1.
Stock losses accelerate into the close as momentum stalls: Nasdaq drops 3%, Dow sheds nearly 500 points
2022-06-28 20:03:21 by Emily McCormick from Yahoo FinanceUS stocks were under pressure Tuesday, with the Nasdaq losing about 3% as selling ramped for technology shares especially.
As of the close, the S&P 500 was off 2%, bringing it down to 3,821.74. The Dow fell by 490 points, or 1.6%, and the Nasdaq dropped 2.98% to 11,181.54. The small cap Russell 2000 was also down more than 1.5%.
Stocks had taken a leg lower in morning trade after a new report showed US consumer confidence deteriorated to a 16-month low in June amid ongoing inflation concerns, stoking concerns that souring outlooks would contributed to a further slowdown in actual spending and activity.
Domestic stocks were briefly buoyed during the pre-market session and at the market open China cut in half its required quarantine times for travelers, in a sign the country may be loosening its most stringent COVID zero policies that had acted as a risk to growth. Stock indexes in Asia and Europe broadly gained. US crude oil prices briefly rose above $111 per barrel, and the 10-year Treasury yield jumped back above 3.25% to approach last week's highs.
US equity investors remain closely attuned to signs of an economic deceleration in the US, with inflation continuing to run at multi-decade highs and monetary policymakers maintaining a firm stance that their priority remains bringing down prices even at the expense of some growth. Closely watched data from the University of Michigan last Friday suggested consumers were at least beginning to temper their expectations for how hot inflation will run in the near-term, however, helping contribute to a stock rally that closed out the S&P 500's second-best week of 2022.
With quarterly corporate earnings season set the pick up in the next few weeks, the focus will soon shift to how companies have been navigating persistent inflation alongside early indications of softening demand. As of Friday, consensus Wall Street strategists were still predicting S&P 500 earnings would grow, in aggregate, by 10.4%, according to FactSet. Some have indicated this estimate will need to be revised down to fully reflect inflation's impact to margins, and the effects of an otherwise softening economy. Semiconductor bellwether Micron (MU) is set to report earnings later this week, with the pace of the earnings reports set to pick up in mid-July.
"I think we're gonna have a second half that's frustrating the bulls and frustrating the bears, bouncing around a bunch as we kind of digest the economy slowing," Bob Doll, Crossmark Global Investments chief investment officer, told Yahoo Finance Live. "How much of an effect does that have on earnings? Maybe we get a little better inflation news so the [price-earnings ratio of the S&P 500] doesn't get threatened as much. But we're moving from a period where it's all been about PEs multiples declining. And we're moving to a period where I think the earnings are gonna be watched more carefully than the PE."
On the move
Nike (NKE) shares dipped after the athletic apparel-maker offered a disappointing full-year outlook, reflecting in large part ongoing concerns over sales trends in its business in China. Sales in Greater China fell by 20%, excluding currency impacts, in Nike's latest quarter. Nike said it expects revenue will grow by a low double-digit percentage this year, with gross margins flat to down by 50 basis points.
Robinhood's (HOOD) stock fell to give back some gains after rallying by 14% in its best day in over a month on Monday, following a report that FTX might be considering a deal to buy the trading platform. Sam Bankman-Fried, the CEO and founder of FTX, told Yahoo Finance, however, that "there are no active M&A conversations with Robinhood."
Kezar Life Sciences (KZR) shares soared after the company announced "positive results" from a phase 2 clinical trial for its drug aimed at treating treading lupus nephritis. The stock was on track for its best session since June 2020 based on early price action.
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2.
Stocks jump to close out second best week of 2022: S&P 500 gains 3.1%, Dow adds 800+ points
2022-06-24 20:10:47 by Emily McCormick from Yahoo FinanceUS stocks rose Friday, with the S&P 500 ending a three-week losing streak as investors digested Federal Reserve officials' latest affirmations that they remained committed to bringing down inflation.
The S&P 500 rose by more than 3%, logging a back-to-back day of gains and its first weekly advance since late May. The S&P 500's more than 6% weekly advance also marked its second best of 2022 to date. The Dow rose by more than 800 points, or 2.7%, while the Nasdaq increased by more than 3.3% as tech shares rebounded. The major averages held onto gains even after a closely watched print on consumer sentiment was revised down to a fresh record low, as Americans continued to grapple with elevated inflation. However, the survey also showed consumers' one-year inflation expectations eased from a multi-decade high.
The three major indexes have traded choppily this week, but ultimately trended higher as investors considered the ongoing economic impact of the Fed's moves to bring down rising prices. Fed Chair Jerome Powell made his most explicit acknowledgement yet this week that a recession was "certainly a possibility" — albeit not the "intended outcome" — as the central bank hiked interest rates further this year.
"Really, investors want the chair to understand that inflation is a significant problem and that dealing with it earlier is actually better for the long-term," Diane Jaffee, group managing director and senior portfolio manager of TCW Group, told Yahoo Finance Live on Thursday. "So I think investors are taking heart that the Fed is going to do whatever it takes."
Still, Powell's nod to current recession risks tracked with increased warning signals from a series of Wall Street firms that have recently raised their own forecasts for the probability of a near-term recession. Powell's assertion that the Fed's commitment to bringing down inflation was "unconditional" also suggested the central bank would not stop hiking rates at the first signs of an economic slowdown.
Cyclical stocks seen as more vulnerable during downturns dipped this week, with the energy sector posting a weekly loss and the materials sector lagging in the S&P 500. West Texas intermediate crude oil futures hovered around $107 per barrel and logged its third straight weekly loss, and headed for its first monthly loss since November.
Treasury yields increased across the curve to steady after renewed recession concerns also sent yields tumbling earlier this week. The benchmark 10-year yield rose back above 3.10%, after topping 3.31% at the start of the week.
On the move
FedEx (FDX) shares rose after the shipping giant delivered a full-year forecast that exceeded Wall Street's estimates, while meeting fiscal fourth-quarter profit expectations. FedEx sees full-year adjusted earnings per share coming in between $22.50 and $24.50, compared to the $22.36 seen by analysts, according to Bloomberg. FedEx Chief Customer Officer Brie Carere noted on the company's earnings call Thursday they were anticipating business-to-consumer shipping volumes to come under some pressure next year as consumer spending continues "tilting towards services from goods."
Zendesk's (ZEN) stock jumped Friday after the company announced it reached a deal to be taken private by a group of investors including Hellman & Friedman and Permira. The all-cash transaction is set to value the software company at about $10.2 billion and will offer Zendesk shareholders $77.50 per share. That represents a premium of about 34% compared to Zendesk's closing level on Thursday.
CarMax (KMX) shares advanced after the used vehicle retailer posted first-quarter results that topped expectations. Earnings per share of $1.56 on revenue of $9.31 billion were exceeded estimates for earnings of $1.51 per share and revenue of $8.99 billion, according to Bloomberg data. Total retail used vehicle unit sales were down 11% compared to last year, however, which CarMax said came as a result of "a lapping of stimulus benefits paid in the prior year period; widespread inflationary pressures, including challenges to vehicle affordability; and waning consumer confidence."
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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3.
Tech stocks are seeing their biggest blowup since the dot-com era
2022-06-24 16:33:00 by Joseph Adinolfi from MarketWatchU.S. stocks are back in rally mode this week, but the main benchmarks are still sharply lower for the year, with the Nasdaq Composite down nearly 27%, making it the worst-hit among the main benchmarks. Using the Invesco QQQ Trust Series ETF (QQQ) as a benchmark, U.S.-traded tech stocks have fallen by two percentage points or more during more than one-fourth of the trading days so far this year. As the first half of the year comes to a close, investors will be keeping a close eye on expectations surrounding inflation, unemployment and economic growth as they try to gauge exactly how aggressive the Federal Reserve will be what’s expected to be the most strident quantitative tightening since the days of Paul Volcker, according to Capital Economics.
4.
Consumer sentiment falls to record low in June as inflation persists
2022-06-24 14:28:48 by Emily McCormick from Yahoo FinanceConsumer sentiment hit a record low in June as Americans continued to face elevated prices for gas, food, and other goods and services.
The University of Michigan's closely watched Surveys of Consumers consumer sentiment index was revised lower to 50.0 in the final June survey.
This marked the lowest level on record in data for the series, which spans back to the mid-1970s. In the preliminary monthly survey, the index registered 50.2.
Inflation, which last increased at the fastest pace in more than 40 years as of May, remained a pressing concern and a key contributor to the further erosion in sentiment.
"The final June reading confirmed the early-June decline in consumer sentiment ... Consumers across income, age, education, geographic region, political affiliation, stockholding and homeownership status all posted large declines," Joanne Hsu, director of the Surveys of Consumers, said in a statement.
"About 79% of consumers expected bad times in the year ahead for business conditions, the highest since 2009," Hsu added. "Inflation continued to be of paramount concern to consumers; 47% of consumers blamed inflation for eroding their living standards, just one point shy of the all-time high last reached during the Great Recession."
The final consumer sentiment index for June represented a marked decline from May's reading of 58.4.
Inflation expectations for the year ahead remained elevated at 5.3%, while long-run inflation expectations moderated, falling to 3.1% from the preliminary report's 3.3%.
Mahir Rasheed, US Economist, at Oxford Economics, said this decline in long-run inflation expectations was "encouragingly lower" than the preliminary reading, noting that Fed chair Jerome Powell called this figure "quite eye-catching" in testimony earlier this week. Rasheed notes, however, this "remains the highest expected long-run rate of the current cycle."
The University of Michigan's print also came following a number of other reports pointing to a deterioration in key parts of the US economy and a slide in sentiment among businesses. The preliminary S&P Global Composite Purchasing Managers' Index (PMI) for June came in at 51.2, the weakest level since January, and S&P's manufacturing output index slid into contractionary territory and a two-year low.
Business confidence has slumped to "a level which would typically herald an economic downturn, adding to the risk of recession," Chris Williamson, chief business economist at S&P Global Market Intelligence, said Thursday.
Last week, a Conference Board survey found that 60% of CEOs said they expect a recession before the end of 2023. Economics teams at Wall Street firms from Goldman Sachs to Citigroup have also raised their expectations for the risk of a recession over the next year, mostly due to their anticipation that the Federal Reserve would have to keep hiking interest rates swiftly to bring down inflation.
Consumers also still expect inflation to remain elevated, though one-year inflation expectations were revised slightly lower in the latest print. The University of Michigan's revised data showed consumers anticipate inflation will rise 5.3% versus the 5.4% previously reported, which had matched March and April's readings for the highest since 1981.
"Consumers also expressed the highest level of uncertainty over long-run inflation since 1991, continuing a sharp increase that began in 2021," Hsu said.
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5.
Fed soft landing ‘somewhat of a myth,’ strategist says
2022-06-22 15:30:10 by Yahoo Finance VideoClaro Advisors' Ryan Belanger joins Yahoo Finance Live to discuss Fed Chair Powell's comments on inflation, the path for monetary policy, and how to position portfolios amid macroeconomic headwinds.
6.
Stocks turn higher as Fed Chair Powell testifies in front of Congress
2022-06-22 15:27:31 by Yahoo Finance VideoYahoo Finance's Jared Blikre and Brian Cheung break down how stocks are reacting to Fed Chair Powell's remarks before the Senate Banking Committee.
7.
Market check: Stocks open lower, energy under pressure
2022-06-22 13:53:08 by Yahoo Finance VideoYahoo Finance's Jared Blikre breaks down how markets opened on Wednesday.
