Tag: Dow Jones

Explained | Why Wall Street had its best week since June

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

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US stock markets just closed their week with sharp gains after the latest official data showed that unemployment in the world’s biggest economy hit the highest point in more than a year. 

For the S&P 500, this was the best week since June. Wall Street is, essentially, cheering for signs that the US economy is, finally, slowing down.

The US has been gripped by debilitating inflation since a few months after the pandemic. The Federal Reserve has been trying to tame it with interest rate hikes but the needle didn’t move significantly, until, it seems, now. 

Consumer price inflation in the US was at 4.3 percent in July 2023, down from the peak of 5.4 percent in February 2022 but far, far away from the two percent mark US Federal Reserve has been aiming for. In the meantime, US interest rates are at their highest in 22 years, making lives tougher for both individual borrowers as well as businesses. 

One of the reasons being cited for the sticky inflation is that there are more jobs in the US than there are people looking for them. And, that trend continued in August. The 187,000 jobs added in the US economy last month was more than what the market had expected. 

However, the steady rise in wages, while at 4.3%, was just a tad bit softer than what the analysts had estimated. The market seemed to take this as an indication that the pricing pressure on businesses may be starting to ease. 

If these numbers, the growth in jobs and wages in America, were any higher than what came through for the month of August, it would have been a sign that Jerome Powell, the chief of the American central bank, may have to hike interest rates further amidst a cost of living crisis.

Now, after the latest data, the CME Group’s FedWatch tool showed traders expect a 93% chance of that interest rates in the US may remain unchanged when the Fed officials for a review on September 19 and 20.

Earlier on August 21, Robert Sockin of Citi and Steven Englander, from Standard Chartered Bank, predicted that the US Fed may leave interest rates unchanged in the upcoming review. At he same time, the two experts emphasised the point that the US economy will have to live with high interest rates for much longer time.  Watch the following interview to understand why.

But not everyone thinks that the trend of rising interest rates in the US is over.  “Even though trends in inflation are moving the right direction and a broader view of the employment market would indicate wage pressures should abate, overall economic growth is above trend and inflation remains well above the Fed’s recently confirmed 2% target,” Steve Wyett, chief investment strategist at BOK Financial, told CNBC on September 1. 

Why is this data important for Indian investors?

Rising interest rates in America make the US dollar more attractive and, therefore, the rupee weaker. If the rupee-dollar exchange rate weakens, it makes imports more expensive and India is a net importer of some crucial items like crude oil. 

If it costs more dollars to bring crude oil into India, it will make everything else more expensive because the fuel needed to transport everything from crops to consumer goods will get dearer. India, too, is faced with biting inflation. The latest data for July showed that prices have gone beyond the tolerance level set by the Reserve Bank of India. 

If this trend continues, the RBI too will have to get back to hiking rates —  it’s on pause right now —  and that would increase borrowing costs for businesses in India. All else remaining equal, it’s reasonable to expect some of the Wall Street cheer to reflect on the Sensex and Nifty 50 (India’s benchmark indices for stocks) when the markets reopen for trade on Monday (September 4). 

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Nasdaq falls two weeks in a row for the first time in 2023

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

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US markets ended mostly lower on Friday with the S&P 500 and the Nasdaq registering their second straight weekly loss. This was the first instance in 2023 when the tech-heavy Nasdaq fell for two weeks in a row. The last instance of the index falling two weeks or more was back in December 2022, when it fell four weeks at a stretch.

The index ended 0.6 percent lower on Friday due to a selloff in semiconductor stocks like AMD, Nvidia and Micron. For the week, it was down nearly 2 percent. The VanEck Semiconductor ETF ended 5.2 percent lower for the week, registering its worst week since October last year.

On the other hand, the Dow Jones ended 100 points higher, while the S&P 500 declined by 0.1 percent. For the week, the S&P 500 was down 0.3 percent. The Dow Jones gained 0.6 percent on a weekly basis.

This week’s moves are the latest in what’s been a rocky patch for the stock market after a strong performance in the first half of the year. The three major indexes are all lower than where they began August.

