Tag: Dow Jones

JPMorgan analyst says ‘correction’ in US stocks is not over

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The slide in US equities over the past three weeks was the start of a selloff that is likely to deepen along with mounting macroeconomic risks, including rising Treasury yields, a strong dollar and elevated oil prices, says JPMorgan Chase & Co.’s Marko Kolanovic.

While earnings results from Corporate America this week may temporarily stabilize the market, it doesn’t mean stocks are out of the woods, the bank’s chief market strategist said.

Complacency around equity valuations, inflation staying too hot, dimming expectations for imminent Federal Reserve interest-rate cuts and an overly rosy profit outlook are among forces Kolanovic says are adding to downside risks.

“The correction likely has further to go,” he wrote Monday in a note to clients after the S&P 500 Index ended last week more than 5% below its March 28 closing high. A market correction is generally defined as a decline of 10% or greater. “Market concentration has been very high, and positioning extended, which are typically red flags, at risk of a reversal.”

US stocks rallied Monday, with the S&P 500 gaining 0.9%, ahead of a busy week of earnings. Results are due from around 180 members of the index, representing more than 40% of its market capitalization.

Microsoft Corp., Google parent Alphabet Inc., Meta Platforms Inc. and Tesla Inc. are among the biggest names set to report. The rebound comes after the group sent the technology-heavy Nasdaq 100 Index to its biggest weekly loss in 17 months amid investor concerns that the Fed will keep rates higher for longer.

To Kolanovic, recent trading patterns and the current market narrative parallel those of last summer, when upside inflation surprises and hawkish Fed revisions spurred a drop in risk assets. Except now investor positioning appears more elevated. The strategist recommends staying defensive, with the equities backdrop looking “problematic.” In his model portfolio a defensive approach involves hedging risk assets with long volatility and commodity exposure, excluding gold.

Kolanovic and his team have been among a small group of bearish contrarians on Wall Street this year. As most of their peers boosted their US equity outlooks, the JPMorgan crew remained averse to stocks and risk assets broadly, with the lowest S&P 500 year-end target among the big Wall Street banks. At 4,200, their forecast implies a roughly 16% drop from Monday’s level before 2024 ends.

The bank’s house view on US equities has failed to materialize for two consecutive years as Kolanovic remained bullish throughout much of 2022’s rout and then held a bearish stance during last year’s 24% rally in the S&P 500.

“The multiple expansion seen in past months, extremely low volatility metrics up to recently, tightest credit spreads since 2007, and the general inability by market participants earlier in the year to identify any potential negative catalysts for stocks are starting to shift,” Kolanovic said.

Separately on Monday, Kolanovic told clients it’s time to consider buying Japanese consumption-related stocks on expectations real wage growth will spur higher personal consumption in the nation and boost consumer-focused shares.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

S&P 500 breaks below 5,100 after the sell-off in big tech

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Tech megacaps dragged down stocks as bond yields jumped after hot retail sales spurred bets the Federal Reserve will be in no rush to cut rates. Oil whipsawed on geopolitical angst.

In a volatile session, the S&P 500 erased an earlier advance and fell over 1%. Microsoft Corp., Apple Inc. and Nvidia Corp. led declines in the rate-sensitive technology space. Volatility perked up, with the premium for one-month put options to protect against a pullback in US equities hitting the highest since October. Wall Street’s “fear gauge” — the VIX — hit levels unseen this year.

“Stocks began to violate uptrends and pull back,” said Craig Johnson at Piper Sandler. “Interest rates are expected to stay higher for longer. A more cautious and tactical approach is favored as earnings season gets underway.”

The S&P 500 broke below 5,100, dropping to the lowest in almost two months. The tech-heavy Nasdaq 100 slid over 1.5%. Both gauges breached their 50-day moving averages — seen as a bearish signal by several chartists. Banks outperformed on a surprise profit from Goldman Sachs Group Inc.

Treasury 10-year yields spiked nine basis points to 4.62%, while those on two-year notes came closer to 5%. Bonds were also under pressure as JPMorgan Chase & Co. and Wells Fargo & Co. tapped the US high-grade bond market, the first in a likely parade of bond sales from banks after results.

