Finance News Archives - Page 38 of 74

May 27, 2022

Stocks rise, S&P 500 looks to snap 7-week losing streak

U.S. stocks rose on Friday, setting the major indexes on track to end a weeks-long losing streak after a string of more upbeat corporate results at least temporarily offset fears of a steep economic slide.

The S&P 500 gained. The blue-chip index headed for a 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} weekly advance as of Thursday’s close, which if maintained, would mark its largest since mid-March. The S&P 500 had fallen for the seven consecutive weeks prior in its longest losing streak since 2000. The Dow Jones Industrial Average and Nasdaq each also increased on Friday.

Investors digested a fresh set of economic data Friday morning, including the latest print on core personal consumption expenditures (PCE) — the Federal Reserve’s preferred gauge of underlying inflation. These showed inflationary pressures eased only modestly in April compared to March, echoing results from the still-elevated Consumer Price Index and Producer Price Index released from earlier this month. Headline PCE increased 6.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in April over last year compared to March’s 6.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} increase, and core PCE rose by 4.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} compared to 5.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in the prior month. But separate data also showed personal spending, adjusted for inflation, accelerated in April compared to March.

Over the past several sessions, investors have weighed favorably the most recent batch of quarterly results and guidance from retailers like Macy’s (M), Nordstrom (JWN), Dollar General (DG) and Dollar Tree (DLTR). These companies largely exceeded Wall Street’s estimates, helping assuage concerns that the profit pressures reported recently by Walmart (WMT), Target (TGT) and Kohl’s (KSS) were reverberating equally across all consumer-facing firms. And outside of retail, airlines including JetBlue (JBLU) and Southwest (LUV) raised their sales guidance for the current quarter, suggesting demand remained strong for discretionary travel.

“Overall the U.S. consumer still remains in great shape. They came into these price hikes, this inflation, with cushion on their balance sheet. Certainly employment is high, so the overall U.S. consumer remains in a very strong place,” Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management, told Yahoo Finance Live.

“The big fear was that inflation was going to continue to run away and cause the Fed to have to tighten the U.S. economy into a recession,” he added. “I think we’re all starting to gradually wake up to the reality that goods spending … was pulled forward. Inventories have been rebuilt, and goods spending has caused the inflation that you’re seeing. That’s going to roll over as people move over to service sector spending.”

“And so it may feel like a recession in some parts of the economy, but other parts of the economy are going to do well,” Schutte said. “Inflation is going to fall, and the Fed is going to go a bit easier.”

However, other strategists cast doubt on the staying power of gains seen in the market so far this week, especially as inflation has shown few meaningful signs of coming down in a substantial way to date.

“This is nothing more than a bear bounce in our opinion. When you look at these bounces we’ve had, they’ve been on very light volume, there’s not a lot of conviction,” Eddie Ghabour, co-founder and managing partner of Key Advisors Group, told Yahoo Finance Live. “The data that we’re getting now that’s been causing this sell-off, remember, is first-quarter data. The data coming in the second quarter is going to be worse than the first quarter. And we’re not going to get that news until July … So I think we’re going to have a very treacherous market in the next few months.”

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10:06 a.m. ET: Consumer sentiment weakened in late May to lowest since 2011

Consumer sentiment fell further in late May, largely on account of concerns around inflation and business conditions in the near-term.

The University of Michigan’s final monthly sentiment index decreased to 58.4, which was downwardly revised from the 59.1 previously reported for the month. Subindices tracking consumers’ views on current conditions and future expectations were each also slightly downwardly revised, and one-year inflation expectations were little changed at 5.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

The latest sentiment drop “was largely driven by continued negative views on current buying conditions for houses and durables, as well as consumers’ future outlook for the economy, primarily due to concerns over inflation,” Joanne Hsu, Surveys of Consumers director, wrote in a statement. “At the same time, consumers expressed less pessimism over future prospects for their personal finances than over future business conditions.”

“Looking into the long term, a majority of consumers expected their financial situation to improve over the next five years; this share is essentially unchanged during 2022,” Hsu added. “A stable outlook for personal finances may currently support consumer spending. Still, persistently negative views of the economy may come to dominate personal factors in influencing consumer behavior in the future.”

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9:32 a.m. ET: Stocks open higher

Here were the main moves in markets as of 9:32 a.m. ET:

S&P 500 (^GSPC): +32.86 (+0.81{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,090.70
Dow (^DJI): +56.27 (+0.17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 32,693.46
Nasdaq (^IXIC): +165.04 (+1.41{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,905.69
Crude (CL=F): -$0.12 (-0.11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $113.97 a barrel
Gold (GC=F): +$10.30 (+0.56{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,864.20 per ounce
10-year Treasury (^TNX): -3.1 bps to yield 2.7250{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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8:58 a.m. ET: Goods trade deficit narrows more than expected in April after record reading in March

The U.S. goods trade gap declined more than anticipated in April after reaching an all-time high of nearly $126 billion in March.