8.
Fed's Harker: 'Starting to see some signs of demand softening'
2022-06-22 13:49:40 by Emily McCormick from Yahoo FinanceThe U.S. economy is starting to show signs of softening demand, which if continued, could make the case for a slightly less aggressive interest rate hike in July, Philadelphia Federal Reserve President Patrick Harker said Wednesday.
"We are, again, starting to see some signs of demand softening, which is exactly what we want," Harker told Yahoo Finance's Brian Cheung Wednesday morning."We don't want it to crash. We want to bring the economy into a safe position and in balance with supply and demand."
Harker's comments suggest the economy has already started to show signs of cooling following the Fed's interest rate hikes unleashed so far this year, which has brought the Fed Funds rate to between 1.50% and 1.75%.
Harker, an alternate member of the Federal Open Market Committee this year, voted in favor of the central bank's 75 basis point interest rate hike last week.
A 'couple quarters' of negative GDP
A further softening in demand in the U.S. economy could help bring down inflation, which is currently running at its hottest level in 40 years, back to the Fed's 2% target. And if evidence of a moderation emerges, the Fed may not need to raise interest rates as swiftly as it did this month, Harker suggested.
"I'm not ready to make a final decision ... exactly where I am between 50 and 75 [basis points]," he said. "If we start to see demand soften — and we are seeing some signs that demand is starting to soften in certain sectors of the economy. And if it's softening quicker than I anticipate, then it may be appropriate to go with a 50. If it's not, then it's probably appropriate to go with the 75. But let's see how the data turns out in the next few weeks."
One of the main concerns for market participants, however, has been over the extent to which larger-than-typical interest rate hikes might ultimately disrupt the economy, or tip the economy into recession.
"We could have a couple of negative quarters [of GDP growth]," Harker said. "But I think the situation we're in right now is — and this word is overused — unprecedented. But I really think it is unprecedented. We came into this pandemic with a very tight labor market and a very strong economy. We still have very tight labor markets. So the historical examples that you would rely on in this situation don't quite fit. This is unique, so I think we have to recognize that and execute policy based on what we're seeing, not based on some historical example."
In recent days, several major Wall Street banks have penciled in an increased risk of a recession, largely on concern that the Fed will hike interest rates to the point of tipping the economy into a downturn in order to rein in inflation.
Two negative quarters of gross domestic product (GDP) growth are seen by many investors as a recession, though the National Bureau of Economic Research makes the final call on "official" U.S. recessions.
Last week, Fed Chair Jerome Powell said at a press conference that a 50 or 75 basis point increase "seems most likely" following the central bank's July meeting given the current inflationary and economic backdrop, while adding the goal was to still avert tipping the economy into a recession in the process.
And in the days since Powell's comments, other FOMC officials have already signaled support for another rate hike of this magnitude. Richmond Federal Reserve President Thomas Barkin said Tuesday that guidance for a 50 or 75 basis point interest rate hike in July "feels pretty reasonable," while noting his rate outlook could be adjusted depending on how the economy evolves over the coming weeks.
"I think we've been very clear that we need to move to a restrictive stance," Harker told Yahoo Finance Live. "How we get there is dependent on the data. So we can't be that precise, [with] what we're going to be doing in September or December right now. I mean, the data will dictate that."
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9.
Stocks rebound: S&P 500 posts best day in three weeks, Dow gains 643 points, or 2.2%
2022-06-21 20:05:02 by Emily McCormick from Yahoo FinanceU.S. stocks rose Tuesday as traders returned from a long weekend, with equities recouping some losses following the S&P 500's worst week since March 2020.
The S&P 500 advanced by 2.45% in its best day in three weeks, ending at 3,764.84 and recovering some declines after plunging by 5.8% last week. The Nasdaq Composite gained 2.5% to end at 11,069.30, and the Dow added more than 643 points, or 2.2%, to end at 30,531.77 and post its best single-day gain since May 4.
Bitcoin (BTC-USD) rose back above $21,000 after a cryptocurrency rout briefly sent prices below $18,000 for the first time since December 2020 over the weekend. Treasury yields climbed, with the benchmark 10-year yield increasing to nearly 3.3%, and U.S. crude oil prices rose by 1.5% to top $111 per barrel.
Tuesday's early recovery rally across risk assets came as an at least brief respite amid weeks of heavy selling. The S&P 500 sank into its first bear market since the height of the pandemic last week, and the sell-off ramped even further after the Federal Reserve unleashed a larger-than-typical 75 basis point interest rate hike and signaled it would be willing to tighten further and at the expense of some economic growth to bring down rampant inflationary pressures.
Federal Reserve Chair Jerome Powell is set to deliver his semi-annual address before Congress on Wednesday and Thursday, during which he is likely to be pressed by lawmakers about the Fed's actions to bring down inflation and the extent to which these may weigh on the economy.
And already, concerns over the resilience of the economy have risen sharply. A number of economists at major Wall Street firms downgraded their growth forecasts over the past several days to reflect an increased risk of a recession. A recession is typically defined as two consecutive quarters of negative GDP growth, though the final call is made by the National Bureau of Economic Research (NBER).
"The most likely outlook is very weak growth and persistently high inflation," Bank of America economists wrote in a note Friday. "We see roughly a 40% chance of a recession next year. Our worst fears around the Fed have been confirmed: they fell way behind the curve and are now playing a dangerous game of catch up."
Others have been even more bearish. Deutsche Bank's base case calls for a recession to begin in the third quarter of 2023, following sluggish real GDP growth of just 1.2% in the U.S. in 2022, versus the 1.8% seen previously. Goldman Sachs economists "now see recession risk as higher and more front-loaded," the firm's chief economist Jan Hatzius said in a new note. He raised his recession probability to 30% from 15%.
Rising risks of a formal recession in the U.S. economy also leave the S&P 500 vulnerable to more downside, even after a more than 22% slide so far for the year-to-date. The S&P 500's bear market slides since World War II have averaged 29.6% with an average duration of 11.4 months, according to data from LPL Financial's Ryan Detrick. However, when bear markets coincide with recessions, the S&P 500 tends to fall 34.8% on average at its bear market trough and last nearly 15 months.
On the move
Kellogg (K) shares rose after the company announced it planned to split into three separate companies. The newly spun out firms will comprise a separate global snack foods company, a North American cereal firm, and pure-play plant-based foods company.
Tesla's (TSLA) stock gained after CEO Elon Musk said the company's head count would only be reduced by as much as about 3.5% in the near-term, or a smaller percentage than previously expected. Musk confirmed that 10% of salaried workers at Tesla would be cut over the next three months, but that ongoing hiring would keep the net reduction to just 3-3.5% of the firm's overall workforce, he told Bloomberg News Tuesday.
Coinbase (COIN) shares jumped more than 12% as cryptocurrency prices bounced after reaching multi-year lows. The crypto trading platform saw its stock slide nearly 80% for the year-to-date through Friday's close, and shares have traded well below their reference price of $250 apiece from the time of Coinbase's April 2021 direct listing.
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10.
Market check: Dow adds 500+ points as stocks bounce back
2022-06-21 15:14:23 by Yahoo Finance VideoYahoo Finance's Brian Cheung discuss how markets are moving in intraday trading.
11.
Market check: Stocks rise after last week’s lows
2022-06-21 14:06:04 by Yahoo Finance VideoYahoo Finance's Jared Blikre breaks down how markets opened on Tuesday.
12.
Recession risk: Consumer has ‘deteriorated faster than we’ve ever seen,’ strategist says
2022-06-21 13:40:01 by Yahoo Finance VideoCalit Advisors Partner Lenore Elle Hawkins joins Yahoo Finance Live to discuss the state of the economy, stock futures, consumer sentiment report data, May retail sales, retail inventories, inflation, and the outlook for a recession.
13.
Stocks log worst week since March 2020, S&P 500 falls 5.8%
2022-06-17 20:06:16 by Emily McCormick from Yahoo FinanceU.S. stocks rose on Friday but still logged their worst weekly declines since the height of the pandemic in 2020, as concerns over the prospects of a recession remained elevated.
The S&P 500 ended higher by 0.2% on Friday to settle at 3,674.79. That brought its one-week decline to 5.8%, or the biggest since March 2020. The Nasdaq jumped 1.4% during the session as badly beaten down tech names recovered some recent losses, though the index still dropped 4.8% since last week. The Dow erased earlier intraday gains to close lower, and the 10-year Treasury yield pulled back to about 3.2%. Crude oil prices sank, and West Texas intermediate futures fell below $109 per barrel to an about one-month low.
The major averages logged another week of steep losses as traders considered the likelihood and timing of a potential recession. While signals of an economic slowdown have been brewing for months now, heightened fears of a more significant downturn resurged in just the past week alone. That came especially after last Friday's Consumer Price Index showed inflation remained at multi-decade highs even following the Federal Reserve's initial moves earlier this year to raise interest rates and bring down demand and prices.
And with the Fed now turning even more aggressive — starting with its first 75 basis point interest rate hike since 1994 on Wednesday — the potential for a slide in economic activity as the central bank trades some growth for lower inflation appears increasingly likely. Fed Chair Jerome Powell reiterated on Friday that the central bank remained "acutely focused on returning inflation to [the Fed's] 2% objective."
"The market is reevaluating what the odds of a recession are in the near-term and what the actual downside on earnings and what the recession will really look like," Ross Mayfield, Baird investment strategy analyst, told Yahoo Finance Live on Thursday. "But to me, it's a fairly kind of tidy story about higher interest rates, more aggressive Fed, and multiple times in the past that leads to some sort of financial crisis or recession. I think the market's trying to price the odds of that."
And that pricing recalibration has so far brought the S&P 500 24% below its Jan. 3 record closing high. But stocks likely still have further to fall if history is any indication, some strategists said.
Deutsche Bank, one of the first major banks to call for a 2023 recession earlier this year, pointed out that the S&P 500's current decline from its peak is so far in-line with the median drop seen amid recessions post-World War II. Currently, it's the fourth worst non-recession correction over that period, Deutsche Bank's Jim Reid said in a note Friday morning. But when recessions materialize, bear markets for stocks tend to deepen.
"The timing of the recession is a hot topic at the moment. When it hits, both [Binky Chadha, Deutsche Bank chief U.S. equity and global strategist] and I would expect the S&P 500 to be down -35 to -40% from the highs," Reid said. "The rationale from [Chadha] being that the initial overvaluation was more extreme than normal cycles, with my additional comment being that this recession marks a regime shift from decades of declining inflation to higher structural levels. This deserves a bigger de-rating than average."
On the move
Gainers
Alibaba (BABA) shares soared following a Reuters report that the People's Bank of China had accepted Ant Group's application to create a financial holding company. Alibaba shares rose more than 5% on the New York Stock Exchange Friday just after market open, and other U.S.-listed Chinese firms also saw their share prices increase.
American Express (AXP) shares gained after Baird upgraded the Dow component as well as peer payment companies Capital One, M&T Bank and Fifth Third to Outperform from Neutral, according to Bloomberg. Baird noted that the "risk/reward finally [looks] attractive for bank and card names" in the wake of the latest selling pressures for the space.
Centene (CNC) shares gained after the healthcare company raised its full-year guidance ahead of its investor day. The company now sees adjusted earnings per share coming in between $5.55 and $5.70, up from a prior range of between $5.40 and $5.55.
