A Swiss flag flies over a indicator of Credit history Suisse in Bern, Switzerland
FABRICE COFFRINI | AFP | Getty Images
Credit history Suisse executives are in talks with its significant investors to reassure them amid increasing worries more than the Swiss bank’s money health, the Monetary Occasions described, citing people involved in the conversations.
1 government associated in the talks informed the Economic Moments that groups at the financial institution ended up actively partaking with its top clientele and counterparties above the weekend, incorporating that they were acquiring “messages of guidance” from leading traders.
Shares of Credit score Suisse touched clean lows last 7 days. The stock is down about 55{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} calendar year-to-day.
Spreads of the bank’s credit default swaps (CDS), which present traders with security versus economic pitfalls this kind of as default, rose sharply Friday. They followed stories the Swiss loan company is wanting to raise capital, citing a memo from its Chief Government Ulrich Koerner.
FT mentioned the executive denied reviews that the Swiss financial institution experienced formally approached its traders about perhaps increasing more funds, and insisted Credit score Suisse “was attempting to stay clear of these types of a transfer with its share value at report lows and higher borrowing costs because of to rating downgrades.”
The lender advised Reuters that it’s in the course of action of a method assessment that features possible divestitures and asset profits, and that an announcement is anticipated on Oct. 27, when the lender releases its 3rd-quarter results.
Credit rating Suisse has also been in talks with buyers to elevate funds with several eventualities in head, Reuters claimed, citing people today familiar with the subject as stating it contains a likelihood that the lender may perhaps “mainly” exit the U.S. current market.
The latest from Credit history Suisse indicators a “rocky interval” ahead but it could guide to a change in the U.S. Federal Reserve’s route, explained John Vail, chief worldwide strategist at Nikko Asset Management, on CNBC’s “Squawk Box Asia” on Monday.
“The silver lining at finish of this interval is the point that central financial institutions will in all probability begin to relent some time as both inflation is down and money conditions worsen dramatically,” Vail explained. “I will not believe it truly is the conclusion of the entire world.”
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“We battle to see a little something systemic,” analysts at Citi reported a report about the achievable “contagion impact” on U.S. banking institutions by “a substantial European bank.” The analysts did not name Credit score Suisse.
“We comprehend the nature of the concerns, but the current condition is night time and working day from 2007 as the stability sheets are basically diverse in phrases of capital and liquidity,” the report claimed, referring to the money disaster that unraveled in 2007.
“We think the U.S. lender stocks are really appealing below,” the report stated.
Asian shares bounced back again Friday from losses earlier in the 7 days, shrugging off info exhibiting U.S. wholesale selling prices soared 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in April from a calendar year before.
The regional rally followed a combined and muted near on Wall Avenue. Oil prices and U.S. futures also were being better.
Traders are puzzling above what’s subsequent with inflation and the U.S. central bank’s response to it. Trading has been volatile, with indexes prone to sharp swings as buyers test to protect their portfolios from the impact of the maximum inflation in a long time.
Federal Reserve Chair Jerome Powell, refreshing off successful Senate confirmation for a next 4-yr term, for the initial time Thursday acknowledged that superior inflation and weakness in other economies could thwart his attempts to avoid a economic downturn.
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Powell had previously sought to portray the Fed’s efforts to tighten desire prices as constant with a so-referred to as “soft landing” for the economy.
Hong Kong’s Hold Seng index obtained 2.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 19,805.34 and the Nikkei 225 in Tokyo jumped 2.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 26,461.49. South Korea’s Kospi extra 1.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 2,594.95 and in Sydney, the S&P/ASX 200 state-of-the-art 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 7,046.50.
Central lender moves to battle back against cost will increase by elevating fascination charges are pulling some currencies reduced even though the greenback rises. The Japanese yen has weakened sharply in the previous several months, even though the Chinese yuan, whose benefit in opposition to other currencies is controlled, has also weakened.