The advance goods trade balance showed a deficit of $105.9 for the U.S. in April, the Commerce Department said Friday. This followed a gap of $125.9 billion in March, which was upwardly revised from $125.3 billion last month.

The print suggests trade produced slightly less of a drag on the U.S. economy at the start of the second quarter compared to the first. In the first quarter, net exports shaved 3.23 percentage points off headline U.S. gross domestic product (GDP). GDP fell at a 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annualized rate in the first three months of the year.

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8:42 a.m. ET: Real personal spending accelerates in April, while saving rate slides to lowest since 2008

U.S. consumers kept spending last month even as inflation remained elevated, as one of the key contributors to U.S. economic activity held up into the spring. However, the personal saving rate dwindled to the lowest level in over a decade, raising some concerns over how much longer spending might manage to prop up the economy.

Real personal spending rose 0.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} month-on-month in April, the Bureau of Economic said Friday, accelerated from March’s 0.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} rise. Unadjusted for inflation, personal spending was up 0.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, exceeding consensus economist expectations for a 0.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} increase, according to Bloomberg data. This metric had risen by 1.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in March.

Personal income, however, decelerated slightly last month, rising 0.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after March’s 0.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} increase. And the personal saving rate, or proportion of disposable personal income set aside to savings, fell to 4.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from March’s 5.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, reaching the lowest level since 2008. After soaring during the pandemic, the saving rate has now come in well below the average of 2019 before the outbreak, when the saving rate had averaged over 7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

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8:38 a.m. ET: Inflation eases just slightly in April as PCE rises 6.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} year-over-year

Inflation as measured by the Bureau of Economic Analysis’ personal consumption expenditures (PCE) index eased only modestly in April compared to March, with fast-rising prices showing few signs of slowing down across the U.S. economy.

The broadest measure of PCE rose 0.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in April month-on-month, which matched consensus economist expectations, according to Bloomberg data. This compared to a 0.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} monthly increase in March. On a year-over-year basis, however, PCE still soared by 6.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, coming in slightly hotter than expected and moderating only slightly from March’s 6.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annual rise.

Core PCE, which excludes volatile food and energy prices, also remained hot and rose 4.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in April over last year. That matched estimates, and followed a 5.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} rise in March. February’s reading of 5.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} had been the highest since 1983.

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7:23 a.m. ET: Stock futures rise as indexes look to log weekly gains

Here’s where markets were trading Friday morning:

S&P 500 futures (ES=F): +11 points (+0.27{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,066.75
Dow futures (YM=F): +26 points (+0.08{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 32,626.00
Nasdaq futures (NQ=F): +54.25 points (+0.44{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 12,333.50
Crude (CL=F): -$0.46 (-0.40{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $113.63
Gold (GC=F): +$8.80 (+0.47{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,862.70 per ounce
10-year Treasury (^TNX): -3.3 bps to yield 2.725{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

NEW YORK, NEW YORK - MAY 23: Traders work on the floor of the New York Stock Exchange (NYSE) on May 23, 2022 in New York City. After a week of steep losses, markets were up in Monday morning trading. (Photo by Spencer Platt/Getty Images) — NEW YORK, NEW YORK – MAY 23: Traders work on the floor of the New York Stock Exchange (NYSE) on May 23, 2022 in New York City. After a week of steep losses, markets were up in Monday morning trading. (Photo by Spencer Platt/Getty Images)

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.

Read the latest financial and business news from Yahoo Finance

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May 26, 2022

Stocks open mixed as market struggles to rebound from sell-off

U.S. stocks rose Thursday morning as markets remain on track to snap a 7-week losing streak.

The S&P 500 climbed as much as 1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in early trading, and the Dow Jones Industrial Average gained over 400 points, or 1.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The Nasdaq Composite rose 1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} higher as the index attempts to claw its way out of bear market territory.

A rebound in retail earnings spurred markets early in the session, with Macy’s (M) rising as much as 12{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in early trading after the retail giant raised its profit outlook in an upside surprise to investors weighing a slew of downward forecast revisions from peers.

Shares of discount retailers Dollar Tree (DLTR) and Dollar General (DG) were also up more than 13{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after both companies raised forecasts on Thursday.

Last week, several retailers, including Walmart Inc. (WMT), have recently slashed their outlooks and warned inflation was likely to weigh on profits.

