now when he wakes each morning because it shows how much the “carry” trade is unwinding.

The other thing Cronk checks is the two-year Treasury yield, which he says shows where the market wants or needs the Federal Reserve to take its main interest rate.

Treasury yields tumbled sharply Monday, when fear in the market was spiking and investors were speculating the Federal Reserve may even have to call an emergency meeting to cut interest rates quickly. But they’ve stabilized since then.

The yield on the two-year Treasury was holding steady at 3.99% Wednesday, where it was late Tuesday.

The expectation on Wall Street is for the Fed to cut its main interest rate at its next scheduled meeting next month by either the traditional quarter of a percentage point or a more severe half of a point.

In the meantime, earnings reports from the biggest U.S. companies continue to roll in, and the growth for those in the S&P 500 index may end up being the best since 2021, according to FactSet.

The Walt Disney Co. delivered stronger earnings for the latest quarter than analysts expected, and its streaming business reported a profit for the first time. But its stock nevertheless fell 4.5% after it warned recent softness it saw at its U.S. theme parks could continue for “the next few quarters.”

Airbnb tumbled 13.4% after its profit in the second quarter fell short of analysts’ expectations, and it told investors that it saw some signs of slowing demand in the U.S.

Helping to limit the market’s losses was Apple, which rose 1.2%. It clawed back some of its losses from earlier in the week after Warren Buffett’s Berkshire Hathaway disclosed it had slashed its ownership stake in the iPhone maker.

All told, the S&P 500 fell 40.53 points to 5,199.50. The Dow dropped 234.21 to 38,763.45, and the Nasdaq composite fell 171.05 to 16,195.81.

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

ASX 200 expected to fall​

The Australian share market looks set to fall on Thursday following a poor night on Wall Street.

According to the latest SPI futures, the ASX 200 is expected to open the day 33 points or 0.4% lower this morning.

U.S. stocks slumped Wednesday after a morning rally evaporated, but the losses on Wall Street weren’t as bad as the manic moves that wracked markets worldwide over the last week.

The S&P 500 slipped 0.8% after an earlier jump of 1.7% petered out. The Dow Jones Industrial Average fell 234 points, or 0.6%, while the Nasdaq composite dropped 1%.

All told, the S&P 500 fell 40.53 points to 5,199.50. The Dow dropped 234.21 to 38,763.45, and the Nasdaq composite fell 171.05 to 16,195.81.

 

[bigdog]

Wall Street rallies to its best day since 2022 on encouraging unemployment data; S&P 500 jumps 2.3%

U.S. stocks rallied to their best day since 2022 in Wall Street’s latest sharp swerve. The S&P 500 jumped 2.3% Thursday after a better-than-expected report on unemployment calmed worries about the slowing economy.

apnews.com

Wall Street rallies to its best day since 2022 on encouraging unemployment data; S&P 500 jumps 2.3%​

By STAN CHOE
Updated 7:35 AM GMT+10, August 9, 2024

NEW YORK (AP) — U.S. stocks rallied Thursday in Wall Street’s latest sharp swerve after a better-than-expected report on unemployment eased worries about the slowing economy.

The S&P 500 jumped 2.3% for its best day since 2022 and shaved off all but 0.5% of its loss from what was a brutal start to the week. The Dow Jones Industrial Average rose 683 points, or 1.8%, and the Nasdaq composite climbed 2.9% as Nvidia and other Big Tech stocks helped lead the way.

Treasury yields also climbed in the bond market in a signal investors are feeling less worried about the economy after a report showed fewer U.S. workers applied for unemployment benefits last week. The number was better than economists expected.

It was exactly a week ago that worse-than-expected data on unemployment claims helped enflame worries that the Federal Reserve has kept interest rates at too high of an economy-slowing level for too long in order to beat inflation. That helped send markets reeling, along with a rate hike by the Bank of Japan that sent shockwaves worldwide by scrambling a favorite trade among some hedge funds.

At the worst of it, at least so far, the S&P 500 was down nearly 10% from its all-time high set last month. Such drops are regular occurrences on Wall Street, and “corrections” of 10% happen roughly every year or two. After Thursday’s jump, the index is back within about 6% of its record.

What made this decline particularly scary was how quickly it happened. A measure of how much investors are paying to protect themselves from future drops for the S&P 500 briefly surged toward its highest level since the COVID crash of 2020.

Still, the market’s swings look more like a “positioning-driven crash” caused by too many investors piling into similar trades and then exiting them together, rather than the start of a long-term downward market caused by a recession, according to strategists at BNP Paribas.

They say it looks more similar to the “flash crash” of 2010 than the 2008 global financial crisis or the 2020 recession caused by the pandemic.

Of course, markets have been quick to turn over the past week regardless of any long-term predictions.

“Today’s jobless claims data may ease some of the concerns raised by last week’s soft jobs report,” said Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley. “But with inflation data due out next week and the stock market still working through its biggest pullback of the year, it’s unclear how much this will move the sentiment needle.”