The euro, furthermore, has weakened amid the fighting in Ukraine and uncertainty more than materials of Russian gasoline and oil . The euro was buying and selling at $1.0397 early Friday acquiring fallen down below the $1.0500 degree it had hovered in close proximity to for most of the 7 days.
“European hazard sentiment is finding mangled by news of Russia cutting gasoline source in retaliation for sanctions,” Stephen Innes of SPI Asset Administration claimed in a commentary.
“EUR (the euro) has crashed as a result of $1.05 and has even damaged down by $1.04 on the back again of the news. In truth, this certainly highlights the uncertainty as we advance with the menace and disruption of the Russian electrical power supply,” he reported.
The greenback was at 128.96 yen, up from 128.42. Against the Chinese yuan, it was at 6.79 per greenback, up from about 6.41 yuan a thirty day period back.
On Thursday, the S&P 500 closed .1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} lower, at 3,930.08, owning been down 1.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} before in the working day. The Dow Jones Industrial Ordinary fell .3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 31,730.30, when the Nasdaq rose .1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 11,370.96.
The indexes are on rate for sharp weekly declines, extending the market’s slump so considerably this yr. The benchmark S&P 500 is now down 17.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} this yr, though the Nasdaq is down 27.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
Smaller corporation stocks held up much improved than the rest of the market. The Russell 2000 rose 1.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 1,739.38.
Yet another dire readout on inflation sparked a wave of promoting early Thursday, with technological know-how shares weighing down the S&P 500 index the most.
The Labor Department’s report that wholesale selling prices soared 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in April from a year previously adds to concerns that production expenditures are remaining handed on to customers, who could pull back on investing, crimping economic progress.
On Wednesday, the Labor Department’s report on customer prices came in hotter than Wall Road anticipated, exhibiting a even larger increase than expected in charges outside the house food and gasoline. That “core inflation” can be extra predictive of future traits.
Inflation has been worsened by Russia’s invasion of Ukraine and the conflict’s affect on climbing strength price ranges. China’s latest lockdowns amid fears about a COVID-19 resurgence have also worsened supply chain and manufacturing challenges at the center of climbing inflation.
The effects of increased selling prices for shoppers has been global. On Thursday, Britain said its economic climate grew at the slowest speed in a year in the course of the 1st quarter. That is elevating fears that the country may be headed for a recession.
In other investing, U.S. benchmark crude oil obtained $1.21 to $107.34 for every barrel in digital investing on the New York Mercantile Trade. It attained 42 cents to $106.13 for every barrel on Thursday.
Brent crude, the pricing basis for international buying and selling of crude, added $1.45 to $108.90 for each barrel.
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Wall Street’s relentless drop stretched into a sixth 7 days on Monday, fueled by new knowledge from China that included to issues about a international financial state that is remaining battered by higher inflation, climbing fascination fees and a malfunctioning source chain.
The S&P 500 fell 3.2 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, including to a downdraft that has knocked 16.3 p.c off the index this year, which includes a five-7 days stretch of marketing that is the market’s longest these kinds of drop in a lot more than a ten years.
The drop has stocks approaching a bear marketplace, Wall Street’s expression for a decline of 20 p.c or much more from latest highs, a retreat that serves as a marker of a severe change in sentiment.
The emphasis of notice on Monday was China’s overall economy, just after customs knowledge confirmed that advancement in the country’s exports slowed drastically in April and Li Keqiang, the Chinese premier, warned this weekend that the existing state of the nation’s work opportunities market was “complicated and grave.”
The trade slowdown was a product of China’s initiatives to incorporate a Covid-19 outbreak with lockdowns that have idled tens of millions of workers, as effectively as weaker need for Chinese-designed merchandise from the United States and Europe, economists claimed, and the news ricocheted by way of world wide markets: Oil costs slid a lot more than 6 percent, dragging shares of oil producers reduced, whilst shares in Europe and Asia also plunged. The Euro Stoxx 600 fell 2.9 per cent, and the Cling Seng Index in Hong Kong dropped 3.8 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
Traders have a very long checklist of good reasons to back again absent from stocks suitable now. Increasing costs and bigger fascination premiums are guaranteed to damage use in the United States, even though the war in Ukraine and the lockdowns in China are hampering provides of every little thing from food items to electricity, exacerbating the inflation dilemma.