The moves build on a brief reprieve for equities, which closed higher Wednesday amid a streak of day-to day gyrations. In the first 99 trading days of the year as of Wednesday’s close, the S&P 500 was down 17.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, marking its fourth worst start to a year in history, per data from Compound Capital Advisors.

Investors also digested a bevy of economic releases Thursday morning, including a revised estimate on U.S. GDP that showed economic activity fell at a 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annualized rate in the first three months of 2022, upwardly revised from an initial estimate of 1.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Bloomberg economists had anticipated the second reading to come in at 1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Meanwhile, applications for unemployment insurance ticked back down in the latest weekly data to 210,000 in the week ended May 21.

Chip designer Nvidia Corp. (NVDA) joined the growing list of companies reporting weaker second-quarter forecasts and alluding to economic constraints ahead. The company’s stock fell in extended trading Wednesday after Nvidia warned current-quarter revenue was likely to come in $500 million lower due to headwinds from Russia’s war in Ukraine and COVID lockdowns in China. Nvidia shares pared these losses early Thursday, rising 0.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} about a half hour into the trading session.

Software company Snowflake (SNOW) also cut its forecast late Wednesday, and shares of the company were down as much as 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in early trading on Thursday.

Recent trading sessions have seen sharp drawdowns in some big-name stocks after earnings reports that affirmed investor worries about the impact of inflation on corporate margins. Earlier this week social media giant Snap Inc. (SNAP) tumbled 43{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in its biggest-one day drop on record, spurring a sell-off of other digital ad-dependent stocks that dragged the Nasdaq down to its lowest close since November 2020.

Last week, the downswing occurred in retail after Walmart and Target (TGT) set off the recent trend of dramatic pullbacks in individual names following weaker earnings forecasts. According to data from FactSet, S&P 500 companies reporting results for the first quarter have seen the largest negative price reaction to positive earnings per share surprises since 2011.

“Whether it’s today or tomorrow, it does feel like we’re starting to digest what is a seemingly large amount of bad news,” Acorns Chief Investment Officer Seth Wunder told Yahoo Finance Live on Wednesday. “The key thing is to get data that eases some of the pressure off of the Federal Reserve.”

The pickup in disappointing guidance has kept Wall Street on edge for signs the central bank’s interest rate hiking plans will be effective in bringing prices back down to healthier levels. Minutes released Wednesday from the Fed’s May policy-setting meeting indicated the majority of officials were strongly committed to rate hikes of 50 basis points at each of the next two meetings in June and July. So far this year, policymakers bumped short-term borrowing costs by 50 basis points earlier this month and 25 basis points in April.

“Though market participants have feared this stance, it should be noted that the Fed has in excess of $100 billion is securities maturing on its balance sheet coming up, so the resulting asset purchases can help negate growth concerns this summer,” Comerica Wealth Management Chief Investment Officer John Lynch said in an emailed note. “It’s actually a perfect time for the Fed to raise aggressively and send a message to markets that they’re serious about inflation without sending growth into a tailspin.”

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10:17 a.m. ET: Crypto under pressure as tech stocks gain

The start of Thursday’s trading session has been raucous, with the Nasdaq leading the charge up nearly 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} despite both Nvidia and Snowflake giving investors yet another downbeat forecast from former tech high-flyers last night.

Notably, however, crypto was not catching the same bid as the riskiest pockets of the market were rallying.

Bitcoin (BTC-USD) traded back below $29,000 at one point on Thursday morning, while Ethereum (ETH-USD) was down in excess of 8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, falling below $1,800 in morning trade on Thursday.

As we’re drafting this update, there’s a bit of a rebound happening in the crypto space, but this divergence between stocks and crypto — if it holds — is certainly something to watch.

—Myles Udland, senior markets editor at Yahoo Finance

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9:34 a.m. ET: Stocks open mixed as market struggles to rebound from losses

Here were the main moves in markets during the opening bell on Thursday:

S&P 500 futures (ES=F): +15.75 (+0.40{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,992.50
Dow futures (YM=F): +134.00 (+0.42{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 32,210.00
Nasdaq futures (NQ=F): +20.00 (+17.00{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,962.25
Crude (CL=F): +$0.88 (+0.80{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $111.21
Gold (GC=F): -$2.60 (-0.14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,843.70 per ounce
10-year Treasury (^TNX): -1.1 bps to yield 2.7490{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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9:07 a.m. ET: US GDP contracted at slightly faster rate in the first quarter

U.S. gross domestic product fell at a 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annualized rate in the first three months of 2022, according to a revised estimate out of Washington.

The nation’s GDP – the broadest measure of economic activity – was initially believed to logged a 1.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} contraction between January and March. The second reading came in higher than the revised contraction of 1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Bloomberg economists had anticipated.