Decliners
Adobe (ADBE) shares declined after the company slashed its full-year revenue outlook to account for greater tax and currency headwinds, and the impact of its decision to end sales in Russia and Belarus amid the war in Ukraine. The company now sees full-year sales totaling $17.7 billion compared to a prior outlook for $17.9 billion.
Match Group (MTCH) shares slid to a record low of $67.25 apiece on Friday, extending declines seen across tech and growth names in recent weeks. Shares of peer dating app company Bumble also fell sharply intraday.
Advent Technology (ADN), a fuel cell and hydrogen technology developer, saw shares sink more than 10% in early trading. The move came a day after the stock skyrocketed by more than 200%, after the company announced it received a funding notification for about $821 million for a fuel cell development project in Greece.
This post will be updated.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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14.
Inflation: ‘The Fed is scared’ and so are markets, economist says
2022-06-17 14:32:46 by Yahoo Finance VideoBeth Ann Bovino, S&P Global Ratings Chief U.S. Economist, joins Yahoo Finance Live to discuss the outlook for the U.S. economy, Fed tightening, and how markets are weighing recession risks.
15.
Market check: Stocks bounce back from Thursday’s steep losses
2022-06-17 14:13:51 by Yahoo Finance VideoYahoo Finance’s Emily McCormick joins the Live show to break down how markets opened on Friday.
16.
Stocks slide to lowest since Dec. 2020 amid renewed recession concerns
2022-06-16 20:04:10 by Emily McCormick from Yahoo FinanceU.S. stocks sank Thursday as investors weighed the potential economic costs of the Federal Reserve's ongoing fight with inflation.
The S&P 500 fell by 3.25% to 3,666.77, its lowest level since Dec. 2020. It also erased gains after rising 1.5% on Wednesday. The Nasdaq Composite plunged by more than 4%, bringing the index down by more than 30% for the year-to-date. The Dow sank by 741 points, or 2.4%, to close below 30,000 for the first time since January 2021.
Stocks, which moved initially to the upside following Fed's first 75 basis point rate hike since 1994 on Wednesday, turned around as traders assessed the potential that the central bank's moves to bring down inflation would trigger a deeper downturn in economic activity.
The Federal Open Market Committee's (FOMC) Summary of Economic Projections (SEP) on Thursday showed the committee itself now sees a less rosy economy ahead as its continues to hike interest rates. The FOMC now anticipates the unemployment rate will come in at 3.7% by the end of this year (versus the 3.5% rate seen in March), and that real gross domestic product will rise just 1.7% (versus the 2.8% increase seen previously). The Fed also raised its forecast for the rate of core inflation at year-end and its expectation for where the Fed funds rate would end 2022.
The lowered growth outlook coupled with a more aggressive path on interest rate hikes ahead appeared to vindicate some pundit's concerns that the Fed's window to achieve a "soft landing" had nearly or already passed. Fed Chair Jerome Powell suggested Wednesday that a 50 or 75 basis point interest rate hike seemed most like at the central bank's next meeting in July. While the Fed is still forecasting GDP growth will end each of 2022, 2023 and 2024 in positive territory, some suggested this may be overly optimistic.
"The Summary of Economic Projections (SEP) and Chair Powell’s presser highlighted a Committee that sees an increasingly narrow path to a soft landing, while still maintaining that as a baseline," Matthew Luzzetti, chief U.S. economist at Deutsche Bank, wrote in a note. "The statement removed the reference to maintaining a strong labor market as inflation is brought under control and the SEP anticipates that the unemployment rate will eventually rise by about half a percentage point. We continue to anticipate that the Fed will have to move more aggressively than signaled at [Wednesday's] meeting and that this tightening will trigger a recession in 2023 that leads to a more material rise in the unemployment rate."
Powell, for his part, said Wednesday that the Fed was not looking for a recession to achieve the central bank's goals of bringing down inflation. However, whether such an outcome is ultimately avoidable as a byproduct of the Fed's moves remains a question for markets, and one that will likely keep volatility at play, some strategists said.
"'Clear and convincing' evidence of moderating inflation has yet to materialize ... Further volatility is likely with the Fed firmly data dependent," Julian Emanuel, senior managing director at Evercore, said in a note. "Ideally, this will include equities reflecting signs of capitulation, the groundwork for 'a' bottom is being laid."
"Until further necessary and sufficient signs (gasoline price turn and VIX [spikes above 40] on heavy stock volume) of 'a' bottom, not necessarily 'the' bottom appear, we maintain balanced exposure," he added.
On the move
Twitter (TWTR) shares turned lower Thursday afternoon, erasing earlier gains after Elon Musk's highly anticipated all-hands meeting with the social media company's employees. Musk reportedly discussed a goal of growing Twitter's user base to 1 billion users, and suggested both subscription and advertising sales would be key to the company's revenue growth going forward, Bloomberg reported, citing people familiar with the matter. However, he also reportedly did not directly address during the meeting whether he had committed to completing his acquisition of the firm.
Robinhood (HOOD) shares fell anew on Thursday amid the recent drop in cryptocurrency prices, and as Wall Street firms struck an increasingly pessimistic tone on the online trading platform's stock on increased regulatory concerns. Atlantic Equities downgraded the stock to Underweight from Neutral on Wednesday and slashed its price target to the lowest on Wall Street at $5 a share, Bloomberg data showed.
Adobe (ADBE) shares declined before the company's fiscal second quarter earnings report, which is set for release Thursday after market close. Consensus analysts see the software company delivering adjusted earnings of $3.31 per share on revenue of $4.35 billion.
This post will be updated.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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17.
Stocks slide to 2022 lows amid rising market volatility
2022-06-16 19:42:07 by Yahoo Finance VideoYahoo Finance's Emily McCormick reports on the stock market sell-off.
18.
Stocks plunge to 2022 lows, bitcoin hovers around $21,000
2022-06-16 16:06:59 by Yahoo Finance VideoYahoo Finance's Emily McCormick breaks down the broad sell-off hitting the markets on Thursday as investors digest renewed recession concerns.
19.
Stocks accelerate losses, Dow falls by 800+ points
2022-06-16 15:17:32 by Yahoo Finance VideoYahoo Finance Live anchors discuss stocks reversing yesterday's gains as recession fears weigh on traders.
20.
Stocks snap 5-day losing streak after Fed raises rates by most since 1994
2022-06-15 20:02:11 by Emily McCormick from Yahoo FinanceU.S. stocks jumped Wednesday afternoon as investors considered the Federal Reserve's latest monetary policy decision. In this, the central bank hiked interest rates 75 basis points, or the most since 1994, and suggested a similar move could take place next month.
The S&P 500 jumped by about 1.5% by market close to end a five-day losing streak and close at 3,789.91. The Nasdaq Composite rose by 2.5% to close at 11,099.15, and the Dow added about 300 points, or 1% for a close of 30,668.27.
Treasury yields held lower and the benchmark 10-year yield pulled back from a more than decade-high to hold just above 3.4%. The monetary policy-sensitive two-year yield also pulled back from a 15-year high. Bitcoin prices (BTC-USD) remained in the red after sinking to a fresh Dec. 2020 low of just over $20,000 earlier in the day.
The Federal Reserve opted to raise interest rates by 75 basis points in June, following a 50 basis point rate hike in May. During a press conference Wednesday afternoon, Fed Chair Jerome Powell also said a 50 or 75 basis point rate hike "seems most likely" for the Fed's next meeting in July, and in doing so implied suggested an even larger interest rate hike of a full percentage point was unlikely in the near-term.
Investors had begun to price in an increased probability of a 75 basis poinnt rate hike over the past several days, after fresh economic data suggested the Fed's previous, more measured moves on rates had so far done little to address inflation. Consumer prices unexpectedly rose to set a fresh 40-year high in May. And other recent data showed consumers' inflation near-term expectations have crept to near or all-time highs.
The Fed also increased its inflation forecast for the current year. The median Federal Open Market Committee member sees core personal consumption expenditures (PCE), the Fed's preferred gauge of underlying inflation, rising by 4.3% in 2022. That compared to an estimate of 4.1% in March, the last time the Fed provided an updated set of projections. For 2023, the Fed sees core PCE rising by 2.7% before slowing to 2.3% in 2024.
At the same time, however, the Fed's assumptions for U.S. GDP and unemployment soured this month compared to March. The median FOMC member now sees real GDP rising 1.7% this year and in 2023, down markedly from the previous median estimate for 2.8% and 2.2%, respectively. The Fed also sees the unemployment rate edging up to 3.7% by the end of this year, rather than dipping back to the pre-pandemic multi-decade low of 3.5% as the Fed had predicted in March.
And heading into Wednesday's decision, some pundits had been less supportive of a 75 basis point hike and cast doubt about whether it would ultimately be a net positive for the economy. The Fed's rate decision was also not unanimous, with Kansas City Fed President dissenting and opting instead for a 50 basis point rate increase.
The risk of the Fed over-tightening, or raising interest rates more swiftly than markets and the economy can adjust to, could ultimately do more damage than good, some strategists argued ahead of Wednesday's decision. In his press conference, Powell also suggested he acknowledged this balancing act, noting, "There’s always a risk of going too far or going not far enough" while adding failing to restore price stability would be "the worst mistake we could make." And the economy has already shown signs of softening: A new report just Wednesday morning showed U.S. retail sales unexpectedly declined in May, as rising gas prices prompted consumers to pull back spending in other areas.
"Our objection to this more aggressive action is that it is unnecessary, because the forces which have driven the recent inflation numbers are already fading," Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a note Wednesday before the release of the Fed decision."Slower wage gains, along with the rollover in the housing market, will depress rent growth, while airline fares are likely to fall over the summer in the wake of falling jet fuel prices, and vehicle prices will drop as inventories rise."
"The inflation fix will not be more effective if the Fed hikes by 75bp [basis points] today or next month, rather than 25bp, and the damage done to private sector wealth could inadvertently trigger a downturn which otherwise would be averted," Shepherdson added. "Less is not always more, but sometimes it is enough."
On the move
Boeing (BA) shares added to Tuesday's gains after the company said it delivered a total of 35 aircraft in May, more than doubling last year's tally of 17. The majority of these were for its lucrative 737 Max jet. Separately, The Seattle Times, citing a Federal Aviation Administration official, reported Boeing may be able to resume 787 Dreamliner deliveries in the coming weeks.
Revlon (REV) shares sharply rose for a second straight day, gaining 17% intraday to build on Tuesday's nearly 60% gain. The stock posted its biggest one-day decline on record last week, falling more than 50% in a single day, after the cosmetics company was reportedly preparing to file for Chapter 11 bankruptcy.
Baidu (BIDU) shares rose after Reuters reported the Chinese internet giant has been in talks to sell its majority stake in streaming business iQiyi. The deal could reportedly value the firm around $7 billion.
—
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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21.
10-year Treasury yield the ‘safest place in town’ amid Fed rate hikes: Strategist
2022-06-15 14:38:55 by Yahoo Finance VideoPriya Misra, managing director and global head of rates strategy at TD Securities, joins Yahoo Finance Live to discuss Fed interest rate hikes, inflation, consumer demand, and the probability of recession.
22.
Stocks open higher as investors await Fed decision
2022-06-15 14:28:11 by Yahoo Finance VideoYahoo Finance's Julie Hyman discusses how stocks are trading in anticipation of the Fed's decision on Wednesday.
23.