The Federal Reserve’s effort to interesting the overall economy also usually means that a crutch for buyers in excess of the previous two yrs, low-cost borrowing prices and simple entry to money that assisted gasoline a staggering rally in shares, is commencing to fade.
There is no signal that any of Wall Street’s main fears will be resolved quickly. The Fed, which elevated its benchmark interest level 50 percent a share level very last week, is envisioned to keep boosting charges right until it is confident that customer charges are at last under regulate — anything investors anxiety will end result in an financial slump in the United States.
On Monday, Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, claimed throughout an interview that, if the economy does not reply to the Fed’s interest price boosts, it could have to ramp up its efforts to amazing progress. That could consist of raising fascination prices by three quarters of a proportion issue in a person go, though he does not consider that is essential suitable now.
“If the economic system doesn’t respond, to me, a 75-foundation-point shift could be suitable — but we will not know that for some time,” he stated, later introducing, “If we really started out to see inflation shifting strongly away from our 2 per cent goal, additional away, that would be a authentic concern.”
Conversely, any indicator that inflation is easing, enabling the Fed to consider slowing its campaign to raise interest costs, would assistance allay concerns, analysts reported.
Yearly inflation arrived at 8.5 percent in March, its fastest rate in about 40 yrs, with fuel and foods driving charges better, and economists be expecting that price tag gains will have slowed a little bit when the data on the Purchaser Value Index for April is launched afterwards in the 7 days. Just one month of greater details in all probability will not be plenty of to quiet markets, analysts say, but it could be a start.
“The base line is that marketplaces do not like uncertainty and the existing macro ecosystem is tenuous at best,” explained Brian Cost, head of expenditure administration at Commonwealth Monetary Network. “Any favourable developments on the geopolitical front, or softer-than-expected inflationary readings, could aid to abate the modern selling tension.”
No issue when it finishes, there’s no problem that the recent extend of volatility has stood out in a market place that for years was remarkably placid.
In 2021, there was seemingly no poor news that could prevent the U.S. stock industry, with the S&P 500 getting 26.9 per cent, and the index experienced everyday gain or reduction of a lot more than 2.5 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} just after, on Jan. 27, as meme shares like GameStop and AMC Entertainment spiked in a speculative frenzy and the Federal Reserve mentioned a resurgent coronavirus was weighing on the financial recovery.
That began to modify when the Fed moved absent from describing inflation as “transitory,” or a little something that could possibly finish as pandemic lockdowns eased, and rather adopted a much more aggressive tone toward cooling down rapid price ranges. By means of Monday, there have currently been 8 times this 12 months with gains or losses of at the very least 2.5 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} — about a single in each individual nine investing days. All all those significant each day modifications have been in March, April and Could.
Strings of major gains and losses are more typical of recessions and the durations that abide by them. Before the pandemic wreaked havoc on the stock sector in 2020, the previous string of huge adjustments was in 2007-11, throughout the money crisis and the restoration from it. In advance of that, the dot-com increase and bust, and the Sept. 11, 2001, attacks, introduced volatility.
Bear markets are similarly unheard of, with the past two possessing occurred in early 2020 and in the monetary crisis prior to. The 20 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} cause for a bear industry — like the 10 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} bring about for what investors contact a “correction” — are somewhat arbitrary thresholds, but they provide as mile markers to clearly show that investors have turned pointedly a lot more pessimistic about the entire world.
The causes for that pessimism abound right now, and will “drag the S&P 500 into a bear industry,” mentioned Victoria Greene, chief expenditure officer at G Squared Private Prosperity, an advisory organization.
“We nonetheless have some structural difficulties — a hawkish Fed, Ukraine, commodity value stress, Covid shutdowns in China, inflation — that are pressuring growth anticipations,” she reported. “The pressures from the macro entire world are much too significantly for stocks to triumph over at this stage.”