In the fourth quarter, economy grew at a robust 6.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} pace. The slowdown comes amid lingering supply chain imbalances, inflation, and disruptions from war in Eastern Europe that weighed on growth.

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8:58 a.m. ET: US jobless claims fall after climbing unexpectedly last week

Applications for unemployment insurance ticked back down in the latest weekly data, underscoring continued strength in the labor market despite higher inflation and worries of an economic slowdown.

The Labor Department’s latest weekly jobless claims report showed 210,000 claims were filed in the week ended May 21, coming in below the 215,000 economists surveyed by Bloomberg had expected. Last week, filings unexpectedly climbed to 218,000, the highest level since January.

Weekly claims continued to hover near a multi-decade low. However, several retailers, including Walmart Inc. (WMT), have recently slashed their outlooks and warned inflation was likely to weigh on profits, raising concerns among market participants that layoffs could be underway.

“Major retailers are reporting margin pressure and softer consumer demand as inflation erodes discretionary spending power and consumers redirect spending dollars from goods to services,” Comerica Chief Economist Bill Adams said in a recent note. “This will lead to slower job growth in the retail and e-commerce industries in the rest of 2022.”

“The stock market selloff could dampen business sentiment and make some businesses more cautious about hiring, especially businesses that are cash flow negative and rely on investors’ money to fund operations like many startups,” he added.

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7:22 a.m. ET: Futures jump as the indexes claw back from sell-off

Here’s where stock futures were in pre-market trading Thursday:

S&P 500 futures (ES=F): +15.75 (+0.40{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,992.50
Dow futures (YM=F): +134.00 (+0.42{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 32,210.00
Nasdaq futures (NQ=F): +20.00 (+17.00{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,962.25
Crude (CL=F): +$0.88 (+0.80{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $111.21
Gold (GC=F): -$2.60 (-0.14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,843.70 per ounce
10-year Treasury (^TNX): -1.1 bps to yield 2.7490{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

A person enters the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., May 19, 2022. REUTERS/Andrew Kelly

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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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May 25, 2022

Stocks drift higher as traders await Fed meeting minutes

U.S. stocks rose slightly on Wednesday, steadying after recent selling sparked amid growing concerns about the impact of inflation on company profits and the broader economy. Traders also awaited the Federal Reserve’s meeting minutes later in the day, which may help further clarify the path of monetary policy in the near-term.

The S&P 500 edged up after Tuesday’s renewed rout. The Dow and Nasdaq also ticked higher. Treasury yields declined on the long end of the curve, and the benchmark 10-year yield fell to hold just above 2.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

Investors this week have eyed a growing list of companies citing the effects that inflation have had and will have on results going forward. Retailers including from Walmart and Target last week to Dick’s Sporting Goods (DKS) and Abercrombie & Fitch (ANF) this week slashed their earnings forecasts for the year as the companies absorbed rising goods and transportation costs. And elsewhere, Snap (SNAP) warned earlier this week that it would post weaker-than-expected sales and profit results this year as the macroeconomic environment “deteriorated further and faster than anticipated.” This was taken as a harbinger of softer results for a bevy of ad-driven tech stocks, sending the Nasdaq Composite to its lowest close since Nov. 2020 on Tuesday.

As the grim company guidance piles up, Wall Street is looking for signs that the Federal Reserve’s interest rate hikes and monetary policy tightening will achieve bringing down inflationary pressures. The Fed is set to release the minutes from its early May meeting Wednesday afternoon, which will offer additional details about how policymakers have been thinking of adjusting policy further to rein in rising prices. Fed Chair Jerome Powell earlier this month suggested additional 50 basis point rate hikes would likely be appropriate at the Fed’s next two meetings.

“The challenge right now is we’re in this new chapter of the inflation story. If you’ll recall, last year it started with whether it’s transitory — turns out, it wasn’t. Then it became about the Fed at the end of last year and earlier this year, whether or not they would tighten significantly. And they did, and now all that’s priced in,” James Liu Clearnomics founder and CEO, told Yahoo Finance Live. “And now what the market is looking at is are basically the fundamentals around how inflation affects corporate profitability and consumer demand.”

And beyond the domestic concerns, a myriad of international concerns — from Russia’s war in Ukraine, to China’s ongoing COVID outbreak — have further infused volatility into the market.

“The Fed can’t really do anything about what’s going on between Russia and Ukraine, they can’t really do anything about China’s COVID zero policies … and a lot of traders are starting to get concerned,” Shawn Cruz, TD Ameritrade head trading strategist, told Yahoo Finance Live.

