Showing posts with label Wall Street Closing Report. Show all posts
Showing posts with label Wall Street Closing Report. Show all posts

Sep 16, 2019

U.S. Market | Wall Street Closing Report: Dow snaps 8-day winning streak on fears spiking oil will slow the global economy

Fred Imbert

Stocks fell on Monday amid fears that a surge in oil prices following an attack in Saudi Arabia could slow down global economic growth.
The Dow Jones Industrial Average slid 145 points, or 0.5%. It was the first decline in nine days for the Dow. The S&P 500 pulled back 0.3%. The Nasdaq Composite also dipped 0.3%.
Quincy Krosby, chief market strategist at Prudential Financial, said “anything that would suggest this is going be painful for the economy” is going to hurt the stock market.
“It’s contained, right now,” said Krosby. “That’s a function of the U.S. increasing its oil production. We are much less vulnerable to outside influences.”
West Texas Intermediate futures jumped more than 14%, notching its biggest one-day gain since 2008. WTI briefly rose more than 15% overnight. The sharp move higher comes after a series of drone strikes on Saturday knocked out about half of Saudi Arabia’s daily crude production. Iranian President Hassan Rouhani said Monday that the attack was a reciprocal response to attacks in Yemen.
Storage tanks are seen at the North Jiddah bulk plant, an Aramco oil facility, in Jiddah, Saudi Arabia, Sunday, Sept. 15, 2019.
Amr Nabil | AP
Saudi Aramco, Saudi Arabia’s national oil company, will reportedly try to restore about a third of the country’s production by Monday.
General Motors shares fell 4.3% after the United Auto Workers union went on strike after contract talks between the two entities broke down. Higher gasoline prices could also potentially hurt sales.
Airlines JetBlue Airways and United Airlines dropped at least 2.8% each while American Airlines lost 7.3%. Devon Energy skyrocketed more than 12% while Marathon Oil jumped 11.6%. Dow members Exxon Mobil and Chevron rose more than 1% each. The Energy Select Sector SPDR Fund (XLE) had its best day of the year, jumping 3.41%.
President Donald Trump tweeted Sunday before the futures open the U.S. could use oil from its Strategic Petroleum Reserve to keep the market “well-supplied.”
However, Energy Secretary Rick Perry told CNBC’s “Squawk on the Street” on Monday that it was premature to say whether the use of reserves will be needed.
Consistently higher oil prices could lead to increasing fuel prices. This would put more pressure on a global economy that is already coping with a slowing manufacturing sector and stubbornly low growth.
This “is the largest supply shock ever. The world is dependent on strategic reserves right now and you will see SPR draws,” said Bob Ryan, chief commodities and energy strategist at BCA Research, in a note. “The market could tighten significantly if the outage is indeed weeks and not days.”
Sentiment was also depressed after China’s industrial production fell to a new 17½-year low. Production rose 4.4% in August while analysts polled by Reuters expected a gain of 5.2%. The industrial-production slowdown came as China and the U.S. remain embroiled in a trade war.
The major indexes posted solid weekly gains last week and closed in on record highs set in July. Through Friday’s close, the Dow and S&P 500 were both about 0.7% below their all-time highs while the Nasdaq was nearly 2% away from its record.
“Market breadth is improving as value stocks begin to catch a bid,” said Craig Johnson, chief market technician at Piper Jaffray, in a note. But “at this juncture, we suspect most of the good news is already priced in and the downside risk from any disappointment is high.”

Sep 8, 2019

How did Wall Street Close on Friday: Stocks closed little changed after disappointing jobs report, but rise for a second straight week

Fred Imbert

Stocks closed little changed on Friday after the release of disappointing jobs data, but posted back-to-back weekly gains on optimism around U.S.-China trade relations.
The Dow Jones Industrial Average ended the day up 69.31 points, or 0.3% at 26,797.46. The S&P 500 climbed just 0.1% to close at 2,978.71 while the Nasdaq Composite slipped 0.2% to 8,103.07.
For the week, the Dow and S&P 500 both gained at least 1.5% while the Nasdaq climbed 1.8%. Those gains came amid hopes that the world’s two largest economies could soon make substantial progress in de-escalating their protracted trade dispute.
China’s Ministry of Commerce said Thursday that Liu He, the country’s top trade negotiator, spoke by phone with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. They agreed to meet in early October for another round of negotiations, according to the Chinese Commerce Ministry. China insiders have also hinted that the upcoming trade talks could lead to a “breakthrough.”
“The fact that the major indices hit new five-week highs in a concerted fashion confirms the end of the August pullback, and barring another twist in the trade war, a larger scale rally is likely underway in the stock market,” said Ken Berman, founder of Gorilla Trades, in a note.
Hope of progress between China and the U.S. offset worries surrounding the economy.
The U.S. economy added 130,000 jobs in August, the Labor Department said Friday. This marked the third straight monthly slowdown in jobs growth. Economists polled by Dow Jones expected jobs to grow by 150,000 last month. Unemployment remained steady at a rate of 3.7% while wages grew more than expected. Wages expanded by 0.4% on a month-over-month basis and by 3.2% year over year.

Treasury yields dipped from their session highs on the data. The 10-year Treasury yield slipped to 1.57% from around 1.6% earlier in the day.
“That payroll number was not great, but it’s not bad,” said Jeff Kravetz, regional investment director at U.S. Bank Wealth Management. “It probably keeps the Fed on track for a rate cut.”
Friday’s data and moves come as investors look for clues about the Federal Reserve’s next monetary policy move later this month. Market expectations for a 25 basis-point rate cut are at 91.2%, according the CME Group’s FedWatch tool.
Fed Chairman Jerome Powell said Friday the central bank will act as needed to sustain the current economic expansion, noting he does not expect the U.S. economy to fall into a recession.
Gregory Faranello, head of U.S. rates at AmeriVet Securities, said Powell’s comments do not change the market’s outlook for the September meeting. However, “should the data hold up for the remainder of 2019, it does raise the bar in the future for future easing.”
In corporate news, Lululemon shares jumped more than 7% on quarterly results that topped analyst expectations. The apparel maker said its same-store sales — a key metric for retailers — rose 15% for the year-earlier period. Lands’ End and Signet Jewelers also rose 2.5% and 4%, respectively, on better-than-expected earnings.
CNBC’s Spriha Srivastava and Sam Meredith contributed to this report.