West Texas Intermediate reclaimed its $85 mark — after briefly falling below it — and gold climbed on fears of escalating tensions in the Middle East. Top Israeli military officials reiterated the country has no choice but to answer Iran’s weekend attack.

US retail sales rose by more than forecast in March and the prior month was revised higher, showcasing resilient consumer demand that keeps fueling a surprisingly strong economy. As long as a robust labor market supports household demand, there’s a risk that inflation will become entrenched.

“If the S&P 500 is going to avoid its first three-week losing streak since last September, investors will need to move past concerns that rate cuts will be delayed because of sticky inflation,” said Chris Larkin at E*Trade from Morgan Stanley. “In the near-term, that could come down to the tone set by the first full week of earnings season, but geopolitical tensions in the Middle East remain a wild card.”

Expectations for monetary policy have been shifting toward a later start to Fed rate cuts, which officials have said requires a higher degree of confidence that inflation is on a sustainable path back toward their 2% target. Traders are no longer fully pricing in a rate cut before November.

“In our view it’s not about ‘higher for longer’ when it comes to the Fed’s rate regime rather, it’s a continuation of the ‘pause for now’ until inflation gives up its stickiness,” said John Stoltzfus at Oppenheimer Asset Management.

Soothsayers at Jefferies JPMorgan Chase & Co., Citigroup Inc. and State Street Corp. agree that the strength in economic data and corporate earnings is enough to keep this year’s stock market rally going — whether or not interest rates are dialed back.

Stickier inflation stemming from strong economic momentum is better for US equities than stagflation, according to Bank of America Corp. strategists led by Ohsung Kwon.

“If inflation is sticky because of momentum in the economy, that’s not necessarily bad for stocks,” they wrote, adding “but stagflation is.”

An improving outlook for the US economy and continued easy financial-market conditions have prompted Wells Fargo Investment Institute to boost its outlook for the US stock market and corporate earnings estimates.

The investment adviser raised its S&P 500 Index 2024 year-end forecast to range of 5,100 to 5,300.

“A point of emphasis is that these year-end targets allow for potential market disappointments related to the track of inflation and the federal funds rate,” strategists at WII wrote.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

US stocks get hit as war jitters fuel rush to bonds

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The financial world was roiled by a flare-up in geopolitical risks that sent stocks sliding — while spurring a flight to the safest corners of the market such as bonds and the dollar. Oil rose.

Equities saw their worst day since January after a news report that Israel was bracing for an attack by Iran on government targets. Approximately 40 launches were identified crossing from Lebanese territory, some of which were intercepted, the Israel Defense Forces wrote in a post on X. US President Joe Biden said he expects Iran will attack Israel sooner rather than later — and his message to Iran is “don’t” do it.

Wall Street’s “fear gauge” — the VIX — spiked to levels last seen in October.

To Matt Maley at Miller Tabak, investors have been much too complacent about geopolitical issues.

“Since gold and oil have been pricing in a meaningful impact on the marketplace from this crisis, it’s not out of the question that the stock market will follow those other markets and see an outsized reaction before long,” Maley noted.

The S&P 500 fell 1.5% Friday, with banks and chipmakers leading losses. The gauge posted its biggest weekly drop in 2024. Treasury 10-year yields sank seven basis points to 4.52%. Andrew Brenner at NatAlliance Securities also cited “massive short covering” and rate locking before an expected flurry of debt issuance by banks after earnings.

The dollar notched its best week since September 2022. Brent oil settled above $90. Gold topped the $2,400-an-ounce mark before erasing gains.

Treasuries rallied sharply, following the market’s worst two days since February, in which yields reached year-to-date highs after inflation readings savaged expectations for Federal Reserve interest-rate cuts this year. Two-year yields — which briefly topped 5% this week — plunged on Friday.

“Risk was off the menu on Friday,” said Fawad Razaqzada at City Index and Forex.com. “Investors were lighting up on risk exposure ahead of the weekend, fearing risk assets could gap lower should something happen.”