In the meantime, big U.S. companies continue to turn in profit reports for the spring that are mostly better than analysts expected.

Eli Lilly jumped 9.5% to help lead the market after it delivered stronger profit and revenue than Wall Street had forecast. Sales of its Mounjaro diabetes treatment and its Zepbound weight-loss counterpart are booming, and the company raised its financial forecast for the year.

Big Tech stocks also rose to claw back some of their sharp losses from the last month.

After a handful of them almost singlehandedly drove the S&P 500 to dozens of all-time highs this year, the group known as the “Magnificent Seven” lost momentum last month amid criticism their prices soared too high in investors’ frenzy around artificial-intelligence technology.

How this handful of stocks performs carries extra impact on the S&P 500 and other indexes because they’re by far the market’s most valuable companies. Nvidia, which has become the poster child for the AI trade, rose 6.1% to trim its loss for the week so far to 2.1%, and it was the day’s strongest single force pushing upward on the S&P 500.

Gains of 1.7% for Apple and 4.2% for Meta Platforms were also big propellants, along with Eli Lilly.

They helped offset a drop of 11.3% for McKesson, which topped analysts’ expectations for profit in the latest quarter but fell short on revenue. It said growth slowed in its medical-surgical business.

Bumble, the Texas-based dating app, lost more than a quarter of its value, 29.2%, after its forecast for revenue in the third quarter came in well below Wall Street’s.

All told, the S&P 500 rallied 119.81 points to 5,319.31. The Dow gained 683.04 to 39,446.49, and the Nasdaq composite rose 464.22 to 16,660.02.

In the bond market, the yield on the 10-year Treasury rose to 3.99% from 3.95% late Wednesday.

In stock markets abroad, indexes were mixed across Asia and Europe. In Japan, which has been home to some of the wildest moves in global markets, the Nikkei 225 ticked down by 0.7%. That looked like a ripple following its tidal swings of down 12.4% and up 10.2% to start the week.

ASX 200 expected to rebound​

The Australian share market looks set to end the week on a positive note following a strong session in the United States.

According to the latest SPI futures, the ASX 200 is expected to open 81 points or 1.1% higher this morning.

U.S. stocks rallied Thursday in Wall Street’s latest sharp swerve after a better-than-expected report on unemployment eased worries about the slowing economy.

The S&P 500 jumped 2.3% for its best day since 2022 and shaved off all but 0.5% of its loss from what was a brutal start to the week. The Dow Jones Industrial Average rose 683 points, or 1.8%, and the Nasdaq composite climbed 2.9% as Nvidia and other Big Tech stocks helped lead the way.

All told, the S&P 500 rallied 119.81 points to 5,319.31. The Dow gained 683.04 to 39,446.49, and the Nasdaq composite rose 464.22 to 16,660.02.

 

[bigdog]

Wall Street ends a wild and scary week almost exactly where it began. More tests loom next week

U.S. stocks closed a wild, whipsaw week for Wall Street with modest gains. The S&P 500 rose 0.5% Friday, coming off its best day since 2022, trimming its loss for the week down to less than 0.1%.

apnews.com

Wall Street ends a wild and scary week almost exactly where it began. More tests loom next week​

By STAN CHOE
Updated 7:20 AM GMT+10, August 10, 2024

NEW YORK (AP) — After a manic week that began with Japanese stocks falling to their worst loss since 1987’s Black Monday, only for U.S. stocks to soar later to their best day since 2022, slight gains on Friday carried Wall Street almost exactly back to where it began the week.

The S&P 500 rose 0.5% to shave what had been a brutal loss for the week down to a barely registerable 0.04%. The Dow Jones Industrial Average added 51 points, or 0.1%, and the Nasdaq composite climbed 0.5%.

The gains pulled the S&P 500 back within 5.7% of its all-time high set last month, after it had sunk nearly 10% below that record during the week. It was a vicious return of volatility for a market that had been rising smoothly, and a measure of fear on Wall Street briefly surged toward its highest level since the 2020 COVID crash. It also may not be over. Worries are still high about the strength of the U.S. economy, and reports are due next week on inflation, sales at retailers and other measures of strength.

But on Friday, at least, the mood was one of calm after more big U.S. companies joined the pile reporting better profit for the spring than analysts expected.

Expedia Group jumped 10.2% after delivering stronger results than forecast, though it saw a softening of demand in July like some other companies. Take-Two Interactive rose 4.4% after the company behind the Grand Theft Auto and NBA 2K video games likewise reported better results than expected.

Earlier in the day, indexes rose for many other stock markets worldwide. They’ve also been frenetic since last week because of a number of factors slamming together at once. At the forefront is the value of the Japanese yen, whose sudden and sharp strengthening recently forced hedge funds and other traders to scramble out of a popular trade en masse.

