Tag Archives: Dow Jones

Stocks Drop Again To Start Week

U.S. equities fell Monday morning, but traded off their lows, as U.S. oil prices pulled back from their highest level since 2008 amid the ongoing war between Russia and Ukraine.

West Texas Intermediate crude futures, the U.S. oil benchmark, traded 6.3% higher to $122.96 per barrel, earlier hitting $130 per barrel at one point before pulling back partially. The international benchmark, Brent crude, traded 6.24% higher to $125.51 per barrel after earlier spiking to $139.13 per barrel — its highest since July 2008.

Gas prices surged to their highest level since 2008, with the national average hitting $4.06 a gallon, according to AAA.

Despite the move away from risk, government bond yields rose, indicating less demand for safe-haven assets. The benchmark 10-year Treasury note was most recently at 1.76%, up nearly 4 basis points on the session as inflation worries pushed yields up.

Positive data from the U.S. Labor Department wasn’t enough for investors to shrug off concerns about the war between Russia and Ukraine. On Friday the Bureau of Labor Statistics reported the economy added 678,000 jobs in February. The monthly jobs gain topped economists’ expectations of 440,000 as gauged by Dow Jones. The unemployment rate slipped to 3.8%.

Last, the Dow and S&P 500 slid about 1.3%. The Dow notched its fourth losing week and the S&P 500 closed in correction territory on Friday, down more than 10% from its record close. The Nasdaq Composite lost roughly 2.8% and is also in a technical correction.

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Stocks Rise After Nasdaq Hits Correction Territory

U.S. stocks posted solid gains Thursday morning, with Nasdaq up nearly 1% the day after dipping into correction territory.

Stocks held their ground even as government bond yields again edged higher, part of a market repricing as the Federal Reserve gets set to tighten monetary policy.

The central bank meets next week, with markets indicating just a slight chance of action on interest rates. However, traders have fully priced in the first of what is expected to be four 0.25 percentage point hikes through 2022.

The two-year Treasury, which is most closely tied to Fed rate policy, most recently yielded about 1.04%, while the benchmark 10-year note was at 1.84%.

Markets were looking ahead to more earnings reports as well as the weekly update on initial jobless claims and existing home sales.

On the economy, the Dow Jones estimate for claims in the week ended Jan. 15 is 225,000, slightly less than the 230,000 from the previous period. Home sales for December are expected to total 6.48 million, a modest 0.3% increase from November, which had posted a gain of 1.9%.

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Stocks Start Week Higher On Trade Deal Hopes

MONDAY – U.S. stock index futures rose on Monday on a report that U.S. and China are getting close to a trade deal.

This morning, the Dow Jones Industrial Average futures were up 65 points, indicating a gain of more than 70 points at the open. Futures on the S&P 500 and Nasdaq 100 were also slightly higher.

The Wall Street Journal reported that China had proposed to bring down duties on certain American goods in an attempt to strike a deal with the U.S. The same report suggested both countries are at the final stage of their negotiations, which could see the country’s leaders meeting at a special summit to sign a trade deal soon.

The Trump administration touted last week significant progress being made in U.S. negotiations with China. Treasury Secretary Steven Mnuchin told CNBC on Thursday the two sides were getting closer.

The back-and-forth on trade between the two countries has sent ripples through financial markets since last year, with investors fretting how tighter trade conditions could impact corporate profits.

On the economic front, there will be construction spending figures out at 10 a.m. ET.

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Stocks Rise Of Jobs News

Stocks rose on Friday on the back of stronger-than-expected employment data. Investors also shrugged off concerns over an escalating trade war between the U.S. and China.

The Dow Jones Industrial Average jumped 99.74 points to 24,456.48, with Apple and Microsoft outperforming. The S&P 500 closed 0.8 percent higher at 2,759.82, with health care rising 1.5 percent. The Nasdaq composite climbed 1.3 percent to 7,688.39 as the iShares Nasdaq Biotechnology ETF (IBB) surged 3.8 percent. Facebook rose to an all-time high, also boosting the Nasdaq.

The U.S. economy added 213,000 jobs in June, while economists polled by Reuters expected a gain of 195,000.

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Bear Market Watch!

The stock market was hammered by trade tariff threats again this week, a frequent occurrence during this administration. Based on last week’s public comments, some Republican representatives are now becoming more worried. Without any concrete policy changes actually occurring, no one can be sure whether the threats are real, or just part of the negotiation strategy.

The Dow Industrials managed to close higher on Friday, avoiding the longest daily losing streak since 1978. Then, the Dow closed lower for eight days in a row, and a losing day on Friday would have been nine days in a row. Again, this kind of streak has not happened since February 1978.

Even though the first tariffs are scheduled to take effect July 6, there is uncertainty over which tariffs will actually be enforced. Therefore, it is difficult to determine what impact they will have on the economy and the stock market. As the rhetoric continues between the US, China, Canada, and the Eurozone markets, more economists are expressing their views on what these tariffs might mean.

Many of the world’s central bankers met last week in Portugal, and they also expressed their concerns. European Central Bank President Mario Draghi cited that past trade disputes had been overwhelmingly negative for the economy, and said that there was “no ground to be optimistic” about the current trade tensions. Some market’s segments are already reacting, as shares of Mercedes Benz and Fiat both dropped over 4% on concerns over what the tariffs could do to profits of the automakers.

Right now, the economy is still acting strong, consumers are optimistic, and technically the stock market is in a positive trend. Market action, however, is cyclical, so eventually these positive trends will turn negative. What signs should investors look for to warn them of a change in these trends? There are three trends that I feel investors can monitor for an early warning of an imminent recession and a bear market.

The first sign to look for is deterioration in the consumer sentiment, as the consumer plays an important role in the health of the economy. I never recommend basing decisions on individual data or even several data points, Rather, one should monitor the overall trend.

What to do? The market acted a bit tired last week and trade threats are likely to pick up again next week, which could trigger some more profit taking. The strong readings from the weekly studies indicate that this should be a buying opportunity for those without long positions in equities.

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3.9% Unemployment Can’t Keep Stocks Up

U.S. stocks fell Friday morning after the government’s monthly jobs report missed Wall Street expectations.

The Dow Jones industrial average fell more than 100 points shortly after the opening bell, as large industrial components like Boeing and Caterpillar weighed down the other blue-chip stocks.

The S&P 500 fell about 0.4 percent in early trading as a decline in interest rates pulled financial and banking stocks down; shares of J.P. Morgan fell 0.8 percent while Bank of America lost about 1 percent.

The Labor Department reported that the economy added 164,000 jobs in the month of April, lower than the 195,000 expected by economists polled by Reuters. Average hourly earnings growth also missed, rising only 0.15 percent against expectations of a 0.2 percent gain.

Despite the miss in the number of jobs added, the government said the unemployment rate fell to 3.9 percent, an 18-year low.

Despite a broader slip in equities, Apple jumped after longtime investor Warren Buffett revealed that he bought 75 million shares during the first quarter, which added to the conglomerate’s already massive stake in the tech giant, “brought down our cash position moderately.”

The early moves in U.S. stocks came as markets across the globe showed a mixed picture. On Thursday, U.S. stocks finished relatively mixed, after the Dow Jones industrial average erased a nearly 400-point loss during the session, on the back of strong earnings.

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