Sep 4, 2019

Dow I Wall Street Closing Report: Dow jumps more than 200 points as Hong Kong tensions ease, tech shares rally

Fred Imbert

Stocks rose on Wednesday as tensions in Hong Kong between the government and protesters eased after the withdrawal of a controversial bill.
The Dow Jones Industrial Average traded 205 points higher, or 0.8%. The S&P 500 gained 0.9% while the Nasdaq Composite advanced 1.1%.
Wednesday’s gains come after the major indexes posted solid losses in the previous session. The Dow dropped 285 points on Tuesday while the Nasdaq and S&P 500 slid 1.1% and 0.7%, respectively.
Caterpillar shares gained 1.3% while Micron Technology advanced nearly 5% after a price-target increase at Mizuho Securities. Intel was the best-performing stock in the Dow, rising nearly 3%.
Bank stocks also got a boost as the U.S. yield curve uninverted, with the 10-year rate trading above its 2-year counterpart. Bank of America and Citigroup gained more than 1% each while J.P. Morgan Chase advanced 1.1%.
Hong Kong leader Carrie Lam said that she will withdraw a contentious extradition bill that has sparked months of mass protests. The Hang Seng index in Hong Kong soared around 4% on reports overnight that the withdrawal of the bill was imminent. The iShares MSCI Hong Kong ETF (EWH) gained 4.4% and was on pace for its biggest one-day rise since Sept. 8, 2015 when it rose 5.4%.
The bill’s withdrawal is seen as a positive because protest escalation was seen as a potential disruptor to the global economy. Some investors feared the protests could hinder U.S.-China trade talks.
“While the initial response to Lam’s speech was a thumbs down, with the main dispute taken off the table things should calm down,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “The big picture issues though remain between the two and will only intensify further in coming years as we approach the 2047 handover but for now, move on.”
Earlier Wednesday, a report showed growth in China’s services sector had expanded at its fastest rate in three months in August, despite broader economic headwinds.
Traders and financial professionals work ahead of the opening bell on the floor of the New York Stock Exchange.
Drew Angerer | Getty Images
The Caixin/Markit Services Purchasing Managers’ Index (PMI) came in at 52.1 in August — its highest reading since May. The 50-mark in PMI readings separates growth and contraction.
“This is an easing of economic woes in China,” said Peter Cardillo, chief market economist at Spartan Capital Securities. This is “triggering a relief rally after yesterday’s declines.”
At the start of the month, the U.S. and China imposed new tariffs on one another’s goods. It marked the latest escalation in a long-running trade war between the world’s two largest economies.
Sentiment also got a boost after New York Federal Reserve President John Williams said in a speech the central bank will act as appropriate to sustain the current economic expansion. He added that low inflation is “is indeed the problem of this era ” and that it is “a reflection of the broader economic picture.”


In Europe, a cross-party alliance of rebel lawmakers defeated British Prime Minister Boris Johnson in parliament on Tuesday, moving to prevent him from taking the country out of the European Union without a formal agreement on October 31.
It prompted the new prime minister to announce he would immediately push for a snap election.
Sterling has since pared some of its recent losses against the U.S. dollar. The U.K. currency gained 0.9% to climb above $1.21 Wednesday, after falling to its lowest level since October 2016 in the previous session.
—CNBC’s Sam Meredith contributed to this report.

Aug 26, 2019

Dow | U.S. Market | Wall Street Closing Report: Dow gains more than 250 points on hopes US and China restart trade talks

Fred Imbert

Stocks jumped on Monday after President Donald Trump said China is ready to come back to the negotiating table following a phone call Sunday.
The Dow Jones Industrial Average traded 163 points higher, or 0.6%. The S&P 500 climbed 0.7% while the Nasdaq Composite advanced 0.9%.
“There is a little sense of optimism that the U.S. and China could restart talks, but at the same time you also have some hesitation,” said Yousef Abbasi, director of U.S. institutional equities at INTL FCStone. He also noted trading volumes were lower than usual. Lower volumes can sometimes lead to volatile moves in markets.
Speaking to reporters at the Group of Seven (G-7) meeting in Biarritz in France Monday, Trump said the two countries would start talking very seriously.
“China called last night our top trade people and said ‘let’s get back to the table’ so we will be getting back to the table and I think they want to do something. They have been hurt very badly but they understand this is the right thing to do and I have great respect for it. This is a very positive development for the world, ” Trump said.
Semiconductor stocks such as Micron and Advanced Micro Devices gained 0.7% and 2%, respectively. Apple led the Dow, rising around 1%.
However, Global Times Editor-in-Chief Hu Xijin said in a tweet that negotiators from both countries did not talk over the phone, adding: “The two sides have been keeping contact at technical level, it doesn’t have significance that President Trump suggested. China didn’t change its position. China won’t cave to US pressure.”
The latest news on the U.S.-China trade front come after Trump said on Friday the U.S. will raise tariffs on $250 billion worth of Chinese goods to 30% from 25%. Tariffs on another $300 billion in Chinese products will also go up to 15% from 10%, he said. Stock futures initially fell overnight on Trump’s comments before rebounding.
Trump’s comments and tweets came after China unveiled new tariffs Friday on $75 billion worth of U.S. products, including autos. Trump had also ordered on Friday that U.S. companies move their Chinese operations elsewhere, sending U.S. stocks tumbling.
The major indexes all fell more than 2% on Friday, with the Dow Jones Industrial Average losing 623.34 points. Those declines wiped out the weekly gains the averages had built through Thursday’s close. After Friday’s session, the Dow ended down 1% for the week, while the S&P 500 and Nasdaq Composite concluded the week down 1.4% and 1.8%, respectively. Last week also marked the indexes’ fourth straight weekly loss, their longest since May.

For August, the major indexes are all down more than 3% as U.S.-China trade tensions rise. Safe-haven assets like gold, silver and long-dated Treasurys are all up sharply month to date. The SPDR Gold Trust is up 8.3% while the iShares Silver Trust has climbed 8.8%. The iShares 20+ Year Treasury Bond ETF (TLT) has surged nearly 10%.
“It seems like gold, silver, and bonds, whenever they’re down, it seems like buyers are coming back into those,” said Christian Fromhertz, CEO of The Tribeca Trade Group. “Equities are acting a little bit differently. It feels like a more sell-the-rip action in equities because people are a bit nervous.”
“People are worried about the trade war and what that’s going to affect,” he said.
China and the U.S. have been engaged in a trade war since last year. The economic conflict has dampened economic and corporate earnings growth expectations as investors and companies weigh its impact on the global economy. The U.S. and China are the world’s largest economies.
“The ongoing Trade War is redrawing global supply chains, claiming casualties in the process,” Julian Emanuel, chief equity and derivatives strategist at BTIG, said in a note. “As persistent headwinds intersect with traditional seasonal softness, recent volatility can be expected to continue in the near term as markets await policy developments.”
The trade war is taking place against a backdrop of softening economic growth. Germany’s manufacturing sector is contracting while China’s economy grew at its slowest pace in nearly three decades in the second quarter.
The U.S. bond market has also flashed a recession signal recently. The 10-year Treasury yield has dipped below its 2-year counterpart. This phenomenon is known as a yield-curve inversion. Experts fear it because it has historically preceded recessionary periods.
—CNBC’s Elliot Smith, Eustance Huang, Michael Bloom and Chris Hayes contributed to this report.