They had been borrowing Japanese yen at very low cost and then investing it elsewhere around the world. But a hike to interest rates by the Bank of Japan forced many to abandon the trade at the same time and sent global markets reeling. A promise by a top Bank of Japan official in the middle of the week not to raise rates further as long as markets are “unstable” helped stabilize the yen.

Also weighing on the market have been worries about the slowing U.S. economy. A raft of weaker-than-expected reports forced questions about whether the Federal Reserve has kept interest rates at too high of an economy-crunching level for too long in order to beat inflation. A report last Friday showing much weaker hiring by U.S. employers than expected was the lowlight.

Such worries dragged Treasury yields lower in the bond market, and they fell again Friday. Yields sank as investors looked for safer places for their money and as expectations built for deeper cuts to rates coming from the Fed. The yield on the 10-year Treasury fell to 3.94% from 3.99% late Thursday.

After seemingly getting the Bank of Japan to stop hiking rates for now, Wall Street’s goal “now appears to be bossing the Fed into big rate cuts,” Bank of America strategist Michael Hartnett said in a BofA Global Research report.

Reports next week could drive more swings for the market. On Thursday will come an update on how much shoppers are spending at U.S. retailers. Households at the lower end of the income spectrum have been struggling for a while to keep up with still-rising prices, but economists expect the report to show a return to growth after a stall in retail spending during June.

Another report on Thursday will show how many U.S. workers are applying for unemployment benefits. The most recent such report raised hopes for the economy after the prior week’s frightened investors.

Looming over them all will be the latest updates on inflation. A worst-case scenario would be if Tuesday’s and Wednesday’s inflation reports show higher-than-expected rises in prices at the wholesale and consumer levels, while the week’s other reports show a sharp weakening of the economy.

The Federal Reserve wouldn’t have an easy way to fix such a toxic mess. The central bank could lower interest rates, which would give the U.S. economy an upward push but also threaten to worsen inflation. Or it could continue to keep its main interest rate at a two-decade high. That would put downward pressure on inflation but also inflict more pain on the economy.

To be sure, even though the U.S. economy is slowing, it is not in a recession. And many economists still see one as unlikely.

A third factor that sent markets spinning recently is increased skepticism about Wall Street’s rush into artificial-intelligence technology, and how much profit growth it will really produce.

The frenzy around AI allowed a handful of Big Tech stocks to drive the S&P 500 to dozens of all-time highs this year, even as high rates weighed on other areas of the market. But the group of stocks known as the “Magnificent Seven” lost momentum last month amid criticism investors got carried away and took their prices too high.

All of the Magnificent Seven rose Friday except for Nvidia, which slipped 0.2%.

All told, the S&P 500 rose 24.85 points to 5,344.16. The Dow gained 51.05 to 39,497.54, and the Nasdaq climbed 85.28 to 16,745.30.

 

[bigdog]

ASX 200 expected to climb again​

The Australian share market looks set to rise again on Monday following a solid session on Wall Street on Friday.

According to the latest SPI futures, the ASX 200 is expected to open the day 59 points or 0.75% higher.

After a manic week that began with Japanese stocks falling to their worst loss since 1987’s Black Monday, only for U.S. stocks to soar later to their best day since 2022, slight gains on Friday carried Wall Street almost exactly back to where it began the week.

The S&P 500 rose 0.5% to shave what had been a brutal loss for the week down to a barely registerable 0.04%. The Dow Jones Industrial Average added 51 points, or 0.1%, and the Nasdaq composite climbed 0.5%.

All told, the S&P 500 rose 24.85 points to 5,344.16. The Dow gained 51.05 to 39,497.54, and the Nasdaq climbed 85.28 to 16,745.30.

 

[bigdog]

Stock market today: Wall Street holds relatively steady ahead of big tests coming later in the week

U.S. stocks drifted through a quiet day to finish mixed, as markets around the world stabilized following a wild week.

apnews.com

Wall Street holds relatively steady ahead of big tests coming later in the week​

By STAN CHOE
Updated 7:12 AM GMT+10, August 13, 2024

NEW YORK (AP) — U.S. stocks drifted through a quiet Monday to finish mixed, as markets around the world stabilized following a wild week of extreme swings.

The S&P 500 finished little changed, edging up by less than 0.01%, after flipping between small gains and losses through the day. The Dow Jones Industrial Average slipped 140 points, or 0.4%, and the Nasdaq composite rose 0.2%.

Many European and Asian stock markets were also relatively quiet. That’s a notable turn after last week kicked off with the worst day for Japanese stocks since the Black Monday crash of 1987, only to give way to the best day since 2022 for U.S. stocks.

The value of the Japanese yen eased on Monday, calming some more after an earlier surge sent shockwaves through markets. The sharp rise for the Japanese yen following a hike to interest rates by the Bank of Japan forced many hedge funds and other investors to abandon a popular trade all at once, where they had borrowed yen at cheap rates to invest elsewhere. The forced selling reverberated around the world.