Stock market news lives updates: Stocks end mixed after bear market slide as rate decision looms
2022-06-14 20:07:42 by Emily McCormick from Yahoo FinanceU.S. stocks ended mixed on Tuesday following a plunge that sent the S&P 500 into its first bear market since the height of the pandemic.
The S&P 500 ended lower by 0.4% in a fifth consecutive session of losses, bringing the index down to 3,735.48. The S&P 500 entered its first bear market since March 2020 on Monday, as its closing price put it more than 20% below its recent record closing high from Jan. The Nasdaq Composite held onto narrow gains of about 0.2% to bring the index to 10,828.35, while the Dow shed 150 points, or 0.5%, to end at 30,364.83.
The benchmark yield on the 10-year Treasury note rose to top 3.4% and reach a fresh 11-year high. The monetary policy-sensitive two-year yield also built on gains to reach its highest since 2007. Oil prices rose, and U.S. West Texas intermediate crude oil futures broke back above $122 per barrel. Bitcoin (BTC-USD) remained under pressure as prices held just over $22,000.
Volatility resurged across markets at the start of the week as investors raced to price in a greater likelihood of a larger interest rate hike from the Federal Reserve as it races to address inflation. Market participants expect the Federal Open Market Committee (FOMC) will raise interest rates by the 75 basis points this week, with CME Group data showing Tuesday that traders were pricing in a more than 90% probability of such an outcome. The FOMC begins its two-day policy-setting meeting on Tuesday, with a decision and press conference from Federal Reserve Chair Jerome Powell set for Wednesday.
Expectations for a much larger-than-typical rate hike soared after the Wall Street Journal reported Monday that a 75 basis point hike was on the table among Fed officials. And talk and market pricing of such a hike had already been building after Friday's much hotter-than-expected May CPI print, and after separate surveys in the days since showed consumers' near-term inflation expectations were increasing to levels at or near all-time recorded highs.
"The Fed’s previous plan to hike by 50bp [basis points] at the meetings in June and July and then revert to 25bp increases in the fall was always dependent on inflation showing signs of cooling," Paul Ashworth, chief North America economist at Capital Economics, wrote in a note Tuesday. "Instead, the monthly gains in core CPI accelerated back to 0.6% in both April and May, suggesting that price pressures are broadening."
New data Tuesday also showed wholesaler price increases also remained elevated last month. The Producer Price Index (PPI) jumped 10.8% in May over last year after a 10.9% jump in April, according to the Bureau of Labor Statistics. Nearly two-thirds of the May rise came from a jump in final demand goods prices including energy, which jumped 5% on a monthly basis.
And other recent reports further suggested businesses' concerns over inflation remained elevated. The latest NFIB Small Business Optimism survey Tuesday showed inflation remained the top problem reported among small business owners. The share of business owners raising their own selling prices rose to match a record high in the 48-year-old survey.
On the move
Gainers
FedEx (FDX) shares jumped by as much as 15.6% intraday on Tuesday after the company raised its dividend, announced it will tie executive compensation to shareholder returns, and added two new board members, with a third director on the way at a later date. The moves follow pressure for changes at the shipping giant from activist investor D.E. Shaw.
Oracle (ORCL) shares ended higher by more than 10% after the software company topped fiscal fourth quarter earnings and sales estimates in results delivered Monday afternoon. Cloud licensing revenue drove the beat as sales in that unit jumped 18%.
Twitter's (TWTR) staff is set to hear from Elon Musk this week, with the billionaire set to make his first appearance at a Twitter all-hands meeting since first announcing his $44 billion plan to buy the social media company in April, Insider reported Tuesday. Shares pared earlier gains but still ended higher by about 0.7%.
Decliners
Compass (COMP) and RedFin Corporation (RDFN) each announced layoffs on Tuesday as slowing housing market activity hit major real estate firms. Compass said it will lay off about 10% of its workforce, or about 450 positions, while RedFin said it had asked 8% of its employees to leave the company.
Coca-Cola (KO) said it will delay a planned initial public offering of Coca-Cola Beverages Africa on the Johannesburg Stock Exchange until 2023 due to present market uncertainty. Shares ended lower by 2.7%.
—
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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24.
Stocks: Oracle rises, Fedex soars, consumer staples lag
2022-06-14 16:09:23 by Yahoo Finance VideoYahoo Finance’s Ines Ferré joins the Live show to discuss how stocks are performing in intraday trading.
25.
Markets Pricing-In Certain Recession; Is There Any Hope?
2022-06-14 14:32:02 by Mark Vickery from ZacksTuesday, June 14, 2022
Pre-market futures are in the green this morning — yes, we’re seeing some weeds emerge from the cracks in the craters left from yesterday’s trading and that of the past three sessions. Everything is down, nothing is spared; even Financials, which should be looking stronger with raising interest rates on the near-term horizon, were down -3% yesterday. I suppose the specter of a full-blown recession isn’t much of a prospect for anyone.
Producer Price Index (PPI) numbers for May are out, in-line on the month-over-month headline to +0.8%, +0.5% on core (stripping out food and energy costs), which is 10 basis points lower than predicted. This is good news, albeit to a minute extent. PPI determines the costs of goods to producers of other goods.
Year over year numbers are getting much of the emphasis — both on the PPI and CPI (Consumer Price Index) side — for one very good reason: they demonstrate to what extent inflation has entered the economy from the same time a year ago. Headline year over year PPI came in at +10.8% — continuing the string of 10%+ prints going back six months to December of last year.
So a +10.8% year over year PPI read means inflation is stubborn — duh! — but at least we’re off the +11.5% in March, but that was an all-time high mark going back to the beginning of the PPI survey in 2010. It’s possible we’re seeing where the top of this curve is overall, but so far there’s no evidence prices are falling fast.
What we all need to do, in lieu of hand-wringing and worrying about our investments in the near-term, is wait for the Fed to make its move Wednesday (its monetary policy meeting begins today) and await the impact of the rate hike, whether it’s 50 basis points or 75. Keep in mind a 75 basis-point hike doubles the current Fed funds rate; for all the negative talk and Fed-shaming we’ve endured of late (much of it for good reasons), the ball is definitely rolling.
Need more proof? Look no further than the Housing market: since the start of the year, the 30-year fixed mortgage rate has doubled from 3% to 6% — its highest level since the end of 2008. Even though common wisdom is there is no direct correlation between Fed funds rates and 30-year mortgages, the data tells a different story: homebuying exploded in 2021 and stayed hot through most of Q1, and at least a portion of this could reasonably considered due to prospective buyers understanding rates were going to raise once the Fed started hiking.
Now we’re expecting inventories +15% for 2022, where four weeks ago only +0.3% was anticipated. This is significant. Even though this year is still expected to be the second-hottest since the Great Recession in the late Oughts (behind 2021), activity is quickly slowing way down. Considering that housing is usually the most expensive thing a consumer buys — and considering how many subsequent goods and services industries are affected by housing activity — we may be seeing a leading indicator out of the current “certain recession” narrative.
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26.
Monday market meltdown: S&P 500 enters bear market, 10-year yield hits 11-year high
2022-06-13 20:16:22 by Emily McCormick from Yahoo FinanceU.S. stocks sank into a bear market on Monday, with traders betting a fresh decades-high print on inflation will force the Federal Reserve to get even more aggressive than previously anticipated to help ease rising prices.
[Click here to read what's moving markets on Tuesday, June 14]
The Nasdaq Composite fell 4.7% by market close to end at 10,809.23, its lowest level since September 2020. The S&P 500 dropped 3.9% to end at 3,749.81. This set the index more than 20% below its recent record high from January, meaning it had officially fallen into a bear market.
Treasury yields rose across the curve, with the benchmark 10-year yield jumping to top 3.34% and reach its highest level since 2011.
Cryptocurrencies also slid after digital currencies lender Celsius Network said Sunday it was pausing all withdrawals, swaps and transfers between accounts on its platform "due to extreme market conditions," according to a statement.
Bitcoin prices (BTC-USD) fell by more than 17% to below $23,000 at session lows, or the lowest since December 2020, in the wake of the announcement, while Ethereum prices (ETH-USD) tumbled below $1,200. Crypto-related stocks including Coinbase (COIN) and MicroStrategy Incorporated (MSTR) also came under renewed selling pressure.
For the broader markets, investors nervously looked ahead the Federal Reserve's latest policy-setting meeting later this week, with a rate decision set for Wednesday. Up until Friday's hotter-than-expected monthly Consumer Price Index, traders widely believed the meeting would set the stage for another half-point rate hike by the central bank, bringing the target range for interest rates between 1.25% and 1.50%. However, after last week's data showed an unexpected pick-up in inflation to a fresh 40-year high of 8.6% in May, investors have raised their bets on an even bigger move by the Fed.
Fed funds futures, which help track traders' predictions for where the Fed's target interest rate band will land, shifted quickly after Friday's report and showed increased bets on an even more pronounced 75 basis point hike. As of Monday, Fed funds futures priced in an about 25% probability of three-quarter point hike and an around 75% probability of a 50 basis point hike, according to CME Group data. As recently as mid-last week, investors were pricing in a more than 90% probability that the Fed would opt for a 50 basis point rate hike.
"There is very little in the details of [Friday's CPI] report to suggest that inflationary pressures are easing," Michael Pearce, senior U.S. economist for Capital Economics, wrote in a note Friday. "The surge in energy prices this month means that headline inflation will remain close to 8.6% in June. Together with the continued strength of the latest activity data, that bolsters the argument of the hawks at the Fed to continue the series of 50 bp [basis point] rate hikes into September and beyond, or even to step up the size of rate hikes at coming meetings."
Such a super-sized rate hike would add more pressure to already-volatile stocks by further raising the cost of borrowing for businesses. But at the same time, equity markets have also remained in turmoil as investors have had to weigh whether inflation left to run at current decades-high rates will push the economy into a deeper downturn. Already, at least one survey has shown consumer sentiment plunged to its lowest level since at least the 1970s in the face of rising prices. And given all these uncertainties, the Fed may well choose to continue down its previously telegraphed path to implement only half-point hikes in the near-term, some economists said.
—
4:05 p.m. ET: Stocks close in bear market as S&P 500 sinks 22% from Jan. high
Here were the main moves in markets as of 4:05 p.m. ET:
S&P 500 (^GSPC): -151.23 (-3.88%) to 3,749.63
Dow (^DJI): -876.05 (-2.79%) to 30,516.74
Nasdaq (^IXIC): -530.80 (-4.68%) to 10,809.23
Crude (CL=F): -$0.08 (-0.07%) to $120.59 a barrel
Gold (GC=F): -$50.80 (-2.71%) to $1,824.70 per ounce
10-year Treasury (^TNX): +21 bps to yield 3.3660%
—
9:35 a.m. ET: Stocks open lower, S&P 500 trades in bear market territory
Here were the main moves in markets as of 9:35 a.m. ET:
S&P 500 (^GSPC): -88.32 (-2.26%) to 3,812.54
Dow (^DJI): -531.94 (-1.69%) to 30,860.85
Nasdaq (^IXIC): -301.10 (-2.66%) to 11,038.92
Crude (CL=F): -$0.98 (-0.81%) to $119.69 a barrel
Gold (GC=F): -$36.90 (-1.97%) to $1,838.60 per ounce
10-year Treasury (^TNX): +12.4 bps to yield 3.2800%
—
7:14 a.m. ET: Stock futures slide ahead of the open
Here were the main moves in markets before the opening bell:
S&P 500 futures (ES=F): -86 points (-2.21%) to 3,813.00
Dow futures (YM=F): -539 points (-1.72%) to 30,849.00
Nasdaq futures (NQ=F): -340.25 points (-2.87%) to 11,499.75
Crude (CL=F): -$1.87 (-1.55%) to $118.80 a barrel
Gold (GC=F): -$15.70 (-0.84%) to $1,859.80 per ounce
10-year Treasury (^TNX): +9.6 bps to yield 3.253%
—
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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27.