Aug 22, 2019

U.S. Market I Wall Street Closing Report: Dow rises slightly ahead of big speech from the Fed chief

Fred Imbert

Dow rises slightly ahead of big speech from the Fed chief

Fred Imbert

Stocks were little changed on Thursday as comments from top Federal Reserve officials at an annual central banking summit raised concern about whether the Fed will cut rates next month.
The Dow Jones Industrial Average traded 65 points higher, or 0.25%.The S&P 500 hovered around the flatline while the Nasdaq Composite traded 0.5% lower.
Kansas City Fed President Esther George told CNBC’s Steve Liesman that the Fed should not have cut interest rates last month, stating that “it wasn’t required in my view. ” George is a voting member on the Fed’s policymaking committee. She made her comments ahead of an annual central banking symposium in Jackson Hole, Wyoming
Meanwhile, Philadelphia Fed President Patrick Harker said he does not see the need for another rate cut, noting the central bank should keep rates at this level “for a while. ” Harker is a nonvoting member on the central bank’s policymaking committee.
“We’ve now had two trial balloons from Fed officials saying ‘We don’t see any reason to lower rates in September,’” said Sam Stovall, chief investment strategist at CFRA Research. “I think the Fed is trying to shake the bushes and see how would the market react if they did not cut rates at all.”
George and Harker’s comments come ahead of a speech from Fed Chairman Jerome Powell on Friday. Investors will look for confirmation over expectations for future rate cuts. Market expectations for a September rate cut are at 93.5%, according to the CME Group’s FedWatch tool. The Fed cut rates by 25 basis points in July, citing “global developments” and “muted inflation.”
Powell is set to deliver his speech as President Donald Trump continues attacking the U.S. central bank, pressuring it to lower rates. On Thursday, Trump tweeted: “The Economy is doing really well. The Federal Reserve can easily make it Record Setting.”
“Trump is forcing these guys to move, but they shouldn’t be doing anything. You’ve got tight unemployment and companies coming out with pretty good earnings — especially the retailers,” said Larry Benedict, founder of The Opportunistic Trader. “I would be very surprised if he signaled something very dovish only because it would be a slap in the face of an independent Fed.”
Traders work on the floor of the New York Stock Exchange (NYSE) on July 10, 2019 in New York City.
Spencer Platt | Getty Images
Powell will deliver his speech amid heightened fears of an economic recession.
The benchmark 10-year Treasury yield briefly fell back below its 2-year counterpart. Weak U.S. manufacturing data added to worries of a recession. IHS Markit said manufacturing activity in the U.S. contracted this month for the first time in nearly 10 years.
These fears have battered stocks in August. The Dow and Nasdaq are both down more than 2% each this month while the S&P 500 has lost 1.9%.
“Traders right now are on pins and needles,” said Art Hogan, chief market strategist at National Securities. “We always feel like we’re on the precipice of something really bad happening because there’s a slowing global economy and an ongoing U.S.-China trade war.”
Hogan pointed out, however, that the Fed is ready to cut interest rates if the U.S. economy slows down considerably while the U.S. consumer remains strong.
Nordstrom shares jumped more than 13% after the retailer reported quarterly earnings and revenue that topped analyst expectations. The company cited “inventory and expense discipline ” for the strong results.
Dick’s Sporting Goods traded more than 3% higher on better-than-expected results for the previous quarter. Comparable-store sales, a key metric for retailers, topped analyst expectations. The company also raised its full-year forecast.
The results from Nordstrom and Dick’s add to a strong batch of retail earnings. On Wednesday, Target and Lowe’s surged after releasing corporate earnings results that topped estimates. Those results lifted sentiment across the market and sent the Dow up more than 200 points.
—CNBC’s Sam Meredith and Jeff Cox contributed to this report.

Aug 21, 2019

U.S. Market I Dow I Wall Street Closing Report: Dow jumps more than 200 points, Target and Lowe's surge on strong earnings

Fred Imbert

Stocks rose on Wednesday as strong quarterly results from retailers such as Target and Lowe's lifted investor sentiment.
The Dow Jones Industrial Average traded 259 points higher, or 1%. The S&P 500 gained 0.8% while the Nasdaq Composite jumped 0.8%.
The better-than-expected results come at a time when traders are worried about a possible U.S. economic slowdown. Those fears have led investors away from riskier assets like equities in favor of traditionally safer assets like gold and Treasurys.
"A very mild recession could begin in 2020 but the stock market data don't support that just yet. That could change in the next rally, but it doesn't support it right now," said Paul Schatz, president at Heritage Capital.
Target shares surged more than 16% to a record after the retailer posted second-quarter results that topped analyst expectations. The company's same-store sales, a key metric for retailers, expanded by 3.4%. Analysts expected growth of 2.9%.
Lowe's jumped around 10% on its second-quarter earnings report. CEO Marvin Ellison said the company capitalized on strong "holiday event execution and growth in Paint and our Pro business to deliver strong second quarter results."
"We're in the camp that there is strength in the broad-based consumer. It's underpinned by low inflation, decent wages and jobs growth," said Tom Martin, senior portfolio manager at Globalt.
Traders work on the floor of the New York Stock Exchange on June 8, 2017 in New York.
Bryan R. Smith | AFP | Getty Images
Traders work on the floor of the New York Stock Exchange on June 8, 2017 in New York.
The Dow was down more than 3% for the month entering Wednesday's session. The S&P 500 and Nasdaq Composite are down more than 2% each. Gold, meanwhile, has jumped more than 5% this month while the benchmark 10-year Treasury yield is down about 40 basis points, or 0.4 percentage points.
But Bank of America CEO Brian Moynihan thinks the U.S. consumer is strong enough to keep the economy growing.
"The underlying consumer is doing well and making more money. More importantly, they're spending more money," he told CNBC's Becky Quick, noting the bank's consumer base has spent $2 trillion in 2019 thus far. "The U.S. consumer continues to spend and that will keep the U.S. economy in good shape."
Investors on Wednesday digested minutes from the Federal Reserve's meeting. The minutes showed the Fed has no "pre-set course" for cutting rates. The Fed cut rates by 25 basis points in July, while signaling that it was only a "midcycle adjustment" and the central bank was not returning to the stimulus era.
The major indexes maintained most of their gains following the release of the minutes.
The U.S.-China trade war remained on investors' radars after President Donald Trump made new comments about the trading relationship with the European Union. "Dealing with the European Union is very difficult," Trump told reporters at the White House.
"We have all the cards in this country because all we have to do is tax their cars and they'd give us anything we wanted because they send millions of Mercedes over. They send millions of BMWs over," he added. Trump is due to meet with other EU leaders this week at the G-7 meeting in France.
—CNBC's Silvia Amaro contributed to this report.

