Category Archives: News

Stocks Rebound From 2-Year Low

TUESDAY – Stocks rose Tuesday, as the Dow Jones Industrial Average and S&P 500 bounced back from their lowest closing levels in nearly two years.

The British pound rebounded slightly after plunging to a record low against the dollar earlier in the week. Sterling traded more than 1% higher at $1.087 per dollar after hitting an all-time low of $1.0382.

Treasury yields also came off their highs, boosting sentiment. The benchmark 10-year yield dipped nearly 5 basis points to 3.823%.

Chicago Federal Reserve President Charles Evans signaled some apprehension about the central bank raising rates too quickly to fight inflation, in contrast to a slew of Fed officials who recently reiterated a tough stance against rising prices.

The move comes after five straight days of losses for stocks, with the S&P 500 closing at its lowest level since 2020. The Dow dropped more than 300 points on Monday, putting it in a bear market after falling more than 20% below its record high. The 30-stock average also posted its lowest closing level since late 2020.

Technical indicators show that the selling has been historic. According to Bespoke Investment Group, the 10-day advance decline line for the S&P 500 has hit a record low, meaning market breadth is at its worst level in at least 32 years.

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Dow Starts Monday Off Lower

MONDAY – The Dow Jones Industrial Average declined on Monday as surging interest rates and foreign currency turmoil pressured markets.

The British pound dropped to a record low on Monday against the U.S. dollar. Sterling at one point fell 4% to an all-time low of $1.0382. The Federal Reserve’s aggressive hiking campaign, coupled with U.K.’s tax cuts announced last week has caused the U.S. dollar to surge. The euro hit the lowest vs. the dollar since 2002. A surging greenback can hurt the profits of U.S. multinationals and also wreak havoc on global trade, with so much of it transacted in dollars.

Traders will be closely watching the S&P 500 on Monday for any break below its bear market low. The S&P’s low close for the year in June was 3,666.77. It closed Friday at 3,693.23 after trading briefly below that close. The benchmark’s intraday low for the year is 3,636.87. Any trade below those levels could drive more selling in the market.

On Friday, stocks ended a brutal week with the blue-chip Dow finding a new intraday low for the year and closing lower by 486 points. The broad-market S&P 500 temporarily broke below its June closing low and ended down 1.7%. The tech-heavy Nasdaq Composite lost 1.8%.

Another super-sized rate hike by the Federal Reserve last week was the catalyst for the latest leg downward in markets. The central bank indicated it could raise rates as high as 4.6% before pulling back. The forecast also shows the Fed plans be aggressive this year, hiking rates to 4.4% before 2022 ends.

Bond yields soared after the Fed enacted another rate hike of 75 basis points. The 2-year and 10-year Treasury rates hit highs not seen in over a decade. On Friday, Goldman Sachs slashed its year-end target for the S&P 500 to 3,600 from 4,300.

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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 Jump On Easing Tensions

TUESDAY – U.S. stocks jumped on Tuesday after Russia appeared to be backing away from an immediate invasion of Ukraine, cooling geopolitical tensions that have knocked the stock market down the last three days.

The Russian Defense Ministry said it had begun returning some troops to deployment bases after training exercises near the Ukrainian border.

WTI crude prices fell 3%, while the 10-year Treasury yield jumped to 2.04% as tensions eased. The VanEck Russia ETF, a U.S.-traded fund which invests in big Russian stocks, jumped nearly 5% in premarket trading.

In addition to the Ukraine drama, investors will get another look at inflation Tuesday. The January producer price index, which measures final-demand wholesale prices, will be released at 8:30 and is expected to show a monthly gain of 0.5%.

Wall Street is coming off a volatile Monday trading session.

The Dow closed lower by 171.89 points, or 0.5%, after falling more than 400 points at one point. The S&P 500 dropped as much as 1.2% before ending the day 0.4% lower. The Nasdaq Composite fell 0.9% at one point before closing just below the flatline.

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Stocks Rise Ahead of Earnings

U.S. stock futures rose in early morning trading on Wednesday as investors digested another batch of corporate earnings and tech shares looked to build on their rebound.

Through Tuesday’s close, the Nasdaq Composite has gained more than 6% from its recent low on Jan. 27 after falling into correction territory earlier this year.

Mortgage applications dropped 10% week over week, however, as the rise in interest rates in recent months appears to have dampened demand among homebuyers.

Yields have risen this year in part because of a more aggressive stance from the Federal Reserve. Atlanta Fed President Raphael Bostic told CNBC on Wednesday that three rate hikes are possible this year but that the central bank is not locked in to any path and will watch how the economy responds.

On Tuesday, the Dow Jones Industrial Average added more than 370 points, helped by a 7.8% pop in Amgen on the back of its strong earnings report. The S&P 500 also registered a gain, climbing 0.8%. The technology-focused Nasdaq Composite rose 1.3%.

As of the closing bell on Tuesday, nearly 60% of all S&P 500 companies have reported fourth-quarter earnings and roughly 77% have topped Wall Street’s earnings estimates, according to FactSet.

