5 Minutes Read

Asian stocks rise to track gains on Wall Street

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

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Summary

The S&P 500 topped 5,250, ending with a quarterly rally of over 10%. Two-year Treasury yields climbed five basis points to 4.62% in a shortened session ahead of the holiday.

Shares in Asia advanced Friday after a stellar quarter for US stocks ended on a positive note amid expectations that the world’s biggest economy will be able to achieve a soft landing.

Japanese, South Korean and mainland Chinese stocks also rose, with much of the region, including Australia, Hong Kong and Singapore closed for a public holiday.

The gains came after Wall Street traders sent the S&P 500 to its 22nd record this year after data showed the US economy remained in good shape. A $4 trillion surge in US equity values in just three months has startled doomsayers, while leaving a host of strategists scrambling to update their 2024 targets.

“Japanese stocks are rebounding from yesterday’s drop,” said Masahiro Yamaguchi, a senior market analyst at SMBC Trust & Banking Ltd. The moves are “driven by the US stock market, as various indicators show the resilience of the US economy.”

Traders are on alert for potential swings in Japan’s currency after officials stepped up warnings this week to stem its slide. While the yen has since strengthened a little against the dollar, it remains close to levels not seen in decades.

Some recent weakening moves in the yen were speculative and not reflecting fundamentals, Japanese Finance Minister Shunichi Suzuki said Friday, adding there is no specific defense line regarding the exchange rate level.

The S&P 500 topped 5,250, ending with a quarterly rally of over 10%. Two-year Treasury yields climbed five basis points to 4.62% in a shortened session ahead of the holiday, after Fed Governor Christopher Waller’s remarks that he’d like to see “at least a couple months of better inflation data” before slashing rates. The dollar extended its quarterly advance. Trading of cash Treasuries in Asia is closed due to the holiday.

In economic data, the US government’s two main measures of activity — gross domestic product and consumer spending — posted strong advances at the end of last year. Consumer sentiment rose markedly toward the end of March, supported partly by the strong stock-market gains.

US stocks spent most of the day struggling for direction, with traders remaining reluctant to make any big bets before the Federal Reserve’s preferred inflation gauge and Fed Chairman Jerome Powell’s remarks Friday — when markets will be closed.

Elsewhere, gold hit a fresh all-time high, extending a weeks-long rally fueled by bets on Fed rate cuts and deepening geopolitical tensions. Oil scored a 16% quarterly gain in the latest sign that export curbs by OPEC and its allies are reining in global supplies.

Bitcoin eased Friday after climbing to $71,555 in the previous session. Meantime, FTX co-founder Sam Bankman-Fried was sentenced to 25 years in prison for stealing billions of dollars from customers.

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

 Daily Newsletter

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

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today's market

index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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US markets will lose steam even as Fed signals rate cuts, survey shows

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

 Listen to the Article (6 Minutes)

Summary

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.

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

 Daily Newsletter

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

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today's market

index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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Should Elon Musk be able to buy Twitter?

 5 Minutes Read

Wall Street moves higher as Federal Reserve still sees 3 cuts to rates this year

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

 Listen to the Article (6 Minutes)

Summary

The S&P 500 rose 0.5% in afternoon trading after flipping between tiny gains and losses before the Fed’s announcement. The Dow Jones Industrial Average was up 221 points, or 0.6%, as of 2:45 p.m. Eastern time, and the Nasdaq composite was 0.6% higher.

US stocks are moving higher Wednesday after the Federal Reserve indicated it’s still likely to deliver the cuts to interest rates this year that Wall Street craves, even though concerns are growing about stubbornly high inflation.

The S&P 500 rose 0.5% in afternoon trading after flipping between tiny gains and losses before the Fed’s announcement. The Dow Jones Industrial Average was up 221 points, or 0.6%, as of 2:45 p.m. Eastern time, and the Nasdaq composite was 0.6% higher.

After surveying its policymakers, the Fed said the median still expects the central bank to deliver three cuts to interest rates in 2024. That’s the same number as they had pencilled in three months earlier, and expectations for the relief such cuts would provide are a big reason U.S. stock prices have set records recently.

The fear on Wall Street was that the Fed would trim the number of forecasted cuts because of a string of recent reports that showed inflation remaining hotter than expected. To grind down inflation, the Fed has been keeping its main interest rate at its highest level since 2001.

High rates slow the overall economy by making borrowing more expensive and by hurting prices for investments. Those fears didn’t come to fruition, but the Fed also indicated it may end up keeping its main interest rate higher in 2025 and 2026 than it earlier indicated.

Part of that may be because of how resilient the US economy has been even with rates at high levels. It began hiking its main interest rate from virtually zero roughly two years ago to its current range of 5.25% to 5.50%.