“The way the market to me is reacting to that, is one, there’s de-leveraging going on. There are some liquidation events out there as well, and that is one of those ‘selling begets more selling’ type of environments. And then the other one is, there’s just not enough confidence out there to come in there and meaningfully put money back to work,” he added. “Once you start to see leverage start going back up, cash coming in from the sidelines, that to me would be an indication that there is at least a little bit more certainty in the outlook for a lot of these people on the sidelines to come back in.”

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9:31 a.m. ET: Stocks open lower before shaking off losses

Here were the main moves in markets as of 9:31 a.m. ET:

S&P 500 (^GSPC): -9.53 (-0.24{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,931.95
Dow (^DJI): -114.27 (-0.36{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 31,814.35
Nasdaq (^IXIC): -22.24 (-0.20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,242.21
Crude (CL=F): +$0.89 (+0.81{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $110.66 a barrel
Gold (GC=F): -$13.90 (-0.75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,851.50 per ounce
10-year Treasury (^TNX): -2.6 bps to yield 2.7340{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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9:12 a.m. ET: Durable goods orders disappoint in April

U.S. durable goods orders decelerated in April and were downwardly revised in March, offering an at least early sign that businesses may be pulling back on investments as economic uncertainties mount.

Orders for durable goods, or manufactured products intended to last at least three years, rose by 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in April compared to March, the Commerce Department said Wednesday. This came in below the 0.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} rate consensus economists were expecting, according to Bloomberg data. In March, durable goods orders rose by 0.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, with this rate revised down from the 1.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} previously reported.

Non-defense capital goods orders excluding aircraft also missed expectations, rising by 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in April versus the 0.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} anticipated. This metric rose by 1.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in March, and serves as a closely watched proxy for business investment. Still, non-defense capital goods shipments excluding aircraft, which factors into GDP, rose by a better-than-expected 0.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} last month.

“It’s entirely possible that the recent slowing is nothing more than a temporary reaction to the spike in energy prices; firms might be waiting to see how consumers respond,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in an email about the report. “So far, we see no evidence of any hit — housing excepted — but we also can’t rule out the idea higher rates are directly causing some capex [capital expenditures] to be deferred, even though firms are sitting on huge piles of cash accumulated during the pandemic.”

“For now, a decent increase in capital spending on equipment in the second quarter seems assured, given the lags from previous strength in orders, but the outlook for H2 has become a bit more cloudy,” he added.

—

7:55 a.m. ET: Dick’s Sporting Goods becomes latest retailer to slash full-year outlook given ‘evolving macroeconomic conditions’

Dick’s Sporting Goods shares sank by more than 14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Wednesday morning after the retailer became one of the latest to lower its full-year earnings and sales guidance as economic uncertainty resurged.

The sporting goods retailer said it now sees adjusted earnings totaling between $9.15 and $11.70 per share for the 2023 fiscal year, with this range coming in well below the $11.70 to $13.10 a share seen previously. Comparable store sales will likely fall between 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} this year, the company added, compared to a prior outlook for sales to come in between unchanged and down 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Dick’s Sporting Goods said it updated its outlook “to reflect the impact of evolving macroeconomic conditions,” according to its earnings release Wednesday morning.

Following the release, the stock was on track to post a sixth straight day of losses, or its longest losing streak since early Dec. 2021, as shares fell in sympathy with other major retailers over the past week.

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7:23 a.m. ET: Stock futures edge lower

Here’s where markets were trading Wednesday morning:

S&P 500 futures (ES=F): -5.25 points (-0.13{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,935.25
Dow futures (YM=F): -55 points (-0.17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 31,825.00
Nasdaq futures (NQ=F): -9.5 points (-0.08{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,761.50
Crude (CL=F): +$1.47 (+1.34{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $111.24
Gold (GC=F): -$14.10 (-0.76{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,851.30 per ounce
10-year Treasury (^TNX): -2.6 bps to yield 2.734{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.

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May 24, 2022

The stock market is acting like it believes Jay Powell

This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe

Tuesday, May 24, 2022

Today’s newsletter is by Emily McCormick, a reporter for Yahoo Finance. Follow her on Twitter

The stock market isn’t trading like it’s expecting the Federal Reserve will swoop in to save it.

The S&P 500 has tumbled by more than 17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from a January record high through Monday’s close. The index has posted monthly losses each month this year except March, and it’s on track for another slide in May. The Nasdaq Composite has fared even worse, plunging more than 28{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from its record high from Nov. 19, as once high-flying tech shares have been especially battered.

Market participants in the past haven’t trusted Fed officials to stay the course on their telegraphed monetary policy path when faced with this level of market volatility. This tendency by the Fed to be spooked by market turmoil and cornered into easing monetary policy has been known as the proverbial “Fed Put.”

