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The Atlantic hurricane season is the period in a year, from June 1st through November 30th, when tropical or subtropical cyclones are most likely to form in the North Atlantic Ocean. These dates, adopted by convention, encompass the period in each year when most tropical cyclogenesis occurs in the basin. Even so, subtropical or tropical cyclogenesis is possible at any time of the year, and often does occur.
Interest Rates?
New US government data shows there were more open jobs last month than expected, raising the possibility that the Federal Reserve could keep hiking Interest Rates Up.
Banks
Shares of large and mid-sized U.S. banks sharply under performed the broader markets with worries about commercial real estate loans in focus among bank investors.
Companies
The e-commerce giant Amazon has agreed to shell out the cash to settle a pair of lawsuits lodged by the Federal Trade Commission. It will cough up $5.8 million to resolve claims that it let employees and contractors access footage from Ring doorbell cameras and another $25 million because Alexa allegedly improperly retained information from children. Amazon’s also facing criticism from its staff—hundreds of corporate employees walked out yesterday to protest the company’s layoffs, return to office mandate, and contributions to climate change.
Advance Auto Parts tanked after the car parts seller cut its dividend and outlook for the year.
The Markets
Here is where the major benchmarks ended, yesterday:
The S&P 500 Index was up 41.19 points (1.0%) at 4221.02; the Dow Jones industrial average (DJIA) was up 153.30 (0.5%) at 33,061.57; the NASDQ Composite was up 165.70 (1.3%) at 13,100.98.
The 10-year Treasurynoteyield (TNX) was down about 3 basis points at 3.603%.
CBOE’s Volatility Index (VIX) was down 2.25 at 15.69.
Oilfield services providers and other energy companies led sector gains, as crude oil futures rallied nearly 3% and pushed back above $70 barrel despite higher-than-expected U.S. inventories reported Thursday. Semiconductor makers and other tech companies continued their recent show of strength. The U.S. Dollar Index ($DXY) fell to its lowest level in more than a week amid ideas the Fed may soon “pause” its sharp rate hikes of the past year.
According to ABC News, the US House of Representatives just approved a bill to raise the nation’s debt ceiling while cutting some government spending over the next two years, in a major victory for both the White House and Republican leaders as the country tip-toes closer to a historic default on its bills. The final vote was 314-117. Now, the deal moves to the Senate, where Majority Leader Chuck Schumer has promised to work to pass it quickly.
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Here is where the major benchmarks ended yesterday:
The S&P 500 Index was down 25.69 points (0.6%) at 4179.83; the Dow Jones industrial average was down 134.51 (0.4%) at 32,908.27; the NASDAQ Composite was down 82.14 (0.6%) at 12,935.29.
The 10-year Treasury yield was down about 5 basis points at 3.641%.
CBOE’s Volatility Index was up 0.26 at 17.74.
Regional banks were among the weakest performers Wednesday, while energy stocks also slumped as crude oil futures extended a recent sell-off.
The utilities and healthcare sectors were among the few gainers.
Despite weakness in technology, the NASDAQ still ended with a gain of 5.8% for the month, while the S&P 500 was up 0.3%. The U.S. dollar index rose to a 2½-month high.
Workers appear to value paid time off even more than having employer-funded health insurance, a recent study found. The Pew Research Center report called “How Americans view their jobs” found 62% of the 5,900 people surveyed felt it’s “extremely” important to have paid time off for vacations or minor illness, with a further 27% saying it’s “very” important. That’s higher than the 51% who said employer-funded health insurance was extremely important, with 28% saying it’s very important.
And, here is where the major market benchmarks ended yesterday:
The S&P 500 Index was up 0.07 point at 4205.52; the Dow Jones industrial average was down 50.56 (0.2%) at 33,042.78; the NASDAQ Composite was up 41.74 (0.32%) at 13,017.43.
The 10-year Treasury yield was down about 13 basis points at 3.694%.
CBOE’s Volatility Index was little changed at 17.46.
Oilfield services companies and others in energy were among the weakest performers as crude oil futures dropped more than 4% to less than $70 a barrel, reflecting ample supply.
Consumer staples and health care were also weak. The U.S. dollar index was down slightly after rising earlier to its highest level since mid-March.
Money managers often share their thoughts in real time, but fewer still have 50 years of experience navigating the markets. Hedge fund manager Doug Kass is one of them.
Kass, who offers his stock picks and insights in his Real Money Pro Daily Diary, doesn’t pull any punches when it comes to managing risk. He recently told investors interested in artificial intelligence that the road to AI profits will likely be rockier than expected for the likes of Nvidia (NVDA) – Get Free Report, Microsoft (MSFT) – Get Free Report, Alphabet (GOOGL) – Get Free Report, and C3.ai (AI) – Get Free Report.
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Here is where the major benchmarks ended yesterday:
The S&P 500® Index was up 54.17 points (1.3%) at 4205.45; the Dow Jones industrial average was up 328.69 (1.0%) at 33,093.34; the NASDAQ Composite was up 277.59 (2.2%) at 12,975.69.
The 10-year Treasury yield was little changed at 3.81%.
CBOE’s Volatility Index was down 1.22 at 17.93.
Tech remains the runaway upside leader among sectors, with the Philadelphia Semiconductor index soaring over 6% to a 14-month high Friday. The NASDAQ-100 also ended near a 14-month high. Communications services and real estate were also strong.
Oilfield services and other energy companies were among the weakest sectors, despite a jump of more than 1% in crude oil futures.
The value of the US tech company Nvidia has soared by a quarter after it predicted a boom in demand for its computer chips to meet the needs of artificial intelligence products such as ChatGPT. Nvidia’s share price rose by 25% in early trading on the back of the announcement, and gave it a market valuation of more than $940bn (£760bn) after stock markets opened on Wall Street on Thursday, up from $755bn on Wednesday evening. The share price had already more than doubled over the course of 2023, amid huge optimism over the rapid progress of generative AI products. These require massive data centers full of semiconductor chips to operate.
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Here is where the major benchmarks ended yesterday:
The S&P 500® Index was up 36.04 points (0.9%) at 4151.28; the Dow Jones industrial average was down 35.27 (0.1%) at 32,764.65; the NASDAQ Composite was up 213.93 (1.7%) at 12,698.09.
The 10-year Treasury yield was up about 10 basis points at 3.823%.
CBOE’s Volatility Index was down 1.01 at 19.02.
The Philadelphia Semiconductor Index also rose more than 4% to near a 14-month high, while the NASDAQ-100 hit a 13-month high. Transportation stocks were also higher. Oilfield services companies were among the weakest performers as crude oil futures fell more than 3%.
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US credit rating called into question
Credit rating agency Fitch just warned that the fight over the debt ceiling could force it to question the US’ perfect credit rating. It said it had put the nation’s triple-A credit rating on “rating watch negative,” meaning it’s poised for a downgrade if lawmakers can’t work things out. Even negotiations that drag on too long before a deal is reached could trigger a downgrade: That’s what happened in 2011, when S&P dinged the US’ credit over default fears. S&P still hasn’t returned the nation’s score to its highest rating.
Thousands of clients of Maxim Healthcare Services are about to receive a payment of up to $5,000 in compensation for a data breach. According to information obtained by The Sun, the private medical personnel company based in Columbia, Maryland; agreed to pay 2020 data breach claims filed in a class action lawsuit by residents of the state of California.
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Gold futures tallied a third consecutive session decline settling at their lowest in nearly a week as further strength in the U.S. dollar pressured prices for the precious metal. Gold gave up early gains that had been driven by uncertainty surrounding a U.S. debt-ceiling deal in Congress.
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And, here is where the major benchmarks ended yesterday:
The S&P 500 Index was down 30.34 points (0.7%) at 4115.24; the Dow Jones industrial average was down 255.59 (0.8%) at 32,799.92; the NASDAQ Composite was down 76.08 (0.6%) at 12,484.16.
The 10-year Treasury yield was up about 4 basis points at 3.742%.
CBOEs Volatility Index was up 1.52 at 20.04.
Technology and regional bank stocks were among the weakest sectors, with the Philadelphia Semiconductor Index down more than 2%. Energy was one of the few gainers among S&P 500 sectors as crude oil futures climbed to a three-week high of near $74 a barrel. The U.S. dollar index rose a third straight day to a two-month high.
Washington’s failure to wrap up the debt-ceiling negotiations sent stocks tumbling yesterday. Here is where the major benchmarks ended:
The S&P 500 Index was down 47.05 points (1.1%) at 4145.58; the Dow Jones industrial average was down 231.07 (0.7%) at 33,055.51; the NASDAQ Composite was down 160.53 (1.3%) at 12,560.25.
The 10-year Treasury yield was down about 2 basis points at 3.701%.
Here is where the major benchmarks ended yesterday:
The S&P 500® Index was up 0.65 point at 4192.63; the Dow Jones industrial average was down 140.05 (0.4%) at 33,286.58; the NASDAQ Composite was up 62.88 (0.5%) at 12,720.78.