Fed survey shows inflation expectations match highest on record
2022-06-13 15:00:38 by Emily McCormick from Yahoo FinanceU.S. households' expectations for inflation over the coming year rose to match the highest recorded level on record in May, according to new data from the New York Fed.
The NY Federal Reserve's Survey of Consumer Expectations released Monday showed consumers in May anticipate inflation will rise at a 6.6% rate over the next year, up from an April reading of 6.3%. May's reading tied with March's print for the highest on record, in data spanning back to June 2013.
Longer-term inflation expectations were slightly more subdued last month, with consumers looking for inflation to average 3.9% over the next three years. This expectation, however, is still well above the Fed's 2% target. These longer-term expectations were unchanged from April.
This data further complicates the job of the Federal Reserve's task to bring down rising prices and prevent expectations from becoming embedded among consumers.
The NY Fed's report comes just days after government data showed an unexpected pick-up in the pace of price increases across the U.S. economy. Friday's Consumer Price Index (CPI) registered an 8.6% annual increase, or the biggest since 1981, as prices for energy, food, shelter and a variety of other goods and services each saw further gains.
Over the weekend, gas prices at the pump jumped above $5 per gallon on average across the U.S. for the first time ever, AAA data showed, further pressuring consumers already squeezed by broad-based price rises.
And amid these rising prices, consumer sentiment has plummeted. The University of Michigan's Surveys of Consumers consumer sentiment index slumped to an all-time low reading of 50.2 in the preliminary June survey, marking the lowest level recorded by the survey dating back to the mid-1970s.
The University of Michigan's latest data on consumer inflation expectations also showed an increase, mirroring the rise in the New York Fed's report.
According to the university's survey, consumers in early June anticipated inflation would rise 5.4% over the next year, matching March and April's readings and marking the highest levels since 1981. UMich data also showed long-term inflation expectations on the rise, hitting 3.3% this month, the highest since at least 2010.
—
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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28.
Stocks crushed after inflation hits 40-year high: Nasdaq falls 3.5%, S&P 500 suffers worst week since January
2022-06-10 20:10:04 by Emily McCormick from Yahoo FinanceU.S. stocks sank Friday as investors digested two downbeat prints on the U.S. economy.
May data on inflation showed price increases unexpectedly accelerated last month, with consumer prices rising 8.6% year-over-year in May, the most since 1981. Consumer sentiment data released Friday morning came in at a record low, as inflation weighs on American households.
The S&P 500, Dow and Nasdaq dropped sharply following the print. The S&P 500 sank by 2.9% during the session, and by more than 5% since last Friday to post its worst weekly performance since January. The index ended just a hair above 3,900, or its lowest level in about three weeks. The Dow sank by 880 points, or 2.7%, and the Nasdaq Composite dropped 3.5% by the end of Friday's session.
Treasury yields spiked especially on the short end of the curve, and the 2-year yield jumped to top 3%. The benchmark 10-year Treasury yield rose to more than 3.1%. U.S. crude oil prices pulled back, falling to around $120 per barrel, after rising above $122 per barrel earlier this week.
For market participants, the Bureau of Labor Statistics' release of the Consumer Price Index (CPI) was a key print, offering a fresh look at the extent to which price increases have persisted across the U.S. economy. The index unexpectedly accelerated to post an 8.6% annual increase in May, following April's 8.3% rise. That marked the biggest jump since late 1981, and took out the prior 41-year high set in the March CPI, which rose 8.5%.
On a month-over-month basis, CPI also jumped by 1.0%, or more than the 0.7% rise expected, and April's 0.3% increase. Core inflation, which excludes volatile food and energy prices, increased 6.0% on an annual basis after April's 6.2% increase.
Inflation has remained a dominant issue for investors, policymakers and the American public this year. Higher prices have threatened to weigh on consumer spending — the key driver of U.S. economic activity — as goods and services become increasingly unaffordable. Inflation has already shown signs of triggering a rotation from spending on some discretionary goods to other purchase areas. And on Friday, a closely watched consumer sentiment index slumped to a record low as inflationary concerns weighed on Americans.
And for investors, inflation has also become a key determinant in the path forward for the Federal Reserve's monetary policies. As the Fed aims to help bring down fast-rising prices, the central bank is widely expected to raise interest rates by another half-point at next week's policy-setting meeting, further increasing the cost of borrowing and doing business for companies.
Amid these concerns over inflation's impact on the economy and Fed's next moves, stocks have continued to trade choppily. Each of the three major averages was on track to post a back-to-back week of losses, based on Thursday's closing prices. The S&P 500 headed for a weekly decline of about 2%.
"At the end of the day, markets are just faced with a whole lot of uncertainty right now. And it's not just that inflation story," Jack Manley, global market strategist at JPMorgan Asset Management, told Yahoo Finance Live on Thursday. "We have still some uncertainty, some lack of clarity around what the Fed is going to do. The war in Europe continues to rage. And we know there are new developments happening on that front every few days."
"There's a lot to digest right now. And without any sort of real clarity on these things, it's hard for markets to meaningfully move higher or lower," he added. "It's all markets really want at the end of the day, is news. And no news is bad news."
—
4:08 p.m. ET: Stocks log worst week since January after inflation print roils markets
Here were the main moves in markets as of 4:08 p.m. ET:
S&P 500 (^GSPC): -116.96 (-2.91%) to 3,900.86
Dow (^DJI): -880.00 (-2.73%) to 31,392.79
Nasdaq (^IXIC): -414.20 (-3.52%) to 11,340.02
Crude (CL=F): -$0.92 (-0.76%) to $120.59 a barrel
Gold (GC=F): +$23.10 (+1.25%) to $1,875.90 per ounce
10-year Treasury (^TNX): +11.2 bps to yield 3.1560%
—
11:08 a.m. ET: (Almost) nowhere to hide in Friday's market
Our inboxes were flooded Friday morning with economist reactions to the May inflation data, and several shops used "nowhere to hide" as their main hook for talking about this data.
But this framework applies to the market as well on this ugly Friday morning.
The Nasdaq is off 3.3% about 90 minutes into the session and the S&P 500 off 2.6%, while all 11 S&P sectors are lower and 8 of these are off more than 2% in morning trade. There are almost no safe spaces in this market right now.
In the true risk-off part of the market, ARK Innovation (ARKK) is down over 6% and the 2021 class of SPACs and IPOs are under pressure as well. These have been some of the best performers in the rally we've seen investors try to put together over the last few weeks.
"The Generals" — the group formerly known as the FAAMNG stocks — are all down more than 3%, however, showing the widespread stress Friday's action is putting on investors. Apple (AAPL), which has held up better than any of the other mega cap tech names through this market sell-off, is again the most durable performer, falling 3.5% in morning trade.
Consumer Staples (XLP) is the best performing sector so far in today's trading, down just 0.4% and rallying since the open. Grocery stores are the lone bright spot in the market today, as higher food prices will likely pass through to these companies' bottom lines in the coming months.
—Myles Udland, senior markets editor
—
10:33 a.m. ET: Consumer sentiment slumps to record low: U. Michigan
Consumers sentiment fell to its lowest-ever recorded level in early June, with rising prices at the pump especially weighing on Americans' wallets.
The University of Michigan's preliminary June consumer sentiment index dropped to 50.2, or an all-time low since the institution began tracking the data. This followed May's index reading of 58.4, and missed estimates for 58.1, according to Bloomberg data.
"Consumer sentiment declined by 14% from May, continuing a downward trend over the last year and reaching its lowest recorded value, comparable to the trough reached in the middle of the 1980 recession," Joanne Hsu, director of the Surveys of Consumers for the University of Michigan, said in a statement.
"Consumers' assessments of their personal financial situation worsened about 20%," Hsu added. "Forty-six percent of consumers attributed their negative views to inflation, up from 38% in May; this share has only been exceeded once since 1981, during the Great Recession."
Hsu also noted that half of all surveyed consumers mentioned gas unprompted in their interviews, up from 30% in May.
—
9:32 a.m. ET: Stocks open lower after inflation ramps further
Here were the main moves in markets as of 9:32 a.m. ET:
S&P 500 (^GSPC): -69.64 (-1.73%) to 3,948.18
Dow (^DJI): -513.18 (-1.59%) to 31,759.61
Nasdaq (^IXIC): -219.70 (-1.87%) to 11,534.53
Crude (CL=F): -$0.47 (-0.39%) to $121.04 a barrel
Gold (GC=F): -$18.50 (-1.00%) to $1,834.30 per ounce
10-year Treasury (^TNX): +3.7 bps to yield 3.0810%
—
9:03 a.m. ET: Stock futures accelerate to the downside after hot May CPI print
Here were the main moves in markets as of 9:03 a.m. ET:
S&P 500 futures (ES=F): -55.25 points (-1.38%) to 3,961.00
Dow futures (YM=F): -384 points (-1.19%) to 31,879.00
Nasdaq futures (NQ=F): -198.75 points (-1.62%) to 12,076.25
Crude (CL=F): +$0.07 (+0.06%) to $121.58 a barrel
Gold (GC=F): -$8.30 (-0.45%) to $1,844.50 per ounce
10-year Treasury (^TNX): +0.2 bps to yield 3.044%
—
7:14 a.m. ET: Stock futures mixed before inflation data
Here were the main moves in markets as of 7:14 a.m. ET:
S&P 500 futures (ES=F): -6.25 points (-0.16%) to 4,010.00
Dow futures (YM=F): -85 points (-0.26%) to 32,178.00
Nasdaq futures (NQ=F): +6.25 points (+0.05%) to 12,281.25
Crude (CL=F): +$0.94 (+0.77%) to $122.45 a barrel
Gold (GC=F): -$8.20 (-0.44%) to $1,844.60 per ounce
10-year Treasury (^TNX): -0.7 bps to yield 3.035%
—
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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29.
We’re headed for a recession — ‘just not yet,’ economic cycle expert says
2022-06-10 14:51:54 by Yahoo Finance VideoLakshman Achuthan, Economic Cycle Research Institute Co-Founder, joins the Live show to discuss the odds of a recession occurring, the causes of a potential downturn, and the outlook for the economy.
30.
Consumer sentiment hits record low in June as inflation weighs on consumers
2022-06-10 14:41:12 by Emily McCormick from Yahoo FinanceConsumer sentiment sank to its worst level on record in early June as the rising cost of food, gas, and other essentials weighed on American consumers.
The University of Michigan's closely watched Surveys of Consumers consumer sentiment index slumped to 50.2 in the preliminary June survey, marking the lowest level recorded by the survey, which dates back to the mid-'70s.
Friday's reading marked a drop from May's already-depressed level of 58.4, and missed estimates for a print of 58.1, according to Bloomberg data. Throughout 2019, the last year before the COVID-19 pandemic sent the economy into recession, the sentiment index had averaged around 96.0.
"Consumer sentiment declined by 14% from May, continuing a downward trend over the last year and reaching its lowest recorded value, comparable to the trough reached in the middle of the 1980 recession," Joanne Hsu, director of the University of Michigan's Surveys of Consumers, said in a statement.