As recently as 2019, this skepticism was well-placed: Eyeing a softening economy, trade uncertainties and a stock market in turmoil, the Fed delivered its first rate cut in over a decade, backing away from plans to raise interest rates further after hiking throughout 2018.

The market in early 2019 bet the Fed wouldn’t carry out the rate hikes it had suggested would take place for that year – and the market was right. This time around, however, commentators are confident the central bank won’t react the same way.

“[The ‘Fed Put’] pattern of behavior established a clear precedent that many market participants are still clinging [to] today, even as the Committee discusses rate hikes while the equity market pushes through key support levels,” Steven Ricchiuto, U.S. chief economist for Mizuho Securities USA, wrote in a note Monday. “Our continued bearish call on the equity market is predicated on the view that the ‘Put’ option no longer exists.”

“A strong belief in the ‘Put’ has kept bottom-up analysts from taking down their forward earnings estimates as they incorrectly hold on to the belief the Fed will reverse its tightening policy before the economy takes too serious a hit,” he added. “Instead, we see the recent deterioration in inflation as an overriding policy issue that precludes the Fed from reversing course unless there is clear evidence that inflation is moving back to target.”

U.S. Federal Reserve Chair Jerome Powell attends a press conference in Washington, D.C., the United States, on May 4, 2022. (Photo by Liu Jie/Xinhua via Getty Images)

In other words, while the market declines this year echo the kinds of declines that came before prior Fed pivots, the economic backdrop today looks very different. With inflation near 40-year highs, the Fed can’t as easily back down as it has prioritized reining in rising prices over virtually every other objective.

And the Fed has made clear it’s willing to risk both stock market prices and some economic growth if it means getting inflation in check. Last week, Fed Chair Jerome Powell acknowledged there “could be some pain involved in restoring price stability.”

Other Fed officials have been aligned with this messaging.

“I think what we’re looking for is the transmission of our policy through market’s understanding, and that tightening should be expected,” Kansas City Fed President Esther George told CNBC last week. “So it’s not aimed at the equity markets in particular, but I think it is one of the avenues through which tighter financial conditions will emerge.”

And right now, the market doesn’t seem to think the Fed is bluffing.

What to watch today

Economy

9:45 a.m. ET: S&P Global US Manufacturing PMI, May preliminary (57.7 expected, 59.2 during prior month)
9:45 a.m. ET: S&P Global US Services PMI, May preliminary (55.2 expected, 55.6 during prior month)
9:45 a.m. ET: S&P Global US Composite PMI, May preliminary (55.7 expected, 56.0 during prior month)
10:00 a.m. ET: Richmond Fed Manufacturing Index, May (12 expected, 14 during prior month)
10:00 a.m. ET: New Home Sales, April (750,000 expected, 763,000 during prior month)
10:00 a.m. ET: New Home Sales, month-over-month, April (-1.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, -8.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)

Earnings

Pre-market

Abercrombie and Fitch (ANF) is expected to report adjusted earnings of 7 cents per share on revenue of $800.13 million
Autozone (AZO) is expected to report adjusted earnings of $26.23 per share on revenue of $3.73 billion
Best Buy (BBY) is expected to report adjusted earnings of $1.60 per share on revenue of $10.41 billion
Ralph Lauren (RL) is expected to report adjusted earnings of 39 cents per share on revenue of $1.46 billion
Petco (WOOF) is expected to report adjusted earnings of 14 cents per share on revenue of $1.45 billion

Post-market

Agilent Technologies (A) is expected to report adjusted earnings of $1.12 per share on revenue of $1.62 billion
Nordstrom (JWN) is expected to report adjusted losses of 5 cents per share on revenue of $3.26 billion
Toll Brothers (TOL) is expected to report adjusted earnings of $1.50 per share on revenue of $2.10 billion

Yahoo Finance Highlights

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May 23, 2022

Stocks rise to recover from bear market brink

U.S. stocks rose Monday, with equities coming off a seven-week losing streak on more solid footing as investors shook off some recent volatility and digested fresh trade-related remarks from the Biden administration.

The S&P 500 rose by more than 0.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} just after market open . The index had closed out Friday’s session flat on the day but down 18.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from its Jan. 5 record closing high to come within striking distance of a bear market, defined once an index closes at least 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from a recent all-time closing high.

The Dow gained more than 200 points, or 0.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, and the Nasdaq also increased shortly after market open. The moves to the upside came after President Joe Biden said he was considering easing tariffs on Chinese goods that had been imposed during the prior administration. Biden’s remarks, made during a news conference with Japanese Prime Minister Fumio Kishida, came in turn after Treasury Secretary Janet Yellen said last week that she was encouraging the Biden administration to remove the tariffs she said imposed “more harm on consumers and business” in the U.S.