Aug 20, 2019

Markets I Dow I Wall Street Closing Report: Dow falls 170 points, snaps 3-day winning streak

Fred Imbert

The Dow Jones Industrial Average fell for the first time in four sessions on Tuesday, paring some of the strong gains from the previous session.
The 30-stock index traded 167 points lower, or 0.6%. The S&P 500 and Nasdaq Composite pulled back 0.7% and 0.6%, respectively.
Home Depot helped keep losses in check. Shares of the home improvement retailer rose 4.4% on better-than-expected earnings. However, Home Depot warned tariffs could hit consumer spending and cut its full-year revenue outlook.
The Dow has recovered most of its 800-point drop from Wednesday while the S&P 500 and Nasdaq have also regained most of their losses from that day.
“When you’re on a roller coaster, the only thing you can be sure of is you’ll end up back where you started,” said Brian Nick, chief investment strategist at Nuveen, noting the market is back where it was a year ago. “We haven’t gone much of anywhere because the economy is moving ahead, but the trade war is setting up these intermittent potholes and the global economy keeps slowing in the background.”
Chip stocks, which are sensitive to trade news, contributed to the decline. Micron Technology and Advanced Micro Devices dipped 1.4% and 1.6%, respectively. Netflix shares pulled back 3.2%.
Bank shares such as Citigroup, Bank of America and J.P. Morgan Chase all traded lower as Treasury yields pulled back.
“I think yields moving down, just kind of got them going. For the past two weeks whenever yields move down, stocks move down,” said Art Cashin, director of NYSE floor operations at UBS.
Equities rose sharply on Monday as bond yields paused their recent and sizable decline, temporarily easing ongoing recession fears. The benchmark 10-year yield fell about 4 basis points, or 0.04 percentage points, to 1.55%.
The White House also stepped in the ongoing debate over whether the U.S. economy will soon enter into recession mode, highlighting the strength in the U.S. economy.
Traders and financial professionals work ahead of the closing bell on the floor of the New York Stock Exchange.
Drew Angerer | Getty Images
Nonetheless, The Washington Post and New York Times both reported the Trump administration was discussing a cut to payroll taxes as a way to mitigate slower economic growth. A White House official pushed back on the reports, saying cutting payroll taxes “is not something under consideration at this time. ” Trump later said on Tuesday that payroll taxes are a matter he had been thinking about.
Traders have been worried about the global economy as the U.S. and China remain engaged in a trade war. Wall Street got a reprieve on that front on Monday after U.S. Commerce Secretary Wilbur Ross announced that it was extending by another 90 days a temporary reprieve for Huawei to do business with American firms.
Jim Paulsen, chief investment strategist at The Leuthold Group, said worries over the economy are also arising because of fears that “overused economic policies have become futile.”
“However, maybe the prowess of economic authorities is not nearly as compromised as advertised,” Paulsen said in a note. “Economic policies do not work immediately. They have varied lags before impacting the character of the economy. On average, many economic policies take about one year before their impact is obvious.”
Traders also looked ahead to the release of the Federal Reserve’s minutes from its July meeting. The central bank cut rates by 25 basis points last month, citing “global developments ” and “muted inflation.” The Fed minutes are scheduled for release Wednesday at 2 p.m. ET.
—CNBC’s Patti Domm and Silvia Amaro contributed to this report.

Aug 15, 2019

U,S. Market I Wall Street Closing Report: Dow rises 100 points led by Walmart, rebounding from worst day of 2019

Yun Li

Stocks rose on Thursday, making back some of the steep losses in the previous session, as retail giant Walmart’s earnings and strong retail sales figures led investors to believe the U.S. consumer could help the country avoid a recession.
The Dow Jones Industrial Average traded about 104 points higher in volatile trading after suffering its worst day of the year Wednesday. The index fell to a session low as 10-year Treasury rate dipped below 1.5%, the lowest level in three years.The S&P 500 was up 0.4%, while the Nasdaq Composite was little changed.

Retail sales rose solidly in July and beat expectations, the Commerce Department said Thursday. Consumers spent more at stores and restaurants last month, a sign that fears of a global slowdown that have roiled financial markets haven’t soured consumer optimism.
Walmart reported better-than-expected earnings and raised its outlook for the full year, sending its stock 6.3% higher Thursday. The retailer saw growth in its core domestic business as well as online operations, marking the 20th consecutive quarter of sales gains in the U.S.
“The economic data this morning are having a calming effect on the equity markets,” said Larry Adam, chief investment officer of Raymond James’ private client group. “Yesterday with all these growing fears of a global recession including the U.S., those numbers today showed the consumer particularly continued to be fairly robust here.”
Thursday’s session follows the Dow’s 800-point loss Wednesday amid a recession signal from the bond market. The stock market took a huge hit in the previous session with the Dow plunging in its fourth-largest point drop ever to a two-month low. The Dow’s 3% fall was the worst this year. The S&P 500 also slid nearly 3%.
Investors have piled into long-duration government bonds amid geopolitical uncertainties and a global slowdown this week, pushing the 30-year Treasury bond yield below 2% for the first time ever on Thursday.
The massive sell-off Wednesday was triggered by a bond market phenomenon where the yield on the benchmark 10-year Treasury note briefly broke below the 2-year rate. The inversion of this key part of the yield curve has been a reliable indicator of economic recessions.
As of Thursday morning, the curve hovered around the inversion point. The yield on the 30-year Treasury bond also fell to a new historic low.
“The 2-10 inversion is sending a massively negative signal that stocks are having a difficult time ignoring,” Adam Crisafulli, a J.P. Morgan managing director, said in a note Wednesday.

Stocks got a bump in morning trading after a spokesperson at China’s Ministry of Foreign Affairs said Beijing “hopes the U.S. will meet China halfway” on trade issues, fueling optimism about a resolution between the two countries.
That came after China said it has to take necessary countermeasures for the latest U.S. tariffs on $300 billion of Chinese goods, adding the U.S. tariffs violated the consensus reached by the leaders of the two countries.
“The market is confused about what the likely outcome is,” said Brent Schutte, chief investment strategist at Northwestern Mutual. “In the past there’s been pronouncements of positive steps that led nowhere, which I think leads the market to still be skeptical.”
This week, President Donald Trump decided to delay tariffs on certain Chinese goods while outright removing some items from the tariff list, a move to avoid any negative impact on the holiday shopping season. The announcement sent the Dow rallying more than 300 points on Tuesday. Those gains were lost in the big sell-off Wednesday.
The deferral “helps China more than us, but will be reciprocated,” Trump said Wednesday.
Cisco shares plunged 8% after it said future earnings would be lighter than expected because of a “significant impact” from the U.S.-China trade war. The tech giant also said China revenue fell 25% last quarter on an annualized basis.
Shares of General Electric dropped more than 10% after Madoff whistleblower Harry Markopolos said he has discovered “an Enronesque business approach that has left GE on the verge of insolvency. ”
— CNBC’s Brian Sullivan and Eustance Huang contributed to this report.