A promise last week by a top Bank of Japan official not to raise rates further as long as markets are “unstable” has helped calm the market. But other worries were also behind last week’s turbulence for markets, including concerns about a slowing U.S. economy.

This upcoming week will feature reports on inflation and how much U.S. shoppers are spending at retailers. The best-case scenario for Wall Street would be data showing a continued slowdown in inflation, combined with strengthening U.S. retail sales.

That would indicate the Federal Reserve is successfully walking the tightrope it’s been attempting since it began hiking interest rates sharply in 2022: It wants the U.S. economy to slow by enough to snuff out high inflation, but not so much that it causes a recession.

A string of worse-than-expected economic data recently has raised worries the Fed may be leaning too far to one side on the tightrope after keeping its main interest rate at a two-decade high. The lowlight came earlier this month when a report showed hiring by U.S. employers weakened by far more than expected.

For the inflation data, meanwhile, strategists at Bank of America led by Ohsung Kwon say a hotter-than-expected reading would be a bigger surprise for the market than a cooler-than-expected figure. That could lead to “a major downside event” for the market if inflation readings come in worse than forecast.

The Fed does not have an easy way to fix a weakening economy where inflation in worsening, a phenomenon called “stagflation.” The central bank could ease rates, which would give the U.S. economy an upward push but also threaten to worsen inflation. Or it could continue to keep its rate high. That would put downward pressure on inflation but also inflict more pain on the economy.

Of course, the U.S. economy is still growing, and many economists see a recession as unlikely. But worries about it have nonetheless put downward pressure on Treasury yields in the bond market.

They fell again Monday ahead of the upcoming data reports. The yield on the 10-year Treasury slipped to 3.90% from 3.94% late Friday. The two-year Treasury yield, which more closely tracks expectations for Fed action, fell to 4.01% from 4.06%.

On Wall Street, the majority of stocks weakened. But a 4.1% jump for Nvidia helped offset many of those losses. Because it’s one of the largest U.S. stocks by value, Nvidia’s movements carry extra weight on the S&P 500 and other indexes.

It and other Big Tech behemoths have been shaky recently and have been mostly declining the last month on worries their stocks shot too high in the Wall Street’s frenzy around artificial-intelligence technology.

KeyCorp jumped 9.1% after the regional bank announced a $2.8 billion investment from the Bank of Nova Scotia. The Cleveland bank said the cash influx will allow it to drive further growth in its investment banking and wealth management businesses.

On the losing end was Hawaiian Electric, which reported weaker results for the spring than analysts expected. The company also said it’s not sure it will be able to last at least another year as a “going concern” unless it can find financing to help pay the estimated $1.71 billion in liabilities it has built up related to the Maui windstorm and wildfire. Its stock sank 14.5%.

All told, the S&P 500 rose by less than a quarter of a point, 0.23, to 5,344.39. The Dow dropped 140.53 to 39,357.01, and the Nasdaq composite gained 35.31 to 16,780.61.

Several big companies will report their latest earnings results later in the week, including Walmart and Home Depot. Most big U.S. companies have been reporting better profits for the spring than analysts expected, but pressure is on retailers amid worries about how spenders at the lower end of the income spectrum are faring.

ASX 200 expected to just edge higher​

The Australian share market is expected to edge higher on Tuesday following a mixed start to the week on Wall Street.

According to the latest SPI futures, the ASX 200 is poised to open the day 1 point higher.

U.S. stocks drifted through a quiet Monday to finish mixed, as markets around the world stabilized following a wild week of extreme swings.

The S&P 500 finished little changed, edging up by less than 0.01%, after flipping between small gains and losses through the day. The Dow Jones Industrial Average slipped 140 points, or 0.4%, and the Nasdaq composite rose 0.2%.

All told, the S&P 500 rose by less than a quarter of a point, 0.23, to 5,344.39. The Dow dropped 140.53 to 39,357.01, and the Nasdaq composite gained 35.31 to 16,780.61.


Market Watch

 

[bigdog]

Stock market today: Wall Street rallies to one of its best days of the year after inflation report

U.S. stocks rose to one of their best days of the year as Wall Street relaxed after the first of several highly anticipated reports on the economy this week came in better than expected.

apnews.com

Wall Street rallies to one of its best days of the year after inflation report​

By STAN CHOE
Updated 7:15 AM GMT+10, August 14, 2024

NEW YORK (AP) — U.S. stocks rallied Tuesday to one of their best days of the year after the first of several highly anticipated reports on the economy this week came in better than expected.

The S&P 500 jumped 1.7% for its third-best day of 2024 after the U.S. government reported inflation at the wholesale level slowed last month by more than economists expected. The Dow Jones Industrial Average rose 408 points, or 1%, and the Nasdaq composite clambered 2.3% higher.