A direct confrontation between Israel and Iran would mean a significant escalation of the Middle East conflict and would lead to a significant rise in oil prices, according to Commerzbank analysts including Carsten Fritsch.

Escalating geopolitical tensions — most recently in the Middle East, but also including attacks on Russian energy infrastructure by Ukraine — have spurred bullish activity in the oil options market. There’s been elevated buying of call options — which profit when prices rise — in recent days, with implied volatility jumping.

As Wall Street’s earnings season kicked off, big banks’ results offered the latest window into how the US economy is faring amid an interest-rate trajectory muddied by persistent inflation.

JPMorgan Chase & Co. and Wells Fargo & Co. both reported net interest income — the earnings they generate from lending — that missed estimates amid increasing funding costs. Citigroup Inc.’s profit topped forecasts as corporations tapped markets for financing and consumers leaned on credit cards.

“Many economic indicators continue to be favorable. However, looking ahead, we remain alert to a number of significant uncertain forces,” JPMorgan’s Chief Executive Officer Jamie Dimon said. He cited the wars, growing geopolitical tensions, persistent inflationary pressures and the effects of quantitative tightening.

BlackRock Inc. Chief Executive Officer Larry Fink said he expects the Fed to cut rates twice at the most this year, and that it will be difficult for the central bank to curb inflation.

Fink told CNBC he would “call it a day and a win” if the inflation rate gets to between 2.8% and 3%, which is above the Fed’s 2% target.

Pacific Investment Management Co. warned that the Fed could pivot back toward interest rate hikes if US inflation moves higher — with the asset manager preferring to buy bonds in other markets.

While shifting expectations around the timing and pace of the first cuts are likely to create further yield volatility in the near term, UBS’s Chief Investment Office thinks the more important point is that the US central bank remains set to start easing this year.

With a low probability of the Fed needing to hike rates further, CIO maintains their positive outlook on quality bonds.

“We continue to favor quality bonds in our global portfolios and recommend investors lock in attractive yields before rates fall this year,” said Solita Marcelli at UBS Global Wealth Management. “We like those with 1–10-year duration, as well as sustainable bonds.”

“We also think investors should consider an active exposure to fixed income to improve diversification,” she concluded.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

US markets will lose steam even as Fed signals rate cuts, survey shows

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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US stocks will lose momentum and Treasuries have yet to hit bottom even after the Federal Reserve decided to stick with its guidance for interest-rate cuts this year, according to Bloomberg’s latest Markets Live Pulse survey.

Investors expect the S&P 500 Index to rise to about 5,454 at the end of 2024, from just under 5,225 on Wednesday, according to a median of 93 responses. That would imply a marked deceleration in its gains, given the gauge has surged almost 10% this year after climbing 24% in 2023.

The survey forecast underscores ongoing skepticism that US stocks can sustain a breathtaking rally to record highs, a move driven by the so-called Magnificent Seven technology names and optimism that artificial intelligence will boost productivity.

More pain is seen for the bond market: the median call in the survey was for the 10-year Treasury yield to increase to about 4.5% from just under 4.3% currently.

Meanwhile, the US dollar may crack, according to the survey. Only 18% of respondents see the Bloomberg Dollar Spot Index climbing from current levels, while more than a third expect it to stagnate and the rest anticipate a decline. The index has climbed about 2% in 2024, unwinding much of its 2.7% decline last year.

The yen is expected to lead the charge against the dollar after it pulled back from close to the weakest since 1990 in the wake of the Fed meeting. Japan’s currency was forecast to outperform by 43% of the respondents, more than double the next-most popular picks — the euro and the British pound.

The yen sank to touch 151.82 per dollar before the Fed, and is still down almost 7% in 2024 after the Bank of Japan committed to maintaining accommodative policy settings on Tuesday even after carrying out Japan’s first rate hike since 2007.

Treasuries, the world’s biggest government bond market, have lost more than 3% so far this year as traders were forced to unwind bets on rapid, steep Fed cuts.

