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CPI Report Today: Dow Futures Edge Down Ahead of Inflation Data
  + stars: | 2023-05-10 | by ( ) www.wsj.com   time to read: +1 min
Stock futures edged lower ahead of inflation data that will help determine whether the Federal Reserve keeps raising interest rates or pauses next month. ET, are expected to show annual consumer-price inflation stuck at 5% in April, while core inflation slowed slightly to 5.4% from 5.6%. S&P 500, Dow industrials and Nasdaq-100 futures were down 0.2% or more. Regional bank stocks slipped. Brent-crude futures fell 1.6% to $76.21 a barrel.
Stocks were mixed Monday afternoon after the Federal Reserve’s lending officer survey showed credit conditions tightened in the first quarter. The report kicked off a busy week with more corporate earnings and inflation data on tap. Regional bank stocks jumped at the open but lost much of that ground as trading progressed. The KBW Nasdaq Regional Banking index lost 1.8%. Oil prices rose, pointing to a recovery for Brent crude after finishing Friday with a third straight weekly loss.
Among the index's biggest losers were Disney , American Express , Goldman Sachs and Boeing . Here are the top 10 names with the largest upside to the average price target, according to data pulled from FactSet. American Express can rally 23.5%, while Goldman Sachs has 21% upside, according to analysts' average price targets. AXP YTD mountain American Express year to date Last month, American Express reported an earnings miss for the first quarter, but its revenue beat expectations, per Refinitiv. Goldman Sachs, however, missed on revenue thanks to a $470 million loss on the partial sale of its Marcus loans portfolio.
The S&P 500 was flat, and tech stocks pushed through rising bond yields. The Dow industrials were hurt in part as Disney shares fell. Meanwhile, Netflix shares fell after mixed results from the streaming service. Morgan Stanley shares fell as the investment bank posted a better-than-expected quarterly profit but dealmaking at the firm slowed. In the bond market, yields rose along with UK sovereign yields after British inflation unexpectedly held above 10% as food prices rose in March.
Next week's market action could be dictated by how well the latest quarterly reports from corporate America are received. Expectations about the immediate earnings outlook have been down for so long, the actual numbers themselves could look like up to investors. Earnings for all financials in the S & P 500 are actually expected to expand in the first quarter by 4.3%. ET: NAHB Housing Market Index (April) Earnings: Charles Schwab, M & T Bank, State Street, J.B. Hunt Transport Tuesday 8:30 a.m. ET: Philadelphia Fed President Patrick Harker speaks on the economic outlook Earnings: AT & T, American Express, D.R.
Friday's big story: Earnings season has kicked up a gear, with reports from big banks including JPMorgan, which posted record quarterly revenue. New data this morning also showed retail sales fell in March. Meanwhile, a Fed official said inflation is still high and that he's prepared to approve another interest-rate increase. Stock futures are wavering, with Dow industrials and S&P 500 futures not far off flat. Nasdaq-100 contracts are lower, as are gold prices, which hit their highest level of the year Thursday.
Stock futures are slightly lower as investors looked to the start of corporate earnings season while considering what the latest inflation data implies about the economy. S&P 500 futures were slightly below the flatline, while Nasdaq-100 futures shed 0.1%. The PPI, which is considered a leading indicator of consumer inflation, bolstered a trend of easing inflation seen in the March consumer price index report released Wednesday. Consumer prices grew 5% on an annual basis, which was the smallest year-over-year increase in nearly two years. Investors will watch for big-bank earnings Friday, with JPMorgan , Wells Fargo and Citi set to report before the bell.
UnitedHealth has by far the biggest weighting in the Dow Jones Industrial Average . The 126-year-old blue-chip benchmark is price-weighted, meaning stocks with higher share prices are given the most weight. The health-care stock closed Wednesday at $520.97, while the stock with the second-highest impact on the 30-stock Dow, Goldman Sachs , stood at $327.37, nearly $200 less than UnitedHealth. While almost all other equity indexes are weighted by market capitalization, including the S & P 500 and the Nasdaq Composite , that doesn't mean UnitedHealth's power is diminished. The insurer is so large, with a $486 billion market cap, it ranks as the ninth-biggest company in the S & P 500.
Since the height of the financial crisis three weeks ago, the S & P 500 is up over 300 points, roughly 8%. Not surprisingly, the rest of the year is almost invariably a strong year. When the S & P 500 advances 7% or more in the first quarter, it's up an average 23% for the full year. April: spring shoots Best month for Dow Industrials: average 1.9%. advance Up 16 straight from 2006 to 2021 End of "best six months" strategy Source: Stock Trader's Almanac
Nasdaq 100 futures retreated on Sunday evening as Wall Street turned its attention to the start of the second quarter. Nasdaq 100 futures shed 0.31%, while S&P 500 futures slid 0.08%. The moves in futures come ahead of the first trading day of the second quarter on Monday. It was the index's best stretch since the second quarter of 2020. Meanwhile, the S&P 500 rose 7% in the first three months of the year for its second-straight positive quarter.
By comparison, the Dow has gained around 0.7% in an average month since 1950. April has historically been the second best month for the S & P 500 and fourth best for the Nasdaq Composite (and second best for Russell 1000 and third best for the Russell 3000). More good news: The Aprils of previous pre-election years have posted an even stronger average performance. Lately, the Dow Industrials have exhibited strength following the tax filing deadline, per the Almanac, which falls on April 18 this year. A March advance would mark a reversal from February, when the Dow Industrials lost 4.2% and briefly gave up all of its early 2023 gain.
Traders work on the floor of the New York Stock Exchange (NYSE) on February 27, 2023 in New York City. U.S. stock futures were little changed on Sunday night as Wall Street looked ahead to a week filled with economic data and the latest commentary from the Federal Reserve. Dow Jones Industrial Average futures fell by 44 points, or 0.13%. An upward move in the 10-year yield raises borrowing costs for consumers and could signal a drop in investor confidence. Economists are expecting a decline of 1.8% in January, according to consensus estimates from Dow Jones.
Dow Industrials Rise as Oil Prices Jump
  + stars: | 2023-03-04 | by ( Anna Hirtenstein | ) www.wsj.com   time to read: 1 min
The Dow Jones Industrial Average rose Monday as investors weighed a surge in oil prices after Saudi-led crude producers announced a surprise production cut over the weekend, saying they would reduce output by over a million barrels per day from May. “This comes at a time when the fight on inflation is not over. If inflation from energy prices starts to rebound again, that won’t be a good scenario for central banks,” said Luc Filip, head of investments at SYZ Private Banking.
The recent market downswing could give way to a big two-month rally, according to Tom Lee, managing partner at Fundstrat. Labor and inflation data in the past month showed unwelcomed stickiness that concerned investors hoping the Federal Reserve would slow down its rate hiking campaign. Lee said data on labor unit costs should be the "last of the 'hot' inflation data," expecting cooler numbers in the near future. He also said the bond market will pivot to reflect a less-aggressive Fed in terms of monetary policy. Lee said the bond market is still more expensive than stocks when comparing price-to-earnings ratios.
All three main stock indexes climbed more than 1% shortly after the opening bell, in part due to an easing in Treasury yields, and all three closed well off their session highs. Stocks steadily gave up gains throughout the session as U.S. Treasury yields moved off the day's lows. Traders work on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 27, 2023. Advancing issues outnumbered declining ones on the NYSE by a 1.69-to-1 ratio; on Nasdaq, a 1.41-to-1 ratio favored advancers. The S&P 500 posted 4 new 52-week highs and 8 new lows; the Nasdaq Composite recorded 71 new highs and 102 new lows.
Each of the three main indexes climbed more than 1% shortly after the opening bell, in part due to an easing in Treasury yields. The yield on two-year Treasury notes , which typically moves in step with interest rate expectations, slipped after touching a near four-month high. Seagen Inc (SGEN.O) surged 9.73% after the Wall Street Journal reported that Pfizer (PFE.N) was in early talks to acquire the biotech firm. Advancing issues outnumbered declining ones on the NYSE by a 2.30-to-1 ratio; on Nasdaq, a 1.66-to-1 ratio favored advancers. The S&P 500 posted four new 52-week highs and five new lows; the Nasdaq Composite recorded 58 new highs and 82 new lows.
And yet, despite the dip this week, markets right now are brimming with bullishness — and Reddit-loving retail investors are partying like it's 2021. Retail investors are rebuffing Jerome Powell in piling into speculative assets. Remember, at the start of the pandemic, government stimulus and near-zero interest rates gave retail investors the perfect opportunity to lay down speculative bets. "With all of these headwinds, retail investors are jumping in on maybe some ill-conceived optimism," Goldman said. But economic data be damned, retail investors are still piling into the riskiest corners of the market.
U.S. stock indexes suffered their worst session of the year Tuesday, dragged down by a disappointing forecast from Home Depot and growing concerns that the Federal Reserve will keep interest rates higher for longer. After rallying sharply to kick off 2023, stocks have stumbled in recent weeks as hot economic data have made investors anxious about the trajectory of U.S. monetary policy.
Dow Industrials Slip After U.S. Inflation Data
  + stars: | 2023-02-14 | by ( Chelsey Dulaney | Akane Otani | ) www.wsj.com   time to read: 1 min
The Dow Jones Industrial Average edged lower Tuesday after data showed inflation cooled, but remained hot enough to keep the Federal Reserve on track for further interest-rate increases. The Dow lost 156.66 points, or 0.5%, to 34089.27. The broad-based S&P 500 was roughly flat, falling 1.16 points, or less than 0.1%, to 4136.13, erasing earlier gains.
The Dow Jones Industrial Average last year was a relative bright spot in a battered stock market. Now, speculation is back, and the blue chips are falling behind. The 30-stock index is up 2.4% in 2023 but is badly trailing the Nasdaq Composite Index, which has surged 14%. Largely home to technology and other growth stocks, the Nasdaq is off to its best start since 1991, and the spread between the indexes is the widest since 2000 for any year through Feb. 8.
LOS ANGELES – While shareholders will still be keyed in to see how many subscribers Disney's suite of streaming services added during the fiscal first-quarter report, the focus of Wednesday's earnings will be the return of CEO Bob Iger. This is Iger's first earnings call since early 2020, and his words will set the tone for the future of the media company. As part of that warning, the company noted that its Disney+ platform may see a tapering of growth going forward. In November, the company reported $1.5 billion in operating losses at its direct-to-consumer unit, which includes its streaming services. As for subscriber growth, analysts predict the total Disney+ user pool will be 161.1 million, a loss of around 3 million compared to the previous quarter.
Fed Chairman Jerome Powell triggered a surge in stocks when he spoke Wednesday , taking the S & P 500 into a new range. Redler expects a near term peak for the S & P 500 could be around 4,200-4,220. The S & P 500 and Nasdaq were both higher Thursday, as the 10-year Treasury yield continued its slide to a low of 3.35%. He's watching the growing number of three-month highs in the Russell 1000 and S & P 600 , which are now outpacing the new highs in the S & P 500. The VIX is based on puts and calls in the S & P 500.
Stock futures slipped Thursday evening as investors look ahead to earnings and economic reports due Friday. S&P 500 futures and Nasdaq 100 futures were down 0.31% and 0.56%, respectively. The S&P 500 rose 1.10% and the tech-heavy Nasdaq Composite jumped 1.76%. The Dow and the S&P 500 have gained 1.7% and 2.2% this week, respectively. Investors may be watching Chevron's report closely after the company announced a $75 billion stock buyback and dividend boost on Wednesday.
Cruise-line shares gained as Norwegian Cruise Line Holdings said its first-quarter revenue tripled and bookings rose to a record. Photo: Joe Raedle/Getty ImagesMajor stock indexes hardly budged Monday after regulators seized ailing lender First Republic Bank and agreed to sell the bulk of its operations to JPMorgan Chase . The sale pre-empts a chaotic collapse of the San Francisco-based lender that investors feared could reignite March’s banking turmoil and instead puts the spotlight back on the Federal Reserve’s interest-rate decision on Wednesday.
US stocks fell Wednesday and were on track to extend a run of losses. A slump in Chinese trade in November highlighted global recession worries. Chinese trade figures released Wednesday underscored recession fears even as the world's second-largest economy continued to roll back its zero-COVID policy measures related to quarantines and testing. Official data released by the government showed exports in November contracted by 8.7% in November from a year earlier, the worst decline since February 2020 when the COVID outbreak was starting to spread worldwide. Here's what else is happening today:Goldman Sachs boss David Solomon sees just a 35% chance the Fed avoids a recession.
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