High inflation has been the scourge of shoppers and financial markets for years. It finally looks to be slowing enough to get the Federal Reserve to ease up on high interest rates, which the Fed has been keeping at economy-crunching levels in order to stifle inflation.

Treasury yields eased in the bond market following the inflation data, as traders remain convinced the Fed’s meeting next month will bring the first cut to interest rates since the COVID crash of 2020. The yield on the 10-year Treasury fell to 3.84% from 3.91% late Monday.

All is not clear, though. On Wednesday, the U.S. government will deliver the latest monthly update on inflation that U.S. consumers are feeling, which could be less encouraging. And on Thursday will come a report showing how much U.S. shoppers are spending at retailers.

A growing worry on Wall Street is that the Fed may have kept interest rates too high for too long and undercut the U.S. economy by making it so expensive to borrow money. The economy is still growing, and many economists don’t expect a recession, but a sharp slowdown in U.S. hiring last month raised questions about its strength.

Such questions weigh because even cuts to interest rates haven’t been enough for stocks to rise significantly in the ensuing 18 months if a recession hits, according to Chris Haverland, global equity strategist at Wells Fargo Investment Institute.

Home Depot on Tuesday delivered stronger profit for the spring quarter than analysts expected, but it also said high interest rates and uncertainty about the economy are keeping some customers from spending on home improvement projects.

The retail giant lowered its full-year forecasts for an important measure of sales and for profit, even though it topped expectations for the second quarter. Its stock rose 1.2% after flipping earlier between modest gains and losses.

Elsewhere on Wall Street, Starbucks soared 24.5% after it convinced Brian Niccol to leave his job as CEO of Chipotle Mexican Grill to take over the coffee chain. He will start as chairman and chief executive next month and will replace Laxman Narasimhan, who is stepping down immediately.

Chipotle, meanwhile, dropped 7.5%. Niccol has been its chief executive since 2018 and its chairman since 2020, and he helped its stock rise more than 240% for the five years through Monday. That tower’s over the S&P 500’s 96% return including dividends. Chipotle said its chief operating officer, Scott Boatwright, would be its interim CEO.

In stock markets abroad, indexes were modestly higher across much of Europe and Asia. Japan’s Nikkei 225 was an outlier and jumped 3.4%.

Japan’s market has been viciously volatile recently, including the worst drop for the Nikkei 225 since the Black Monday crash of 1987. It’s been swinging since a hike to interest rates by the Bank of Japan forced many hedge funds and other investors to abandon a popular trade all at once, where they had borrowed Japanese yen at cheap rates to invest elsewhere. The forced selling that followed the surge in the Japanese yen’s value reverberated around the world.

But a promise last week by a top Bank of Japan official not to raise rates further as long as markets are “unstable” has helped calm the market.

Another worry that’s made Wall Street so shaky the last month is concerns that investors went overboard in their mania around artificial-intelligence technology and took the prices of Big Tech and AI-related stocks too high.

Nvidia, the company whose chips are powering much of the move into AI, has been at the center of the action. After soaring more than 170% through the year’s first six and a half months, it plunged more than 20% over the ensuing three weeks.

On Tuesday, Nvidia rose 6.5% and was the strongest force pushing upward on the S&P 500. All the other stocks in the small group known as the “Magnificent Seven” also climbed. They almost singlehandedly pushed the S&P 500 to dozens of all-time highs earlier this year, even as high interest rates weighed on much of the rest of the stock market.

Unlike much of the early part of this year, it wasn’t just the Magnificent Seven rising Tuesday. Wall Street’s rally was more widespread, and nearly 85% of the stocks in the S&P 500 rose. The smaller stocks in the Russell 2000 index also climbed 1.6%.

All told, the S&P 500 rose 90.04 points to 5,434.43. The Dow added 408.63 to 39,765.64, and the Nasdaq composite gained 407.00 to 17,187.61.


ASX 200 expected to storm higher
The Australian share market looks set rise again on Wednesday following a very good session in the United States.

According to the latest SPI futures, the ASX 200 is expected to open the day 57 points or 0.8% higher.

U.S. stocks rallied Tuesday to one of their best days of the year after the first of several highly anticipated reports on the economy this week came in better than expected.

The S&P 500 jumped 1.7% for its third-best day of 2024 after the U.S. government reported inflation at the wholesale level slowed last month by more than economists expected. The Dow Jones Industrial Average rose 408 points, or 1%, and the Nasdaq composite clambered 2.3% higher.

All told, the S&P 500 rose 90.04 points to 5,434.43. The Dow added 408.63 to 39,765.64, and the Nasdaq composite gained 407.00 to 17,187.61.

