Category Archives: Indexes

Stocks Tumble Again

MONDAY – U.S. stocks dropped on Monday morning, putting the S&P 500 on track to fall back into bear market territory and possibly to a new low for 2022. A jump in short-term rates drove the negative sentiment as investors still reeling from a hotter-than-expected inflation report on Friday braced for the Federal Reserve to raise rates later in the week.

The short-term 2-year Treasury yield rose by 17 basis points to more than 3.22% Monday, reaching its highest level since 2007 as investors bet the Fed may have to get even more aggressive to squash inflation. At one point in the session, the 2-year rate traded above its 10-year counterpart for the first time since April, a so-called yield curve inversion seen as an indicator of a recession.

The major averages last week posted their biggest weekly declines since late January as investors grew increasingly concerned rising inflation will tip the economy into a recession. The Dow and S&P 500 fell 4.6% and 5.1%, respectively, while the Nasdaq Composite lost 5.6%. A chunk of those losses came Friday, when hotter-than-expected U.S. inflation data spooked investors. The Dow dropped 880 points, or 2.7%. The S&P 500 and Nasdaq lost 2.9% and 3.5%, respectively.

The Bureau of Labor Statistics reported Friday that the U.S. consumer price index rose last month by 8.6% from a year ago, its fastest increase since December 1981. That gain topped economists’ expectations. The so-called core CPI, which strips out food and energy prices, also came in above estimates at 6%.

On top of that, the preliminary June reading for the University of Michigan’s consumer sentiment index registered at a record low of 50.2.

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Stocks Flat To Close Losing Week

FRIDAY – Stocks were flat on Friday and the market headed for a losing week as investors braced for tighter monetary policy from the Federal Reserve.

Despite a small rebound Thursday and Friday’s early gains, the major averages were headed for weekly declines. The S&P 500 and Nasdaq were down 1% and 2.6%, respectively, for the week through Thursday’s close. The Dow was down 0.7% week to date. Those losses would mark the first weekly losses for the S&P 500 and Nasdaq in four weeks. Meanwhile, the Dow is headed for back-to-back weekly declines.

The losses have been driven by a change of tone by the Federal Reserve, signaling it will be even more aggressive to fight inflation. On Wednesday, the central bank disclosed its March meeting minutes, revealing that policymakers plan to reduce their bond holdings by a consensus amount of about $95 billion a month. The minutes also indicated potential interest rate hikes of 50 basis points in future meetings. A basis point equals 0.01%.

Investors are also looking ahead to earnings season kicking off next week with reports from five big banks.

The Dow bounced back on Thursday after two straight days of losses, ending the day up 0.25% after dropping as much as 300 points earlier in the session. The S&P 500 and Nasdaq also closed higher for the day.

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Stocks Rise Slightly After Fed Selloff

THURSDAY – Stocks rose slightly Thursday as the market tried to recover from back-to-back losing sessions, while traders digested the Federal Reserve’s plans to tighten monetary policy.

The Fed on Wednesday released the minutes from its March meeting, which showed that officials planed to reduce their trillions in bond holdings with a consensus amount around $95 billion. Meanwhile, policymakers indicated that one or more 50 basis-point interest rate hikes could be warranted to battle surging inflation.

Officials “generally agreed” that a maximum of $60 billion in Treasuries and $35 billion in mortgage-backed securities would be allowed to roll off, phased in over three months and likely starting in May.

The news sent the blue-chip Dow down more than 100 points Wednesday, while the S&P 500 slid 1%. The tech-heavy Nasdaq Composite dropped another 2.2%, bringing its week-to-date losses to 2.6%. Those losses came after comments from Fed Governor Lael Brainard pushed stock prices lower on Tuesday.

Investors await the weekly jobless claims data Thursday morning, which is expected to show a total of 200,000 claims filed.

Crude prices ticked higher after falling in the previous session. U.S. oil gained 0.7% to $96.94 per barrel, while international Brent advanced 0.9% to $101.95.

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Stock Start Week Flat – Twitter Rockets

MONDAY – U.S. stocks were mostly flat Monday, as traders monitor the bond market’s warning signals about the economy.

Twitter ($TWTR) shares surged more than 25% after SEC filings revealed Elon Musk purchased a more than 9% passive stake in the social media company. It comes less than a week after Musk polled his followers, questioning whether the social media giant follows free speech principles. Based on Twitter’s Friday closing price, the stake is worth $2.89 billion.

An often-cited recession signal was triggered Thursday evening when the the 2-year and 10-year Treasury yields inverted for the first time since 2019. The 5-year note yield is also trading above its 30-year counterpart.

Investors are also monitoring the latest developments in Ukraine. German Chancellor Olaf Scholz said Sunday that Western nations will impost additional sanctions on Russia in the coming days.

Seasonally, April is generally one of the best months for stocks, edging higher in the last 20 years by 2.41% on average, MKM Partners’ JC O’Hara wrote in a note. Within the 16 of the last 17 Aprils, the S&P has also inched higher.

Friday’s positive session came despite March’s employment report, which fell short of economists’ estimates. The U.S. economy added 431,000 jobs during the month, while estimates from Dow Jones called for 490,000.

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Stocks Start Week Flat

MONDAY – Stocks were steady Monday morning as a week filled with key economic reports kicked off, and investors continue to keep a close eye on the Fed’s planned interest rate hikes.

Parts of The Treasury yield curve inverted on Monday, raising some recession concerns. Earlier on Monday, the yield on the 5-year Treasury note rose to 2.6361%, while the 30-year yield was down less than 1 basis point to 2.6004%.

However, the main yield spread that traders watch — the spread between the 2-year and the 10-year rate — remained positive for now.