The 10-year Treasury yield was up about 3 basis points at 3.721%.
CBOE’s Volatility Index was up 0.38 at 17.19.
The NASDAQ-100 Index ended at a 13-month high, driven by gains in large tech companies. Lenders were also particularly strong, with the KBW Regional Banking Index up nearly 3%. Oilfield services companies also rose as crude oil futures ticked higher. Consumer staples was among the weaker sectors.
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Debt ceiling negotiations could result in less funding for state and local health officials to combat STDs. Remote work is making it easier for some family caregivers to fill care gaps. An RSV vaccine for pregnant women is another step closer to approval. Congress will question CIGNA over its practice of rejecting medical claims by the hundreds of thousands every month.
Regional bank stocks slid again on Friday on fears that more banks might fail or need intervention from the government. The KBW Regional Bank index fell by nearly 3% from rumors that Treasury Secretary Janet Yellen said additional bank consolidations might need to occur, according to a CNN report.
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Yesterday, stocks turn south after Republicans walked out on debt ceiling talks, but the S&P 500 and NASDAQ are still higher for the week. In summary:
The Dow Jones Industrial Average fell 109.28 points, or 0.3%, to close at 33,426.63.
The S&P 500 fell 6.1 points, or 0.1%, to finish at 4,191.98.
The NASDAQ Composite dropped 30.94 points, or 0.2%, to end at 12,657.90.
All three major indexes booked weekly gains, with the Dow rising 0.4% to snap two straight weeks of losses. The S&P 500 saw a 1.6% gain for the week, also snapping back-to-back weekly losses; the NASDAQ rose 3% in a fourth straight week of gains for its longest winning streak since the week ending Feb. 3rd, according to Dow Jones Market Data.
Markets: Stocks climbed for the second straight day as a last-minute deal to raise the debt ceiling begins to take shape. GOP House Speaker Kevin McCarthy and Democratic Senate Majority Leader Chuck Schumer signaled their chambers could vote next week on an agreement that would avert the US’ first-ever default.
Stock spotlight: Netflix shares popped after the streamer said its cheaper ad-supported plan is off to a hot start. Earlier this week, Netflix said that 25% of its new subscribers opted for the ad tier in regions where it’s available.
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Here is where the major benchmarks ended yesterday:
The S&P 500 Index was up 39.28 points (0.9%) at 4198.05; the Dow Jones industrial average was up 115.14 (0.3%) at 33,535.91; the NASDAQ Composite was up 188.27 (1.5%) at 12,688.84.
The 10-year Treasury yield was up about 7 basis point at 3.65%.
CBOE’s Volatility Index was down 0.78 at 16.09.
The tech sector continued to be one of the market’s strongest performers, with the Philadelphia Semiconductor Index jumping nearly 3% and the Nasdaq-100 closing at a 13-month high. Real estate led decliners among S&P 500 sectors.
Also, the U.S. dollar index surged near a two-month high amid growing confidence the Fed won’t be lowering rates any time soon.
The Federal Trade Commission said on Tuesday [yesterday] it will try to block an effort by bio-pharmaceutical leader Amgen Inc. from purchasing Horizon Therapeutics for $28.3 billion, charging the move could force insurance companies to favor their products. The FTC said the coupling of Amgen and Horizon could have allowed Amgen to leverage its portfolio of top-selling drugs to entrench a monopoly position in treatments for thyroid eye disease and chronic refractory gout. The watchdog agency said Amgen could force insurance companies and pharmacy benefit managers, or PBMs, into favoring Horizon’s two monopoly products. It said Tepezza is used to treat thyroid eye disease, while Krystexxa is used to treat chronic refractory gout. The agency said neither of the treatments has competition in the pharmaceutical marketplace.
And, the CME FedWatch Tool shows an 82% probability of the Fed leaving rates where they are, versus an 18% chance of another rate hike. As for rate cuts, Liz Ann Sonders of Schwab said they remain unlikely “unless the banking crisis significantly worsens and/or the economy or labor market sinks notably.” “Otherwise, the most likely outcome is for the Fed to pause and hold,” she added.
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So, here is where the major benchmarks ended yesterday:
The S&P 500® Index was down 26.38 points (0.64%) at 4,109.90; the Dow Jones Industrial Average was down 336.46 (1.01%) at 33,012.14; the NASDAQ Composite was down 22.16 (0.18%) at 12,343.05.
The 10-year Treasury yield was up about 4 basis points at 3.541%.
CBOE’s Volatility Index was up 90 basis points at 18.02.
The energy sector was one of the weakest performers Tuesday, as WTI Crude Oil futures dipped. The Dow Jones U.S. Oil & Gas Total Stock Market Index was down more than 2%, while the S&P Global Oil Index shed 2.5%. Real estate and utilities also lagged. Communication services and tech were the strongest performers.
The executive branch of the European Union said Monday that Microsoft has offered enough remedies to address antitrust concerns, paving the way for the proposed $69 billion acquisition of gaming giant Activision Blizzard. The acquisition was opposed by rival game developer and PlayStation console maker Sony over fears it would see Microsoft’s Xbox platform push it out of the market. Market regulators globally, meanwhile, expressed concern over whether Microsoft would come to dominate the cloud-gaming market through the acquisition. On Monday, however, the European Commission, the executive arm of the EU, said Microsoft had done enough to allay concerns on cloud gaming specifically to warrant a positive decision on the merger.
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Here is where the major benchmarks ended [yesterday] Monday:
The S&P 500 Index was up 12.20 points (0.30%) at 4,136.28; the Dow Jones Industrial Average was up 47.98 (0.14%) at 33,348.60; the NASDAQ Composite was up 80.47 (0.66%) at 12,365.21.
The 10-year Treasury yield was up 3 basis points at 3.50%.
CBOE’s Volatility Index was up 17 basis points at 17.20.
Financial companies were among the leaders Monday, with regional lenders Citizens Bank (CFG), PacWest Bancorp (PACW), Western Alliance (WAL), and Zions Bancorporation (ZION) all bouncing higher after a punishing stretch for the banks last week. The materials and technology sectors were also up, while utilities and real estate lagged.
Here is where the major benchmarks ended this week:
The S&P 500 Index was down 6.54 points (0.2%) at 4124.08; the Dow Jones industrial average was down 8.89 at 33,300.62; the NASDAQ Composite was down 43.76 (0.4%) at 12,284.74.
The 10-year Treasury yield was up about 7 basis points at 3.464%.
CBOE’s Volatility Index was up 0.10 at 17.03.
Consumer Discretionary Socks led the declines Friday among S&P 500 sectors, with financials and energy shares also weaker. Worries over the potential for more trouble in the banking sector helped send the KBW Regional Bank Index to its lowest close since late 2020. Utilities and Consumer Staples were among the stronger performers.
Jerome Powell May Get a New No. 2. President Biden said yesterday that he would nominate economist Philip Jefferson, who is already on the Fed’s board, to become second-in-command at the central bank, replacing Lael Brainard. He also plans to nominate the current US rep to the World Bank, Adriana Kugler, to an empty board seat. She would be the Fed’s first Latina governor. If confirmed by the Senate, the pair will jump into their new roles as the Fed continues to try to curb inflation without tipping the economy into a recession.
The S&P 500® Index was down 7.02 points (0.2%) 4130.62; the Dow Jones industrial average was down 221.82 (0.7%) at 33,309.51; the NASDAQ Composite was up 22.06 (0.2%) at 12,328.51.
The 10-year Treasury yield was down about 5 basis points at 3.382%.
CBOE’s Volatility Index was down 0.03 at 16.91.
Financial companies were among the weakest performers Thursday, with the KBW Regional Bank Index dropping for a fourth straight day and ending near a 2½-year low. Energy shares were also under pressure with crude oil futures down more than 1%. Consumer Staples and Consumer Discretionary were among the few sectors posting gains. The U.S. dollar index jumped to its highest level in over a week.
Earnings roundup
The following companies reported results over the past day or had large, news-driven stock price moves:
Disney reported earnings of 93 cents per share, which met expectations, and better-than-expected revenue of $21.82 billion, but the drop in streaming subscribers alarmed investors. Subscriptions for the Disney+ streaming service totaled 157.8 million, down 2% from the end of 2022 and below expectations of closer to 163.2 million. This decline overshadowed a 17% jump in revenue from Disney parks. The company’s shares fell more than 8% to near a two-month low.
Alphabet (GOOGL) shares rose over 4% after the Google parent introduced several new artificial intelligence-driven tools at a developers’ conference, according to reports.
Beyond Meat (BYND) reported an expected net quarterly loss of 92 cents per share, an improvement from the $1.58 per share loss a year earlier. But shares of the plant-based meat producer were down about 18% after the company also said it would sell up to $200 million of common stock.
Peloton (PTON) shares fell more than 8% following reports the U.S. Consumer Product Safety Commission said it was recalling more than 2 million bikes over concerns about seat breakages and related injuries. Peloton will offer free, updated seat posts to anyone using the recalled model.
Robinhood (HOOD) reported a net loss of 45 cents per share, better than Wall Street expectations for a loss of about 61 cents per share, as well as stronger than expected revenue. Monthly active users rose 3.5% compared to the previous quarter, to 11.8 million. Shares of the broker rose more than 6%.
Trade Desk (TTD)reported net earnings 2 cents per share, compared with a loss of 3 cents per share a year earlier and above Wall Street expectations. Shares ofthe advertising technology company were down more than 1%.
Earnings reports taper off Friday, with a little over 100 companies expected to report, according to Nasdaq. Next week will also be relatively earnings-light, though several major retailers, including Target Corp. (TGT) on May 17 and Wal-Mart Inc. (WMT) on May 18, are on tap to announce results. Kohl’s Corp. (KSS) is scheduled to report results May 24.
Because the inflation data came in roughly as expected, Wall Street sees the door still open for the Federal Reserve to leave interest rates alone at its next meeting in June. That would be the first time it hasn’t raised rates at a meeting in more than a year, and a pause would offer some breathing room for the economy and financial markets.
Today is the last day of the US Covid-19 public health emergency, which has been in place since Jan. 31st, 2020. With it comes the end of certain Covid-era rules, though some telehealth protections have been extended through the end of 2024. Here’s to all the medical professionals who got us through, and a remembrance for the millions who lost their lives to Covid.
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Brightline, a California-based mental health startup, laid off 20% of its staff this week following a data breach. North Carolina is the latest state to consider changes to the prior authorization process that advocates say delays care. A board member at Geisinger claims that consolidation prompted the healthcare provider to sell to Kaiser Permanente. Texas Gov. Greg Abbottsaid the state should address mental health issues in the wake of a shopping mall mass shooting, but did not call for gun control reform.
Finally, here is where the major benchmarks ended yesterday:
The S&P 500 Index was up 18.47 points (0.5%) at 4137.64; the Dow Jones industrial average was down 30.48 (0.1%) at 33,531.33; the NASDAQ Composite was up 126.89 (1.0%) at 12,306.44.
The 10-year Treasury yield was down about 8 basis points at 3.441%.
CBOE’s Volatility Index was down 0.80 at 16.91.
Oilfield services providers and other energy companies were among the laggards Wednesday, pressured by a more-than 1% drop in WTI crude oil futures.
Financial sector stocks struggling to escape the effects of the bank volatility earlier this spring helped push the KWB Regional Bank Index back near a 2½-year low reached last week.
The S&P 500® Index was down 18.95 points (0.5%) 4119.17; the Dow Jones industrial average was down 56.88 (0.2%) at 33,561.81; the NASDAQ Composite was down 77.36 (0.6%) at 12,179.55.
The 10-year Treasury yield was up about 1 basis point at 3.53%.
CBOE’s Volatility Index was up 0.66 at 17.64.
Semiconductor stocks and other technology shares were among the weakest performers Tuesday, with materials and health care also slightly lower.
Energy companies including oil field services providers were among the strongest, as WTI crude oil futures rose for a fourth consecutive day to their highest level since May 1st.
It’s National Nurses Week and National Student Nurses Day. We at the ME-P salute all the nurses (and future nurses) who read and inform our stories, and all of those who’ve been on the front-lines of the pandemic. We hope you take some time to kick back or at least slip into some comfortable shoes.
The S&P 500® Index was up 1.87 points at 4138.12; the Dow Jones industrial average was down 55.69 (0.2%) at 33,618.69; the NASDAQ Composite was up 21.50 (0.2%) at 12,256.92.
The 10-year Treasury yield was up about 7 basis points at 3.515%.
CBOEs Volatility Index was down 0.2 at 16.99.
Among S&P 500 sectors, financial and energy companies were top gainers, with the latter getting some help from a more than 2% rally in WTI crude oil futures.
Transportation, utility and industrial stocks were among the weakest performers, and the Russell 2000 was down about 0.3%, reflecting continued weakness in small-caps.
Dr. Rochelle Walensky, the head of the Centers for Disease Control and Prevention, submitted her resignation yesterday, saying the waning of the COVID-19 pandemic was a good time to make a transition.
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The World Health Organization just reported that COVID-19 no longer qualifies as a global emergency, marking a symbolic end to the devastating coronavirus pandemic that triggered once-unthinkable lock-downs, upended economies and killed millions of people worldwide.
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Here’s where the major indexes ended:
The S&P 500® Index was up 75.03 points (1.9%) at 4136.25; the Dow Jones industrial average was up 546.64 (1.7%) at 33,674.38; the NASDAQ Composite was up 269.01 (2.3%) at 12,235.41.
The 10-year Treasury yield was up about 8 basis points at 3.431%.
CBOE’s Volatility Index was down 2.89 at 17.20.
Financial shares were a bright spot Friday, with the KBW Regional Banking Index up over 4% after sinking near a 2½-year low Thursday. Energy stocks were also strong as crude oil futures rallied over 4% and pushed back above $70 a barrel. Small-cap stocks also gained, with the Russell 2000 up more than 2%.
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* UNC Health might be able to expand its footprint faster, pending state approval. * A new chatbot called Pi is helping people with their emotional well-being. * The FDA approved the first RSV vaccine, which comes from GSK.
Happy Cinco de Mayo. The holiday commemorates the defeat of French forces by the Mexican army at the Battle of Puebla in 1862, but its popularity jumped in the 1980s when beer companies began to leverage Cinco de Mayo in marketing campaigns.
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The antitrust watchdogs at the Federal Trade Commission (FTC) just tore into Facebook saying the agency has caught the social media giant violating kids’ data privacy for profit — for the third time. Now the FTC has had enough. In a new proposal to protect kids, the agency wants to ban the platform from ever monetizing youth data again. In a ferocious rebuke, the FTC said Facebook defied its direct order to protect kids’ online privacy and broke the promise the company made in a 2019 consent order when it was forced to pay a $5 billion penalty for violating a 2012 order.
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Here’s where the major indexes ended:
The S&P 500 Index was down 29.53 points (0.7%) at 4061.22; the Dow Jones industrial average was down 286.50 (0.9%) at 33,127.74; the NASDAQ Composite was down 58.93 (0.5%) at 11,966.40.
The 10-year Treasury yield was down about 4 basis points at 3.364%.
CBOE’s Volatility Index was up 1.74 at 20.08.
Financial stocks led the market’s declines, with the KBW Regional Banking index sinking nearly 3% to its lowest level since November 2020. Transportation stocks were also under pressure as banking sector troubles exacerbated recession concerns. Crude oil futures initially extended this week’s slump, dropping under $64 a barrel to a 17-month low before rebounding.
Many pharma companies reported earnings in the last week, and the common thread is crashing Covid-related sales.
For example, AstraZeneca’s Covid medication sales dropped $1.5b in Q1, Merck’s Covid antiviral sales fell 88% from the same quarter in 2022, and Roche’s diagnostics division sales fell 28% from Q1 2022, thanks to low Covid-test demand. Clearly, pharma companies have to figure out how to pivot their strategies in a post-Covid world.
The CDCwill not continue to track Covid-19 community spread as the country enters the endemic stage of the pandemic.
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The Food and Drug Administration approved Wednesday the first-ever vaccine to combat severe respiratory syncytial virus, or RSV. Arexvy, the new vaccine developed by GlaxoSmithKline, was approved for adults 60 and older and was 82% effective at preventing lower respiratory tract illness caused by RSV, according to trial data. It was also 94% effective in those who had at least one underlying medical condition.
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The Federal Reserve voted unanimously to raise interest rates by a quarter point yesterday, the tenth rate hike since the central bank started its battle against inflation last March. The move comes amid ongoing fragility in the banking sector triggered partly by higher interest rates, and following the collapse of three regional banks. Markets had anticipated the rate hike, and remained fairly muted after the Fed’s announcement.
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Finally, here’s where the major indexes ended up:
The S&P 500® Index was down 28.83 points at 4090.75; the Dow Jones industrial average was down 270.29 (0.8%) at 33,414.24; the NASDAQ Composite was down 55.18 (0.5%) at 12,025.33.
The 10-year Treasury yield was down about 7 basis points at 3.367%.
CBOE’s Volatility Index was up 0.52 at 18.30.
Energy companies were among the market’s weakest performers as crude oil continued a recent decline, with WTI crude futures falling more than 4% under $70 a barrel—a nearly six-week low.
Semiconductor and financial shares were also weak. The U.S. dollar index dropped sharply in the wake of the Fed announcement before rebounding.
The S&P 500® Index was down 48.29 points (1.2%) at 4119.58; the Dow Jones industrial average was down 367.17 (1.1%) at 33,684.53; the NASDAQ Composite was down 132.09 (1.1%) at 12,080.51.
The 10-year Treasury yield was down about 15 basis points at 3.428%.
CBOE’s Volatility Index was up 1.67 at 17.77.
Regional banks led the declines, with the KBW Regional Banking index sinking more than 5% to its lowest level since late 2020.
Energy stocks were also weaker as crude oil futures extended a slide, dropping under $72 a barrel to their lowest level in more than five weeks. Small-caps also slumped, with the Russell 2000 index down 2%.
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More specifically, ahead of the Federal Reserve’s latest policy decision and fresh earnings results:
By 6:45pm ET (10:45pm GMT) Dow Jones Futures were flat while S&P 500 Futures and NASDAQ 100 Futures eased 0.1% apiece.
In extended deals, Advanced Micro Devices Inc (NASDAQ:AMD) fell 6.5% after reporting Q1 EPS of $0.60 versus $0.56 expected on revenues of $5.4 billion versus $5.3 billion expected. Looking ahead, the company forcasted Q2 2023 revenue in the range of $5-5.6 billion versus $5.49 billion expected.
Ford Motor (NYSE:F) slipped 1.6% after the company reported Q1 EPS of $0.63, beating expectations of $0.42,ewhile revenue was reported at $39.1 billion versus $37.4 billion expected.
Sprout Social (NASDAQ:SPT) dipped 17.4%, reporting Q1 EPS of $0.06, beating expected losses of $0.01 per share, while revenue came in at $75.2 million versus $75.07 million expected.
Companies, mostly in tech and media, have laid off thousands of employees, so far this year. For example:
Amazon announced in early January that it’s eliminating 18,000 roles in total, including layoffs that were announced in November 2022. The company announced last month that it was laying off an additional 9,000 people.
Payments company PayPal is cutting 7% of its staff, which amounts to about 2,000 employees, President and CEO Dan Schulman said on Jan. 31st.
E-commerce company eBay announced in an SEC filing on Feb. 7 that it’s laying off 500 people, or 4% of its workforce.
And, Jenny Craig is saddled with $250 million in debt and has been looking for a buyer, Bloomberg Law reported in March. The weight loss industry is going through changes, as the obesity drug business has exploded in popularity. The medications, which mimic hormones found in the body to support weight loss, have recently grown in popularity thanks to reported use by celebrities and posts from everyday people on social media about successful weight loss.
Finally, General Motors terminated “several hundred” contract employees who worked at its Global Technical Center in Warren, Michigan, and other locations this weekend in its bid to shave $2 billion from its budget by the end of next year. The cuts come nearly a month after 5,000 salaried employees agreed to a voluntary separation package that GM said would help it achieve close to 50% of its cost-cutting target this year alone and prevent further involuntary cuts.
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Happy Tuesday! Today marks the first day of Mental Health Awareness Month. One in five US adults experiences mental illness each year, but fewer than half of them get care, according to the National Alliance on Mental Illness.
The MARKETS
The S&P 500® Index was down 1.61 points at 4167.87; the Dow Jones industrial average was down 46.46 (0.1%) at 34,051.70; the NASDAQ Composite was down 13.99 (0.1%) at 12,212.60.
The 10-year Treasury yield was up about 13 basis points at 3.585%.
Eli Lilly (NYSE: LLY) investors continued to be in a good mood about their stock on Friday. Following the estimates-beating first quarter reported by the big pharmaceutical company the previous morning, they traded the shares up by 1.4% on the final trading day of the week. That eclipsed the 0.8% gain of the S&P 500 index.
Researchers at MIT have created a new type of tabletop printer that spits out vaccine doses on demand in the form of thumbnail-size microneedle patches. Once scaled, this mobile technology could produce hundreds of doses per day, revolutionizing pandemic response. And in a boon for warmer or more remote parts of the world, the vaccine patches can be stored at room temperature for months before they’re slapped on—no refrigeration or professional administering required.
Compensation pay for US workers picked up in the first three months of the year, showing that a major source of inflationary pressure persists and cementing the path for an interest rate hike at the Federal Reserve’s meeting next week. The Employment Cost Index, released Friday by the Bureau of Labor Statistics, showed that workers were paid 1.2% more in wages and benefits in the first quarter from the prior three-month period. That’s up from analysts’ expectations of 1.1%.
Markets: Stocks rose yesterday, finishing strong to give the Dow its best month since January. But First Republic Bank tanked again as rumors flew about its fate, again.
Economy: For all the Fed watchers, new data released makes it look like another rate hike could be in store next week. The data shows wages are still trending upward, and one of the Fed’s favorite inflation measures rose slightly last month.
Here’s where markets ended.
The S&P 500 Index was up 34.13 (0.8%) at 4169.48, a nearly three-month high; the Dow Jones industrial average was up 272.00 (0.8%) at 34,098.16; the NASDAQ Composite was up 84.35 (0.7%) at (12,226.58.
The 10-year Treasury yield was down about 9 basis points at 3.437%.
CBOE’s Volatility Index was down 1.27 at 15.76.
Energy companies were among the strongest sectors today with help from a rally in crude oil futures. Transportation and financial stocks were also strong. Utilities and consumer discretionary sectors were among the weakest sectors.
Economy: The US economy entered a 12 mph zone last quarter, slowing to an annual growth rate of 1.1% (short of estimates). While the growth figures were discouraging and a consequence of the Fed’s interest rate hikes, economists found some bright spots! It seems that consumers won’t stop shopping, resulting in a 3.7% increase in consumer spending. Still, some are waiting on that recession?
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So – Here’s where the key indexes settled yesterday.
The S&P 500 Index was up 79.36 (2%) at 4135.35; the Dow Jones industrial average was up 524.29 (1.6%) at 33,826.16; the NASDAQ Composite was up 287.89 (2.4%) at 12,142.24.
The 10-year Treasury yield was up about 9 basis points at 3.524%.
CBOE’s Volatility Index was down 1.90 at 16.94.
Small-cap companies, which tend to struggle more when economic growth stalls, remained at the back of the pack, with the Russell 2000 up slightly over 1%.
The energy sector continued to rank among the weakest-performing sectors, as crude oil futures continued trading near lows for the month.
Treasury yields jumped to one-week highs after the first-quarter gross domestic product (GDP) report showed inflation remained elevated.
The two tech giants posted earnings that showed they’re both on solid footing, despite investors’ concerns that growth would slow to a trickle. For Alphabet, Google search advertising revenue grew again after a quarter in the red. And Microsoft’s all-important cloud division posted better-than-expected sales. Both companies stated AI could impact their businesses, but they differed in their predictions: Microsoft characterized AI as a much more disruptive force than Google did.
Get ready for earnings calls from pharmaceutical companies: Eli Lilly, AstraZeneca, AbbVie, and more quarterly calls this week. Investors will watch AbbVie’s sales numbers, as Amgen introduced the first biosimilar version of AbbVie’s blockbuster arthritis drug, Humira, in January. In its last call, AbbVie executives said they expected to lose $7.9 billion in Humira sales in 2023
The S&P 500 Index was down 15.64 points (0.4%) at 4055.99; the Dow Jones industrial average was down 228.96 (0.7%) at 33,301.87; the NASDAQ Composite was up 55.19 (0.5%) at 11,854.35.
The 10-year Treasury yield was up about 4 basis points at 3.439%.
The CARES Act, a COVID relief law that was enacted in March of 2020, made it easier to pull money from one’s 401(k) or IRA It allowed people to take up to $100,000 out of their accounts and have three years to pay it back without the normal 10% early withdrawal penalty and tax payment. For Americans who needed cash quickly, their 401(k) was a tempting well to dip into that wouldn’t have been otherwise available.
In the spring of 2020, nearly 20% of all withdrawals from 401(k)’s, between April 6th and June 26th were related to COVID, according to CNBC. CNBC reported that at Fidelity Investments, the largest provider of 401(k) plans in the U.S., more than 700,000 people took from their 401(k) or their 403(b) plan. The median amount was about $5,000, while more than 18,000 people asked for the full $100,000 amount.
And Vanguard’s How America Saves report from 2021 found that more than 7% of people withdrew from their 401(k) or a 401(b) — similar to a 401(k) but available to not-for-profit companies — in 2020.
The S&P 500 Index was down 65.41 (1.6%) at 4071.63; the Dow Jones industrial average was down 344.57 (1.0%) at 33,530.83; the NASDAQ Composite was down 238.05 (2.0%) at 11,799.16.
The 10-year Treasury yield was down about 12 basis points at 3.394%.
CBOEs Volatility Index was up 1.99 at 18.92.
Transportation stocks also had a rough day after United Parcel Service’s (UPS) shares dropped some 10% after its results missed analysts’ forecasts. Energy companies were lower after WTI crude oil futures dropped under $77 a barrel for the first time this month. Small-cap companies, which are considered to have greater recession exposure than larger businesses, were also under pressure, with the Russell 2000 index falling more than 2% and nearing a five-week low.
1. Regional banks’ plight was Morgan Stanley’s perk. The bank saw nearly $20 billion in new client assets in the wake of the banking crisis that rocked smaller banks like First Republic. Why the bank became a “destination of choice” amid the crisis.
2. Taylor Swift was the only one asking the right question on FTX. The mega star didn’t sign a $100 million sponsorship deal with the crypto exchange because, unlike seemingly everyone in Silicon Valley, she did some form of due diligence.