Aug 12, 2019

Dow | Wall Street Closing Report: Dow drops 390 points and slips back below 26,000 as bond yields decline

Yun Li

Stocks fell on Monday as bond yields resumed their August spiral lower, raising concerns about the state of the economy.
The benchmark 10-year Treasury yield, which fell to its lowest since 2016 last week, dipped to 1.63%. The spread between 2-year and 10-year Treasury yields narrowed to only 6 basis points on Monday, near its lowest level since 2007.
Dow Jones Industrial Average fell 391 points, or 1.49%, to 25,896.44, while the S&P 500 dropped 36.21 points, or 1.24%, to 2,882.44 and the Nasdaq Composite is down 1.2% to 7,863.41. It was the second down day in a row for the market, which had staged a remarkable recovery last week until the selling returned again on Friday.
“The bear is alive and kicking,” Mike Wilson, Morgan Stanley’s chief U.S. equity strategist, said in a note on Monday. “We think the failed breakout last week for the S&P 500 confirms we are still mired in a cyclical bear market.”
Bank stocks declined as interest rates dived. Bank of America and Goldman Sachs both dropped more than 2%, while J.P. Morgan slid 1.87%. The SPDR S&P Bank ETF is down 2.1% on Monday.
Also hurting stocks were the intensified Hong Kong protests, which soured investor sentiment already aggravated by the trade dispute between Washington and Beijing. Hong Kong International Airport cancelled all departures for the remainder of the day, citing serious disruptions due to intensifying protests.
Trade bellwether Caterpillar fell 2.2% and Boeing declined more than 1%. Retailers, who are targeted in the latest round of China tariffs, are under pressure as Office Depot tanked 5.6% while Nordstrom slipped 2.35%.
Adding to the geopolitical risks were the Argentina’s election results which took markets by surprise as the country’s center-right leader, President Mauricio Macri, performed poorly in primary elections. The outcome triggered a sell-off in peso and Argentina’s stocks, which are down 30%.
Major U.S. stock averages suffered their worst days of the year on Aug. 5 after China allowed its currency to drop against the dollar below a key level unseen since 2008. Still, the Dow recovered to only finish last week lower by less than 1%.
“These are not necessarily familiar risks, but this is not new and different,” said Kate Warne, investment strategist at Edward Jones. The fact that markets didn’t have a bigger decline “should be reassuring that investors are not seeing this as a see change; they are seeing it as one more episode in what we all expect to be a long-running set of tensions both between the U.S. and China and the rest of the world.”
The intensified tensions caused Goldman Sachs to lower its fourth-quarter growth forecast by 20 basis points to 1.8% as the firm no longer expects a trade deal before the 2020 election.
Bank of America on Monday raised chance of a recession to 1-in-3 in the next 12 months as the firm believes many economic indicators are “flashing yellow.”
The People’s Bank of China on Monday set its daily midpoint for yuan trading at 7.0211 per dollar, the third consecutive session below the psychological level of 7 per dollar. A weaker currency makes a country’s exports cheaper and President Donald Trump’s administration has consistently complained that a cheaper yuan would give China a trade advantage.
Trump said Friday that the U.S. would continue to hold trade talks with Beijing, but that Washington was not prepared to make a deal for now.
The Hong Kong protests have gained steam with about 600 people arrested in total since the unrest began. Steve Eisman, the investor of “Big Short” fame, said last week the protests are his biggest worry with the global economy, calling them a possible “black swan.”
— CNBC’s Sam Meredith, Saheli Roy Choudhury and Matt Clinch contributed to this report.

Aug 6, 2019

Dow | Wall Street Closing Report: Dow jumps 300 points as Wall Street rebounds from worst day of the year

Fred Imbert, Silvia Amaro

Stocks jumped on Tuesday, rebounding from their worst day of the year, after China’s central bank indicated it wanted its currency to trade at a higher-than-expected level against the dollar, easing tensions about the nation using its currency as a weapon in the trade war.
The Dow Jones Industrial Average closed 315 points higher. The S&P 500 was up 1.3% while the Nasdaq Composite climbed 1.5%. The Dow snapped a five-day losing streak, while the S&P 500 and Nasdaq rose for the first time in seven sessions.
Some of the stocks that led Monday’s sell-off, such as Apple, Micron Technology and Nike, were among the best-performing stocks on Tuesday. Apple and Micron Technology both gained more than 1%. Nike advanced nearly 3%.
China’s central bank set the yuan’s official reference point at stronger than the key 7 yuan-to-the-dollar point on Tuesday. The move calmed currency markets, initially rocked by fears the U.S.-China trade war was devolving into a currency war.
“Going forward, stabilization in the U.S./China trade war is now the most important key to broader market stabilization,” said Tom Essaye, founder of The Sevens Report, in a note. “If the escalation continues, that will cause a further pull-back, regardless of what the [Federal Reserve] is going to do. And, I say that because another 25 or 50 basis points of easing by the Fed won’t materially offset a protracted and escalating trade war.”
A bank employee counts US currency and Chinese currency notes at a bank on August 6, 2019 in Nantong, Jiangsu Province of China. The onshore exchange rate of the Chinese currency fell beyond 7 per US dollar on August 5.
Xu Jinbai | Visual China Group | Getty Images
U.S. equity markets saw their worst trading day of 2019 on Monday. The Dow dropped 767 points while the S&P 500 slid nearly 3%. The Nasdaq plunged more than 3% on Monday.
The sell-off had begun last week when President Donald Trump announced new tariffs on Chinese goods. However, market reaction became even more negative when Chinese authorities let the yuan break to its lowest level against the dollar in more than 10 years on Monday.
Also on Monday, the Treasury Department designated China a currency manipulator, a move that has not been seen since the Clinton administration. Beforehand, Trump took to Twitter to voice his opinion on the currency move.
“China dropped the price of their currency to an almost a historic low. It’s called ‘currency manipulation.’ Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!,” he tweeted.
China also confirmed earlier reports that it was suspending the purchases of U.S. agricultural products. The U.S.-China trade war has been going on since last year, dimming sentiment and the outlook for corporate profits and economic growth.
National Economic Council Director Larry Kudlow told CNBC’s “Squawk on the Street ” on Tuesday that Trump was still open to a trade deal between the U.S. and China that would lead to flexibility on tariffs.
“The reality is we would like to negotiate,” Kudlow said during a live interview. “We’re planning for the Chinese team to come here in September. Things could change with respect to the tariffs.”
But Keith Lerner, chief market strategist at SunTrust Private Wealth, warned that stocks will likely  fall further even after Tuesday’s sharp rebound.
“There are two aspects of a bottoming. There’s a price aspect and a time aspect. The typical corrective period has lasted about a month to a month and a month and a half. We’re only seven days into this,” Lerner said. “I think we’re in for a bumpy ride. It’s going to be very news-headline driven.”