Reporting was contributed by Claire Fu Jeanna Smialek Melina Delkic and William P. Davis.
Stocks sank Monday afternoon as investors eyed the escalating threat of Russian invasion in Ukraine alongside ongoing concerns over inflation and an aggressive move toward policy tightening by the Federal Reserve.
The S&P 500 dropped to extend losses after last week’s roller-coaster sessions on Thursday and Friday. Treasury yields rose and the 10-year yield hovered back near 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The latest leg lower came after the Wall Street Journal reported the U.S. was closing its embassy in Kyiv and destroying networking and computer equipment, with concerns over a Russian military attack mounting.
Markets have been whipsawed in recent sessions by conflicting signals over the immediacy of a potential Russian invasion of Ukraine. Earlier, Russia’s Foreign Minister Sergey Lavrov said he was urging Russian President Vladimir Putin to continue diplomatic talks. This came less than a day after U.S. officials signaled Russia could be nearing the launch of an invasion of Ukraine as soon as this week. National Security adviser Jake Sullivan told CNN on Sunday that “a major military action could begin by Russia in Ukraine any day now,” though the U.S. was still hoping for a diplomatic resolution. And these remarks in turn came after President Joe Biden held a phone call with Vladimir Putin on Saturday warning that the U.S. and its allies would “impose swift and severe costs” on Russia in the event of a military attack in Ukraine.
Oil prices rose to build on gains after a recent run-up as Russia-Ukraine tensions remained in focus. West Texas intermediate crude oil futures (CL=F) jumped above $95 per barrel for the first time since 2014. U.S. crude prices have already jumped more than 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the year-to-date. Brent crude (BZ=F), the international standard, drifted above $95 per barrel. With oil prices elevated, the S&P 500 energy sector has far outperformed the other major S&P 500 sectors for the year-to-date, climbing more than 26{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} versus the broader market’s 7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} drop.
Further upside in energy prices in response to the Russia and Ukraine conflict would depend on the timing of any attack and the contours of any U.S. response toward Russia, one of the world’s key oil exporters, some analysts noted.
“It all comes down to how much of their supply is actually impacted by an invasion, and that’s not entirely clear. There are estimates that are saying crude could go to $120 a barrel if we get an invasion,” Rebecca Babin, CIBC Private Wealth U.S. senior energy trader, told Yahoo Finance Live about Brent crude prices. “I say we top out at probably just around $100 because I do think that there will not be as strict of sanctions as the market fears because ultimately, that hurts the US and our allies almost as much as it hurts Russia.”
For equity markets, however, the geopolitical conflict may compound volatility already stirred up by investors jittery over the potential for the Fed to tighten monetary policy aggressively in the near-term. With inflation running at a 40-year high and the labor market on solid ground, investors are largely expecting the Fed to raise benchmark interest rates between five and seven times this year.
Conflict in Ukraine “could actually build the worst-case scenario for the Fed, in the sense that you could see energy prices move higher, [and] if you start to see gasoline prices go north of $4 per gallon, I think that could crimp consumer spending,” Larry Adam, Raymond James chief investment officer, told Yahoo Finance Live. “And then obviously, if energy prices go higher, that could lead to further inflationary pressures. And that could be a double-edged sword that the Fed could be challenged by.”
Later this week, investors are set to receive another batch of earnings results from companies including Airbnb (ABNB), DoorDash (DASH), Walmart (WMT) and Roku (ROKU). Economic data reports will include the Commerce Department’s January retail sales report, which is likely to show sales rebounded in January after dipping in December.