Consumers' assessments of their own personal financial situations deteriorated sharply and contributed heavily to the overall drop in the index, Hsu noted. Nearly half (46%) of consumers attributed these worsening views to inflation, up from 38% who did so in May.
"This share has only been exceeded once since 1981, during the Great Recession," Hsu said.
The University of Michigan's report came shortly after the release of the Bureau of Labor Statistics' latest monthly print on consumer price increases.
The Consumer Price Index (CPI) showed prices soared by 8.6% in May over last year, representing the quickest annual jump since late 1981. Energy, food and, shelter were the biggest contributors to the broad-based gains in the index, with energy prices up 34.6% over last year and gas prices alone up nearly 49%.
Friday's sentiment report suggested consumers were taken particular note of the gas price gains.
"Half of all consumers spontaneously mentioned gas during their interviews, compared with 30% in May and only 13% a year ago," Hsu said. "Consumers expect gas prices to continue to rise a median of 25 cents over the next year, more than double the May reading and the second highest since 2015."
Consumers also expected inflation more broadly to remain elevated. The University of Michigan's data showed consumers anticipate inflation will rise 5.4% over the next year, matching March and April's readings and marking the highest levels since 1981.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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31.
Twitter set to turn bot data over to Musk: report
2022-06-08 17:13:04 by Emily McCormick from Yahoo FinanceTwitter's (TWTR) board is reportedly set to pull an about-face, offering Elon Musk internal data on hundreds of millions of tweets as it vies for the billionaire to complete his acquisition of the social media company.
Twitter is set to turn over information to Musk capturing more than 500 million tweets, the devices the posts came from, and other information about the account holders, The Washington Post reported Wednesday, citing an unnamed person familiar with the matter.
Such a move would help respond to Musk's repeated demands for more information about the composition of Twitter's user base and the extent of its problem with bots. Musk has challenged Twitter's claims that just 5% of its accounts are bots, calling the way the company calculates fake accounts "very suspicious" in a May tweet.
Musk has also said the Twitter deal would remain on hold until he received information, leading some on Wall Street to speculate he may be trying to renegotiate the deal down from its original $44 billion price tag.
Twitter rose modestly following the Post's report on Wednesday; Twitter shares have fallen about 15% since Musk's deal to buy Twitter for $54.20 per share was announced per share in late April.
In a letter Monday to Twitter's general counsel Vijaya Gadde, Musk's legal team asserted Musk believed Twitter was "actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement" by withholding the information. Musk waived his typical right as a buyer to due diligence when he first announced his deal with Twitter in April.
"This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement," according to the letter.
Twitter could hand over the information to Musk as soon as the end of this week, The Washington Post reported Wednesday.
In a response to a Yahoo Finance request for comment Wednesday afternoon, a Twitter spokesperson reiterated the company's statement released Monday in response Musk's letter.
"Twitter has and will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement," according to the spokesperson.
"We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement at the agreed price and terms."
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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32.
Stocks break two-day winning streak as inflation concerns persist
2022-06-08 16:00:56 by Emily McCormick from Yahoo FinanceU.S. stocks dropped on Wednesday, with the S&P 500 and Dow giving back gains after rising for back-to-back sessions.
The S&P 500 fell over 1% on Wednesday, while the Dow and S&P 500 both lost more than 0.7%. The small-cap Russell 2000 was the day's biggest laggard, falling over 1.5% at session lows. All three major averages had kicked off this week with gains, rising on both Monday and Tuesday.
West Texas intermediate crude oil prices (CL=F) rose above $122 per barrel to reach the highest level since February, and the benchmark U.S. 10-year Treasury yield resumed its climb above 3%.
Shares of Scott's Miracle-Gro Company (SMG) sank after the company became one of the latest retailers to slash guidance after building more inventory than its end users were demanding.
Individual gainers on Wednesday included streaming company Roku (ROKU), which gained over 9% following a report from Insider that suggested Netflix (NFLX) could explore a bid for the company.
Spotify (SPOT) shares also gained over 6% after the company's investor day.
Despite the early-week advances, the major U.S. stock indexes have remained choppy overall as investors weighed individual company warnings on inflation and the macroeconomic backdrop against policymakers' efforts to bring down elevated prices.
The Federal Reserve remains in a quiet period ahead of its forthcoming policy-setting meeting next week, which is overwhelmingly expected to set the stage for the central bank to roll out a second 50 basis-point interest rate hike.
And other policymakers also reaffirmed that cooling red-hot inflation pressures remains a key priority. U.S. Treasury Secretary Janet Yellen told senators on Tuesday that she expected inflation to remain high and reaffirmed that she saw price increases as being driven by Russia's war in Ukraine, the pandemic-era shift to goods purchases, and ongoing supply chain issues.
"Watching the market ... as it teeters between inching ahead and pulling back, suggests that until there's a more definitive reading on the inflation front coupled with the Fed's thinking on further rate hikes in September, we can expect this bounce back and forth," Quincy Krosby, chief equity strategist for LPL Financial, said in an email.
"Given the uncertainty the market has to discount, and not the least how corporate earnings will fare as the economy slows further, having a market that wobbles a bit before it makes up its mind is probably the healthiest course, at least for now," Krosby added.
The Bureau of Labor Statistics is poised to release its latest Consumer Price Index on Friday, which is expected to show inflation eased only marginally in May from April's elevated 8.3% rate. Consensus economists are looking for headline inflation to rise at a 8.2% annual rate for May, and by 5.9% excluding food and energy prices.
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4:02 p.m. ET: Stocks break winning streak on Wednesday
Here were the main moves in markets at the close of trading on Wednesday:
S&P 500 (^GSPC): -44.96 (-1.08%) to 4,115.72
Dow (^DJI): -269.76 (-0.81%) to 32,910.38
Nasdaq (^IXIC): -88.96 (-0.73%) to 12,086.27
Crude (CL=F): +$3.02 (+2.53%) to $122.43 per barrel
Gold (GC=F): +$3.50 (+0.19%) to $1,855.60 per ounce
10-year Treasury (^TNX): +5 bps to yield 3.0290%
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11:46 a.m. ET: Roku shares soar on reports Netflix is in talks to acquire the company
Shares of Roku (ROKU) jumped more than 12% intraday on Wednesday amid speculation that the company was holding talks to be acquired by Netflix (NFLX). Netflix shares also rose intraday.
Insider first reported Wednesday that internal discussions for the deal were taking place. Spokespeople at both Roku and Netflix told Yahoo Finance that they would not comment on rumors or speculation.
Some major Wall Street firms have already cast doubt on such a tie-up, however. In a note Wednesday morning, JPMorgan's Cory Carpenter and Doug Anmuth called the acquisition "highly unlikely," as it would usher in a massive shift to ad-supported video content at Netflix.
"NFLX’s ad efforts are still in the very early stages," the analysts wrote. "We’d be surprised if NFLX made an acquisition of this magnitude, essentially shifting the platform from no ads to ‘all-in’ on AVOD over the span of a few months. We do not think this would be well received by NFLX shareholders."
"We think it’s more likely that NFLX builds its ad offering on its own or through smaller M&A deals—similar to its gaming effort," they added.
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10:04 a.m. ET: Scotts Miracle-Gro is the latest company to cut its outlook
Lawn giant Scotts Miracle-Gro (SMG) mowed down its guidance on Wednesday.
In a release before the market open, Scotts cut its outlook for sales and profits for 2022 citing, among other factors, "a fluid and rapidly evolving market."
Shares of Scotts were down as much as 8% in early trading.
The company now expects adjusted earnings to be between $4.50-$5.00 per share.
In its report released May 3, the company said its prior full-year EPS forecast for $8.00 per share "is likely unattainable." With this most recent update, Scotts is forecasting full-year adjusted EPS of roughly half that prior target.
Last month, Scotts cited "lousy" weather in most markets as having a negative impact on sales, though the company said Wednesday some of this softness has rebounded.
"While there remains enough time in the year to see continued improvement in our controls and gardening categories, that is not likely to be the case with most of the products in our lawn care portfolio," Scotts said Wednesday.
Moreover, Scotts also said its retail partners — think national outlets like Home Depot (HD) or Tractor Supply (TSCO), as well as your local gardening shop — did not replenish orders over the last few weeks at the rate the company might've hoped.
"In fact, retailer orders were more than $300 million below our plans for the month in the U.S. Consumer segment alone," the company said. "This surprising trend has put significantly greater pressure on our fixed cost structure that, when coupled with the commodity cost increases we have experienced since the start of the war in Ukraine, will cause us to fall well short of the revised financial targets we established in March."
"The changes we have seen since our last public comments in early May are clearly not what we would have expected,” Scotts CEO Jim Hagedorn said. "The revised guidance we are providing is our best estimate of where things currently stand in a fluid and rapidly evolving market. While we are striving to deliver the best outcome for fiscal 2022, our focus is shifting toward the future. We are committed to taking decisive steps to improve our margins and cash flow in fiscal 2023 and get the business back to a level of performance that our shareholders rightfully expect."
With this release, Scotts becomes just the latest big company to revise its outlook and say, in essence, it isn't quite sure where things are headed. And second quarter earnings season is still over a month away.
—Myles Udland, senior markets editor
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9:32 a.m. ET: Stocks open lower, holding onto overnight losses
Here were the main moves in markets as of 9:32 a.m. ET:
S&P 500 (^GSPC): -27.54 (-0.66%) to 4,133.14
Dow (^DJI): -225.92 (-0.68%) to 32,954.22
Nasdaq (^IXIC): -65.15 (-0.54%) to 12,110.08
Crude (CL=F): +$0.90 (+0.75%) to $120.31 a barrel
Gold (GC=F): +$4.50 (+0.24%) to $1,856.60 per ounce
10-year Treasury (^TNX): +5 bps to yield 3.0220%
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7:07 a.m. ET: Stock futures decline
Here's where markets were trading before the opening bell Wednesday morning:
S&P 500 futures (ES=F): -12.5 points (-0.3%) to 4,146.25
Dow futures (YM=F): -123 points (-0.37%) to 32,042.00
Nasdaq futures (NQ=F): -17.5 points (-0.14%) to 12,694.00
Crude (CL=F): +$1.27 (+1.06%) to $120.68
Gold (GC=F): -$2.60 (-0.14%) to $1,849.50 per ounce
10-year Treasury (^TNX): +3.9 bps to yield 3.009%
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7:00 a.m. ET: Mortgage applications index falls for fourth straight week, reaching lowest level in over two decades
U.S. mortgage applications slid further last week as elevated home prices and rising interest rates dragged purchase and refinancing activity to the lowest level in over two decades.
The Mortgage Bankers Association's weekly market composite index tracking mortgage loan application volume sank 6.5% during the period ending June 3. This represented a fourth consecutive weekly decline and extended a 2.3% drop from the prior week. Refinance applications fell 6% week-on-week and by 75% compared to the same time last year. Purchases, meanwhile, fell 7% from the prior week, and on a seasonally unadjusted basis, were lower by 21% compared to last year.
“Weakness in both purchase and refinance applications pushed the market index down to its lowest level in 22 years. The 30-year fixed rate increased to 5.4% after three consecutive declines. While rates were still lower than they were four weeks ago, they remained high enough to still suppress refinance activity," Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a press statement.