Aug 5, 2019

Dow | UJ.S. Stock Market | Wall Street Closing Report: Dow plunges 760 points in worst day of 2019 as trade war intensifies

Fred Imbert

Stocks fell sharply Monday as a trade war between the world’s largest economies intensified with China retaliating against President Donald Trump’s latest move.
The Dow Jones Industrial Average plunged 767.27 points, or 2.9%, to close at 25,717.74 and dropped as much as 961.63 points at one point. The S&P 500 dropped nearly 3% to 2,844.74. The Nasdaq Composite lagged, falling 3.5% to 7,726.04. it was the worst percentage drop for all three indexes this year. The S&P 500 is now more than 6% below its record hit only last month.
Apple led the decline in stocks that have the most to lose from a prolonged U.S.-China trade conflict, losing 5.2%. Nike dropped 2.7%. Macy’s and Best Buy pulled back 3.1% and 3.5%, respectively. The SPDR S&P Retail ETF (XRT) closed 2.2% lower. FedEx dropped 4%. Caterpillar and Boeing dropped 2.3% and 2.5%, respectively. Semiconductor stocks such as Micron Technology, Skyworks Solutions and Advanced Micro Devices fell at least 4.4%.
“Now we have a trade situation that is going off the rails as the side effects multiply due to the ramping up of the use of tariffs and we are only further apart from any resolution with the Chinese,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “The policy of using tariffs as a tool to address our legitimate beefs with the Chinese has failed miserably.”
China, which has historically controlled its currency, the yuan, allowed it to fall to its lowest level on Monday against the dollar in more than a decade. The onshore yuan broke above 7 per U.S. dollar and traded around 7.05.
Trump later accused China of manipulating its currency, saying in a tweet: “This is a major violation which will greatly weaken China over time.”
Traders work on the floor at the New York Stock Exchange.
Brendan McDermid | Reuters
China “appears to have decided that, given the increasingly dim prospects of a trade deal with the US, the boost to China’s export sector from currency depreciation is worth attracting the ire of the Trump,” Julian Evans-Pritchard, senior China economist at Capital Economics, wrote in a note. “The fact that they have now stopped defending 7.00 against the dollar suggests that they have all but abandoned hopes for a trade deal with the US.”
Along with the currency move, China retaliated by suspending the purchases of U.S. agricultural products and threatened to slap tariffs on the farm goods purchased after Aug. 3, according to state media and other reports.
The move continues a sell-off that began last week when President Donald Trump ordered new tariffs on the rest of Chinese goods and the Federal Reserve failed to signal it would be as aggressive as the market hoped in backstopping the economic slowdown. The Nasdaq fell for a sixth straight session, its longest losing streak since late 2016. The S&P 500 also posted a six-day losing streak. The Dow declined for a fifth straight day.
Trump announced last week the U.S. would impose a 10% tariff on $300 billion worth of Chinese imports. The tariff will take effect on Sept. 1. Trump’s announcement came after Chinese and U.S. officials discussed trade earlier last week as the two countries tried to restart talks.
That tariff would target retail, along with other consumer goods from companies like Apple. The tech giant told U.S. Trade Representative Robert Lighthizer in a June letter that tariffs on this tranche of goods would hit “all of Apple’s major products,” hindering the company’s contributing to the economy.
The news pushed the S&P 500 to its worst weekly performance of the year. The S&P 500 dropped 3.1% last week. The Dow had its second-biggest weekly drop of 2019 last week, sliding 2.6%.
Investors rushed to traditional safe havens like Treasurys and gold on Monday amid the uncertainty. The benchmark 10-year Treasury yield fell to 1.74% and reached its lowest level since November 2016. Gold futures for December delivery gained 1.3% to settle at $1,476.50 per ounce.
The Cboe Volatility Index (VIX), widely considered to be the best fear gauge in the market, jumped 36% to above 23.
—CNBC’s Eustance Huang and Silvia Amaro contributed to this report.


Aug 1, 2019

Dow | Wall Street Closing Report | Dow drops 280 points, giving up big earlier gain after Trump says US adding more tariffs on China

Fred Imbert

Stocks slashed gains on Thursday after President Donald Trump said the U.S. would impose an additional 10% tariff on Chinese imports to the U.S.
The Dow Jones Industrial Average traded 300 points lower after rallying as much as 311 points earlier in the day. The S&P 500 was down 1.1%. The Nasdaq Composite traded down 1.1% after jumping more than 1.6%.
“Trade has always been an issue hanging over the market and whether or not we see an escalation, said Quincy Krosby, chief market strategist at Prudential Financial. “The fact is we’ll surely get a reaction from Beijing.”
“There were concerns that after the [Federal Reserve] meeting and as earnings season began to wind down, the market would be more susceptible to volatility,” Krosby said.
Trump said in a series of tweets the tariff will be imposed on $300 billion worth of Chinese goods. The levy will take effect Sept. 1.
Trump’s tweets came after a U.S. delegation met with Chinese trade officials earlier this week. Those were the first in-person trade talks between China and the U.S. since both countries reached a truce on the situation.

Shares of Caterpillar and Deere, two bellwethers of global trade, dropped to trade more than 2% lower.  Boeing traded 0.9% lower. FedEx shares also fell 4%.
Apple, which has managed to avoid large hits from U.S.-China trade tariffs, fell 2.7%. The tech giant told U.S. Trade Representative Robert Lighthizer on June 17 that tariffs on the remaining $300 billion in Chinese imports would cover “all of Apple’s major products.”
Retail stocks like Nike dropped 3.1%. Yeti Holdings dropped 10.8% while PVH slid 7.5%. The SPDR S&P Retail ETF (XRT) plummeted by 3.3%.
Treasury yields fell sharply on the news. The benchmark 10-year yield slid to 1.89%, hitting its lowest level since November 2016. The 2-year rate dell to trade at 1.726%.
Gold prices spiked as investors looked for safety, trading 0.3% higher and erasing earlier losses. The Cboe Volatility Index (VIX), considered the best fear gauge in the market, traded 15.3% higher at 18.66 and hit its highest level since early June.
“People are trading very nervously,” said Ilya Feygin, senior strategist at WallachBeth Capital. “They are overreacting to every little piece of news.”
“Things are going to keep swinging back and forth instead of this slow upward grind we’ve seen recently. There’s going to be a lot of headlines,” Feygin said.
Stocks had rallied earlier in the day, as investors were betting the Federal Reserve would cut interest rates again in September. 
Traders work on the floor at the New York Stock Exchange.
Brendan McDermid | Reuters
The Fed cut interest rates by 25 basis points on Wednesday — its first cut in more than a decade — citing “global developments” along with “muted inflation” as reasons for easing monetary conditions.
But Chairman Jerome Powell told reporters in a news conference following the Federal Open Market Committee’s rate decision that the central bank’s rate cut was a “midcycle adjustment,” hinting that further rate cuts later this year were not a sure thing.
That comment led to a 333-point drop on the Dow, its biggest one-day drop since May 31. The S&P 500 and Nasdaq dropped 1.1% and 1.2%, respectively, to end July.
“Yesterday was the perfect example of expectations being misaligned with reality,” said Art Hogan, chief market strategist at National Securities. “The Fed did exactly what it should have done. An insurance cut is exactly that.”
“The Fed delivered a message saying the market may have been ahead of itself pricing in so many rate cuts,” he said.
Thursday marked the first trading day of August, a month that has not been kind to Wall Street. Since 1950, August has been the second-worst month for the S&P 500, according to the Stock Traders’ Almanac. Over that time, the S&P 500 has averaged a loss of 0.1% in August.
—CNBC’s Sam Meredith contributed to this report.