The Fed held steady for a fifth-straight meeting as Chair Jerome Powell said higher-than-expected inflation figures at the start of the year didn’t change the broader story that price gains were slowing on a “sometimes-bumpy road.”

That affirmed expectations for the Fed to stay the course on rate cuts later this year, which buoyed tech megacaps and helped drive US stocks to a fresh record on Wednesday.

Some 55% of the Pulse survey respondents said they expect stocks to outperform bonds once the Fed does start reducing rates, with a slightly smaller share saying the opposite.

The MLIV Pulse survey was conducted among Bloomberg terminal clients immediately after the Fed decision by Bloomberg’s Markets Live team, which also runs the MLIV blog. Sign up for future surveys here.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Dow Jones gains over 200 points, S&P 500 sees new closing high shrugging off sticky inflation

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Stocks climbed to a fresh record as the latest inflation figures did little to alter bets the Federal Reserve will cut rates this year — even if officials keep a more cautious stance for now.

An equity decline that lasted just a few minutes gave way to a rebound that pushed the S&P 500 up more than 1%. Notwithstanding the fact that the consumer price index continued to show signs of “stickiness,” the overall report came only slightly above economist estimates. While that’s not ideal for a central bank trying to get close to its 2% target, the CPI was not a shocker to Wall Street traders dreading another post-inflation rout.

“Another hotter-than-expected CPI reading may breathe new life into the sticky inflation narrative, but whether it actually delays rate cuts is a different story,” said Chris Larkin at E*Trade from Morgan Stanley. “Sticky doesn’t necessarily mean overheating.”

The S&P 500 closed around 5,175. Tech led gains on Tuesday, with Oracle Corp. soaring 12% amid cloud revenue growth. Nvidia Corp. rallied over 7%. Boeing Co.’s losses in 2024 approached 30%. Treasuries remained lower after a $39 billion sale of 10-year notes and a growing slate of new corporate bonds.

For a glimpse on how anxiety was running high before Tuesday’s CPI print, the options market provided some clues.

Traders were more concerned about a potentially big S&P 500 move post-CPI than they were about the Fed’s rate decision next week, according to Citigroup Inc. analysts.

After closing at its highest since October, the Cboe One-Day Volatility Index — a measure of cost in S&P 500 options with maturities of no more than 24 hours — fell sharply on Tuesday. The more famous 30-day volatility index known as the VIX also retreated after the inflation data.

Now the relative sense of calm in the face of a strong inflation print was unusual. In fact, the advance in stocks marked a break from how stocks have traded on CPI days since the Fed started lifting rates.

An S&P 500 move of 1% or more has only happened on a handful of occasions on the day of the CPI release since March 2022. Most of the time, however, gains were on the back of lower — not higher — core inflation.

“It’s proving difficult to see what may stop the market’s momentum, as earnings, inflation, and interest rates are moving in the right direction,” said Skyler Weinand at Regan Capital.

The S&P 500 will deliver stronger-than-expected earnings in 2024, powered by resilient economic growth and artificial intelligence breakthroughs, according to Bank of America Corp. strategists — who are now among Wall Street’s most bullish profit forecasters.

The team including Ohsung Kwon and Savita Subramanian raised their earnings-per-share estimate to $250 from $235, tying with BMO Capital Markets and Deutsche Bank AG for the most optimistic outlook among strategists tracked by Bloomberg.

Subramanian last week raised her S&P 500 target to 5,400.

As a flurry of forecasters bump up their optimism toward US stocks in lockstep, Morgan Stanley’s Mike Wilson won’t budge, arguing he sees no justification to upgrade his outlook given an absence of broad earnings growth.

The strategist stuck to his year-end S&P 500 forecast of 4,500 in an interview on Tuesday with Bloomberg Surveillance Radio, even as a growing list of peers at firms including Bank of America Corp., Goldman Sachs Group Inc., and UBS Group AG have raised projections for the benchmark.

“A lot of folks have raised their price targets because of higher multiples,” Wilson said. “We’re not willing to do that.”