“The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past two months," Kan added. "These worsening affordability challenges have been particularly hard on prospective first-time buyers.”
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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33.
Mortgage activity hits 22-year low as rising rates bite housing market
2022-06-08 14:22:15 by Emily McCormick from Yahoo FinanceA closely watched gauge of mortgage application activity slid to a more than two-decade low last week, as elevated home prices and rising interest rates dragged further on purchase and refinancing activity.
The Mortgage Bankers Association's (MBA) weekly market composite index tracking mortgage loan application volume sank 6.5% during the period ending June 3. This represented a fourth consecutive weekly decline and extended a 2.3% drop from the prior week.
Refinance applications fell 6% week-on-week and were down 75% compared to the same time last year. Meanwhile, purchases fell 7% from the prior week, and on a seasonally unadjusted basis, were lower by 21% compared to last year.
“Weakness in both purchase and refinance applications pushed the market index down to its lowest level in 22 years," Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a press statement. "While rates were still lower than they were four weeks ago, they remained high enough to still suppress refinance activity. Only government refinances saw a slight increase last week."
“The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past two months," Kan added. "These worsening affordability challenges have been particularly hard on prospective first-time buyers.”
The MBA's latest report adds to other housing market data underscoring cooling demand as interest rates creep higher. New home sales slid by a much worse-than-expected 16.6% in April to reach a two-year low, while existing-home sales sank to the lowest since June 2020 as the median home listing price soared to a fresh record high of $391,200.
The average rate on a 30-year fixed mortgage hovered at 5.09% as of the beginning of the month, according to Freddie Mac data released June 2. While that was a tick down from the 5.10% from the prior week, it was still a jump from the comparable week last year, when the rate averaged 2.99%. The average rate on a 30-year fixed mortgage reached the highest level since 2009 in mid-May at 5.30%.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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34.
Spotify shouldn't be punished for Netflix's problems: analyst
2022-06-07 17:11:26 by Emily McCormick from Yahoo FinanceNot all streaming platforms are created equal — and music streamers like Spotify (SPOT) currently have the upper hand, according to at least one analyst.
Netflix's (NFLX) disappointing first-quarter results and its warning the platform may lose another 2 million subscribers this quarter sent a chill across the broader streaming industry.
Shares of peer media streaming platforms like Disney (DIS), Roku (ROKU) and Spotify have each tumbled since the April 19 warning.
But lumping video and music streaming platforms together is an overgeneralization by investors, says Raymond James analyst Andrew Marok. And the latter bear some key advantages over the former.
“What we see in the competitive environment for streaming music is a lot more stable [of an] environment than you see, for instance, in streaming video, where content owners are increasingly taking ownership of their content, walling it off, going directly to consumers," Marok told Yahoo Finance Live on Tuesday.
"On the streaming [music] side, the dynamic where the major labels own a significant majority of the content and are also basically dependent on the streaming platforms such as Spotify and Apple Music (AAPL) to power industry growth makes that a much more stable contingent," he added. "There isn’t the price competition that you see in streaming video, it’s really kind of things like product differentiation and network effects."
Raymond James upgraded shares of Spotify to Outperform from Market Perform earlier this week and offered a price target of $150 per share, implying upside of 35% from Monday's closing prices. Shares of Spotify have tumbled by more than 50% so far in 2022 and by 70% since reaching an all-time high in February 2021.
"At these trading levels we believe that the bad news is priced in with relatively limited downside," Marok said in his upgrade note Monday. "Spotify remains a best-in-class streaming audio platform with a lot of subscriber runway and low churn (a potentially recession-resistant name in streaming entertainment)."
'Collateral damage'
Marok acknowledged Spotify has seen "some collateral damage from Netflix's issues."
However, he maintained that the differences between the video and music streaming businesses keep Spotify relatively more insulated from the threat of competition – a key concern Netflix cited in its last quarterly report.
For one thing, the commoditization of music streaming, with every major platform largely carrying the same library of songs, has helped deter new entrants from breaking into the business, Marok said. And on the user side, it's often more difficult for listeners to toggle between different music streaming platforms than video platforms.
"You build your playlist, the service will kind of tune its algorithms to provide good music recommendations, things like that, and once you have all that set up, it’s relatively more difficult to switch services to an Apple Music or an Amazon Music," Marok told Yahoo Finance. "Whereas, with streaming video, it really is a content differentiation story, where you could watch 'Stranger Things' on Netflix one month and then [Obi-Wan Kenobi] on Disney+ the next month, and you could cycle between those services in a way that we really don’t see with streaming music.”
Marok also offered an upbeat outlook on Spotify's ongoing investment in podcasting, a business area the company has touted as its next major growth driver and bolstered through a series of acquisitions over the past several years. However, the endeavor has also been costly, and Spotify in April issued quarterly gross margin guidance that fell short of Wall Street's estimates, in part due to spending on non-music content.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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35.
10 Best ETFs to Buy in 2022 According to Reddit
2022-06-02 13:53:07 by Hamna Asim from Insider MonkeyIn this article, we discuss 10 best ETFs to buy in 2022 according to Reddit. If you want to see more ETFs that Redditors are monitoring, click 5 Best ETFs to Buy in 2022 According to Reddit.
Exchange traded funds are trending on Reddit as retail investors move towards a passive method of navigating the stock market amid severe volatility. According to Morningstar, 2021 was a hot year for the passive investment sector, as passive investors accounted for about one fifth of the £8.5 trillion European investment funds market. This was a boost of 9.5% over the preceding year. Comparatively, there was a growth of only 2.1% in actively-managed investments over the period. These statistics are not surprising, since S&P Global data suggests that in a span of 15 years, about 90% of actively managed funds have underperformed their benchmarks.
Redditors are often known for their risky and daring bets in the stock market. However, even the most spontaneous of retail investors have pulled back from reckless navigation of this tumultuous market and seek out exchange traded funds that are managed by professionals to safeguard their money. Through these investments, Redditors are exposed to a mix of growth and value plays such as Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Exxon Mobil Corporation (NYSE:XOM).
Source:Pixabay
Our Methodology
We scoured the latest trending threads on the internet platform Reddit to assess the investor sentiment around exchange traded funds. We selected the ETFs that were most popular among Redditors. The ETFs listed below are discussed with regards to their top holdings.
Best ETFs to Buy in 2022 According to Reddit
10. Invesco QQQ Trust (NASDAQ:QQQ)
Invesco QQQ Trust (NASDAQ:QQQ) is an exchange traded fund that invests in innovation, tracking the growth-heavy NASDAQ-100 Index. As of May 31, the ETF has assets under management of $166.33 billion. Its holdings comprise investments in the augmented reality, cloud computing, big data, mobile payments, streaming services, and electric vehicles sectors.
The largest stock in Invesco QQQ Trust (NASDAQ:QQQ)’s portfolio is Apple Inc. (NASDAQ:AAPL), one of the Big Five US tech giants. The Apple stake makes up 12.53% of the ETF’s total holdings. On May 25, Loop Capital analyst Ananda Baruah maintained his Buy rating and a $180 price target on Apple Inc. (NASDAQ:AAPL), noting that although he still expects an increase in the iPhone revenue for the June quarter, the projections for the September and December quarters "remain low" as the company's average prices continue to be "materially stronger" than the Street.
Among the hedge funds tracked by Insider Monkey, 131 funds were long Apple Inc. (NASDAQ:AAPL) at the end of March 2022, compared to 134 funds in the earlier quarter. Warren Buffett’s Berkshire Hathaway held the leading stake in the company, comprising about 891 million shares worth $155.5 billion.
Here is what Berkshire Hathaway has to say about Apple Inc. (NASDAQ:AAPL) in its Q4 2021 investor letter:
“Apple Inc. (NASDAQ:AAPL) – our runner-up Giant as measured by its year end market value – is a different sort of holding. Here, our ownership is a mere 5.55%, up from 5.39% a year earlier. That increase sounds like small potatoes. But consider that each 0.1% of Apple’s 2021 earnings amounted to $100 million. We spent no Berkshire funds to gain our accretion. Apple’s repurchases did the job. It’s important to understand that only dividends from Apple are counted in the GAAP earnings Berkshire reports – and last year, Apple paid us $785 million of those. Yet our “share” of Apple’s earnings amounted to a staggering $5.6 billion. Much of what the company retained was used to repurchase Apple shares, an act we applaud. Tim Cook, Apple’s brilliant CEO, quite properly regards users of Apple products as his first love, but all of his other constituencies benefit from Tim’s managerial touch as well.”
9. Vanguard Energy Index Fund (NYSE:VDE)
Vanguard Energy Index Fund (NYSE:VDE) is a passively managed exchange traded fund that aims to replicate the performance of a benchmark index that measures the return of companies in the energy space. As of April 30, the ETF holds 102 stocks and has total net assets worth $9.8 billion. Vanguard Energy Index Fund (NYSE:VDE) has a top ten holdings concentration of 66.1%.
The largest sub-sectors that Vanguard Energy Index Fund (NYSE:VDE) invests in include integrated oil and gas, exploration and production, refining and marketing, storage and transportation, and equipment and services. The leading position in Vanguard Energy Index Fund (NYSE:VDE)’s portfolio is taken up by Exxon Mobil Corporation (NYSE:XOM), an American multinational oil and gas corporation based in Irving, Texas.
Exxon Mobil Corporation (NYSE:XOM) has consistently raised its dividends for 39 years, making it a reliable dividend aristocrat to invest in. On April 27, the company declared a quarterly dividend of $0.88 per share, in line with previous. The dividend is payable on June 10, to shareholders of the company as of May 13. Exxon Mobil Corporation (NYSE:XOM) delivered on June 1 a dividend yield of 3.60%.
According to Insider Monkey’s Q1 data, 83 hedge funds held long positions in Exxon Mobil Corporation (NYSE:XOM), compared to 71 funds in the earlier quarter. Rajiv Jain’s GQG Partners owned the leading stake in the company, with 51.80 million shares worth $4.2 billion. The hedge fund boosted its hold on Exxon Mobil Corporation (NYSE:XOM) by 60% in Q1 2022.
Here is what Goehring & Rozencwajg Associates has to say about Exxon Mobil Corporation (NYSE:XOM) in its Q3 2021 investor letter:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publicly expressed concerns about both projects.
According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
8. Vanguard Total Stock Market Index Fund (NYSE:VTI)
Vanguard Total Stock Market Index Fund (NYSE:VTI) tracks the performance of the CRSP US Total Market Index. Following a passively managed, index-sampling strategy, the ETF invests in large, mid, and small-cap growth and value stocks. The minimal expense ratio of 0.03% minimizes net tracking error. The top 10 holdings of Vanguard Total Stock Market Index Fund (NYSE:VTI) as of April 30 comprised 24.20% of the overall portfolio. The fund invests in 4,112 stocks, with total net assets worth $1.2 trillion.
One of the largest securities in Vanguard Total Stock Market Index Fund (NYSE:VTI)’s portfolio is Microsoft Corporation (NASDAQ:MSFT). Jefferies analyst Brent Thill on May 23 maintained a Buy recommendation on Microsoft Corporation (NASDAQ:MSFT) but slashed the price target on the shares to $325 from $400. The analyst has lowered forecasts across 28 software companies due to stiffening economic headwinds and the threat of recession. He believes his target multiples could slip further if fundamentals continue to weaken.