The possibility of some easing of tariffs while the U.S. economy grapples with decades-high rates of inflation helped at least temporarily boost risk assets that had been battered in recent weeks by jitters over rising prices, more aggressive Federal Reserve monetary policies and international concerns in Ukraine and China. As of Friday, the S&P 500 had also posted a seventh consecutive weekly loss last week in its longest losing streak since 2001. And at its worst point on Friday, the index sank as much as 20.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from its January record high to trade in bear market territory.

Traders work on the floor during the opening bell of the New York Stock Exchange in New York City on May 16, 2022. - US stocks were off to a downbeat start Monday following the rally in the prior session, as concerns about growth in the domestic and global economies continue. (Photo by TIMOTHY A. CLARY / AFP) (Photo by TIMOTHY A. CLARY/AFP via Getty Images) — Traders work on the floor during the opening bell of the New York Stock Exchange in New York City on May 16, 2022. – US stocks were off to a downbeat start Monday following the rally in the prior session, as concerns about growth in the domestic and global economies continue. (Photo by TIMOTHY A. CLARY / AFP) (Photo by TIMOTHY A. CLARY/AFP via Getty Images)

Since World War II, there have been 12 formal bear markets for the S&P 500, and 17 including “near bear markets,” or periods when the index fell by more than 19{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, according to LPL Financial Chief Market Strategist Ryan Detrick. Of these, the average drop was about 29.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, and lasted an average of 11.4 months.

However, when bear markets coincide with recessions, they tend to be worse, falling 34.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on average and lasting 15 months, Detrick added. A recession tends to be considered after two consecutive quarters of negative GDP (gross domestic product) growth.

Traders are set to receive the second estimate of first-quarter U.S. GDP later this week, which was reported last month in the first estimate to have contracted at a 1.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annualized rate. More recent economic data have shown some pockets of strength, however, with retail sales and some manufacturing data coming in strong, while employment data have started to soften.

“I do think that the economy is better right now than the stock market is telling you,” Rhys Williams, Spouting Rock Asset Management Chief Strategist, told Yahoo Finance Live on Friday. “And my guess is we’re going to muddle through on both stocks and bonds over the summertime.”

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9:32 a.m. ET: Stocks open higher

Here were the main moves in markets as of 9:31 a.m. ET:

S&P 500 (^GSPC): +32.49 (+0.83{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,933.85
Dow (^DJI): Open to 31,261.90
Nasdaq (^IXIC): +48.89 (+0.43{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,403.51
Crude (CL=F): -$0.33 (-0.30{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $109.95 a barrel
Gold (GC=F): +$10.30 (+0.56{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,852.40 per ounce
10-year Treasury (^TNX): +5.2 bps to yield 2.8390{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

—

7:23 a.m. ET: Stock futures gain more than 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

S&P 500 futures (ES=F): +47.5 points (+1.22{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,947.00
Dow futures (YM=F): +346.00 points (+1.11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 31,559.00
Nasdaq futures (NQ=F): +127.25 points (+1.07{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,968.00
Crude (CL=F): +$1.08 (+0.98{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $111.36
Gold (GC=F): +$16.90 (+0.92{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,859.00 per ounce
10-year Treasury (^TNX): +4.6 bps to yield 2.833{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.

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May 22, 2022

Larry Summers called inflation. Here’s what he sees next.

If Larry Summers was suitable about inflation, then what does he see happening upcoming? That’s what I requested myself as I organized to communicate with the observed, general public-dealing with economist this previous Thursday.

As you may possibly know, early final 12 months Summers sounded the alarm about President Biden’s $1.9 trillion American Rescue Program, stating it was the ‘least responsible’ economic plan in 40 years and that it could engender important and persistent inflation. Turns out Summers, a self-explained progressive, was appropriate.

Far more on what Summers saw that other folks skipped in a 2nd, but first I want to focus on that past political level, simply because Summers was essentially calling out his possess party—which it’s possible is not stunning.

Summers, as I’m guaranteed you know, is not only the whip-wise former Treasury Secretary and previous president of Harvard, he’s also acknowledged to be candid, sometimes at the cost of people’s inner thoughts, (and for not possessing an inferiority sophisticated).

A honest trade, I say. You want a sycophant, buy a puppy. You want an economist who bars no retains, simply call Summers.

Senior White House economic adviser Lawrence Summers speaks during an interview with Reuters in Washington June 24, 2010. Leaders of the world's top economies must ensure they maintain growth, Summers said on Thursday ahead of a G20 meeting where Europe is expected to support curbing deficits. REUTERS/Molly Riley — Senior White Property economic adviser Lawrence Summers speaks for the duration of an job interview with Reuters in Washington June 24, 2010. REUTERS/Molly Riley

It is in all probability the circumstance that there is a area for persons who are loyalists, and who will advocate for their group. But there is it’s possible extra price in having advisors who simply call them like they see them. If you’ve engaged an economist who claims points no one disagrees with, how useful are they definitely?