Market Watch

 

[bigdog]

Stock market today: Wall Street ticks higher after inflation data clears the way for cuts to rates

Wall Street ticked higher after the latest update on inflation came in almost exactly as economists expected. The S&P 500 rose 0.4% Wednesday.

apnews.com

Wall Street ticks higher after inflation data clears the way for cuts to rates​

By STAN CHOE
Updated 7:04 AM GMT+10, August 15, 2024

NEW YORK (AP) — U.S. stocks ticked higher in a quiet Wednesday after the latest update on inflation came in almost exactly as economists expected.

The S&P 500 rose 0.4% to follow up on one of its best days of the year and climb within 3.7% of its all-time high set last month. The Dow Jones Industrial Average gained 242 points, or 0.6%, to finish a day above the 40,000 level for the first time in nearly two weeks. The Nasdaq composite edged up less than 0.1%.

Treasury yields were also relatively steady in the bond market after the U.S. government said consumers paid prices that were 2.9% higher last month for gasoline, food, shelter and other things than a year earlier.

The data should keep the Federal Reserve on track to cut its main interest rate at its next meeting in September, a move that Wall Street has long been looking forward to. The Fed has been keeping rates at an economy-crunching level in hopes of stifling inflation that topped 9% two years ago, and lower interest rates would ease the pressure on both the economy and on prices for investments.

The only question is how big the first cut to rates since the 2020 COVID crash will be: the traditional quarter of a percentage point or a more dramatic half point?

Wednesday’s reading on inflation at the consumer level wasn’t as cool as the prior day’s update on inflation at the wholesale level, but it likely doesn’t change much, according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.

If most of the data over the next few weeks points to a slowing economy, he said the Fed may cut more aggressively. That includes a report coming up Thursday about how much U.S. shoppers spent at retailers.

While the economy is still growing, and many economists see a recession as unlikely, worries have risen about its strength after a much worse-than-expected month of hiring by U.S. employers in July.

The yield on the 10-year Treasury eased to 3.83% from 3.85% late Tuesday. It’s been coming down since topping 4.70% in April, as expectations have built for coming cuts to interest rates.

The two-year Treasury yield, which more closely tracks expectations for the Fed, edged up to 3.95% from 3.94% late Tuesday, as traders weigh whether September’s anticipated cut will be the traditional or jumbo-sized move.

On Wall Street, Kellanova rose 7.8% after Mars said it would buy the company behind Pringles, Cheez-Its and Kellogg’s for $83.50 per share in cash. The companies put the deal’s total value at $35.9 billion, including debt. Kellanova was created when the Kellogg Co. split into three companies in the summer of 2022.

Cardinal Health rose 3.7% after joining the parade of companies that have reported stronger profit for the spring than analysts expected.

On the losing end was Brinker International, the company behind Chili’s and Maggiano’s restaurants. It fell 10.7% after reporting weaker profit for the latest quarter than expected. That was despite strengthening sales trends at Chili’s, which got a boost from higher prices, increased traffic and the launch of its “Big Smasher” burger. Expectations were high coming into the report for Brinker International, whose stock is still up 45.6% for the year so far.

Starbucks fell 2.1% to give back some of its big gain from the prior day after it said it had lured Brian Niccol away from Chipotle Mexican Grill to become its CEO.

All told, the S&P 500 rose 20.78 points to 5,455.21. The Dow gained 242.75 to 40,008.39, and the Nasdaq composite rose 4.99 to 17.192.60.

In stock markets abroad, indexes were modestly higher across much of Europe and mixed in Asia.

Japan’s Nikkei 225 has been the center of financial markets’ wildest action in recent weeks, and it rose 0.6% following a day of ups and downs. Japan’s embattled Prime Minister Fumio Kishida surprised the country Wednesday by announcing he’ll step down when his party picks a new leader next month.

ASX 200 expected to rise again
The Australian share market looks set to rise again on Thursday following a good night on Wall Street.

According to the latest SPI futures, the ASX 200 is expected to open the day 28 points or 0.3% higher this morning.

U.S. stocks ticked higher in a quiet Wednesday after the latest update on inflation came in almost exactly as economists expected.

The S&P 500 rose 0.4% to follow up on one of its best days of the year and climb within 3.7% of its all-time high set last month. The Dow Jones Industrial Average gained 242 points, or 0.6%, to finish a day above the 40,000 level for the first time in nearly two weeks. The Nasdaq composite edged up less than 0.1%.

All told, the S&P 500 rose 20.78 points to 5,455.21. The Dow gained 242.75 to 40,008.39, and the Nasdaq composite rose 4.99 to 17.192.60.

 

[bigdog]

Stock market today: Wall Street leaps, and S&P 500 rallies 1.6% as US shoppers drive the economy

Wall Street rallied close to its record heights after data showed the U.S. economy is holding up better than expected.

apnews.com

Wall Street leaps, and S&P 500 rallies 1.6% as US shoppers drive the economy​

By STAN CHOE
Updated 7:32 AM GMT+10, August 16, 2024

NEW YORK (AP) — Wall Street rallied to one of its best days of the year Thursday after data showed the U.S. economy is holding up better than expected, with particular credit going to the country’s shoppers.