“Investors continue to try to hang their hat on more consistency” within economic data, said Greg Bassuk, CEO of AXS Investments. “What we’re seeing with these mixed results certainly increases the likelihood of more volatility ahead.”

Elsewhere, oil prices rallied for the seventh week in a row for the first time since June 2022. September natural gas contracts rose 7.5 percent for the week, the highest since mid-June.

The S&P 500 energy index emerged as the best among the 11 S&P 500 sectors, gaining 3.5 percent in the week gone by, followed by the S&P 500 Healthcare Index, which rose 2.5 percent.

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

Wall Street Update: Dow Jones posts worst week in four months as rate hike fears return

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

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Benchmark indices on Wall Street declined on Friday and posted losses for the week as fears of the US Federal Reserve continuing to hike interest rates returned to spook investors.

The S&P 500 ended 0.3 percent lower, while the Nasdaq fell 0.1 percent. The Dow Jones saw a cut of nearly 200 points or 0.55 percent.

For the week, the Dow fell nearly 2 percent, marking its worst weekly drop in four months.

Stronger-than-expected wage numbers heightened fears that the central bank may have reason to resume hiking later this month. Average hourly earnings increased by 0.4 percent in June and 4.4 percent from a year ago. Meanwhile, the unemployment rate declined from 3.7 percent in May.

Traders kept their bets on a resumption in hiking later this month, pricing in a 92 percent chance of a quarter-point hike on July 26. Latest minutes of the FOMC meeting in June indicated that policymakers are anticipating two more rate hikes in 2023.

“It’s kind of a mixed picture today,” said Truist’s Keith Lerner. “It’s good news that the economy is not falling apart, it’s still chugging along, but you still have these wage pressures that are going to keep the Fed likely to raise rates at the end of the month.”

Near term, Lerner said equities are ripe for a pullback following a big June and second quarter. This could lead to consolidation and choppy action as markets head into earnings season.

(With Inputs From Agencies.)

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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 stock futures extend gains after encouraging inflation data

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

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Futures tracking the Dow Jones Industrial Average, S&P 500 and Nasdaq extended gains on Friday, as the May inflation data showed continued easing, offering fresh evidence of easing price pressures due to the US Federal Reserve’s aggressive interest rate hikes.

The Dow Jones Industrial Average rose 179 points, or 0.52 percent, S&P 500 futures gained 30 points, or by 0.68 percent, and Nasdaq 100 futures ticked higher by 144 points, or 0.95 percent.

Shares of Apple gained nearly 1 percent before the bell to trade above a $3 trillion market cap. Elsewhere, Nike shares tumbled about 3 percent after the apparel giant reported a weaker-than-expected quarterly profit.

According to data released Friday by the Commerce Department, the personal consumption expenditures (PCE) price index, considered to be the Fed’s preferred inflation gauge, gained 3.8 percent in May, on an annual basis from 4.3 percent in April. It marks the lowest level since April 2021. On monthly basis, prices were up a mere 0.1 percent.

Excluding volatile food and energy components, the core PCE price index, which is more closely watched because it strips out volatile food and energy prices, rose 4.6 percent last month on an annual basis from 4.7 percent in the previous month, landing at its lowest point since October 2021.

On a monthly basis, the core index was up 0.3 percent.

This data is watched like a hawk by the US Fed, which earlier this month opted not to hike its benchmark rate for an 11th consecutive time, instead pausing to review the economic data, banking activity as well as the effects of monetary tightening.

Fed Chair Jerome Powell signalled on Thursday that the US central bank was likely to resume its monetary tightening campaign after a break earlier this month.

“There were no fireworks within the Fed’s favorite inflation report today,” George Mateyo, chief investment officer for KeyBank, wrote in a statement. “Today’s data shows economic resilience and the disinflationary narrative are becoming more evident, but additional proof is needed. Right now, the Fed’s job is not clear cut. While they may not be done with rake hikes, perhaps they don’t have much more work to do.”