The stock market may be rallying, but the yield curve remains inverted — which suggests that there are plenty of investors who are still concerned about economic conditions this year, according to Weinand at Regan Capital.

“While a recession would naturally steepen out the yield curve to positive territory, we think the yield curve can steepen this year without a recession,” he noted. “Investors will eventually realize that we can achieve a soft landing and that sentiment shift can push 10-year Treasury bond yields back above 2-year Treasury bond yields.”

The Fed is widely expected to hold interest rates steady for a fifth straight meeting when policymakers gather March 19-20. Much of the focus by investors will be on the Federal Open Market Committee’s quarterly forecasts for rates, including whether fresh employment and inflation figures have prompted any changes.

To Bret Kenwell at eToro, regardless of whether the inflation print is ideal, investors mostly want to know whether they can count on what’s expected — and right now, that’s for a June rate cut.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

US stocks dragged lower by tech giants after torrid rally

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Stocks came under pressure as a trio of tech heavyweights fell, with traders wading through mixed economic data in the run-up to Jerome Powell’s testimony to Congress.

Equities lost traction after a rally that has spurred concern about sky-high valuations — especially in megacaps, leaving the group vulnerable to big moves in the face of bad news. Apple Inc.’s iPhone woes in China deepened while Advanced Micro Devices Inc. hit a US roadblock in selling an artificial-intelligence chip to the Asian nation. And Tesla Inc. extended its rout as China shipments slumped.

Bullish positioning in US technology stocks is at the highest in three years — raising the risk of a pullback, according to Citigroup Inc.’s Chris Montagu. Long positioning in Nasdaq 100 futures is “extremely extended,” he said.

“Trees don’t grow to the sky,” said Kenny Polcari at SlateStone Wealth. “What is starting to concern some investors is whether or not some of these tech companies that have gotten stretched can in fact live up to the ‘lofty valuations’ that investors have placed on them.”

Wall Street also weighed data showing the US service sector cooled — even as orders and business activity picked up. Caution prevailed, with Powell heading to Capitol Hill for his semiannual testimony before Congress, where the Federal Reserve chief is expected to reiterate the lack of urgency to cut rates.

The S&P 500 dropped 1%, while the Nasdaq 100 slipped almost twice as much. Tesla extended a two-day selloff to 11%, while Apple suffered its fifth straight loss. Nvidia Corp. rose. Treasury 10-year yields fell six basis points to 4.15%. Bitcoin slid after a record-setting run that topped $69,000. Gold also hit an all-time high.

The “Magnificent Seven” — comprising Apple, Microsoft Corp., Nvidia, Amazon.com Inc., Meta Platforms Inc., Alphabet Inc. and Tesla — have powered the S&P 500 to all-time peaks this year, partly fueled by the AI frenzy.

The rally has left strategists scrambling to lift their 2024 targets — while raising questions on whether tech is seeing a boom or a bubble.

Also Read: JPMorgan sees “froth” in US stocks, while Goldman says rally justified

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

JPMorgan sees “froth” in US stocks, while Goldman says rally justified

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Are US stocks forming a bubble? It depends on who you ask.

To JPMorgan Chase & Co.’s chief market strategist Marko Kolanovic, the dramatic rally in US equities and Bitcoin’s quick surge above the $60,000 mark signal yes. He sees those advances as indicative of accumulating froth in the market — conditions that typically precede a bubble when asset prices rise at an unsustainable pace.

He joins in a chorus of rapidly piling up warnings from Wall Street that are hearkening back to the dot-com boom of the late-1990s, or the post-pandemic mania of 2021, when stock prices quickly ballooned and then burst.

Meanwhile, David Kostin at Goldman Sachs Group Inc. is among those who thinks the risk-on mood is warranted, arguing Big Tech’s lofty valuations are supported by fundamentals.

As the S&P 500 Index keeps hitting new highs — driven chiefly by big gains in American technology giants — it’s drawn the ire of critics who think the bullish run can’t last, and excitement from optimists who think there’s room for more gains.

Kolanovic is a key figure in the former group. The market is pushing ahead “with volatility low and froth building,” he wrote Monday in a note to clients.