The S&P 500 jumped 1.6% for its fourth-best day of the year and its sixth straight gain as the U.S. stock market rights itself following a scary few weeks. It’s back to within 2.2% of its all-time high set last month after briefly falling close to 10% below it.

The Dow Jones Industrial Average rose 554 points, or 1.4%, while the Nasdaq composite burst 2.3% higher as Nvidia and other Big Tech stocks recovered more of their stumbles from the last month.

Treasury yields also leaped in the bond market following the encouraging economic report. One said U.S. shoppers increased their spending at retailers last month by much more than economists expected, while another said fewer U.S. workers applied for unemployment benefits.

A year ago, such reports could have sent the stock market reeling on worries they would push inflation higher. But good news for the economy is once again good news for Wall Street, particularly after a report showed U.S. employers pulled back on their hiring last month by much more than expected.

That dud of a jobs report raised worries the U.S. economy could buckle under the weight of high interest rates brought by the Federal Reserve, and it contributed to turmoil in stock markets worldwide. But Thursday’s reports hint a perfect landing may still be possible, one where the Fed slows the economy’s growth by just enough through high rates to stifle inflation but not so much that it causes a recession.

“The growth scare isn’t over, but it’s a little less scary,” said Brian Jacobsen, chief economist at Annex Wealth Management.

Inflation has also been improving since it topped 9% two summers ago, punctuated by reports earlier this week on prices at both the consumer and wholesale levels. That has cleared the way for the Federal Reserve to soon deliver the cuts to interest rates that Wall Street loves.

Walmart added to the optimism after it delivered a bigger profit for the spring than analysts expected, and its shares climbed 6.6% The retail giant also raised its forecast for sales for the full year, indicating U.S. shoppers can keep spending. Such spending by U.S. consumers makes up the bulk of the economy.

It was just one of several big companies to join the parade of businesses topping analysts’ expectations for springtime profit.

Deere & Co. rode 6.3% higher after the seller of backhoes, dozers and other equipment reported higher profit and revenue than expected. That was despite what it called challenging conditions across the agricultural and construction sectors globally.

Cisco Systems’ profit and revenue for the latest quarter squeaked past analysts’ forecasts, and its stock jumped 6.8% after the maker of networking equipment also said it would eliminate thousands of jobs as it shifts to faster-growing areas of technology like artificial intelligence.

Ulta Beauty’s stock rose 11.2% to help lead the market after Warren Buffett’s Berkshire Hathaway revealed it has built an ownership stake in the retailer.

All told, the S&P 500 rose 88.01 points to 5,543.22. The Dow gained 554.67 to 40,563.06, and the Nasdaq composite rallied 401.89 to 17,594.50.

In the bond market, the 10-year Treasury yield clambered up to 3.91% from 3.84% late Wednesday following the strong economic data.

The two-year Treasury yield, which more closely follows expectations for action by the Federal Reserve, jumped to 4.09% from 3.96% late Wednesday.

Traders still widely expect the Federal Reserve to cut its main interest rate at its next meeting in September, which would be the first such cut since the 2020 COVID crash. But they’re now largely expecting the Fed to lower rates by the traditional quarter of a percentage point, according to data from CME Group.

A week ago, many traders were forecasting a more severe cut of half of a percentage point because of worries at the time that the U.S. economy’s growth was sliding.

The Fed has been clear about the tightrope it began walking when it started hiking rates sharply in March 2022: Being too aggressive would choke the economy, but going too soft would give inflation more oxygen and hurt everyone.

The signals of a resilient U.S. economy helped drive smaller stocks in particular on Thursday. Smaller companies can be more beholden to the strength of the U.S. economy than huge multinationals, and the Russell 2000 index of smaller stocks rose 2.5% to help lead the market.

Smaller stocks have been even jumpier than the rest of the market, rising more than the S&P 500 when data indicate the U.S. economy is doing well and interest rates are about to come down, but tumbling more sharply when pessimism rises.

In stock markets abroad, indexes also rose in much of Asia and Europe.

Japan’s Nikkei 225 rose 0.8% after data showed its economy returned to growth during the spring. The U.K. economy also grew during the latest quarter, a welcome signal following a rough run, and the FTSE 100 rose 0.8% in London.

ASX 200 expected to jump​

The Australian share market looks set to end the week in a very positive fashion thanks to a particularly strong session in the United States.

According to the latest SPI futures, the ASX 200 is expected to open 77 points or 1% higher this morning.

Wall Street rallied to one of its best days of the year Thursday after data showed the U.S. economy is holding up better than expected, with particular credit going to the country’s shoppers.

The S&P 500 jumped 1.6% for its fourth-best day of the year and its sixth straight gain as the U.S. stock market rights itself following a scary few weeks. It’s back to within 2.2% of its all-time high set last month after briefly falling close to 10% below it.