Friday, June 30, is a pivotal day for traders, marking not just the end of the this month, but also the conclusion of the second quarter and the first half.

Dow Jones has rallied 3.69 percent this month, and it’s on track for its best month since November. The S&P 500 has climbed 5.18 percent and is on pace for its best monthly performance since January. The Nasdaq has surged 5.07 percent, and both it and the broad-market index are heading for a fourth consecutive positive month.

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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, Nasdaq futures rise slightly as investors await economic data

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

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Futures tracking the S&P 500 and Nasdaq edged higher on Tuesday, as investors eyed the next batch of economic data that could offer hints on the US Federal Reserve’s monetary tightening plans, while a profit warning from Walgreen Boots weighed on Dow futures. In pre-market trading, S&P 500 and Nasdaq futures gained about 0.14 percent and 0.34 percent, respectively. Futures tied to the Dow Jones Industrial Average lost 29 points.

Walgreens Boots Alliance tumbled 7.1 percent in premarket trading as it posted weaker-than-expected earnings and slashed its financial year profit forecast on lower demand for coronavirus tests and vaccines as well as lower consumer spending. However, gains in megacap stocks such Amazon, Tesla and Nvidia supported market sentiment.

Apart from key figures, including new home sales, monthly durable goods and consumer confidence data, due today, market participants are also focusing on Federal Reserve Chair Jerome Powell’s speech before the European Central Bank forum at Sintra in Portugal.

Several key policymakers including Fed Chair, Bank of England governor Andrew Bailey, and Bank of Japan Governor Kazuo Ueda are due to speak at a panel with ECB President Christine Lagarde on Wednesday.

“We are still seeing the markets adjusting to the growing acceptance that central banks, the Fed included, may not be cutting interest rates this year and that further hikes are coming,” Stuart Cole, chief macro economist at Equiti, told news agency Reuters.

“Specifically for the US, it raises questions about whether or not the Fed can achieve a soft landing,” Cole stated.

In the broader market, European shares were under pressure to maintain positive momentum after Asian stocks were boosted by the Chinese government saying it would support the economy, with investors focused on concern over the European and US economic outlook.

On Monday, US stocks closed lower, as investors were wary of betting on riskier assets before seeing the outcome of Russia’s aborted weekend mutiny.

The rebellion by Russian mercenaries raised questions about President Vladimir Putin’s future. While Putin had thanked mercenary fighters and commanders who had stood down to avoid bloodshed, the US State Department said the situation in Russia remained dynamic.

The S&P 500 fell 19.51 points, or 0.45 percent, at 4,328.82; and the Nasdaq Composite lost 156.74 points, or 1.16 percent, to 13,335.78. Meanwhile, Dow plunged 12.72 points, or 0.04 percent, to 33,714.71. It was the sixth consecutive negative session for the 30-stock Dow, its longest losing streak since September last year.

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

Stocks rise on Wall Street, but remain lower for the week

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

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Technology companies helped lift stocks Thursday, ending a five-day losing streak for the S&P 500, though the major indexes remain on pace for a weekly loss.

The S&P 500 rose 0.8 percent, while the tech-heavy Nasdaq composite closed 1.1 percent higher. The Dow Jones Industrial Average added 0.5 percent.

Major indexes are all in the red for the week and have been swinging between big monthly gains and losses throughout the year. Investors’ worries about inflation, rising interest rates and recession risks have made for a volatile market. That has also left Wall Street focused on data points on the economy, especially those regarding inflation.

“We’ll continue to see outsized moves in the markets over the coming months,” said Jeff Kleintop, chief global investment strategist at Charles Schwab. “We’re going to be feeling our way through and there’s going to be a lot of volatility.”

The S&P 500 rose 29.59 points to 3,963.51. The Nasdaq gained 123.45 points to 11,082, and the Dow rose 183.56 points to 33,781.48.

Tech stocks powered much of the rally, along with health care companies and retailers. Chipmaker Nvidia climbed 6.5 percent, Pfizer rose 3.1 percent and Nike gained 2.8 percent.

Communication services stocks posted some of the biggest losses. T-Mobile US slid 3.3 percent.