Source: CNBC

Jul 31, 2019

Wall Street Closing Report on Wednesday 31, 2019 | Dow drops 300 points in worst day since May after Powell hints rate cut not the start of a trend

Fred Imbert

Stocks dropped on Wednesday as Federal Reserve Chair Jerome Powell dampened hopes for further rate cuts later this year.
The Dow Jones Industrial Average traded 250 points lower after falling as much as 478 points at one point. The S&P 500 and Nasdaq Composite both dropped 0.7%.
The Fed cut rates by 25 basis points, matching market expectations. The central bank cited  “global developments ” along with “muted inflation” as reasons for easing monetary conditions.
However, Powell told reporters in a news conference following rate decision that the central bank’s rate cut was a “mid-cycle adjustment, ” hinting that further rate cuts later this year are not a sure thing.
“That refers back to other times when the FOMC has cut rates in the middle of a cycle and I’m contrasting it there with the beginning of a lengthy cutting cycle. That is not what we’re seeing now, that’s not our perspective now,” Powell said.“You have to look at not just the 25 basis-point cut, but look at the committee’s actions over the year.”
“We started off [the year] expecting some rate increases. We then moved to a patient setting for a few months and now we’ve moved here,” he added “As we’ve moved to more accommodative policy, the economy has actually performed as expected with that gradual increase in support.”
Those comments sent equities to their lows of the day, led by momentum stocks such as Microsoft and Amazon. The U.S. dollar also hit its highest level in more than two years against a basket of currencies. The benchmark 10-year Treasury yield jumped above 2.07% before falling back to around 2.02%.
“Our whole story has been the markets are pricing two scenarios. They’re pricing in a 70% chance of two cuts, i.e. a mid-cycle adjustment and a soft landing, and a 30% probability that they cut to zero. That would be the beginning of a rate-cut cycle because we’re going to a recession,” said Mike Collins, senior portfolio manager at PGIM Fixed Income. “The markets are discounting the latter scenario and emphasizing the former.”
However, Powell did suggest this rate move was not necessarily a one-off either.
“He corrected himself. The market was clearly construing his comments to mean the Fed was very much one and done,” said Gregory Faranello, head of U.S. rates at AmeriVet Securities. “In the end, this means more than anything a pick-up in volatility.”
“The trends that hurt the most are in place. Equities are lower, the dollar’s higher and the yield curve is flatter. Before we came into this meeting, these were some of the things we were thinking about the Fed alleviating,” Faranello added. “This is very much a pain trade and the pathway forward is extremely uncertain. The idea for further cuts is clearly on the table but I don’t think it’s a no-brainer by any stretch of the imagination.”
The cut comes amid mixed economic data. U.S. economic growth slowed down to 2.1% in the second quarter. However, that growth rate was better than expected.
“The Fed has capitulated to softer economic growth. Inflation is headed lower, but recession is unlikely,” said David Abramson, chief U.S. strategist at Alpine Macro, in a note. “Policy reflation should put a floor under stock prices and sustain the forward earnings multiple, even as overall profit momentum fades in the coming months.”

Apple rises on earnings

Apple reported Tuesday evening earnings per share and revenue for the previous quarter that topped analyst expectations, sending the stock up 5% on Wednesday. The company also issued better-than-expected revenue guidance for the fourth quarter.
“Overall, when we consider AAPL’s valuation with the company’s fundamental levers for further EPS upside, we see a balanced reward profile relative to the risks,” said Jeriel Ong, an analyst at Deutsche Bank, in a note. Ong added Apple’s “stabilizing” trends will likely give investors more confidence.
Nearly 60% of S&P 500 companies have reported earnings so far. Of those companies, 76% have posted stronger-than-forecast quarterly profits, according to FactSet.
—CNBC’s Sam Meredith contributed to this report.

Source: CNBC

May 30, 2019

US Market | Wall Street Closing Report on Tuesday 30, May, 2019 | Stocks rise slightly, but trade and economy worries persist

Fred Imbert

Stocks gave back their earlier gains on Thursday as Treasury yields reversed course to trade lower on the day as fears of a global economic slowdown persisted.
The Dow Jones Industrial Average traded 46 points lower while the S&P 500 dipped 0.2%. The Nasdaq Composite also dipped 0.2%. The three major averages traded higher earlier in the day.
Stock benchmarks traded into the red around the same time the 10-year Treasury yield went negative. The yield fell to 2.227%, near 20-month lows. The 10-year yield entered May trading above 2.5%.
Plunging yields this month, along with a yield curve inversion, have raised concerns about slowing economic growth. Investors typically see bonds as a safer alternative to riskier assets when economic worries arise.
“It definitely points to slower growth. That’s the primary driver right now in this risk-off environment we’ve experienced in the month of May,” said Ryan Nauman, market strategist at Informa Financial Intelligence, about the drop in yields. “People are rotating out of equities and into Treasurys for that defensive play.”
Bank shares followed yields lower. The SPDR KS&P Bank ETF (KBE) dropped 2.2% as Bank of America shares lost 2.5%. J.P. Morgan Chase also declined 1.4%.
The S&P 500 is down more than 5% this month and closed below 2,800 on Wednesday — a key level watched by traders — for the first time since late March.
There are “insufficient signs of bottoming” in the market, said Mark Newton, managing member at Newton Advisors, in a note. “Yet this will all take time. Until then, downside targets should take another 3-5 trading days with the 2722-35 [range] having significance for S&P. Closes back up above 2800, however, would be something to watch carefully.”
The protracted trade dispute between China and the U.S. also weighed on markets. A senior Chinese diplomat ramped up the rhetoric overnight. Also, China has halted soy purchases from the U.S., according to Bloomberg News.
Financial professionals work on the floor of the New York Stock Exchange (NYSE)
Drew Angerer | Getty Images
Chinese Vice Foreign Minister Zhang Hanhui said Thursday that provoking trade disputes amounted to “naked economic terrorism. ”
Washington and Beijing have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets. Earlier this month, both countries ratcheted up tensions through higher tariffs.
The higher levies pressured U.S. stocks in May, putting them on pace for their first monthly decline of 2019. Through Wednesday’s close, the S&P 500 and Dow are both down more than 5% while the Nasdaq is down 6.8%.
In economic news, the second read on first-quarter U.S. GDP showed the economy expanded by 3.1% on an annualized basis. The 3.1% print topped a Dow Jones estimate of 3%.
—CNBC’s Sam Meredith contributed to this report.