Fed officials upgraded their forecasts for the US economy’s growth this year, and continued strength could translate into higher profits for companies, which in turn would help their stock prices.

“They probably figure they don’t need to cause a recession to tame inflation and that’s a good thing,” said Brian Jacobsen, chief economist at Annex Wealth Management.

“The Fed is getting a little less confident about where we are or even where we’re going, so they will likely take their cues from the markets as to whether they’re doing a good job or not.” In the bond market, Treasury yields had a mixed reaction.

The two-year Treasury yield, which closely tracks expectations for Fed action, initially jumped before quickly giving up the gain. It was recently at 4.63%, down from 4.69% late Tuesday.

The yield on the 10-year Treasury, which also takes into account longer-term economic growth and inflation, initially tumbled after the Fed’s announcement but then rose. It was recently at 4.29%, compared with 4.30% late Tuesday.

On Wall Street, Mexican food chain Chipotle rose 3.6% after announcing its first stock split in history, a move that would lower the price of each share and make it accessible to more investors.

Markets in Europe and Asia were mixed. Japan’s markets were closed for a holiday a day after the Bank of Japan hiked its benchmark interest rate for the first time in 17 years, raising the rate to a range of zero to 0.1% from minus 0.1%.

The FTSE 100 in London was virtually flat after British inflation in February came in below expectations at 3.4%, marking its lowest level since September 2021. That supports hope for rate cuts in the coming months.

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

 Daily Newsletter

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

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today's market

index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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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)

 Listen to the Article (6 Minutes)

Summary

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.

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

 Daily Newsletter

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

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Oil Fluctuates as Traders Assess China’s Vow, Unrest in Libya

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today's market

index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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Reddit, investors seek up to $748 million in planned IPO

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

 Listen to the Article (6 Minutes)

Summary

The people said the company is setting aside about 1.76 million shares in the IPO to be bought by users and moderators who created accounts before January 1.

Reddit Inc. and its investors are seeking to raise as much as $748 million in what would be one of the biggest initial public offerings so far this year, according to people familiar with the matter.

The social media platform and some of its current shareholders plan a sale of 22 million shares for $31 to $34 each, said the people, who asked not to be identified because the information wasn’t public yet. The company was seeking a valuation of as much as $6.5 billion in the listing, Bloomberg News has reported.

The people said the company is setting aside about 1.76 million shares in the IPO to be bought by users and moderators who created accounts before January 1. Those shares won’t be subject to a lockup period, meaning the owners can sell them on the opening day of trading, according to Reddit’s filing in February with the US Securities and Exchange Commission.

A representative for Reddit declined to comment.

Reddit’s more than two-year slog to listing reflects the ups and downs of the market, beginning with its initial confidential filing in 2021, when IPOs on US exchanges set an an all-time record of $339 billion, according to data compiled by Bloomberg. Reddit raised funds that year valuing it at $10 billion, and Bloomberg News reported the following year that it could be valued at as much as $15 billion in an IPO.

Meanwhile, IPOs in the US tumbled, reaching only $26 billion last year, the data show. In January, Bloomberg News reported that Reddit was weighing feedback from early meetings with potential IPO investors that it should consider a valuation of at least $5 billion.

The company is a high-profile addition to the year’s roster of newly and soon-to-be public companies. The biggest of those listings was the $1.57 billion offering by Amer Sports Inc. in January. Astera Labs Inc., a software maker focused on artificial intelligence, said in a filing Friday that it would seek up to $534 million in its IPO, which will likely proceed Reddit’s.

Reddit’s listing will be watched closely by IPO candidates such as Microsoft Corp.-backed data security start up Rubrik Inc. and health-care payments company Waystar Technologies Inc. Their deliberations come after a quartet of US listings led by semiconductor designer Arm Holdings Plc’s $5.23 billion offering in September failed to ignite a lasting rebound in the market.

Founded in 2005, Reddit averaged 73.1 million daily active unique visitors in the fourth quarter, according to its February filing. The company reported a net loss of $91 million on revenue of $804 million in 2023, compared with a net loss of about $159 million on revenue of $667 million a year earlier.

Reddit’s largest shareholder is Advance Magazine Publishers Inc., part of the Newhouse family publishing empire that owns Conde Nast, which bought Reddit in 2006 and spun it out in 2011.

Reddit said its millions of loyal users and moderators pose risks as well as a benefit for the company. Redditors have a historically combative relationship with the site, launching revolts over everything from racism on the platform to executives’ staffing decisions.

Thousands of members of the WallStreetBets forum — which boasts around 15 million users and helped popularize meme stocks like GameStop Corp. — voted to boost a forum post about shorting Reddit’s stock when it begins trading. Their reasons varied from the company’s lack of profitability to competitive concerns.