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2:10 p.m. ET: Stocks sink, Dow drops 400+ points
Here’s where stocks were trading Monday afternoon:
S&P 500 (^GSPC): -50.89 (-1.15{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,367.75
Dow (^DJI): -402.1 (-1.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,335.96
Nasdaq (^IXIC): -113.38 (-0.82{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,677.10
Crude (CL=F): +$2.01 (+2.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $95.11 a barrel
Gold (GC=F): +$30.90 (+1.68{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,873.00 per ounce
10-year Treasury (^TNX): +1.6 bps to yield 1.967{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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12:02 p.m. ET: Peloton shares drop as new CEO says pushes back on near-term sale: Financial Times
Shares of Peloton (PTON) dropped Monday after newly installed CEO Barry McCarthy suggested to the Financial Times that a near-term sale of the company was unlikely to occur.
McCarthy, who is moving to New York from California for his new role leading the connected fitness company, told the media outlet, “If I thought it was likely that the business was going to be acquired in the foreseeable future, I can’t imagine it would be a rational act to move across the country.”
The remarks follow weeks of speculation and separate reports that companies including Amazon and Nike were considering purchasing the company. Peloton shares have fallen 5.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the year-to-date and 78{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over the past year.
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10:51 a.m. ET: ‘We might have to get used to a protracted period of time where we have uncertainty around Russia’: Strategist
Markets have been whipsawed by emerging headlines around the Russia and Ukraine conflict in the past week — and investors may need to prepare for a more extended period of uncertainty about the geopolitical situation, according to at least one strategist.
“I think it’s a major concern. I don’t think we’re going to war any time soon. I think Russia is going to want to go ahead and essentially dance along with us,” David Tawil, ProChain Capital President, told Yahoo Finance Live on Monday. “And I think there’s the point where we might have to get used to a protracted period of time where we have uncertainty around Russia, around Ukraine, around a lot of commodities for those reasons. Much like COVID, we may have to go ahead and live with this for an extended period of time.”
“That will not be taken well by the markets in the short-term, but I think over the long-term, we will go ahead and digest that and go ahead and move on,” he added.
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9:36 a.m. ET: Gas prices jump to highest level since 2014, adding to inflation woes
Prices for gas at the pump climbed to a fresh seven-year high, according to new data from AAA, in another sign of inflationary pressures hitting consumers’ wallets across the country.
The average price for a gallon of gas increased to $3.488 as of Monday, AAA said. According to Bloomberg historical data, this marked the highest level since August 2014. The rise has tracked an extended jump in crude oil prices, with energy supply concerns rising alongside mounting tensions between Russia and Ukraine.
In the comparable year-ago period, the average price a gallon of gas was a $2.505 nationally. A month ago, the price was $3.306.
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9:31 a.m. ET: Stocks open lower amid geopolitical tensions
Here were the main moves in markets just after the opening bell Monday morning:
S&P 500 (^GSPC): -3.76 (-0.09{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,414.88
Dow (^DJI): -22.10 (-0.06{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,715.96
Nasdaq (^IXIC): -22.54 (-0.24{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,758.22
Crude (CL=F): -$0.70 (-0.75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $92.40 a barrel
Gold (GC=F): +$21.80 (+1.18{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,863.90 per ounce
10-year Treasury (^TNX): +3 bps to yield 1.981{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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7:33 a.m. ET Monday: Stock futures extend gains, led by tech
Here were the main moves in markets as of Monday morning:
S&P 500 futures (ES=F): -40 points (-0.91{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,369.50
Dow futures (YM=F): -272 points (-0.79{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 34,355.00
Nasdaq futures (NQ=F): -164 points (-1.15{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,076.50
Crude (CL=F): -$0.26 (-0.28{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $92.84 a barrel
Gold (GC=F): +$16.20 (+0.88{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,858.30 per ounce
10-year Treasury (^TNX): -1.6 bps to yield 1.935{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Photo by: NDZ/STAR MAX/IPx 2022 2/11/22 People walk past the New York Stock Exchange (NYSE) on Wall Street on February 11, 2022 in New York.
The S&P 500 closed at a record on Thursday in a pre-holiday rally along with the Dow and Nasdaq, buoyed by positive data that suggested the Omicron variant was less likely to lead to hospitalizations. The indexes recouped losses from earlier this week after investors shrugged off worries the variant would stunt economic recovery.