Energy stocks also fell. The price of US crude oil settled 0.8 percent lower at $71.46 per barrel, another low point for the year. ConocoPhillips dropped two percent.

Activision Blizzard lost 1.5 percent after the Federal Trade Commission said it is suing to block Microsoft’s planned $69 billion takeover of the video game company, saying it could suppress competitors to its Xbox game consoles and its growing games subscription business. Microsoft rose 1.2 percent.

Small company stocks gained ground. The Russell 2000 index added 11.39 points, or 0.6 percent, to 1,818.29.

Bond yields mostly rose. The yield on the 10-year Treasury note, which helps set mortgage rate s, increased to 3.49 percent from 3.42 percent late Wednesday.

Markets in Europe closed mostly lower, while markets in Asia ended mixed.

On Thursday, the US reported slightly more Americans filed for jobless claims last week, but not as many as economists had forecast. The labor market remains one of the strongest pockets of the economy, which has been stifled under the weight of stubbornly hot inflation and rising interest rates.

Low unemployment is good for the broader economy but makes it more difficult for the Federal Reserve to tame inflation. The central bank has been raising interest rates to curb borrowing and spending in order to cool stubbornly hot inflation. Its benchmark interest rate sits at 3.75 percent to four percent, the highest in 15 years.

The Fed will meet next week and is expected to raise its benchmark interest rate by a half-percentage point.

Resilient consumer spending, which is partly tied to strong employment, has also made the fight against inflation more difficult. It has been keeping the economy strong enough to stay out of a recession, analysts have said, but it is also increasing the chances that the Fed will go too far in raising interest rates. The Fed could potentially cause a recession by hitting the brakes too hard on the economy.

Wall Street will get more insight into how consumers feel about inflation and the economy on Friday when the University of Michigan releases its consumer sentiment survey for December. Investors will also get an update on how inflation is impacting businesses when the government releases its latest monthly report on wholesale prices Friday.

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

Wall Street sell-off accelerates after brief respite

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

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Investors began another cycle of selling on Thursday as the dollar added to its stranglehold on currency markets, recession fears sapped stocks and bonds suffered more interest rate pain.

After a partial rebound on Wednesday, US stocks fell sharply on Thursday morning. The Dow Jones Industrial Average fell 580.6 points, or almost two percent, to 29,103.1; the S&P 500 lost 94.5 points, or 2.5 percent, to 3,624.6; and the Nasdaq Composite dropped 366.1 points, or 3.3 percent, to 10,685.5.

Europe’s morning was also rough. The STOXX 600 share index was down 2.3 percent, with the euro and the pound, hammered over the last week by UK debt concerns, remaking only partial ground, last up 0.1 percent and 0.7 percent, respectively.

China currency intervention talk was gathering momentum too while Europe’s government bond markets were braced for the highest German inflation reading since the 1950s.

Gilt selling had also resumed a day after the Bank of England had dramatically intervened to try and quell the storm surrounding the UK government’s new spending plans.

“The market wouldn’t mind some stability, it has become a little bit unpredictable,” said Barings Investment Institute’s Chief European strategist, Agnes Belaisch.

She said investors were now seeing “incoherence” in the UK with government spending as the Bank of England tries to rein in inflation, while everywhere else the focus is on how high central banks are prepared to go with interest rates.

Germany’s 10-year government bond yield, the benchmark of the euro zone, jumped as high as 2.29 percent, as numbers from North Rhine-Westphalia pointed to a double-digit inflation figure for the country as a whole.

The UK 10-year gilt yield, which drives UK borrowing costs, rose about 12 basis points (bps) to 4.13 percent after falling almost 50 bps the day before due to the BoE’s sudden intervention, although the 30-year yield being targeted by the central bank was little changed at 3.96 percent.

UK Prime Minister Liz Truss defended her new economic programme that has sent sterling to a record low this week and left the UK’s borrowing costs close to Greece’s – saying it was designed to tackle the difficult situation Britain was now in.