“Equities have moved up this year, even as bond yields rose and rate cut expectations unwound,” he said. “Investors may be assuming that the increase in yields is reflective of economic acceleration, but earnings projections for 2024 are coming down and the market appears too complacent on the cycle.”

In contrast, Goldman’s Kostin said this time is different from other periods in history when stock prices have moved abruptly, typically beyond their value. Unlike prior such instances, the breadth of “extreme valuations” is far more contained this time, with the number of stocks trading at those multiples down sharply from the peak in 2021.

Moreover, in contrast to the “growth at any cost” mentality in 2021, “investors are mostly paying high valuations for the largest growth stocks in the index,” he wrote in a note Friday. “We believe the valuation of the Magnificent 7 is currently supported by their fundamentals.”

The group, particularly Nvidia Corp., Meta Platforms Inc. and Microsoft Corp., have raced ahead this year and pulled major stock indexes along with them. The S&P 500 has logged 15 closing records in 2024, posting four-straight months of gains.

So far, financial results are justifying the moves. Earnings per share for the cohort rose a combined 59% in the fourth quarter from a year earlier, compared with expectations of 47%, data compiled by Bloomberg Intelligence show.

But to Kolanovic, the environment is a head-scratcher, reflecting investor complacency and an underappreciation of risk.

The continued climb in stocks “may keep monetary policy higher for longer, as premature rate cutting risks further inflating asset prices or causing another leg up in inflation,” he said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Philip Morris International included in Dow Jones Sustainability World Index for the first time

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Philip Morris International (PMI) has been included in the Dow Jones Sustainability World Index for the first time, the company said in a statement. The World Index is one of the benchmarks for measuring the sustainability performance of companies worldwide.

The World Index includes the top 10% of the largest 2,500 companies in the S&P Global Broad Market Index based on long-term economic, environmental, and social criteria.

“Investors and other financial stakeholders place increasing value on reliable, robust, and timely measures of sustainability performance,” said Emmanuel Babeau, Chief Financial Officer, PMI.

“ESG ratings are one part of the input dataset for many institutional investors,” he said.

PMI scored 85 out of 100 in the 2023 S&P Global CSA reflecting an increase of 21 points since it first began engaging with the ranking in 2018.

This is the first year PMI has recorded the highest CSA score out of 13 companies assessed in the tobacco industry by S&P, the company said.

ISS ESG Corporate Rating further awarded PMI “Prime” status according to its rating methodology.

Prime status is awarded to companies with an ESG performance above a sector-specific threshold, meaning that they fulfil absolute performance requirements.

“We are the only company in our sector included in the Dow Jones Sustainability World Index, leading the tobacco industry in this rating for the first time,” said Jennifer Motles, PMI’s Chief Sustainability Officer.

Philip Morris International (PMI) is an international tobacco company working to deliver a smoke-free future and evolving its portfolio for the long term to include products outside tobacco and nicotine sector.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

New record for S&P 500, Dow Jones; Nasdaq jumps 3% fueled by Nvidia

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The S&P 500 surged to new highs on Thursday led by a blowout quarter from Nvidia, which propelled the broader market and the entire tech sector.

The benchmark index gained 2.11%, its best day since January 2023 to close at 5,087.03. UBS has set the highest target on the S&P 500 for the year, at 5,400.

Nvidia’s results also led the Nasdaq higher, with the index advancing over 3% overnight, marking its best single day gain since February 2023. The Nasdaq is just 15 points away from its own record high.

The Dow Jones crossed the 39,000 mark for the first time, gaining 1.2% overnight.

Nvidia’s shares surged 16% overnight, adding $277 billion to its market value in a single day, surpassing Meta’s record of $197 billion just 20 days prior. Other tech stocks also rallied in lieu of Nvidia’s performance. Meta and Amazon’s shares gained close to 4% each, while Microsoft and Netflix rose 2%.

Phillip Colmar of MRB Partners noted equities are benefiting from earnings growth and firmer economic activity than was expected. He said, however, that stocks could still drop if economic growth eventually becomes priced into higher bond yields.