4. It’s starting to get scary in the housing market. Foreclosure filings were up 22% in Q1 compared to last year, and repossessions are headed in the wrong direction as well.
Finally, Fintel reports that on April 21, 2023, Goldman Sachs maintained coverage of Tesla (NASDAQ:TSLA) with a Buy recommendation. As of April 6th, 2023, the average one-year price target for Tesla is $203.14. The forecasts range from a low of $24.58 to a high of $315.00. The average price target represents an increase of 24.63% from its latest reported closing price of $162.99. The projected annual revenue for Tesla is $118,517MM, an increase of 37.75%. The projected annual non-GAAP EPS is $5.70.
The S&P 500® Index was up 3.52 points (0.1%) at 4137.04; the Dow Jones industrial average was up 66.44 (0.2%) at 33,875.40; the NASDAQ Composite was down 35.25 (0.3%) at 12,037.20.
The 10-year Treasury yield was down about 7 basis points at 3.50%.
CBOEs Volatility Index was up 0.12 at 16.89.
Real estate and financials were among Monday’s weakest-performing sectors, while energy companies led gainers thanks to a jump of about 1% in crude oil futures. The U.S. dollar index fell to about 101.37, its weakest level since mid-April, while Treasury yields eased slightly.
Earth Day is celebrated on April 22nd annually. The day was born out of a massive oil spill in Santa Barbara, California and carried forward today by the Earth Day Network. Earth day was created to help bring awareness and support for environmental protection around the world. Arbor Day is another popular observance to help the environment by encouraging individuals to plant trees and other plants in an effort to take care of our environment.
LYFT plans to cut 1,200 jobs as the latest cuts could impact 30% or more of its’ 4,000 employees.The company planned to announce the move after a board meeting next week but did so sooner. The cuts could help Lyft slash 50% of its costs as it doesn’t count drivers as employees.
The S&P 500® Index was up 3.73 points at 4133.52; the Dow Jones industrial average was up 22.34 at 33,808.96; the NASDAQ Composite was up 12.90 (0.1%) at 12,072.46.
The 10-year Treasury yield was up about 2 basis points at 3.566%.
CBOE Volatility Index was down 0.44 at 16.73.
Consumer Discretionary and Consumer Staples led gainers among S&P 500 sectors, while energy companies continued to slump in the wake of this week’s sell-off in crude oil prices. The PHLX Oil Service index sank 4% this week and ended at a three-week low. WTI crude futures rose slightly Friday but still dropped almost 6% for the week.
Earnings Round-Up
Major companies reporting quarterly results over the past day included:
Procter & Gamble (PG) reported Earnings Per Share (EPS) of $1.37 per share for the first quarter, about 5 cents above analysts’ forecasts, as well as stronger-than-expected revenue of $20.7 billion. The company also raised its outlook for 2023 organic sales growth to 6% from its earlier forecast of 4% to 5%. Its shares rose more than 3%.
Regions Financial (RF), the latest smaller U.S. bank to report, fell short of EPS forecasts, though revenue met expectations and deposits remained stable. The company’s shares fell about 3%.
CSX Corp. (CSX) reported first-quarter EPS of 48 cents, surpassing analysts’ expectations by about 5 cents, and revenue of $3.71 billion also topped forecasts. The railroad company’s shares rose more than 3%.
Schlumberger (SLB) reported net income of 63 cents per share, beating analysts’ forecasts of 61 cents, as well as higher-than-expected revenue. However, the oilfield service company’s shares more than 4% after suggesting the North American onshore market may plateau this year.
Freeport-McMoRan (FCX) reported a profit of 46 cents per share, which was better than analysts’ were expecting but still down by about half from a year earlier. The company’s mining volumes and supply chains were hampered by extreme weather and protests in Peru. The company’s shares fell more than 4%.
HCA Healthcare (HCA) reported EPS of $4.85, beating expectations by about 70 cents, and raised its earnings and revenue forecasts for the full year. Its shares jumped nearly 4%.
(Bloomberg) — A US debt default would threaten “a basic anchor” of the global financial system and “must not happen,” BlackRock Inc. Vice Chairman Philipp Hildebrand warned Thursday at the Bloomberg New Economy Gateway Europe forum.
“All we can do is to pray that everyone in the United States understands how important the sanctity of the sovereign signature of the leading currency, of the leading bond market, of the leading economy in the world is,” Hildebrand, a former president of the Swiss central bank, said during an on-stage interview. “This is not something you want to mess with.”
The 10-year Treasury yield hit a four-week high above 3.60% earlier this week, up from a seven-month low of 3.278% on April 4th.
The S&P 500 Index was down 24.73 (0.6%) at 4129.79; the Dow Jones industrial average was down 110.39 (0.3%) at 33,786.62; the NASDAQ Composite was down 97.67 (0.8%) at 12,059.56.
The 10-year Treasury yield was down about 7 basis points at 3.534%.
CBOEs Volatility Index was up 0.73 at 17.19.
Energy companies were among the weakest performers Thursday, as crude oil prices extended this week’s sell-off, with benchmark WTI futures down more than 2% to under $78 per barrel—a low for the month.
The real estate and technology sectors also lagged, while consumer staples and transportation sectors held up better.
Meta Platforms, the billionaire’s social media empire, will reportedly cut thousands more jobs. And the bloodbath is not over, according to the latest reports. Meta plans to eliminate thousands more jobs. According to Bloomberg News, an internal memo has been sent to managers, asking them to prepare for tough new announcements. The job cuts, which total 4,000, are expected to affect Facebook, WhatsApp and Instagram. They would also affect Reality Labs, the division that houses the group’s Metaverse projects — Quest virtual-reality headsets. In 2021 and 2022, Reality Labs, which is supposed to build the company’s next big thing, recorded a cumulative loss of nearly $24 billion, including $13.7 billion just last year.
And, Walt Disney Company plans to cut thousands of jobs next week, in another lay-off round that includes about 15% of the staff in its entertainment division, according to people familiar with the plans. Disney Entertainment will bear a significant chunk of the job cuts – with approximately 15% of the division’s staffers set to exit next week, according to a report. Disney has more than 200,000 employees across its various businesses.
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And now, the Markets:
The S&P 500 Index fell 0.35 point to 4154.52; the Dow Jones industrial average was down 79.62 (0.2%) at 33,897.01; the NASDAQ Composite was up 3.81 at 12,157.23.
The 10-year Treasury yield was up about 2 basis points at 3.60%.
CBOE’s Volatility Index was down 0.37 at 16.46.
Transportation was one of the top gainers among S&P 500 sectors yesterday, thanks in part to strength in United Airlines (UAL) and other top carriers. Real estate and financials were also higher, while oilfield services stocks were among the weakest performers due to a sharp drop in crude oil prices. WTI futures fell below $80, their lowest level in nearly three weeks.
Oil prices rallied at the start of this month after members of OPEC+ announced a production cut.
First quarter earnings from big lending institutions painted something of a mixed picture, with Bank of America posting healthy returns as Goldman Sachs on Tuesday saw headwinds from its loan portfolio.
The following is a round-up of yesterday’s market activity:
The S&P 500 Index was up 3.55 points (0.1%) at 4154.87; the Dow Jones industrial average was down 10.55 at 33,976.63; the NASDAQ Composite was down 4.31 at 12,153.41.
The 10-year Treasury yield was down about 2 basis points at 3.574%.
CBOEs Volatility Index was down 0.12 at 16.83.
Small-cap stocks, which tend to suffer more from recession concerns than their large-cap peers, were among the weakest performers with the Russell 2000 falling about 0.4%. Communications services and utilities were laggards among S&P 500 sectors, while industrials and consumer staples were stronger.
Volatility as measured by the VIX continued to drop to the lowest levels since late 2021.
Did you know that the probability of being audited by the IRS is generally low, with less than 1% of tax returns receiving a second look? The average chance of being audited is 1 in 333, or 0.3%. But, certain factors can increase the likelihood of being audited, such as earning a lot of money or claiming complex deductions.
For example, the audit rate among filers with income of $10 million or more is 6.66%, while the audit rate for filers with incomes between $25,000 and $500,000 is roughly 0.5%. If selected for an audit, the taxpayer must demonstrate that the information on their tax return is correct
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The following is a round-up of yesterday’s market activity:
The S&P 500 Index was up 13.68 points (0.3%) at 4151.32; the Dow Jones industrial average was up 100.71 (0.3%) at 33,987.18; the NASDAQ Composite was up 34.26 (0.3%) at 12,157.72.
The 10-year Treasury yield was up about 8 basis points at 3.3.60%.
CBOE’s Volatility Index was down 0.13 at 16.94.
Among S&P 500 sectors, real estate stocks led advancers, while financials and industrials were also higher. Small-caps rose, with the Russell 2000 up about 1%. Communication services companies were among the weakest performers, and energy companies slumped as crude oil futures dropped nearly 2%.
The U.S. dollar index strengthened slightly, and equity market volatility remained subdued, with the VIX extending a decline to the lowest levels since late 2021.