“We are facing difficult economic times,” Truss, who only took over as UK prime minister this month, said on local BBC radio. “I don’t deny this. This is a global problem. But what is absolutely right is the UK government has stepped in and acted.”

GETTING INFLATION IN CHECK

Zooming back out, it was still about the dollar which has crushed currencies virtually everywhere this year, as well as the impact of Russia’s invasion of Ukraine.

Speaking with reporters in London on Wednesday, veteran Federal Reserve policymaker Charles Evans gave no indication that any of the recent foreign exchange and bond market drama would blow the US central bank off its rate hike course.

“We just really need to get inflation in check,” Evans said, backing lifting the Fed’s rates – now at three percent to 3.25 percent — to a range of 4.5 percent to 4.75 percent by the end of the year or March.

Also Read: ‘Steep rise in interest rates over short period of time, a worry for risky assets’

The yield on 10-year Treasury notes was up 7.6 bps to 3.8 percent; 30-year Treasuries rose 4.6 bps to 3.7 percent.

Federal Reserve Bank of Cleveland President Loretta Mester echoed that on Thursday, saying she didn’t see distress in US financial markets that would alter the Fed’s campaign.

Thursday’s currency moves saw the U.S. dollar index, which measures the currency against its peers, hang around its recent 20-year high again having had its worst session in 2-1/2 years on Wednesday.

“Despite substantial appreciation year-to-date, we see little pressure for policymakers to respond to dollar strength for now,” Morgan Stanley strategists wrote in a note released Thursday.

“Trade-weighted dollar strength is not excessive, in sync with broadly tighter financial conditions and in line with Fed objectives, though inflation benefits are small.”

Overnight, China’s yuan had fallen again too, although it stayed just off recent post-financial crisis lows, as China’s central bank said stabilising the foreign exchange market was its top priority and on reports of potential FX intervention too.

MSCI’s broadest index of Asia-Pacific shares outside Japan ended the day virtually flat, although Japan’s Nikkei did manage a near one percent rise.

Weekly jobless claims data bucked expectations with an unexpected fall showing how tight the US labour market remains. US GDP fell at an unrevised 0.6 percent annualised rate last quarter, the government said in its third estimate of GDP. The economy contracted at a 1.6 percent rate in the first quarter.

Recession angst combined with supply issues and the strong dollar meant oil prices seesawed after gaining more than $3 in the prior session.

Goldman Sachs cut its 2023 oil price forecast this week, citing expectations of weaker demand and a stronger US dollar, but said global supply issues reinforced its long-term view that prices could rise again.

Oil prices fell again on Thursday, weighed on by the stronger dollar and weak economic outlook, even as OPEC+ have begun discussions about an oil output cut.

US crude fell 0.9 percent to $81.4 per barrel and Brent was at $88.6, down 0.8 percent on the day.

The strong dollar also helped pushed gold prices down on Thursday, with looming rate hikes also a headwind. Spot gold dropped 0.7 percent to $1,648.2 an ounce. US gold futures fell 0.9 percent to $1,645.2 an ounce.

Also read: Oil steadies on prospect of OPEC+ output cut, weaker dollar

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

Wall Street bounces off lows as UK steps in to calm bonds

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

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US and global equities staged a mild comeback on Wednesday as the Bank of England said it would step into the bond market to stem a damaging rise in borrowing costs, an attempt to dampen investors fears of contagion across the financial system.

The BoE said it would temporarily buy long-dated bonds – linked most closely to workers’ pensions and home loans – in light of a surge in 30-year UK bond yields above five percent, their highest since 2002.

Sterling, which hit record lows against the dollar on Monday, was last down 0.1 percent, whipsawed in volatile trade, while gilt prices roared higher, fuelled by the central bank’s commitment to postpone a planned sale aimed at reducing the bonds it bought during the depths of the pandemic.

European government bonds got a lift from the surge in gilts.

Investors have been rattled in the last week in particular by soaring bond yields, as central bankers have raced to raise interest rates to contain red-hot inflation before it tips the global economy into recession.