The S&P closed at an all time high of 4,725.72, while the Dow ended the week just shy of 36,000. The Nasdaq Composite also closed 130 points up, or 0.85{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
“One of the ways pandemics end is significant mutation of the virus. It looks like Omicron may be our friend in that regard, significant mutations different enough from the parent that it doesn’t make people as sick,” True Health Initiative President Dr. David Katz told Yahoo Finance Live.
In other positive news on the COVID-19 front, Merck (MRK) received authorization from the U.S. Food and Drug Administration for its at-home COVID-19 drug, just one day after Pfizer (PFE) was also approved for use of its own treatment.
The pill developed by Merck in conjunction with Ridgeback Biotherapeutics, called molnupiravir, was shown to reduce hospitalizations and deaths by around 30{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in clinical trial data. Pfizer’s pill was reported to be 90{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} effective at preventing hospitalizations and deaths in high-risk patients.
Shares of Merck closed down 0.54{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in early trading at $75.75 a piece, while Pfizer’s stock closed at $58.66 per share, down 1.49{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
Investors weighed a trove of economic releases ahead of the holiday weekend.
The Labor Department reported that initial jobless claimstotaled 205,000, sustaining a downward trend from the highs of their pandemic peak and reflecting labor market tightness brought on by a demand for workers heading into the new year. The latest print brings the four-week moving average for new claims to its lowest in 52 years, ticking up by 2,750 week-over-week to reach 206,250.
Meanwhile, U.S. consumer prices accelerated at the fastest pace in nearly four decades as shoppers confront rising inflation levels ahead of the holidays.
“Workers have a lot of power, and that’s likely to result in continued wage gains,” Girard chief investment officer Timothy Chubb told Yahoo Finance. “What worries us from an inflation standpoint is, at what point do we potentially see some of those inflation risks sort of hand the baton to the labor market?”
Meanwhile, November sales of new U.S. homes jumped 12.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to a seven-month high of 744,000, buoyed by low mortgage rates and higher demand in the housing industry.
U.S. durable goods orders rose by 2.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in November, up from the prior month, boosted by a sharp rise in aircraft orders.
In Wednesday’s trading session, investors weighed an upbeat print on consumer confidence levels and the release of an upwardly revised estimate for domestic GDP, placing all three major averages in the green after a mixed open.
The Conference Board reported consumer confidence increased by a greater-than-expected margin in December, with the headline index at 115.8 during the month and higher than Bloomberg’s consensus estimates of 111.0. In November, the index had a reading of 111.9, revised from an initial report of 109.5. Meanwhile, the nation’s gross domestic product grew at an annual rate of 2.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in the third quarter in the final estimate from the Bureau of Economic Analysis after the initial report of 2.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
“We’ve been saying that this is definitely a buy the dip sort of market because we expect more earnings upgrades to come,” Anik Sen, PineBridge Investments global head of equities told Yahoo Finance Live. “We think that the real debate should be about the length and strength of the economic cycle ahead.”
Thursday’s market gains may be the start of the year-end Santa Claus Rally — one in which stocks climb higher in the final seven trading sessions of a year, plus the first two trading days of the new year. Starting today, traders are looking to see whether nearly a century of data will uphold.
For reasons unclear, over the past 92 years, the S&P 500 gained 77{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the time during the year-end rally period, according to data from Sundial Capital Research. The average gain in this nine-day trading period tallied 2.66{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
4:00 p.m. ET: S&P 500 closes at a record
Here were the main moves as markets closed ahead of the Christmas weekend:
S&P 500 (^GSPC): +29.16 (+0.62{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,725.72
Dow (^DJI): +196.57 (+0.55{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 35,950.46
Nasdaq (^IXIC): +131.48 (+0.85{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 15,653.37
Crude (CL=F): +$1.13 (+1.55{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $73.89 a barrel
Gold (GC=F): +$7.90 (+0.44{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,810.10 per ounce
10-year Treasury (^TNX): +3.6 bps to yield 1.4930{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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12:32 p.m. ET: S&P 500 climbs to new high
Here were the main moves during intraday trading:
S&P 500 (^GSPC): +32.83 (+0.70{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,729.39
Dow (^DJI): +230.23 (+0.64{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 35,984.12
Nasdaq (^IXIC): +128.35 (+0.83{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 15,650.25
Crude (CL=F): +$0.92 (+1.26{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $73.68 a barrel
Gold (GC=F): +$6.80 (+0.38{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,809.00 per ounce
10-year Treasury (^TNX): +3.6 bps to yield 1.4930{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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10:21 a.m. ET: New homes sales rise to highest since April
November sales of new U.S. homes jumped 12.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to a seven-month high. The Census Bureau reported that new home sales rose 82,000 last month from October to 744,000, buoyed by low mortgage rates and higher demand in the housing industry.