The domestic stock markets owe much of their resilience today to the strength of the biggest companies, which investors tend to favor when recessions appear likely, though financial stocks have lagged most of the year, according to Liz Ann Sonders, chief investment strategist at the Schwab Center for Financial Research. Indeed, small-cap stocks were notable laggards yesterday, with the Russell 2000 index falling more than 1%.
The markets appear convinced the Fed will raise its benchmark interest rate by another quarter of a point in May, taking it to a range of 5%–5.25%, even after the larger-than-expected de-celerations in both consumer and producer prices reported earlier this week.
The following is a round-up of yesterday’s market activity:
The S&P 500 Index was down 8.58 (0.2%) at 4137.64; the Dow Jones industrial average was down 143.22 (0.4%) at 33,886.47; the NASDAQ Composite was down 42.81 (0.4%) at 12,123.47.
The 10-year Treasury yield was up about 6 basis points at 3.515%.
CBOE’s Volatility Index was down 0.73 at 17.07.
Among S&P 500 sectors, real estate and utilities were among the weaker performers yesterday. Notwithstanding the day’s weakness, volatility expectations as measured by the VIX dropped to its lowest level since late 2021.
WTI crude oil futures rose modestly and have surged about 24% over the past four weeks, illustrating still-present inflationary forces.
A rally on Wall Street yesterday is lifting stocks to their highest level in almost two months following the latest sign that inflation continues to cool. Yesterday’s report showed that prices paid to producers last month were 2.7% higher than a year earlier, the lowest inflation level there in more than two years. The hope on Wall Street is that easier inflation on the wholesale level will not only support profits for companies but also flow through to cooler inflation for consumers. A day earlier, a separate report said inflation for consumers slowed to 5%.
Inflation and how high the Federal Reserve will hike interest rates to tame it have been at the center of Wall Street’s struggles for more than a year. The Fed has hiked rates at such a feverish pace over the last year that it’s already slowed parts of the economy and caused strains to appear in the banking system.
And so, stocks climbed on the cooler-than-expected PPI, and perhaps some optimism around the Q1 earnings season, with several big banks reporting Friday. However, expectations around Fed policy didn’t budge much.
Bond yields were little changed and markets still see a 70% probability of the Fed enacting a quarter-point rate increase in May, according to the CME FedWatch tool.
The following is a round-up of yesterday’s market activity:
The S&P 500 Index was up 54.27 points (1.3%) at 4146.22; the Dow Jones industrial average was up 383.19 (1.1%) at 34,029.69; the NASDAQ Composite was up 236.93 (2.0%) at 12,166.27.
The 10-year Treasury yield was up about 3 basis points at 3.447%.
The consumer-price index, a closely watched inflation gauge that measures what consumers pay for goods and services, rose 5% last month from a year earlier, down from February’s 6% increase and the smallest gain since May 2021, the Labor Department said yesterday. Earlier, the consumer price index for March came in below expectations, rising 0.1% monthly compared to forecasts for a 0.2% increase. Many other indicators have inflation continuing to fall in the coming months as tightening credit conditions and weaker economic demand take a bite out of economic growth.
The following is a round-up of today’s market activity:
The S&P 500 Index was down 16.99 (0.4%) at 4091.95; the Dow Jones industrial average was down 38.29 (0.1%) at 33,646.50; the NASDAQ Composite was down 102.54 (0.9%) at 11,929.34.
The 10-year Treasury yield was down about 3 basis points at 3.404%.
CBOE’s Volatility Index was down 0.01 at 19.09.
Technology stocks led Wednesday’s declines, with the PHLX semiconductor index sinking 1.8%. Consumer discretionary and transportation were also among the weakest sectors, while oilfield services led gainers as crude oil prices extended a recent rally.
WTI crude futures jumped over 2% above $83 a barrel and ended near a five-month high. Gold futures rose a second straight day and remain above $2,000 an ounce.
A closely-watched government measure of inflation is expected to show that price increases cooled further last month. March’s Consumer Price Index (CPI), slated for release today,is expected to come in at5.2%, a slowdown from February’s 6% annual gain, according to estimates from Bloomberg. The number would mark the slowest annual increase in consumer prices since May 2021 but would still be significantly above the Federal Reserve’s 2% target. The Fed has been raising interest rates to try to bring down inflation, but the central bank risks sending the economy into a recession by hiking rates too high too fast.
The following is a round-up of today’s market activity:
The S&P 500® Index was down 0.17 point at 4108.94; the Dow Jones industrial average was up 98.27 (0.3%) at 33,684.79; the NASDAQ Composite was down 52.48 (0.4%) at 12,031.88.
The 10-year Treasury yield was up about 1 basis point at 3.428%.
CBOE’s Volatility Index was up 0.12 at 19.09.
Energy companies led the gainers, with the PHLX Oil Service Index jumping nearly 2% behind strength in crude oil futures, which rallied to their highest levels since late January. The transportation and financial sectors were also strong.
The U.S. dollar weakened slightly, while gold futures climbed nearly 1% to end a three-day tumble.
Starwood Capital CEO Barry Sternlicht, who has a net worth of $4.6 billion, says inflation is going to drop—and it’s going to drop hard. In an interview with CNBC’s Squawk Box, Sternlicht was asked what he’d say in response to JPMorgan Chase CEO Jamie Dimon’s annual letter to shareholders, in which Dimon writes that current economic conditions “create more risk and potentially higher inflation,” and higher rate hikes.
However, after saying he’s a big fan of Dimon and that he runs “probably one of the best banks in the world,” Sternlicht clarified to CNBC that “we don’t agree on everything.”
The following is a round-up of yesterday’s market activity:
The S&P 500® Index was up 4.09 (0.1%) at 4109.11; the Dow Jones industrial average was up 101.23 (0.3%) at 33,586.52; the NASDAQ Composite was down 3.6 at 12,084.36.
The 10-year Treasury yield was up about 4 basis points at 3.419%.
CBOEs Volatility Index was up 0.54 at 18.94.
Energy and transportation were the strongest-performing S&P 500 sectors, while communications services was the biggest laggard. WTI crude oil futures fell slightly but remained near two-month highs posted last week.
Gold futures fell sharply for the second session in a row. The U.S. dollar index jumped to its strongest level in nearly two weeks.
The financial markets will be closed on Friday, April 7th, for Good Friday holiday observation. Most firms will process transaction requests received on April 7th as if received on Monday, April 10, before 4 p.m., Eastern Standard Time. Since it is not a federal holiday, almost everything else will be open. The U.S. bond market will open at its usual 8 a.m. EDT on Friday but close early at noon EDT. Regular hours resume on Monday.
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Here’s how the major indexes performed Thursday:
•The S&P 500® Index rose 14.64 points (0.4%) to 4105.02; the Dow Jones industrial average was little changed at 33,485.29; the NASDAQ Composite rose 91.09 (0.8%) to 12,087.96.
•The 10-year Treasury yield rose about 2 basis points to 3.305%.
•CBOE’s Volatility Index was down 0.68 at 18.40.
After jumping 7% in the first quarter, the S&P 500 Index started out the second quarter posting a slight drop for the week. Tech stocks were generally firm, and communication services led gainers among S&P 500 sectors, while energy stocks led declines. WTI crude futures were little changed but remained above $80 a barrel and near two-month highs. Gold futures extended Wednesday declines from 13-month highs.
Markets: The NASDAQ extended its losing streak for a third day yesterday amidst a mixed showing for stocks overall. Among the tech stocks having a rough day was cybersecurity giant Zscaler, as investors got new data suggesting the labor market may be cooling (setting off recession jitters again).
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This week’s economic numbers “all point to a softening economy,” but not necessarily a “soft landing,” says Kevin Gordon, senior investment strategist at the Schwab Center for Financial Research. An economic slowdown that averts recession “is what the Fed is looking for, but the market is saying today—with both stock prices and bond yields lower—that recession fears are outweighing hopes for a soft landing,” Kevin says.
The S&P 500® Index fell 10.22 points (0.3%) to 4090.38; the Dow Jones industrial average rose 80.34 (0.2%) to 33482.72; the NASDAQ Composite fell 129.47 (1.1%) to 11996.86.
The 10-year Treasury yield fell about 3 basis points to 3.309%.
CBOEs Volatility Index was up 0.12 at 19.12.
Among S&P 500 sectors, consumer discretionary and industrial stocks led declines. One bright spot was the healthcare sector, which jumped nearly 2%, helped by gains in Johnson & Johnson (JNJ) and Eli Lilly (LLY). Recession concerns weighed particularly heavily on small-cap stocks, as the Russell 2000 index dropped near a two-week low. WTI crude futures fell slightly but remained above $80 a barrel and near two-month highs.
Gold futures extended this week’s rally and ended at a 13-month high.