I have spoken with Larry lots of situations more than the many years, and I have to inform you, I know of couple of people today on planet earth who possess a bigger wealth of understanding at their disposal which they can share by much more cogent and usually droll usually means than he does.

And Larry was in wonderful form this week — potentially in section due to the fact he’s staying supplied his due — when I caught up with him to do a keynote discussion at the Bruin Funds/Sportico conference at Kiawah, South Carolina, a new event which aims to be the Davos or Sun Valley for the small business of sports.

Summers regaled the choose assembled viewers — commissioners, moguls, group professionals and this sort of — with a couple tales his own prowess as an athlete and his take on athletics from his former perch as an Ivy League university president. Finally however we did pivot to economics.

Ahead of I get to what he experienced to say, allow me return to Larry’s inflation warning, which he laid out in a Washington Submit viewpoint piece in February 2021.

Besides Democrats, some others, like Fed Governors Richard Clarida and Charles Evans, also criticized Summers’ evaluation.

So substantially so that Summers felt compelled to defend himself in a subsequent Write-up piece titled, “My inflation warnings have spurred questions. Below are my responses.”(Clarida, who resigned from the Fed earlier this 12 months soon after he “faced scrutiny about trades he produced in 2020 as the central bank was poised to rescue money marketplaces,” for one, now states he observed the hazard of inflation as of last summer months and is at present calling for powerful fascination level hikes.)

Federal Reserve Vice Chair Richard Clarida talks on the phone during the three-day — Federal Reserve Vice Chair Richard Clarida talks on the telephone through the a few-day “Problems for Financial Policy” conference in Jackson Hole, Wyoming, U.S., August 23, 2019. REUTERS/Jonathan Crosby

So now, 15 months just after that Submit piece, Summers is not just searching location on (however there are people who, even though acknowledging Summers was ideal, say for instance he was right for the completely wrong explanations), what he predicted appears to be so evident that a single is tempted to ask Fed governors and relaxation of the dismal researchers: how did you miss out on it?

So, what did Summers see?

For one issue, he when compared the bailout of 2009 — of which it was later said that the federal government did too very little bailing, ensuing in the Wonderful Economic downturn — to what he saw at that place past calendar year. This, from the February 2021 Washington Publish opinion piece, spells out the gist of Summers’ math:

“…a comparison of the 2009 stimulus and what is now becoming proposed is instructive. In 2009, the hole among actual and estimated possible output was about $80 billion a month and escalating. The 2009 stimulus actions provided an incremental $30 billion to $40 billion a month throughout 2009 — an amount of money equal to about 50 percent the output shortfall.

In contrast, current Congressional Spending budget Office estimates advise that with the presently enacted $900 billion package deal — but with out any new stimulus — the gap in between real and probable output will decline from about $50 billion a month at the starting of the yr to $20 billion a month at its conclusion. The proposed stimulus will full in the neighborhood of $150 billion a thirty day period, even in advance of consideration of any comply with-on actions. That is at the very least a few periods the sizing of the output shortfall.”

Base line, Summers claims: We should really have completed extra in 2008, but we did also considerably in 2021.

Summers acknowledges source constraints, those relevant to COVID particularly, as well as Ukraine, and anti-globalism, have also pushed costs increased.

But the true offender is the demand aspect. It is about oodles of dollars in people’s pockets getting used on every thing from sporting activities betting, to meme shares and crypto, to new houses. I fully grasp that acquiring the sum of a countrywide bailout ideal ain’t uncomplicated, but I feel you can argue convincingly that we overdid it.

And so, cutting to the chase, here’s Summers see going ahead:

“I like to consider to retain my info comparatively comparable,” Summers claimed this 7 days.

“There’s never been a minute when we had inflation in excess of 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and unemployment beneath 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, when we didn’t have a recession inside the up coming two years. Inflation is now properly higher than 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Unemployment is now very well below 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, especially if you modify for vacancies. So I feel it is really very most likely that we are heading to have a recession someday within the next two decades. I’m far more self-assured about that than I am about what is heading to materialize to desire prices.”

Ok, so that is poor. But hey, we see it coming, appropriate? Time to hedge your bets.

This post was highlighted in a Saturday edition of the Early morning Temporary on Might 14, 2022. Get the Morning Short despatched immediately to your inbox every single Monday to Friday by 6:30 a.m. ET. Subscribe

Observe Andy Serwer, editor-in-main of Yahoo Finance, on Twitter: @serwer

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