Forecast ranged between 737,000-850,000 across 51 estimates, with a median of 770,000, according to Bloomberg data.
The median sales price of a new home sold in November was $416,900, 14.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} higher than a year ago.
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9:30 a.m. ET: Markets open higher following economic releases
Here were the main moves in markets at open Thursday morning:
S&P 500 (^GSPC): +10.69 (+0.23{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,707.25
Dow (^DJI): +102.67 (+0.29{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 35,856.56
Nasdaq (^IXIC): +180.81 (+1.18{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 15,521.89
Crude (CL=F): +$0.12 (+0.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $72.88 a barrel
Gold (GC=F): +$5.30 (+0.29{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,807.50 per ounce
10-year Treasury (^TNX): +0.5 bps to yield 1.4620{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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9:07 a.m. ET: Consumer prices accelerate, while spending slows
U.S. consumer prices accelerated at the fastest pace in nearly four decades. The Commerce Department reported an increase of 5.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over the past 12 months, reflecting the fastest gain in 39 years as shoppers confront rising inflation levels ahead of the holidays.
Meanwhile, personal spending rose 0.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in November, a slowdown from last month’s print of 1.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The figure, which accounts for 70{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of economic activity, comes amid the latest wave of COVID-19 cases, hinting at the possibility of a broader economic slowdown.
Personal incomes rose 0.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in November, down slightly from the 0.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} increase in October.
U.S. durable goods orders rose by 2.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in November, up from the prior month, boosted by a sharp rise in aircraft orders.
Core capital goods orders, a measure of business investment in equipment that excludes aircraft and military hardware, fell 0.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after an upwardly revised 0.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} increase in October, according to Bloomberg.
The median Bloomberg estimates projected a 0.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} increase in core capital goods orders and a 1.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} rise in total durables bookings.
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8:30 a.m. ET: First-time unemployment filings remain at pre-pandemic levels
Initial jobless claimsremained at pre-pandemic lows, sustaining a downward trend from the highs of their coronavirus peak and reflecting labor market tightness brought on by a demand for workers heading into the new year.
The Labor Department reported on Thursday that new initial jobless claims totaled 205,000 for the week ending December 18, on par with consensus estimates. The latest print brings the four-week moving average for new claims to its lowest in 52 years, ticking up by 2,750 week-over-week to reach 206,250.
“The direction in the labor market recovery remains positive, with demand still strong,” Rubeela Farooqi, chief economist for High Frequency Economics, wrote in a note. “Labor shortages are persisting, preventing a stronger recovery, although these appeared to ease somewhat in November.”
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7:00 a.m. ET: Contracts on Dow, S&P, and Nasdaq edge higher ahead of open
Here’s how markets were moving in early trading on Thursday:
S&P 500futures (ES=F): +13.75 points (+0.29{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,699.75
Dow futures (YM=F): +107.00 points (+0.30{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,739.00
Nasdaq futures (NQ=F): +34.75 points (+0.21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,204.50
Crude (CL=F): +$0.20 (+0.27{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $72.96 a barrel
Gold (GC=F):+$5.20 (+0.29{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,807.40 per ounce
10-year Treasury (^TNX): +0.08 bps to yield {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} 130.66