Johnson & Johnson proposes monster $8.9 billion talc settlement. The healthcare giant offered $8.9 billion to settle lawsuits from tens of thousands of people who claim that its talc-based powders and other products gave them cancer. It’s a huge increase from the $2 billion J&J originally offered and would be one of the largest product liability settlements in history, according to the WSJ. To clinch the settlement, J&J needs support from more than 75% of the voting claimants—and it thinks it has it.
And here’s how the major indexes performed yesterday, Tuesday:
The S&P 500 Index fell 23.91 points (0.6%) to 4,100.60; the Dow Jones industrial average fell 198.77 (0.6%) to 33,402.38; the NASDAQ Composite fell 63.13 (0.5%) to 12,126.33.
The 10-year Treasury yield fell about 9 basis points to 3.346%.
Small-cap stocks were among the weakest performers Tuesday, with the Russell 2000 index sinking more than 2%. Industrial, energy, and financial stocks led decliners among S&P 500 sectors. Gold futures surged to a 13-month high, while the U.S. dollar index slipped.
Shares of Walmart fell as the largest U.S. retailer began its investor meeting Tuesday. Comments from Walmart executives could offer indications on the overall financial health and spending patterns of U.S. consumers. The company said in February that high prices and weak demand for discretionary items could be headwinds.
Major U.S. stock indexes ended mixed, after the announcement of a surprise OPEC+ production cut sent crude oil prices to two-month highs and fueled inflation concerns that could keep the Federal Reserve in policy-tightening mode. This weekend, several OPEC+ members, including Saudi Arabia, announced production cuts totaling nearly 1.2 million barrels a day that are slated to start in May. In response, WTI crude futures soared above $80 a barrel. Word of the planned cuts also boosted expectations that the Fed could raise its benchmark interest rate again in May as the central bank extends efforts to tamp down inflation. The OPEC+ cuts “suggest more headline inflation pressure in the near-term,” says Jeffrey Kleintop, chief global investment strategist at Charles Schwab & Co. The potential for further waves of inflation will “keep central banks from declaring victory over excessive price gains,” he adds. “That’s another headwind for tech stocks and other ‘long duration’ equities that get more of their cash flow in the future than in the near term.”
The following is a round-up of today’s market activity:
The S&P 500® Index was up 15.2 (0.4%) at 4124.51, the highest close since Feb. 15; the Dow Jones industrial average was up 327 (1.0%) at 33601.15; the NASDAQ Composite was down 32.45 (0.3%) at 12189.45.
The 10-year Treasury yield was down about 7 basis points at 3.417%.
CBOE’s Volatility Index was down 0.14 at 18.56.
Oil producers and other energy companies led gainers Monday. Health care stocks also outperformed. Consumer discretionary and real estate were among the laggards.
Among individual stocks, Tesla (TSLA) shares tumbled over 6% following reports the electric car-maker delivered just 423,000 vehicles in the first quarter. Analysts had expected 430,000, according to research firm FactSet.
Looking ahead, medical companies, especially vaccine makers, may be worth watching this week with the World Vaccine Congress taking place in Washington, D.C. Some well-known vaccine makers include Moderna (MRNA), Johnson & Johnson (JNJ), and GlaxoSmithKline (GSK). Late last month, Walgreens Boots Alliance (WBA) reported a steep year-over-year decline in demand for COVID-19 vaccinations.
The U.S. dollar index fell slightly, while gold futures climbed above $2,000 per ounce to post their highest close in over two years.
A disastrous month of March is what Charles Schwab has just experienced. An avalanche of bad news fell on the firm. The stock fell 33% between Feb. 28 and Mar. 31. At the end of February, Charles Schwab’s shares were trading at around $77.92. A month later the price is now $52.38. The difference translates to more than $47 billion in market capitalization wiped out in just one month. According to Bloomberg News, this is Charles Schwab’s worst month since the October 1987 stock market crash, known as Black Monday. That day, the Dow Jones index lost 508 points, a decline of 22.6% and the largest daily decline in a stock market index at the time. Only the drop by 76% of the Icelandic stock market in 2008 would exceed this record.
VERSUS
With the first quarter of 2023 behind us, and despite wild fluctuation due to continuous rate hikes from the Fed and an unexpected bank panic, stocks and bonds managed to turn in a pretty, pretty, pretty good performance for the quarter. The S&P 500 gained 7%, and the Dow Jones Industrial Average gained 0.4%. But if the market’s metaphorical report card is impressive, tech companies were indisputably the honors students.
Wall Street rewarded tech companies’ layoffs and other cost cutting measures, giving tech stocks a resurgence. And with ChatGPT becoming a household name, investors have their money on generative AI as the next big bet. As of last night:
The tech-heavy NASDAQ Composite index rose a whopping 18% since January 1, its largest quarterly gain in two years.
Stocks of the tech giants leading the charge in AI-powered search, Microsoft and Alphabet, are up 20% and 16%, respectively.
Bank stocks were a delight for short sellers, who made $2 billion betting against the sector in the past three months.
Smaller institutions were most badly injured by the bank panic: The SPRD S&P Regional Banking ETF, which consists of non-behemoth banks, had more than a quarter of its value wiped out in Q1.
Large banks are feeling the pinch of rising interest rates: Global merger and acquisition deals suffered the biggest first-quarter decline since 2001, according to data analyzed by the Financial Times.
April Fools’ Day—occurring on April 1 each year—has been celebrated for several centuries by different cultures, though its exact origins remain a mystery. April Fools’ Day traditions include playing hoaxes or practical jokes on others, often yelling “April Fools!” at the end to clue in the subject of the April Fools’ Day prank. While its exact history is shrouded in mystery, the embrace of April Fools’ Day jokes by the media and major brands has ensured the unofficial holiday’s long life.
Investors celebrated a lower-than-expected reading on the Federal Reserve’s preferred inflation gauge by driving major U.S. stock indexes higher Friday, the last trading day of the first quarter. Sentiment got a boost after reports that the personal consumption expenditures (PCE) index rose 0.3% in February, a little below the 0.4% economists were expecting, and 5% from the same month a year ago. Core PCE inflation, which excludes volatile food and inflation prices, was also up 0.3% from the previous month and 4.6% from a year earlier. PCE and core PCE both rose 0.6% in January from the month before.
Despite wild fluctuation due to continuous rate hikes from the Fed and an unexpected bank panic, stocks and bonds managed to turn in a pretty, pretty, pretty good performance for the quarter. The S&P 500 gained 7%, and the Dow Jones Industrial Average gained 0.4%.
But, tech companies were indisputably the market leaders.
Wall Street rewarded tech companies’ layoffs and other cost cutting measures, giving tech stocks a resurgence. And with ChatGPT becoming a household name, investors have their money on generative AI as the next big bet. As of last night:
The tech-heavy NASDAQ Composite index rose a whopping 18% since January 1st, its largest quarterly gain in two years.
Stocks of the tech giants leading the charge in AI-powered search, Microsoft and Alphabet, are up 20% and 16%, respectively.
Bank stocks were a delight for short sellers, who made $2 billion betting against the sector in the past three months.
Smaller institutions were most badly injured by the bank panic: The SPRD S&P Regional Banking ETF, which consists of non-behemoth banks, had more than a quarter of its value wiped out in Q1.
Large banks are feeling the pinch of rising interest rates: Global merger and acquisition deals suffered the biggest first-quarter decline since 2001, according to data analyzed by the Financial Times.
“The 0.3% monthly increase in core PCE was a step in the right direction but suggests the path to 2% inflation will still likely be long and bumpy,” says Collin Martin, a fixed income strategist at the Schwab Center for Financial Research.
The S&P 500 Index rose 58 points (1.44%) to 4109.05; the Dow Jones industrial average was up 415 points (1.26%) at 33274.15; the NASDAQ Composite was up 208 points (1.74%) at 12221.91.
The 10-year Treasury yield slipped seven basis points to 3.482%.
CBOEs Volatility Index was down 22 basis points (1.16%) at 18.78.
Analysts at Morgan Stanley downgraded Charles Schwab Corp (NYSE: SCHW) on Tuesday, citing concerns over cash sorting and regulatory changes. But, Schwab CEO Walt Bettinger recently said that the company’s banking unit had enough liquidity to cover if 100% of its bank deposits ran off without having to sell a single security — Morgan Stanley says otherwise. Schwab’s recent performance has not been up to Morgan Stanley’s expectations, with customers moving cash out of sweep accounts into money market funds at a rate twice that which the bank had been modeling.
The S&P 500® Index rose 23 points (0.57%) to 4050.84; the Dow Jones industrial average was up 141 points (0.43%) at 32859.03; the NASDAQ Composite was up 87 points (0.73%) at 12013.47.
The 10-year Treasury yield slipped 2 basis points to 3.555%.
CBOE’s Volatility Index was little changed at 19.14.
CVS expects to finalize its $8 billion acquisition of Signify Health this week, the retail pharmacy giant said yesterday. CVS beat out both Amazon and UnitedHealth Group to buy Signify, a value-based provider network. The company announced the deal last September, and executives said they expect it to close “on or around March 29th.”
