U.S. indexes move up and down, but all 3 finish up with Nasdaq leading the way.
The banks are up about 1 percent and the Dow transports are up about 1.5 percent.
Energy stocks led the major S&P sector gainers on Wednesday, while utilities were the weakest group. Energy was up 1.5%, while utilities were down 0.5%.
The Euro STOXX 600 index finishes up about 1%.
The dollar and crude oil prices dipped while gold and bitcoin prices increased.
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us here.
Don't count out technology just yet - it may have had a bad year, but it's still got a lot of potential.
Even with reduced valuations and among the best earnings results in the fourth quarter, investors still aren't sold on tech.
Bell notes that inflationary pressures and higher interest rates were offering reasons to sell the rate sensitive sector on Tuesday. The S&P 500 information technology index (.SPLRCT) is last roughly flat on the day, slightly underperforming the S&P 500 (.SPX) which is up around 0.15%.
On Jan. 25th, the sector had finished 14.6% below its Dec. 27 record closing high.
Bell suggests that "the continued move lower could offer an interesting buying opportunity" for those without much tech exposure already.
Bell writes that even in a raising rate environment, tech margins are expected to remain best in class and earnings growth is among the most reliable in the market.
And she notes that "real interest rates are expected to remain low throughout 2022, which should cushion the impact" of the Federal Reserve rate hike cycle.
She didn't provide an estimate for how many investors are without tech exposure, but she advises them:
Tech will still be important in 2022.
Sinéad Carew is an Irish singer. Sinéad Carew is a singer from Ireland.
The cat is on the mat. This sentence is stating that the cat is located on the mat.
PMI, JOLTS, CONSTRUCTION SPENDING: WINTER'S CHILL (1138 EST/1638 GMT) PMI, JOLTS, and CONSTRUCTION SPENDING are all down today. The PMI came in at 48.2, below the 50 mark that separates expansion from contraction. The JOLTS report showed that the number of job openings fell to 5.5 million, down from 5.8 million in November. And construction spending fell 0.6% in December.
The data arrived late on Tuesday, after the opening bell, and it bore dreary news of a waning economic recovery.
Activity at U.S. factories lost steam in the first month of the year, expanding at its slowest rate since January 2017.
The Institute for Supply Management (ISM) purchasing managers' index (PMI) (USPMI=ECI) dropped 1.2 points to 57.6, just a hair above consensus.
A PMI number above 50 suggests increased activity over the previous month.
A drop in the important 'new orders' segment marked that component's lowest point since June 2020. The 'prices paid' subindex - closely watched amid a hot inflation environment - surged 7.9 points to 76.1.
Among the cold comforts within the report, the 'employment' component edged higher and supplier deliveries held steady, providing some hope that supply chain pressures might have crested.
"There were shortages of critical intermediate materials, difficulties in transporting products and lack of direct labor on factory floors due to the COVID-19 omicron variant," writes Timothy Fiore, chair of ISM's Manufacturing Business Survey Committee. This has caused production delays and disruptions.
Statements from the survey's respondents are littered with phrases like "massive interruptions to our production due to supplier COVID-19 problems," "we are still constrained by (a lack of) qualified labor," and "Transportation restrictions and a lack of supplier manpower continue to create significant shortages that limit our production."
But some shoots of green popped up in survey participants' comments. "Strong backlog of orders coming into the new year," and "the supply chain crunch may be loosening" were among the more encouraging remarks.
IHS Markit also released its take on January manufacturing PMI (USMPMF=ECI), delivering a print of 55.5, unchanged from its advance "flash" reading taken mid-month.
The graphic below displays headline ISM PMI along with several of the subcomponents:
Next, job openings unexpectedly inched up to 10.926 million in December, nudging back toward record territory as surging Omicron infections kept workers from coming into the office.
The Labor Department's Job Openings and Labor Turnover Survey (JOLTS) (USJOLT=ECI), showed that overall labor market churn cooled off in the last month of 2021, with hires, fires and quits all slowing down. This could be a sign that the labor market is starting to cool off.