The IPO is being led by Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp., according to Reddit’s filing. The company plans for its shares to trade on the New York Stock Exchange under the symbol RDDT.

Reddit co-founder and Chief Executive Officer Steven Huffman said in a signed letter included in the filing that the company has many opportunities to grow both the platform and the business.

“Advertising is our first business, and advertisers of all sizes have discovered that Reddit is a great place to find high-intent customers that they aren’t able to reach elsewhere,” Huffman said. “Advertising on Reddit is rapidly evolving, and we are still in the early phases of growing this business.”

Reddit said it’s in the early stages of allowing third parties to license access to data on the platform, including to train artificial intelligence models. The company said that in January it entered into data licensing arrangements with an aggregate contract value of $203 million and terms ranging from two to three years. It expects a minimum of $66.4 million of revenue from those agreements this year, according to the filing.

Reddit also has announced a deal with Alphabet Inc.’s Google, allowing Google’s AI products to use Reddit data to improve their technology. Large language models often need vast troves of human-generated content to improve.

Huffman owns shares giving him 3.5% of the voting power. That includes Class B shares that will have 10 votes each compared with one each for the Class A shares to be sold in the IPO, the filing shows. Huffman also has a voting proxy agreement with Advance.

Other large shareholders include Chief Operating Officer Jennifer Wong, as well as FMR LLC and entities affiliated with OpenAI Chief Executive Officer Sam Altman, Tencent Holdings Ltd., Vy Capital and Quiet Capital and Tacit Capital, according to the filing.

Huffman’s fellow co-founder, venture capitalist Alexis Ohanian, isn’t listed among the investors with stakes of 5% or more and isn’t named elsewhere in the filing.

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

 Daily Newsletter

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

Previous Article

Oil Fluctuates as Traders Assess China’s Vow, Unrest in Libya

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Shanghai residents turn to NFTs to record COVID lockdown, combat censorship

LIVE TV

today's market

index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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JPMorgan sees “froth” in US stocks, while Goldman says rally justified

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

 Listen to the Article (6 Minutes)

Summary

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.

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

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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

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

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today's market

index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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South Korea’s retail investors join craze for India bonds

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

 Listen to the Article (6 Minutes)

Summary

Mirae Asset Management Co’s fund dedicated to Indian debt has grown to about 32 billion won ($22.5 million) from 24 billion won at the end of last year, thanks to the first net inflow in about three years, according to Kim Jin Ha, head of the global fixed income division at South Korean money manager.

The craze for India’s booming bond market has reached as far as South Korea, where a bond fund that’s been mostly dormant for a decade is suddenly getting lots of interest.

Mirae Asset Management Co’s fund dedicated to Indian debt has grown to about 32 billion won ($22.5 million) from 24 billion won at the end of last year, thanks to the first net inflow in about three years, according to Kim Jin Ha, head of the global fixed income division at South Korean money manager.

“The public is growing more interested in India, unlike the past when only a few institutional investors showed interest,” he said in an interview. Kim said he’s met eight securities firms and banks dealing with local retail investors this year with inquiries about India’s bond market, compared with virtually none in 2023.

India and US stocks have been in the spotlight, with the rally to records playing out in the backdrop of a still-nascent recovery in Chinese equities. Even Japan’s retail investors, who have traditionally been inclined toward the US, are showing interest in the South Asian nation that boasts the fastest growth rate among the major economies.

Wall Street Pivots to India as It Searches for China Alternative

“The hottest topic is certainly the US these days, but outside of US assets, India is gaining attention as an alternative to China,” said Cho Jae Sung, general manager of Shinhan Bank’s Seoyeouido branch in Seoul. The interest is mainly from those who prefer funds and are looking for better returns, Cho said.

The shift comes as China grapples with ongoing economic challenges, while India’s sovereign bonds are set to be added to JPMorgan Chase & Co’s global debt indexes from June.

The inclusion is expected to lure up to $30 billion of inflows, which exceeds the size of Indian sovereign bonds currently held by foreigners, Kim said, adding that the appeal of investing in India is also due to its stable currency.

The rupee is Asia’s top performer this year, up 0.4% versus the dollar with the lowest volatility among emerging market currencies, according to data compiled by Bloomberg. The South Korean won has weakened 3.2% in the same period, after gaining 4.8% in the fourth quarter.

Kim, who has been managing the India fund since 2013, said he prefers investing in rupee bonds issued by supranational organizations. The securities make up 40% of the fund, with the rest allocated to debt issued by the nation’s state companies, the country’s treasuries and currency, he said.