The dollar, the ultimate safe-haven in times of market turmoil, was down 0.33 percent, still near its highest in two decades, spurred on by yields on the benchmark 10-year Treasury approaching 4.0 percent for the first time since 2008.

The pound briefly fell by as much as one percent after the BoE’s announcement, while UK stocks cut losses to rise about 0.2 percent, which in turn helped the broader European equity market avoid deeper falls.

“The surge in bond yields threatens the housing market and broader economy. But the BoE still has to raise the policy rate,” Kenneth Broux, Societe Generale currency strategist, said.

“You also have the contagion element. The IMF and the US Treasury waded in yesterday in fear of global contagion from gilts to other markets,” he said.

The International Monetary Fund (IMF) and ratings agency Moody’s criticised Britain’s new economic strategy announced on Friday, which has sparked a collapse in the value of British assets.

The MSCI All-World index was last up about 0.5 percent, having pulled off a session trough that marked its lowest since November 2020. It is heading for a nearly nine percent drop in September – its biggest monthly decline since March 2020’s 13 percent fall.

In Europe, the STOXX 600 and FTSE 100 both pared losses to trade flat on the day.

Wall Street opened higher, with the S&P 500 Index up about one percent after it fell to a two year low on Tuesday. The Dow Jones Industrial Average and the Nasdaq Composite also gained around one percent.

Weighing on growth stocks was Apple Inc, which was down about three percent on a report the tech giant was dropping its plans to boost production of the latest model of its flagship iPhone.

Scott Wren, Senior Global Market Strategist at Wells Fargo Investment Institute, said markets may already be pricing in future pain.

“Should the economy slow and eventually fall into recession and inflation stays higher for longer, we believe financial asset prices have adjusted to reflect this likely reality,” Wren wrote in a client not released Wednesday. “Eventually, brighter skies will be on the horizon.”

KEEP CALM AND DON’T BUY STERLING

At the heart of this week’s sell-off across global markets is the British government’s so-called “mini-budget” last week that announced a raft of tax cuts and little in the way of detail as to how those would be funded.

Gilt prices have plunged and the pound has hit record lows as a result.

Sterling was little changed at $1.073, still above Monday’s record trough of $1.0327 but set for its biggest monthly slide since the Brexit vote in June 2016.

Strategists at Amundi, Europe’s largest asset manager, said earlier on Wednesday they believed UK assets were in for more losses, as the UK’s fiscal credibility remained on the line.

“We believe risks remain tilted to the downside – given how much is already priced-in, less aggressive signalling from the BoE will accelerate the move to below parity (for sterling/dollar), in our view,” strategists led by Laurent Crosnier, global head of FX, wrote, recommending investors avoid pounds.

The safe-haven dollar has been a major beneficiary from the rout in sterling, falling 0.3 percent on Wednesday but still near a 20-year peak at $113.8 against a basket of currencies.

The euro snapped a five-day losing streak, gaining 0.3 percent to $0.96255, narrowly off last week’s 20-year low of $0.9528.

Oil prices rose on Wednesday in US trading hours as production cuts caused by Hurricane Ian outweighed downward pressure from a strengthening dollar and expected US crude stockpile builds. US crude rose 2.7 percent to $80.61 per barrel and Brent was at $88.03, up two percent on the day.

Spot gold added 1.3 percent to $1,650.59 an ounce. US gold futures fell 0.30 percent to $1,621.80 an ounce.

Also Read: Oil prices fall amid strong US dollar, growth concerns

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

Wall Street keeps selling as world assets fail to recover

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

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US stocks gave up early gains to fall deeper into a bear market on Tuesday, while sterling steadied a day after hitting a record low, as investors remained nervous about a potential global recession.

The pound was little changed at $1.067 after sterling collapsed to $1.0327 on Monday on concern over the funding of recently announced UK tax cuts, which follow huge energy subsidies.

The Bank of England said late on Monday it would not hesitate to change interest rates and was monitoring markets “very closely.” BofE Chief Economist Huw Pill added on Tuesday that BofE was likely to deliver a “significant policy response” to last week’s announcement but it should wait until its next meeting in November before making its move.