Source: CNBC

May 29, 2019

US Market | Wall Street Closing Report on Tuesday 29, May 2019 | Dow slides more than 200 points as yields fall on worries about the economy

Fred Imbert

Stocks fell on Wednesday as bond yields declined again, triggering concerns about the economic outlook. Increasing trade tensions in the China-U.S. trade fight also weighed on markets.
The Dow Jones Industrial Average dropped 211 points while the S&P 500 slid 0.6%. The Nasdaq Composite declined by 0.7%. The Dow briefly fell more than 400 points as the 10-year Treasury note yield hit its low of the day.

The 10-year Treasury note yield fell to its lowest level since September 2017 and last traded around 2.25%. A portion of the yield curve further inverted as 3-month Treasury bills last yielded 2.36%, well above the 10-year rate. A yield curve inversion is seen by traders as a potential sign that a recession is in the horizon.
Bank shares fell along with yields. Bank of America and J.P. Morgan Chase both slid 0.2%.
The S&P 500 broke below 2,800, a key technical level watched by traders. The broad index also traded around its lowest level since late March.
“The topping pattern is crystal clear,” Frank Cappelleri, executive director at Instinet, wrote in a note. He added that other stock indexes across the globe were also showing topping patterns. “The equity advance through April was broad, which helped keep the uptrend intact. Now, with so many areas sporting bearish patterns like this, if one breaks, the odds are it will have company.”
Washington and Beijing have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment.
Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Retailers dropped broadly on tariff concerns Wednesday. Abercrombie & Fitch shares plunged more than 26% after the company warned it same-store sales could be flat if tariffs remain unchanged. Dick’s Sporting Goods also fell 5.8%. The SPDR S&P Retail ETF (XRT) dropped more than 2%.
“The market has really gone from a posture of thinking 100% chance of a trade deal, that it was just a matter of when, to now basically thinking there’s probably not going to be a trade deal,” said Larry Benedict, founder of The Opportunistic Trader.
In the latest move, China made a veiled threat this week through state media regarding rare earth minerals, a market crucial to the U.S. technology and defense industries which China dominates.
The major stock indexes were headed for their first monthly decline of 2019. The Dow and S&P 500 were both down more than 4% entering Wednesday’s session.
The Opportunistic Trader’s Benedict pointed out that the market’s decline has been steady and without many large moves.
“This move is worse because everybody is waiting for a bounce and it hasn’t come,” he said. “If we went down 3% and then bounced up 1%, that’s a better scenario than drifting lower … It’s like a slow death.”
—CNBC’s Sam Meredith and John Melloy contributed to this report.

Source: CNBC

May 23, 2019

Markets I Wall Street Closing Report I Dow drops more than 250 points, continuing this month's slide on trade-war fears

Fred Imbert

Stocks fell sharply on Thursday as investors started to fear the U.S.-China trade war is slowing the economy.
The Dow Jones Industrial Average fell 308 points as United Technologies lagged. The S&P 500 fell 1.2% while the Nasdaq Composite dropped 1.5%. The Dow fell more than 400 points at its lows, but it regained some of its losses in the final hour of trading as Intel shares turned around to trade 1% higher.
The Dow is now down more than 400 points in two days as Wall Street begins to realize the trade war may last a lot longer than previously expected. Bond yields and crude oil also plunged on Thursday as the rising risk spread through other markets. The 10-year yield fell to its lowest since 2017. The S&P 500 is down more than 4% so far in May.
“The trade landscape looks bleaker than ever,” said Adam Crisafulli, executive director at J.P. Morgan, in a note. “Anyone bullish on the SPX has to be conducting a lot of soul searching at the moment.”
Crisafulli also pointed out that data from around the world is indicating an economic rebound from earlier this year is “showing signs of attenuating” while the Federal Reserve is in no hurry to cut rates.
IHS Markit said on Thursday that U.S. manufacturing activity grew at its slowest pace since September 2009 this month. The data led investors to load up on Treasurys.
As yields fell on the weak economic data, bank shares including J.P. Morgan Chase and Bank of America were hit.
Shares of Apple, hit hard this month on trade war fears, fell another 1.6% after a UBS analyst cut his price target on the iPhone maker to $225 per share from $235. The analyst kept his buy rating on the stock, but noted that “a slightly lower multiple is prudent given soft smartphone market and ongoing US/China trade issues.”
Shares of Qualcomm fell 2.6% while Xilinx traded 2.2% lower. Micron Technology and Lam Research declined 3% and 1%, respectively.
A cargo ship is seen at a port in Qingdao in China’s eastern Shandong province on October 12, 2018
AFP | Getty Images
“Long term, six-to-12 months, this won’t derail the bull market. A lot of this rests on what the Fed is going to do and they have not given any indication they will raise rates,” said John Davi, chief investment officer at Astoria Portfolio Advisors. But “given how fast we rallied over the past four months … between valuations becoming a little bit stretched, trade wars and how fast we came back, it’s kind of hard to see a meaningful rally from these levels.”
U.K.-based chip designer Arm Holdings said it suspended business with Huawei to comply with the U.S. blacklisting of the telecom company. Panasonic also said it stopped shipping some smartphone components to Huawei. Vodafone and BT Group, the biggest phone carriers in the U.K., said they are removing Huawei phones from their 5G network plans.
At the same time, China is taking a stronger tone in its rhetoric towards the U.S. Ministry of Commerce spokesperson Gao Feng said: “If the U.S. would like to keep on negotiating it should, with sincerity, adjust its wrong actions. Only then can talks continue.”
“The U.S. ... crackdown on Chinese companies not only seriously damages the normal commercial cooperation between both countries, but it also forms a great threat to the security of the global industrial and supply chain,” Feng added.
U.S. Secretary of State Mike Pompeo told CNBC’s “Squawk Box ” on Thursday that “it is important for the conversation to continue. ” He also said Huawei works with the Chinese government even though the company has denied such claims. “For them to say that they don’t work with the Chinese government is false.”
The U.S. and China have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment. Tensions ratcheted up earlier this month with both sides hiking tariffs on their goods.
This has led the S&P 500 down 4.6% for the month. The Dow and Nasdaq have fallen 4.6% and 6.1%, respectively.
—CNBC’s Sam Meredith contributed to this report.

Source: CNBC

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