“The mega cap U.S. stocks, or the ‘Magnificent 7,’ they are frothy. They have very elevated earnings expectations and very elevated valuations that doesn’t give any room for disappointment,” Colmar said. He noted that the Nvidia-fueled market rally still carries “inherent risk” to it, given the cyclical nature of semiconductor stocks.

(With Inputs From Agencies.)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

S&P 500 closes five points away from 5,000 after making a high of 4,999.85

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The historic rally in US stocks continued to power ahead, with the S&P 500 closing within a striking distance of 5,000.

Gains on Wednesday were fueled by a renewed surge in big tech and a strong sale of 10-year Treasuries that dimmed supply concerns. While bonds barely budged, equities extended their bull run on prospects that a solid economy will continue fueling corporate profits. In late trading, Walt Disney Co. and Arm Holdings Plc jumped on upbeat outlooks.

Traders shrugged off concerns about lofty valuations, February’s weak seasonality and cautious commentary from Federal Reserve officials — with stocks hitting fresh records. That positive tone in equities continued to prevail after the US government sold a record $42 billion of 10-year Treasuries at a lower-than-anticipated yield.

“The market continues to climb the wall of worry, including shifting Fed expectations, geopolitical tension, and overbought market conditions,” said Mark Hackett at Nationwide. “We are entering a sluggish seasonal period, but the market has strong momentum.”

February has the reputation of being a “digestion month” for the S&P 500, according to Sam Stovall at CFRA. However, when both January and February registered gains, the gauge saw a positive full-year total return 100% of the time, rising an average of 24%.

“Even though past performance is no guarantee of future results, this, along with other early-year indicators — such as posting all-time highs in January and February — point to an overwhelming probability of a good year following a great one,” Stovall said. “Brace for heightened volatility, however.”

Defying concerns about narrow market breadth, the “Magnificent Seven” technology companies — Alphabet Inc., Amazon.com Inc., Apple Inc., Meta Platforms Inc., Microsoft Corp., Nvidia Corp. and Tesla Inc. — continued to power gains this month.

Bets on a soft landing pushed US stocks to their first record in two years in January — marking a crucial milestone in the equity-market resurgence.

“Our base case is still for a soft landing where growth slows throughout the year, but remains healthy overall, while inflation does not prove to be overly sticky,” said Solita Marcelli at UBS Global Wealth Management. “And we do believe this environment will allow the Federal Reserve to start cutting rates by May, and by 100 basis points through year-end.”

Following the steps of all major US equity benchmarks, the MSCI World Index of developed-market shares also rose to a record.

Resilient economic growth in the US and an expected rebound in Europe are likely to support equities — even as some parts of the stock market look “frothy,” according to Barclays strategists led by Emmanuel Cau.

While one of the world’s largest exchange-traded funds sits at a crucial inflection point following a torrid rally since late October, further gains may be in store in the coming weeks. The Invesco QQQ Trust Series 1 (QQQ), which that tracks the Nasdaq 100, is trading near key resistance levels from three years ago relative to the broader SPDR S&P 500 ETF, better known by its ticker SPY.

If resistance from February 2021 is decisively pierced, the QQQ/SPY ratio is poised to rally more from here, with bullish confirmation for QQQ on absolute basis climbing to a new high, according to Anthony Feld at Bloomberg Intelligence.

Also on Wall Street’s radar on Wednesday was a raft of central bank speakers — all showing no rush to cut rates as already signaled by Fed Chair Jerome Powell.

At $42 billion, the 10-year Treasury sale eclipsed the $41 billion high-water mark reached in November 2020. With the latest changes to Treasury auction sizes announced last week, three of its seven notes and bonds, including the two- and five-year, are scheduled to hit record sizes in the February-to-April quarter.

The sale was one of three big tests for the market this week. Tuesday’s $54 billion auction of three-year notes also drew a lower yield than the one that had been predicted by trading at the bidding deadline, a positive sign. The US Treasury will complete its quarterly debt refunding Thursday with the sale of $25 billion of 30-year bonds.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow