The Oxford Economics index turned down in its July forecast, meaning the odds of a recession have risen. But the company said, “They are still below the historical recession threshold and still lower than they were a year ago.” Still, “if we have an extreme negative recession [this year], and there is a massive negative wealth effect that impacts all assets. Binance said late Sunday that it temporarily closed bitcoin withdrawals due to a large volume of pending transactions. Caso and his team are “less optimistic about the prospect for an Android AI upgrade cycle, since we don’t believe Android has the power to force users to upgrade, as Apple is doing.” The FactSet consensus calls for earnings per share to rise 1.8% to $4.53, sales to grow 0.9% to $42.57 billion and for same-store sales to decline by 2.2%.
Tech stocks are a victim of high expectations
One of a handful of Wall Street strategists who anticipated this year’s rebound in U.S. stocks is raising his expectations for how high the market might… One- through 30-year yields on U.S. government debt were broadly lower Monday afternoon as traders eyed the latest developments in the Middle East and looked ahead to a busy week of U.S. economic updates. “The impact on equities from an Iran attack is just not something we can model ahead of the event.
Crypto
The reason for the increased expected move, the 30-day implied volatility for the stock was at 33.0%, compared with historical volatility of 23.1% over the past 90 days. Pace said he is leaning toward the view that the U.S. economy is relatively healthy. The yield curve between the 2-year Treasury and 10-year Treasury has been flattening and could uninvert as the Federal Reserve starts cutting interest rates, Pace said. Major indicators in the fixed-income space have been showing different signals on the health of the economy, according to Ben Pace, chief investment officer at Cerity Partners.
U.S. stocks could soon rise to 4,400 on the S&P 500, says Wall Street strategist who called 2023’s rebound
Qualcomm Inc.’s stock was one of the few major chip stocks in the red on Monday following an analyst downgrade. Home Depot is scheduled to report fiscal second-quarter results early Tuesday, like around 6 a.m. The inverted yield curve has been pointing to a recession, while spreads — or the difference in yields — between high-yield bonds and U.S. Treasuries remain fairly narrow, indicating that the economy is healthy, Pace said in a call.
Feared Iranian attack on Israel is a top threat to stocks this week
S&P Global Ratings followed the announcements by cutting JetBlue’s credit rating by one notch to B-, which is six notches deep into speculative grade, or “junk” status. Earlier, the airline announced plans for a $400 million convertible debt offering. The company also announced plans to offer $2.75 billion in notes, secured by assets of the carrier’s TrueBlue loyalty program. The inclusion of a company in the Dow Jones Industrial Average does not depend on defined criteria.
Treasury yields extend advance seen after Friday’s jobs report
Geopolitics threatened to deal a fresh blow to investor confidence on Monday just as stocks appeared to be shaking off the most chaotic stretch of the year. The Dow Jones Industrial Average fell 160 points, or 0.4%, to around 39,342 on Monday afternoon, while the Nasdaq Composite edged up 0.2%. Why U.S. stocks face a bumpy road to recovery with inflation and earnings updates on the horizon. From the S&P 500 to the Dow Jones, these indexes provide a holistic view of market health and direction. A spike in the index could signal overall bullish sentiment, while a dip might hint at prevailing market uncertainties. By keeping an eye on these indicators, one can tune into the broader market pulse.
Companies such as McDonald’s and Walmart are reporting that their customers are cutting back amid the strain of still-elevated inflation and high borrowing costs. Investors now fret that the Fed may have waited too long to ease borrowing costs for consumers and businesses, raising the risks of a recession. Notably, the slump follows what had been a bullish year, with the stock market reaching record highs that bolstered the retirement accounts of millions of U.S. workers. The whiplash may have some 401(k) savers questioning what’s behind the reversal, especially after the U.S. economy had appeared to be on solid footing, with steady growth and cooling inflation, thanks to the Federal Reserve’s flurry of interest rate hikes.
That means A further sharp escalation of banking strains would likely be necessary to change the Fed’s perspective. The overall market’s EPS beat rate in the first quarter remains solid with strong results coming from mega-cap technology bellwethers despite the challenging macro backdrop, said Wilson. Qualcomm shares were down 1.4% in afternoon action and among only five laggards in the PHLX Semiconductor Index on the day.
Fed funds futures traders were pricing in an 11% chance of another quarter-point rate hike in June, up from 8.5% on Friday. Investors are increasingly worried that a recession may begin in the U.S. later this year, as the Federal Reserve on Wednesday raised its key interest rate for the 10th time in a row, while growing evidence points to a slowing U.S. economy. The U.S. stock market can’t seem to figure out whether the recent decline in Treasury yields is good or bad for equities, according to DataTrek Research. Previously, Bannister had said in a report shared with clients and the media during the opening days of the year that markets would advance during the first half of 2023. As MarketWatch reported, respondents to the Fed survey cited tighter lending standards and weaker demand for commercial and industrial loans to firms of all sizes.
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- “The fear is that we might ultimately tip into a recession, versus that prior expectation for a soft landing.”
- A spike in the index could signal overall bullish sentiment, while a dip might hint at prevailing market uncertainties.
- Market corrections, or a drop of at least 10% from their highs, occur an average of every one and half to two years, the firm said in a report.