He plans to increase the fund’s current duration of 2.7% considering the prospect of the Federal Reserve cutting rates later this year. The fund has returned 9.3% through the past 12 months as of Monday, and almost 6% annually over the past five years, data compiled by Bloomberg show.

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

 Daily Newsletter

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

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today's market

index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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New record for S&P 500, Dow Jones; Nasdaq jumps 3% fueled by Nvidia

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

 Listen to the Article (6 Minutes)

Summary

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 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

 Daily Newsletter

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

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Oil Fluctuates as Traders Assess China’s Vow, Unrest in Libya

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today's market

index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
Quiz
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Goldman Sachs lifts S&P 500 target to 5,200 on profit expansion

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

 Listen to the Article (6 Minutes)

Summary

Wall Street peers like those at Bank of America Corp. have signaled their willingness to potentially raise their year-end targets as well on the idea that investors aren’t optimistic enough.

Just months after setting a 2024 target for the S&P 500 Index, Goldman Sachs Group Inc. strategists have boosted their forecast for a second time as the stock market eclipsed the significant 5,000 milestone this month.

“Increased profit estimates are the driver of the revision,” a team led by David Kostin wrote in a note to clients dated Friday.

Kostin now sees the S&P 500 rising to 5,200 by the end of this year, raising his forecast by about 2% from the 5,100 level he predicted in mid-December. The new target implies a 3.9% jump from Friday’s close.

In November, he initially projected the S&P 500 would hit 4,700 by the end of this year.

Goldman’s 5,200 price target for the S&P 500 in 2024 is now among the highest on Wall Street, joining the ranks of Wall Street bulls including Tom Lee of Fundstrat Global Advisors and Oppenheimer Asset Management chief strategist John Stoltzfus, who both hold a similar year-end outlook.

The firm’s strategists upgraded their earnings-per-share forecast for the year to $241 and $256 in 2025, from $237 and $250 previously. That reflects their expectation for “stronger economic growth and higher profits” for the information technology and communication-services sectors, which contain five of the so-called Magnificent Seven stocks including Apple Inc., Microsoft Corp., Nvidia Corp., Alphabet Inc. and Meta Platforms Inc. The new estimate sits above the median top-down strategist forecast of $235.

The firm’s strategists expect valuation multiples for both the S&P 500 and its equal-weight brethren to remain close to current levels — at 20 and 16 times earnings, respectively, “making earnings growth the primary driver of remaining upside this year.”

The S&P 500 Index has climbed 4.9% this year, fueled by expectations of a dovish policy shift by the Federal Reserve and as artificial intelligence optimism lifted technology stocks. Profits in the 500-member gauge are expected to grow 8.8% in 2024 from a year ago, data compiled by Bloomberg Intelligence show.

The S&P 500 topped its all-time peak for the first time in two years in January, while the Nasdaq 100 hit its first record in a similar span back in December after the Fed signaled that its aggressive rate hikes to contain inflation are likely over and cuts are on the table for 2024.

Wall Street peers like those at Bank of America Corp. have signaled their willingness to potentially raise their year-end targets as well on the idea that investors aren’t optimistic enough. The median S&P 500 target by nearly a dozen equity strategists tracked by Bloomberg currently sits at 4,950 through mid January.

“The biggest risk to the S&P 500 in the near term is upside,” Savita Subramanian of Bank of America said on Bloomberg TV earlier this month. “Our target of 5,000 is probably too low in the near term.”

Even Morgan Stanley’s Michael Wilson — among the most prominent bearish voices on Wall Street — is now expecting gains in the US equity market to broaden into less loved corners than the big tech companies that have dominated the rally so far. His 2024 target remains 4,500, implying a roughly 10% drop from Friday’s close.

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

 Daily Newsletter

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

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today's market

index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
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 5 Minutes Read

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)

 Listen to the Article (6 Minutes)

Summary

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.

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

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

 Daily Newsletter

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

Previous Article

Oil Fluctuates as Traders Assess China’s Vow, Unrest in Libya

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today's market

index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -72.15
sensex ₹1,882.60 +28.30
nifty IT ₹2,206.80 +30.85
nifty bank ₹1,318.95 -14.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95
index Price Change
nifty 50 ₹16,986.00 -7.15
sensex ₹1,882.60 +8.30
nifty IT ₹2,206.80 +3.85
nifty bank ₹1,318.95 -1.95

Currency

Company Price Chng %Chng
Dollar-Rupee 73.3500 0.0000 0.00
Euro-Rupee 89.0980 0.0100 0.01
Pound-Rupee 103.6360 -0.0750 -0.07
Rupee-100 Yen 0.6734 -0.0003 -0.05
Quiz
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Question 1 of 5

What coins do you think will be valuable over next 3 years?

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Should Elon Musk be able to buy Twitter?