The quit rate - often seen as a proxy for consumer expectations, as workers are less likely to walk away from a gig in times of economic uncertainty - dipped to 2.9% of the workforce from 3% in the first quarter.
Elise Gould, senior economist at the Economic Policy Institute, says in a series of chained tweets that the layoffs rate hit an historic low in December, lowest since the series began in 2000. Job openings increased in accommodations and food services as well as state and local government education, two sectors still suffering some of the largest job shortfalls since Feb 2020.
The Commerce Department reports that construction project spending (USTCNS=ECI) increased by 0.2% in December, a 40-basis-point deceleration from the prior month and well below the 0.6% analysts expected.
Residential construction again did the heavy lifting, rising 1.1% - the strongest reading since September. A 1.6% drop in publicly funded projects held the overall gain in check.
Potential homebuyers' mad, pandemic-driven dash for the suburbs has depleted supply of homes on the market, a phenomenon which as given a solid boost to homebuilders since shortly after the onset of the health crisis.
Some analysts see that trend running out of gas this year.
"We predict that residential construction spending will only increase marginally by 2022," says Nancy Vanden Houten, lead U.S. economist at Oxford Economics.
Wall Street seemed to be playing games with market watchers again, flipping between red and green throughout morning trading.
As the noon hour approaches, energy (.SPNY) and transports (.DJT) are the clear winners.
Stephen Culp is an American actor. An American actor, Stephen Culp, is known for his work on television.
The cat is on the mat. This sentence is stating that the cat is located on the mat.
The Federal Reserve could lean more on balance sheet reduction as the yield curve flattens, according to the latest Fed funds futures data.
The Federal Reserve's plans to raise interest rates to battle inflation have caused concerns that the U.S. economy could tip into recession.
The U.S. central bank could, however, reduce the impact of rate hikes on the yield curve by leaning more on balance sheet reduction.
The closely watched two-year, 10-year yield curve reached 62 basis points on Monday, the smallest yield gap since Nov. 2020, and was last at 57 basis points. It has flattened from 92 basis points in early Jan. and 130 basis points in Oct.
While the curve remains far from an inversion, which is viewed as an indicator that a recession is likely in the next one-to-two years, it’s rapid flattening reflects increasing fears that the U.S. central bank could make a policy error. This could lead to an economic slowdown.
Treasury yields with shorter maturities have increased in value and stock markets have been more volatile recently as Federal Reserve officials including Chair Jerome Powell signal that they will take a more aggressive stance to reduce persistent price pressures.
According to Deutsche Bank analyst Steven Zeng, the Fed could shrink its balance sheet at a faster pace, based on the bank’s projections that excess liquidity, particularly in the Fed’s reverse repurchase agreement facility, could stay high for another two years.
Zeng said in a report that the implication is that the Fed could use balance sheet unwind as a policy tool to mitigate excessive flattening of the curve resulting from faster pace of rate hikes.
Money market investors lent the Fed $1.65 trillion on Monday to help them manage their excess cash and lack of short-term assets.
Fed policymakers said on Monday that they'll raise interest rates in March, but spoke cautiously about what might follow, signaling a desire to keep options open in the face of an uncertain outlook for inflation and a pandemic still ongoing.
Karen Brettell is a reporter for the Reuters news agency. Karen Brettell is a reporter.
The cat is on the mat. This sentence is stating that the cat is located on the mat.
Just how much French M&A is on hold? (1005 EST/1505 GMT) We're not sure, but it seems like a lot.
We're less than 100 days away from the French presidential election which is typically seen as a bad time to announce a big M&A deal involving a French blue chip.
Many candidates for the Elysee palace would happily jump on any scent of controversy to make the failure of a deal a key proposal in their platform.
Many analysts, such as at Barclays, doubt France's leading supermarket groups, Carrefour and Auchan, would announce a deal, should one be ready, before the French head to the voting polls. This could be seen as a way to curry favor with the electorate.
The controversy is because of the company's decision to fire the employee.