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Stocks Jump After Trump Tweet

THURSDAY – Stocks jumped in early trading Thursday after President Donald Trump said China and the U.S. were zeroing in on a trade deal, lifting hope that an agreement will be reached before a key deadline.

The S&P 500 hit a record high, rising 0.9%. The Dow Jones Industrial Average traded 250 points higher, or 0.9%. The Nasdaq Composite advanced 0.8%.

Trump said in a tweet both sides were getting “VERY close to a BIG DEAL with China. They want it, and so do we!”

His tweet comes after Reuters reported that Trump was meeting with his top trade officials on Thursday ahead of a Sunday trade deadline. If an agreement is not reached by then, additional U.S. levies on Chinese products will take effect.

Stocks started December on the wrong foot as worries around U.S.-China trade relations increased. In the first two sessions of the month, the Dow lost more than 500 points.

Still, the major averages are up sharply for the year. The S&P 500 and Dow have jumped 25.3% and 19.7%, respectively, year to date. The Nasdaq is up around 30%.

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Stocks Open Lower On Trade Worries

U.S. stock index futures were lower Monday amid lingering U.S.-China trade worries while protests in Hong Kong escalate.

Around 7:30 a.m. ET, Dow Jones Industrial Average futures were down 118 points, indicating a loss of 136 points at the open. S&P 500 and Nasdaq 100 were also lower.

These decline would knock the major averages from record levels reached last week. The Dow notched its eighth record close of the year on Friday while the S&P 500 closed at an all-time high for the 19th time. The Nasdaq, meanwhile, posted a record close for the 14th time in 2019.

President Donald Trump said Friday he had not agreed to roll back tariffs on China. Those comments came after the Chinese commerce ministry said that both sides had agreed to cancel existing tariffs in phases. A U.S. official also reportedly said both sides agreed to roll back the tariffs in tranches.

The stock market’s recent move to record highs comes in part because of improving sentiment around U.S.-China trade talks. With his comments on Friday, Trump dampened trade expectations in the market. 

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Tariff News Lifts Stocks To Records

U.S. stock index futures turned sharply higher Thursday after China said the world’s two largest economies had agreed to remove existing trade tariffs.

Around 8:30 a.m. ET, Dow Jones Industrial Average futures were up 154 points, implying an opening gain of 138 points. S&P 500 and Nasdaq 100 futures also pointed to solid gains.

The gains put the Dow and S&P 500 on track to reach fresh record highs at the open.

Gao Feng, a ministry spokesperson for China’s Commerce Ministry, said that both sides had agreed to simultaneously cancel some existing tariffs on one another’s goods, according to the country’s state broadcaster. The ministry spokesperson said that both sides were closer to a so-called “phase one” trade agreement following constructive negotiations over the past two weeks.

One important condition for a limited trade agreement, Feng insisted, was that the U.S. and China must remove the same amount of charges at the same time.

On the data front, the latest weekly jobless claims numbers came in at 211,000, down slightly from 218,000 in the previous week.

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Stocks Rising Again On Trade Optimism

TUESDAY – Stocks were set to open higher on Tuesday, following a record close in the previous session, as investors grew more bullish on a potential U.S.-China trade deal as both sides consider more rollbacks on tariffs.

Futures on the Dow Jones Industrial Average rose 70 points and indicated a positive open of more than 58 points, while futures on the S&P 500 and Nasdaq Composite were also higher. Major averages are on track for a third straight positive session.

China is pushing President Donald Trump to remove more tariffs on about $125 billion worth of Chinese goods imposed in September as part of the “phase one” trade deal, Reuters reported Monday evening. A U.S. official told Reuters the fate of the Dec. 15 tariffs is being considered as part of negotiations.

Strong earnings, more promising economic data and optimism over a resolution on trade with China drove the Dow to all-time highs on Monday, following the S&P 500 and Nasdaq’s new records last week.

The Dow’s year-to-date gain now stands at around 18%, while the S&P 500 is up more than 22% and the Nasdaq more than 27% so far this year.

Traders will also have eyes on a raft of economic data Tuesday morning. September balance of trade, import and export figures are due for release at 9:30 a.m. ET before November Redbook data at 9:55 a.m. ET.

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Stocks Slide, But On Track For Positive Week

FRIDAY – Stocks traded lower on Friday amid weak overseas data, but remained on track to post solid weekly gains after the release of better-than-expected earnings.

The Dow Jones Industrial Average traded 97 points lower, or 0.4%. The S&P 500 pulled back 0.3% while the Nasdaq Composite declined by 0.5%.

More than 70 S&P 500 companies have reported calendar third-quarter earnings this week. Of those companies, 81% have posted better-than-expected results, FactSet data shows.

Weak data from China weighed down the market on Friday.

Still, concerns over the state of the global economy lingered. Overnight, China posted its weakest growth in nearly three decades, as the U.S.-China trade war hit demand at home and abroad. The world’s second-largest economy grew 6% in the third quarter, less than expected, and its weakest pace of expansion in over 27 years.

Sentiment around U.S.-China trade talks improved slightly this week, however. Larry Kudlow, director of the National Economic Council, told CNBC’s “Squawk Box” on Thursday there is “a lot of momentum” to get a deal done.

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