- Geopolitical tensions also flared anew to start the week, with the Pentagon sending more US forces to the Middle East ahead of a potential attack by Iran.
Bitcoin deepened its losses on Monday, falling more than 4.8% to the lowest level in almost two weeks, as Binance, the largest crypto exchange, paused bitcoin withdrawals twice over the weekend. The pricing of “straddles” on Home Depot’s stock is showing that the options market is prepared for a much bigger than usual move on Tuesday after earnings are reported. The stock market today is a dynamic, ever-shifting landscape, and keeping abreast with its movements is crucial for informed decision-making. From market today updates to deeper dives into specific stocks, the importance of staying updated cannot be stressed enough. Whether you’re an active trader or someone simply keeping tabs on their retirement portfolio, a timely market update can be the difference between capitalizing on an opportunity and missing out.
However, much of the macro data may be providing a “false signal” as leading indicators point to downward trends in EPS surprise and margins over the coming months, said Wilson. Bookmark this page for your daily dose of market insights, and arm yourself with the knowledge to navigate the intricate world of stocks. “If you are worried about your retirement plan, I wouldn’t be pulling the plug and moving to cash,” Agati added, noting that he would look at investment-grade fixed income investments or U.S. “This ‘carry trade’ has been unraveling in recent weeks and might have crescendoed on Friday,” according to Yardeni Research. Stocks seesawed between gains and losses throughout the session, unable to decisively erase the losses from last Monday’s sell-off, which was the worst in two years. And despite three bank failures and the KRE regional bank index down over 40% since February, the Fed still considers the U.S. banking system sound, Shah said.
Instead, an independent Wall Street Journal commission decides whether a share is to be included or excluded. There are no fixed times for reviewing the composition of the index, since changes are only made by the commission as and when they are needed.
U.S. stocks limped higher at the open on Monday, with only the Nasdaq Composite lingering in the red. Shares of regional banks traded sharply higher, building on Friday’s recovery after the S&P 500, Dow Jones Industrial Average and the SPDR S&P Regional Banking ETF recorded their worst weekly losses since March. In search of a “safe haven”, some investors have turned to bitcoin, which has limited supply and is often touted by supporters as a hedge against existing financial system stress and monetary policy. The crypto has rallied more than 70% so far this year, according to CoinDesk data.
“Fears over the health of the economy escalated drastically in recent days,” Oxford Economics, an independent economic advisory firm, said in its Recession Monitor on Wednesday. “We think that is an overreaction to what has been a steady weakening in the incoming economic data.” These jitters may be a sign of a gap that’s opened between the future investors see and the one economists see. The July inflation report arriving on Wednesday morning will likely be the next big number. When world markets fall with big red numbers like they did last week, investors are shaken and 401(k)s are dented.
“The real issue here is investors are worried the Fed is behind the curve in cutting interest rates, and that means there could be a bigger risk of a policy error,” Amanda Agati, chief investment officer of PNC’s asset management group, told CBS MoneyWatch. “The fear is that we might ultimately tip into a recession, versus that prior expectation for a soft landing.” The stock market has proved resilient in the face of growing recession fears, with support tied in part to expectations the Federal Reserve will pivot to rate cuts well before year-end. Investors should think through what that scenario would say about the backdrop for equities, said Seema Shah, chief global strategist at Principal Asset Management, in a Monday note. Softer U.S. economic data may point to weaker earnings over the next several months as corporates’ pricing power will erode as inflation cools, while labor… U.S. stocks closed mixed Monday, showing little movement following the afternoon release of the Federal Reserve’s senior loan officer opinion survey on bank lending practices , which showed a tightening in credit conditions in the first quarter.
A range of signals in recent months suggest the economy is losing speed, leading some experts to urge the Federal Reserve to lower its benchmark interest rate for the first time since 2020. For now, however, the central bank has left rates unchanged, including more at its policy meeting last week. Markets are clamoring for lower interest rates, but a move by the Fed would also be an acknowledgement that the economy is slowing. Fears of a recession are what sparked the latest big sell-off and any weakness in the economic picture could be the catalyst for the next big move down in stock prices. The second update will be the main event, with the consumer price index set to show the rise in inflation faced by the average consumer last month. Economists expect the reading to show a slight rise on a monthly basis, though not enough to scramble predictions for the Fed to begin cutting interest rates at its policy meeting next month.
Although the S&P 500 is down roughly 8% from its peak in July, drops in equity prices of 5% or more have occurred at least once a year for the past four decades, according to Oxford Economics. Market corrections, or a drop of at least 10% from their highs, occur an average of every one and half to two years, the firm said in a report. Stocks have soared into record terrain this year, propelled by expectations the Fed would soon trim interest rates for the first time since 2020 and by the ongoing artificial intelligence boom. Here are four reasons why experts say the stock market is tumbling, along with their advice on what investors should do. The S&P 500 slid 160 points, or 3%, to 5,186 on Monday, the index’s biggest one-day drop in nearly two years, according to FactSet. The tech-heavy Nasdaq Composite sank 3.4% as investors fled some of the tech giants that until recently had powered the U.S. market higher, with Apple shedding 4.8% and Nvidia falling 6.4%.