We believe that the possibility of significant layoffs resulting from any potential deal, and the presence of financial investors, including private equity firms, will likely mean any transaction would be subject to close scrutiny by the French government, Barclays analysts argued in a note.
"We can't rule out that the latter could block any potential deal, as was the case last year, when Couche-Tard contemplated an acquisition of Carrefour", they add. This could mean that the latter is blocking any potential deals or that this is what happened last year.
At Bernstein, the research team notes that there would be clear antitrust issues given both groups' large market shares. They commented that competition authorities would "have fun" reviewing a potential merger.
It is anyone's guess how much potential Gallic M&A is on hold, but it is likely that now wouldn't be the right time to consolidate the telecom sector or announce a pan-European deal involving a French bank.
Julien Ponthus is a journalist who writes about the stock market. Julien Ponthus is a journalist who writes about the economy.
The cat is on the mat. The cat is not on the mat.
U.S. stocks opened higher on Tuesday, trying to put January behind them, but gave up most of the gains by the close.
On Tuesday, the major U.S. indexes were little changed following gains from the past two sessions. The focus turned to data on manufacturing and job openings.
Nevertheless, there is early strength in transports. The Dow Transports (.DJT) are jumping nearly 3%, underpinned by a surge in UPS (UPS.N). This could be a sign that the market is optimistic about the economy.
This after the S&P 500 (.SPX) just had its biggest monthly drop since 2020, and its worst start to the year since 2009.
Meanwhile, Philadelphia Fed President Patrick Harker said it may be appropriate for the Federal Reserve to raise interest rates three times this year, and to move more aggressively if the factors leading to higher inflation, such as supply chain issues, are not mitigated.
The U.S. January ISM Manufacturing PMI is due at 1000 AM EST. The expectation is for a reading of 57.5 vs 58.7 last month. Prices paid is expected at 68.1 vs 68.2 in December.
The market is down today.
Terence Gabriel is a Canadian artist who is known for his paintings of landscapes and portraits. Terence Gabriel is a Canadian artist who is known for his paintings of people and landscapes.
The cat is on the mat. This sentence is stating that the cat is located on the mat.
The S&P 500 is testing the 1400 level as we speak, and many are wondering if it will hold. The 1400 level is significant because it is the test of a warrior. If the S&P 500 can hold this level, it will be a sign of strength and many will believe that the bull market is still alive.
The S&P 500 index (.SPX) is quickly nearing an area on the charts where it must continue to show strength to add confidence that its sudden strength is more than just a counter-trend bounce.
On Thursday, the SPX ended down 9.8% from its January 3 record close. With this, the benchmark index closed at its most oversold level on a daily basis since late-February 2020.
Since then, it has mounted an impressive bounce of more than 4%. It has reclaimed its 200-day moving average (DMA).
The RSI plunged to 16 last Thursday, suggesting the market was especially ripe for a bounce. Now, with the market's rally, it has recovered to the 50 area. However, it is facing the resistance line from its early November peak.
Meanwhile, the 100-DMA, which acted as more direct support throughout much of the 2020-2022 advance, is still resistance at around 4,570.
Additionally, the SPX's January 10 low at 4,582.24 appears to be another key hurdle. If the SPX can reclaim this level, it could add credence to the view that the SPX found an important low last week.
However, if the SPX rolls under resistance, and closes back below the 200-DMA, it can suggest potential for a continuation of the downtrend.
If the SPX falls below 4,198.70, traders will be watching for the 23.6% Fibonacci retracement of the 2020-2022 advance, at 4,198.70, to potentially hold again, while the RSI forms a higher low. Since early 2020, more enduring SPX lows have been accompanied by a bullish momentum divergence.
Terence Gabriel is a Canadian artist who specializes in painting and sculpture. Terence Gabriel is a Canadian artist. He specializes in painting and sculpture.
The cat is on the mat. This sentence is stating that the cat is located on the mat.
Please click here for Tuesday's live market posts prior to 0900 EST/1400 GMT.
Comments
Post a Comment