The Dow Jones Industrial Average rose 554 points, or 1.4%, while the Nasdaq composite burst 2.3% higher as Nvidia and other Big Tech stocks recovered more of their stumbles from the last month.

All told, the S&P 500 rose 88.01 points to 5,543.22. The Dow gained 554.67 to 40,563.06, and the Nasdaq composite rallied 401.89 to 17,594.50.

 

[bigdog]

Stock market today: Wall Street closes its best week of the year with some more gains

U.S. stocks drifted higher as Wall Street coasted to the close of its best week since November. The S&P 500 rose 0.2% Friday, extending its winning streak to a seventh day.

apnews.com

Wall Street closes its best week of the year with some more gains​

By STAN CHOE
Updated 6:21 AM GMT+10, August 17, 2024

NEW YORK (AP) — Wall Street coasted to the close of its best week since November, as U.S. stocks drifted a bit higher Friday.

The S&P 500 rose 0.2% for a seventh straight gain and pulled back within 2% of its all-time high set last month. The Dow Jones Industrial Average gained 96 points, or 0.2%, and the Nasdaq composite added 0.2%.

Treasury yields eased in the bond market following a couple mixed reports on the U.S. economy. One showed homebuilders broke ground on fewer projects last month than forecast, which threw some cold water on the market. Optimism had been rising earlier in the week following a flurry of better-than-expected reports on everything from inflation to sales at U.S. retailers.

But a report later in the morning suggested U.S. consumers are feeling better about the economy than expected. That’s a big deal for Wall Street because their spending makes up the bulk of the economy.

Friday’s relatively calm trading capped a manic week where strong economic data helped right Wall Street following a scary run. The S&P 500 had briefly dropped close to 10% below its record last week, as stocks reeled worldwide on a range of worries. Many of those questions are still hanging over the market, just not quite as precariously as before.

One concern centered on the strength of the U.S. economy following a surprisingly weak report on hiring last month.

Even though confidence rose in the economy’s strength following this week’s strong run of reports, it is still likely slowing under the weight of high interest rates. That’s by design. The Federal Reserve’s goal has been trying to cool what was a hot job market by making it more expensive for companies and households to borrow and spend. The Fed did that that to remove upward pressure on inflation, which peaked at more than 9% two summers ago.

The question is whether the slowdown in the economy’s growth will overshoot and become a recession. That’s still to be determined, but the hope on Wall Street is that an expected cut to interest rates at the Fed’s next meeting in September will help forestall that.

The market’s focus will swing next week to Jackson Hole, Wyoming. That’s where Federal Reserve Chair Jerome Powell will give a speech late in the week, and the setting has been home to big policy announcements in the past.

Because the Fed has said its upcoming moves will depend in large part on what data reports at the time say, “it will be difficult for Powell to pre-commit to a particular trajectory at Jackson Hole,” say economists at Deutsche Bank led by Matthew Luzzetti.

But Powell could offer hints about whether the Fed is hoping to merely remove the brakes from the economy through rate cuts or give it an accelerant.

A second big concern for the market has focused on whether investors took the prices of Nvidia and other highly influential Big Tech stocks too high in their frenzy around artificial-intelligence technology.

That debate is still ongoing. Within just an hour on Friday morning, Nvidia went from being the single heaviest weight on the S&P 500 to the strongest force lifting the index. It flipped from an early 1.4% drop to end with a rise of 1.4%.

Such swings have become typical for the stock that’s become the face of the AI craze. After soaring more than 170% through the year’s first six and a half months, Nvidia plunged more than 20% over the ensuing three weeks.

A third factor that’s caused global markets’ big swings is more technical, one triggered by a hike to interest rates by the Bank of Japan. That forced hedge funds around the world to abandon a popular trade en masse, where they had borrowed Japanese yen at cheap rates to invest elsewhere.

The forced and sudden selling that ensued hit markets worldwide, but it calmed after a top Bank of Japan official said it won’t raise rates further as long as markets are unstable. Analysts, though, say more potential selling may still be left to uncoil in the system.

On Wall Street, H&R Block leaped 12.1% for one of the market’s bigger gains after it reported a bigger-than-expected profit for the latest quarter. It also increased its dividend 17% and announced a stock buyback program of up to $1.5 billion.

All told, the S&P 500 rose 11.03 points to 5,554.25. The Dow gained 96.70 to 40,659.76, and the Nasdaq composite added 37.22 to 17,631.72.

In the bond market, the yield on the 10-year Treasury fell to 3.88% from 3.92% late Thursday. The two-year yield, which more closely tracks expectations for Fed action, fell to 4.05% from 4.10% late Thursday.

In stock markets abroad, Japan’s Nikkei 225 jumped 3.6% to cap its best week in more than four years. It was a strong rebound from its sharp losses the week before, which included the worst day for the Japanese stock market since the Black Monday crash of 1987.