The yield on five-year gilts rose as much as 100 basis points in two trading days, but was down about one percent on Tuesday.

US stocks faltered after a morning bounce. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite all declined less than one percent.

The S&P benchmark index fell more than 20 percent from its early January high to a low on June 16, confirming a bear market. The index then rallied into mid-August before petering out.

“We don’t see a quick retrenchment or a return to two percent inflation, keeping the Fed in hiking mode. This implies more volatility and a need for caution and balance in equity allocations,” Tony DeSpirito, BlackRock’s chief investment officer for US Fundamental Equities, wrote in a note released on Tuesday.

Markets see a 70 percent probability of a further 75 basis points move at the next US Federal Reserve meeting in November.

The Fed needs to raise interest rates by at least another percentage point this year, Chicago Fed President Charles Evans said on Tuesday, a more aggressive stance than he has previously embraced that underscores the central bank’s resolve to quash excessive inflation.

Other central bank speakers due on Tuesday include Fed Chair Jerome Powell and European Central Bank President Christine Lagarde.

“Central bankers have been walking a tightrope trying to curb inflation while attempting to limit recessionary risks,” Bank of America strategists wrote in a note released Tuesday.

“However, their recent tone and ‘jumbo’ rate hikes have reinforced that the foremost priority is controlling inflation, even at the potential cost of a recession.”

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

Wall Street ends lower, Dow confirms bear market

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

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Wall Street slid deeper into a bear market on Monday, with the S&P 500 and Dow closing lower as investors fretted that the Federal Reserve’s aggressive campaign against inflation could throw the US economy into a sharp downturn.

After two weeks of mostly steady losses on the US stock market, the Dow Jones Industrial Average (DJI) confirmed it has been in a bear market since early January. The S&P 500 index (SPX) confirmed in June it was in a bear market, and on Monday it ended the session below its mid-June closing low, extending this year’s overall selloff.

With the Fed signaling last Wednesday that high interest rates could last through 2023, the S&P 500 has relinquished the last of its gains made in a summer rally.

“Investors are just throwing in the towel,” said Jake Dollarhide, Chief Executive Officer of Longbow Asset Management in Tulsa, Oklahoma. “It’s the uncertainty about the high-water mark for the Fed funds rate. Is it 4.6 percent, is it five percent? Is it sometime in 2023?”

Confidence among stock traders was also shaken by dramatic moves in the global foreign exchange market as sterling hit an all-time low on worries that the new British government’s fiscal plan released Friday threatened to stretch the country’s finances.

That added an extra layer of volatility to markets, where investors are worried about a global recession amid decades-high inflation. The CBOE Volatility index (VIX), hovered near three-month highs.

The Dow is now down 20.5 percent from its record high close on January 4. According to a widely used definition, ending the session down 20 percent or more from its record high close confirms the Dow has been in a bear market since hitting its January peak.

The S&P 500 has yet to drop below its intra-day low on June 17. It is down about 23 percent so far in 2022.

In Monday’s session, the Dow Jones Industrial Average (DJI) fell 1.11 percent to end at 29,260.81 points, while the S&P 500 (SPX) lost 1.03 percent to 3,655.04.

The Nasdaq Composite (IXIC) dropped 0.6 percent to 10,802.92.

Ten of 11 S&P 500s sector indexes fell, led by 2.6 percent drops in real estate (SPLRCR) and energy (SPNY).

Gains in Amazon and Costco Wholesale Corp (COSTO) helped limit losses in the Nasdaq.

Shares of casino operators Wynn Resorts (WYNNO), Las Vegas Sands Corp (LVS.N) and Melco Resorts & Entertainment jumped between 11.8 percent and 25.5 percent after Macau planned to open to mainland Chinese tour groups in November for the first time in almost three years.

Volume on US exchanges was 11.9 billion shares, compared with the 11.2 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 5.37-to-1 ratio; on Nasdaq, a 2.31-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 120 new lows; the Nasdaq Composite recorded 16 new highs and 594 new lows.

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