The Dow and S&P 500 rose on Friday to close out their second consecutive winning week. The Dow gained 153 points, or 0.4%. The S&P 500 advanced 0.5% and has more than erased its losses since Russia invaded Ukraine in late February. Meanwhile, the Nasdaq Composite dipped 0.2% but still finished the week in the green.

The moves came as investors continue to monitor developments in Russia’s war on Ukraine and expectations about the Fed’s plans to hike interest rates.

Investors are looking forward to the Job Openings and Labor Turnover Survey, or JOLTS, this week. The JOLTS report is one set of employment data that the Federal Reserve is watching closely as it tightens monetary policy.

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Stocks Now Mixed, S&P Still Higher

HTML clipboard FRIDAY – The S&P 500 was steady Friday as the benchmark index looked to close out its second consecutive positive week.

Overall, stocks were mixed early.

For the week, the S&P 500 and Nasdaq are up more than 1% and 2%, respectively. The Dow is marginally higher.

The S&P 500 is now up more than 3% in March, more than erasing its losses since Russia invaded Ukraine late last month.

The rebound has come even as the war in Ukraine continues and the Federal Reserve is set to hike interest rates several more times this year – some analysts saying as many as seven increases.

On Monday, Fed Chair Jerome Powell vowed to be tough on inflation. The remarks came after the Federal Reserve raised interest rates for the first time since 2018 last week, with hikes coming at each of the six remaining policy meetings this year.

Powell noted rate hikes could go from quarter-percentage-point moves to more aggressive half-point increases.

The central bank chief’s comments led Wall Street to raise rate hike expectations, with firms from Goldman Sachs to Bank of America penciling in half-point hikes in future Fed meetings this year.

Meanwhile, investors looked to promising signs the economy can run strong even as the Fed tightens monetary policy to address inflation.

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Stocks Try To End Positive Week On A High Note

HTML clipboard FRIDAY – U.S. stocks rose slightly Friday morning as the S&P 500 looked to close out its second consecutive positive week.

The move comes after a solid session for stocks on Wednesday in which the S&P rose 1.4%, the Nasdaq Composite gained 1.9% and the Dow added 349 points.

For the week, the S&P 500 and Nasdaq are up 1.3% and 2.1%, respectively. Both are on track for their second-straight winning week. The Dow is down marginally week to date.

The rebound has come even as the war in Ukraine continues and the Federal Reserve is set to hike interest rates several more times this year.

Traders are keeping an eye on Europe as the Ukraine-Russia continues. The European Union on Friday struck a gas deal with the U.S. in an effort to reduce its dependency on Russian energy.

The news comes after President Joe Biden said Thursday at a NATO summit in Brussels that the U.S. would respond if Russia used chemical weapons in Ukraine.

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Stocks Rise Slightly After Wednesday’s Losses

HTML clipboard THURSDAY – Stocks rose early Thursday morning as investors tried to recover from declines in Wednesday’s regular trading session.

Investors are continuing to monitor the war in Ukraine and weigh the Federal Reserve’s rate hikes amid persistent inflation.

NATO leaders met in Brussels Thursday to discuss increasing pressure on Russia, as Ukraine appears to be retaking ground in the war.

Last week, the Fed raised interest rates for the first time since 2018. Chair Jerome Powell on Monday vowed to be tough on inflation and opened the door for more aggressive half-percentage-point rate hikes.

The S&P 500 fell into correction territory late February, but is now 7.5% off its highs. The Dow is also 7% from its intraday record and the Nasdaq Composite is off by 14%.

Stocks have seesawed this week, alternating between up and down days. The Dow is about 1% lower on the week while the S&P 500 and Nasdaq Composite are little changed.

All three major averages are on track to close the month at least 1% higher.

On the data front, initial jobless claims last week totaled 187,000.

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Stocks Extend Losses

U.S. stocks eased Wednesday as oil prices rose, renewing inflation fears.

The Dow Jones Industrial Average dropped about 410 points, or 1.2%. The S&P 500 declined 1%. The Nasdaq Composite dipped 0.9%.

Traders digested the latest news on the Ukraine-Russia war. Ukrainian President Volodymyr Zelenskyy called for more pressure on Russia from other countries as the conflict appears to be entering a stalemate.

Oil prices ticked higher on the day, with international oil benchmark Brent crude advancing nearly 5% to top $120 per barrel. U.S. crude gained around 4% to more than $114 per barrel.

The 10-year U.S. Treasury yield surpassed 2.41% at its session high Wednesday, the highest since May 2019. The benchmark rate has surged since the beginning of the week, when Federal Reserve Chairman Jerome Powell vowed to be aggressive on inflation. The Fed last week raised interest rates for the first time since 2018.

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Stocks Fall As Oil Prices Rise

WEDNESDAY – U.S. stocks dipped in early morning trading on Wednesday as oil prices gained, renewing inflation fears.

Traders digested the latest news on the Ukraine-Russia war. Ukrainian President Volodymyr Zelenskyy called for more pressure on Russia from other countries as the conflict appears to be entering a stalemate.

Oil prices ticked higher on the day, with U.S. crude gaining about 3% to more than $112 per barrel. Brent crude, the international benchmark, advanced about 3% to roughly $119.

The benchmark 10-year U.S. Treasury yield topped 2.41% at its session high Wednesday, the highest since May 2019.

Wall Street is coming off a strong session Tuesday in which the Dow jumped more than 250 points and the S&P 500 climbed 1.1%.

Federal Reserve Chair Powell on Monday promised aggressive action on inflation. The comments came after the Fed last week raised interest rates for the first time since 2018 and forecast a plan to hike rates by a quarter-point at each of the remaining six meetings of 2022.

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