In a phone call following the deal announcement, Shawn Guertin, EVP and CFO at CVS, said the company anticipates that acquiring Signify will “generate attractive returns” for CVS. The acquisition strengthens CVS’s goal of becoming a value-based healthcare company and could give it a leg up over rival Walgreens. Both companies have doubled down on value-based care in the last couple of years, making several multi-billion dollar deals, such as Walgreens’s $5.2 billion VillageMD acquisition in 2021 and CVS’s $10.6 billion takeover of Oak Street Health.
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The U.S. Food and Drug Administration has approved NARCAN, an overdose-reversing nasal spray, for over-the-counter, non-prescription sale, the agency just announced. The FDA green light marks the first naloxone product approved for use without a prescription. Naloxone rapidly reverses the effects of an opioid overdose, including situations where fentanyl is involved. In the 12-month period ending in October 2022, the United States recorded 101,750 overdose deaths, primarily from opioids including fentanyl, according to the FDA.
“Today’s action paves the way for the life-saving medication to reverse an opioid overdose to be sold directly to consumers in places like drug stores, convenience stores, grocery stores and gas stations, as well as online,” the agency said in a news release.
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Here’s how the major indexes performedyesterday:
The S&P 500® Index rose roughly 57 points (1.42%) to 4027.83; the Dow Jones industrial average was up 323 points (1.0%) at 32717.73; the NASDAQ Composite was up 210 points (1.79%) at 11926.24.
The 10-year Treasury yield was little changed at 3.575%.
CBOEs Volatility Index was down 80 basis points (4.01%) at 19.17.
A rare alignment of five planets will be visible in the night sky this week, but this Tuesday [tonight] evening will be your best bet. Just head outside right after sunset, look west, and you’ll see Mercury, Venus, Mars, Jupiter, and Uranus appear to line up in an arc shape below the crescent moon. Anyone on Earth should be able to see it, even if you’re living in a city with light pollution.
The word syzygy is often used to describe interesting configurations of astronomical objects in general. For example, one such case occurred on March 21, 1894, around 23:00 GMT, when Mercury transited the Sun as would have been seen from Venus, and Mercury and Venus both simultaneously transited the Sun as seen from Saturn. It is also used to describe situations when all the planets are on the same side of the Sun although they are not necessarily in a straight line, such as on March 10, 1982.
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Here’s how the mixed markets fared yesterday on Monday:
The S&P 500® Index was up 6.54 points (0.16%) at 3977.53; the Dow Jones industrial average was up 194.55 points (0.6%) at 32432.08; the NASDAQ Composite was down 55.12 points (0.47%) at 11768.84.
The 10-year Treasury yield was up around 17 basis points at 3.542%.
CBOEs Volatility Index was down 1.05 points (4.8%) at 20.71.
Outside of the financial sector, energy also had a good day Monday, as the apparent return to calm in the world of banks helped ease concerns about the economy. Oil prices recovered, with West Texas Intermediate rising more than 5% to roughly $73.
Jack Dorsey’s wealth tumbled after Hindenburg Research targeted his payments company Block, per Bloomberg. The short seller alleged Block misled investors “with inflated metrics” Block’s share price tumbled as much as 22% on Thursday on Hindenburg’s report.
Short seller Hindenburg Research has hit another billionaire’s fortune with a report. Jack Dorsey, the co-founder of payments company Block and Twitter, saw his net worth tumble by $526 million, or 11%, to $4.4 billion after the US-based research firm led by Nathan Anderson accused Block of misleading investors in a March 23 report, according to Bloomberg. Dorsey isn’t on the list of the world’s 500 richest persons on the Bloomberg Billionaires Index currently. He was previously featured at number 456 with a net worth of $5.41 billion on March 22nd, per Insider’s scan of the Index on Wednesday.
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Investors sparked a furious selloff in Deutsche Bank AG and thrust one of Europe’s most important lenders into the center of concerns about the health of the global financial system. Shares of Germany’s largest lender tumbled as much as 15%, their third consecutive day of losses, though they later regained some ground and were recently down 10%. The cost to insure against its default using credit-default swaps soared to their highest levels since 2020.
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Chairman Jerome Powell was ambiguous this week about future Federal Reserve moves, suggesting “some additional policy firming may be needed.”
Treasury yields dropped near seven-month lows, a seeming indication of escalating recession worries after the Fed raised its benchmark lending rate nine times to a range of 4.75% to 5% over the past year. The release next week of updated data on consumer confidence, inflation, and economic growth will likely be in focus.
The swings in stock prices this week “were consistent with the unclear outlook for monetary policy, the banking system, and the broader economy,” says Kevin Gordon, senior investment strategist at Charles Schwab. “More time needs to pass before we know the true impact of the expected tightening in credit conditions.”
The S&P 500® Index was up 22.27 (0.6%) at 3970.99; the Dow Jones industrial average was up 132.28 (0.4%) at 32,237.53; the NASDAQ Composite was up 36.56 (0.3%) at 11,823.96.
The 10-year Treasury yield was little changed at about 3.374%.
CBOE’s Volatility Index was down 0.87 at 21.74.
The real estate sector led the gainers Friday, followed by consumer staples and health care. Financials and consumer discretionary stocks edged lower, and technology stocks were little changed, though the tech-focused NASDAQ Composite still notched its second straight weekly gain. Gold and crude oil futures both declined, while the U.S. dollar strengthened.
Mass firings at tech companies continue as Accenture (NYSE:ACN) just announced plans to lay off around 19,000 people, or 2.5% of its current workforce, in the next 18 months. Over half of the departures will consist of people in non-billable corporate functions, the professional services firm said.
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Despite strong gains early this week, antifungal drug developers lost steam even after Cidara Therapeutics (NASDAQ:CDTX) won FDA approval for its candidemia treatment Rezzayo. Shares of Cidara (CDTX) and its rival in antifungal space Scynexis (NASDAQ:SCYX) jumped amid concerns of a fast-spreading fungal infection caused by yeast species Candida auris in the U.S. New approval of Rezzayo for fungal disease candidemia and invasive candidiasis has failed to reignite the interest, with Cidara (CDTX) and Scynexis (SCYX) trading at least 20% lower. Meanwhile, Cidara (CDTX) has not replicated its regulatory success on the financial front, reporting lower-than-expected financials for Q4 2022 on Thursday.
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The following is a round-up of today’s market activity:
The S&P 500® Index was up 11.75 (0.3%) at 3948.72; the Dow Jones industrial average was up 75.14 (0.2%) at 32,105.25; the NASDAQ Composite was up 117.44 (1.0%) at 11,787.40.
The 10-year Treasury yield was down about 11 basis points at 3.391%.
CBOE’s Volatility Index was up 0.35 at 22.61.
The energy sector led declines Thursday as crude oil futures fell back under $70 a barrel, with financials and consumer staples also losing ground. Technology and communications stocks managed to hold onto gains.
Finally, gold futures surged over 2% to a one-year high near $2,000 an ounce.
Cathie Wood just revealed that her flagship fund ARK Invest lost over $2 billion last year. Her struggles sum up how rising interest rates are affecting markets, according to the CEO of JPMorgan Asset Management. “When the Federal Reserve hits the brakes, something goes through the windshield,” George Gatch said.
Cathie Wood’s Ark Invest also sold $13.5 million worth of Coinbase stock. The famed money manager now holds a 7% stake in the crypto exchange worth $837 million. Shares of Coinbase are up nearly 30% in the past five trading sessions as crypto prices rallied.
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Moderna – which received about $10 billion in taxpayer money to produce its COVID-19 vaccine and has since earned billions more in profits selling it – was sued in early 2022 by Genevant Sciences and Arbutus Biopharma Corp., which accused Moderna of using technology they have patented in its vaccine. The two companies have asked a federal court in Delaware to award them damages for the infringement.
Alex Coffey, senior trading strategist at TD Ameritrade, said recent turmoil in the banking industry has effectively tightened credit conditions, possibly making further rate increases by the Fed unnecessary. Still, the Fed had to send a message that it’s not making an abrupt shift in its efforts to bring inflation down. The Fed has been in “cruise control” raising rates, “staying in the fast lane,” Alex says. “Now, it has turned off cruise and maybe changed lanes, but isn’t doing a quick move toward the off ramp. Today’s increase was not a ‘dovish’ hike, but also not the hawkish stance that was feared.”
“We’re near the end of the tightening cycle,” he adds. “But they have to do this slowly.”
The Fed commentary appeared to briefly soothe the market, causing the S&P 500® Index to rise as much as 1% soon after the central bank’s announcement, but the benchmark changed direction in the last hour of trading. The reversal may have in part been in response to the ambiguity of Powell’s words, as well as continuing concern about a potential recession.
And so, the following is a round-up of today’s domestic market activity:
The S&P 500 Index was down 65.90 (1.7%) at 3936.97; the Dow Jones industrial average was down 530.49 (1.6%%) at 32,030.11; the NASDAQ Composite was down 190.15 (1.6%) at 11,669.96.
The 10-year Treasury yield was down about 17 basis points at 3.44%.
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