Among the hedge funds tracked by Insider Monkey, 259 funds were bullish on Microsoft Corporation (NASDAQ:MSFT) at the end of March 2022, compared to 262 funds in the preceding quarter. Ken Fisher’s Fisher Asset Management held the largest position in the company, comprising 27.8 million shares worth about $8.6 billion.
In addition to Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Exxon Mobil Corporation (NYSE:XOM), elite investors are piling into Microsoft Corporation (NASDAQ:MSFT).
Here is what Baron Opportunity Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2021 investor letter:
“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter, following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft’s results continued to be strong across the board, with total revenue growing 20% in constant currency, beating Street estimates by 3%; an acceleration in Commercial Cloud revenue to 34% constant-currency growth; operating margins expanding to just under 45%; earnings growth of 23%; and free cash flow growth of 30%. We believe the company is positioned to deliver 13% to 15% organic growth over the next three years, underpinned by total addressable market expansion and continued market share gains across its disruptive cloud product portfolio.”
7. Vanguard S&P 500 Value Index Fund (NYSE:VOOV)
Vanguard S&P 500 Value Index Fund (NYSE:VOOV) invests in the value stocks from the S&P 500 Index. The exchange traded fund closely tracks the returns of the S&P 500 Value Index, and it is feasible for long-term investors who need to grow their money. The ETF’s investments are focused on the financials, healthcare, industrials, and consumer staples sectors. As of April 30, Vanguard S&P 500 Value Index Fund (NYSE:VOOV) holds 448 stocks in its portfolio, with total net assets of $3.1 billion. The fund has a top 10 holdings concentration of 18.10%.
A notable stock in Vanguard S&P 500 Value Index Fund (NYSE:VOOV)’s portfolio is UnitedHealth Group Incorporated (NYSE:UNH), an American diversified health care company that provides consumer-oriented health benefit plans, Medicaid plans, and health insurance, in addition to other health management solutions.
On April 14, UnitedHealth Group Incorporated (NYSE:UNH) reported its Q1 financial results, posting earnings per share of $5.49, beating market consensus estimates by $0.14. The revenue of $80.15 billion rose 14.18% year-over-year, outperforming analysts’ predictions by $1.38 billion.
According to Insider Monkey’s database, 103 hedge funds placed long bets on UnitedHealth Group Incorporated (NYSE:UNH) at the end of Q1 2022, up from 96 funds in the last quarter. Boykin Curry’s Eagle Capital Management held the biggest stake in the company at the conclusion of the March quarter, with 2.90 million shares worth about $1.5 billion.
Like Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Exxon Mobil Corporation (NYSE:XOM), UnitedHealth Group Incorporated (NYSE:UNH) is a top pick of smart investors.
Here is what Baron Durable Advantage Fund has to say about UnitedHealth Group Incorporated (NYSE:UNH) in its Q1 2022 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH) is a leading diversified health and wellbeing company whose divisions include insurance arm, United Healthcare and healthcare services arm, Optum, which offers care delivery and other services. Shares increased 1.8% on good fourth quarter results with revenues up 12.5% year-over-year, operating margins of 7.5% and EPS up 78% while also reaffirming its 2022 guidance. We believe UnitedHealth leads the healthcare industry in innovation and execution as evidenced by its strong value proposition leading to Medicare Advantage share gains, strong cost controls, and its leadership position in the shift to value-based care.”
6. Vanguard 500 Index Fund (NYSE:VOO)
Vanguard 500 Index Fund (NYSE:VOO) invests in the S&P 500 Index, exposing shareholders to 500 of the largest US companies. The fund offers an expense ratio of 0.03% as of April 29. At the end of April 2022, Vanguard 500 Index Fund (NYSE:VOO)’s net assets equalled $760.1 billion and the top ten holdings represented 29% of the total portfolio. Information technology stocks account for 27.40% of the overall holdings of the fund.
One of the biggest names in Vanguard 500 Index Fund (NYSE:VOO)’s portfolio is Amazon.com, Inc. (NASDAQ:AMZN), the American multinational firm specializing in e-commerce, cloud computing, digital streaming, and artificial intelligence.
Morgan Stanley analyst Brian Nowak on June 1 reiterated an Overweight rating on Amazon.com, Inc. (NASDAQ:AMZN) but lowered the price target on the stock to $3,500 from $3,800. He slashed estimates across online ad and e-commerce companies and adopted a more conservative base case to reflect higher macro and micro unpredictability, the analyst told investors. He now expects about 13% and 16% year-over-year online ad growth and approximately 8% and 10% e-commerce growth in 2022 and 2023.
Among the hedge funds tracked by Insider Monkey, Jaime Sterne’s Skye Global Management held a prominent stake in Amazon.com, Inc. (NASDAQ:AMZN) at the end of March 2022, comprising 740,500 shares worth $2.4 billion. Overall, 271 hedge funds were bullish on the stock as of the conclusion of the first quarter of 2022.
Here is what Miller Value Partners Opportunity Equity has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter:
“For frame of reference, Amazon (NASDAQ:AMZN) bottomed at the same valuation in the financial crisis (side note: Amazon bottomed at 4x EV/GP after the tech bubble burst)! So there’s historical precedent for the lows being in. We will see whether that holds true this time. Regardless, we think there’s significant upside over a 5-year time horizon. The one other topic I want to briefly address is our volatility. We hope to write something about the topic in more depth in the future, but we want our clients and prospective investors to understand our views on it. We think that volatility is significantly misunderstood. We believe it creates opportunities from which we can profit.”
Click to continue reading and see 5 Best ETFs to Buy in 2022 According to Reddit.
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Disclosure: None. 10 Best ETFs to Buy in 2022 According to Reddit is originally published on Insider Monkey.
36.
Market check: Stocks open higher to kick off June trading
2022-06-01 13:59:33 by Yahoo Finance VideoYahoo Finance's Jared Blikre discusses how stocks opened on Wednesday and whether the market has reached a bottom yet.
37.
Market check: Stocks end the month of May in the red
2022-05-31 20:07:17 by Yahoo Finance VideoYahoo Finance's Ines Ferré breaks down how stocks are performing into the close after heavy selling in May.
38.
Stocks open lower after snapping losing streak, lumber futures fall
2022-05-31 13:58:05 by Yahoo Finance VideoYahoo Finance's Jared Blikre discusses how stocks opened on Tuesday and how commodity futures are trading.
39.
Stock market news live updates: Stocks rally to end 7-week losing streak, S&P 500 logs best week since Nov. 2020
2022-05-27 20:10:45 by Emily McCormick from Yahoo FinanceU.S. stocks jumped on Friday, with the major indexes ending a weeks-long losing streak after a string of more upbeat corporate results at least temporarily offset fears of a steep economic slide.
[Click here to read what's moving markets on Tuesday, May 31]
The S&P 500 rallied into the close, gaining 2.5% to end at 4,158.24. The blue-chip index ended a seven-week losing streak and posted its best week since Nov. 2020, rising by more than 6.5% since last Friday. The S&P 500 also erased its losses for the month of May to date.
The Dow Jones Industrial Average rose by 576 points, or 1.8%, on Friday to end at 33,212.96, and the Nasdaq Composite added more than 3% to close at 12,131.13.
Investors digested a fresh set of economic data earlier on Friday, including the latest print on core personal consumption expenditures (PCE) — the Federal Reserve's preferred gauge of underlying inflation. These showed inflationary pressures eased only modestly in April compared to March, echoing results from the still-elevated Consumer Price Index and Producer Price Index released from earlier this month. Headline PCE increased 6.3% in April over last year compared to March's 6.6% increase, and core PCE rose by 4.9% compared to 5.2% in the prior month. But separate data also showed personal spending, adjusted for inflation, accelerated in April compared to March.
Over the past several sessions, investors have weighed favorably the most recent batch of quarterly results and guidance from retailers like Macy's (M), Nordstrom (JWN), Dollar General (DG) and Dollar Tree (DLTR). These companies largely exceeded Wall Street's estimates, helping assuage concerns that the profit pressures reported recently by Walmart (WMT), Target (TGT) and Kohl's (KSS) were reverberating equally across all consumer-facing firms. And outside of retail, airlines including JetBlue (JBLU) and Southwest (LUV) raised their sales guidance for the current quarter, suggesting demand remained strong for discretionary travel.
“Overall the U.S. consumer still remains in great shape. They came into these price hikes, this inflation, with cushion on their balance sheet. Certainly employment is high, so the overall U.S. consumer remains in a very strong place," Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management, told Yahoo Finance Live.
"The big fear was that inflation was going to continue to run away and cause the Fed to have to tighten the U.S. economy into a recession," he added. "I think we’re all starting to gradually wake up to the reality that goods spending ... was pulled forward. Inventories have been rebuilt, and goods spending has caused the inflation that you’re seeing. That’s going to roll over as people move over to service sector spending."
"And so it may feel like a recession in some parts of the economy, but other parts of the economy are going to do well," Schutte said. "Inflation is going to fall, and the Fed is going to go a bit easier."
However, other strategists cast doubt on the staying power of gains seen in the market so far this week, especially as inflation has shown few meaningful signs of coming down in a substantial way to date.
"This is nothing more than a bear bounce in our opinion. When you look at these bounces we’ve had, they’ve been on very light volume, there's not a lot of conviction," Eddie Ghabour, co-founder and managing partner of Key Advisors Group, told Yahoo Finance Live. "The data that we’re getting now that’s been causing this sell-off, remember, is first-quarter data. The data coming in the second quarter is going to be worse than the first quarter. And we’re not going to get that news until July ... So I think we’re going to have a very treacherous market in the next few months.”
—
4:03 p.m. ET: Stocks post best week since Nov. 2020 as S&P 500 erases May losses
Here's where markets closed out the session on Friday:
S&P 500 (^GSPC): +100.43 (+2.47%) to 4,158.27
Dow (^DJI): +576.36 (+1.77%) to 33,213.55
Nasdaq (^IXIC): +390.48 (+3.33%) to 12,131.13
Crude (CL=F): +$1.01 (+0.89%) to $115.10 a barrel
Gold (GC=F): +$3.40 (+0.18%) to $1,857.30 per ounce
10-year Treasury (^TNX): -1.3 bps to yield 2.7430%
—
11:54 a.m. ET: Stocks extend gains to trade near session highs, Dow heads for sixth straight day of gains
Here were the main moves in markets as of 11:54 a.m. ET:
S&P 500 (^GSPC): +72.05 (+1.78%) to 4,129.89
Dow (^DJI): +344.28 (+1.05%) to 32,981.47
Nasdaq (^IXIC): +299.88 (+2.55%) to 12,040.53
Crude (CL=F): +$0.12 (+0.11%) to $114.21 a barrel
Gold (GC=F): +$4.50 (+0.24%) to $1,858.40 per ounce
10-year Treasury (^TNX): -2.7 bps to yield 2.7290%
—
10:06 a.m. ET: Consumer sentiment weakened in late May to lowest since 2011
Consumer sentiment fell further in late May, largely on account of concerns around inflation and business conditions in the near-term.
The University of Michigan's final monthly sentiment index decreased to 58.4, which was downwardly revised from the 59.1 previously reported for the month. Subindices tracking consumers' views on current conditions and future expectations were each also slightly downwardly revised, and one-year inflation expectations were little changed at 5.3%.
The latest sentiment drop "was largely driven by continued negative views on current buying conditions for houses and durables, as well as consumers’ future outlook for the economy, primarily due to concerns over inflation," Joanne Hsu, Surveys of Consumers director, wrote in a statement. "At the same time, consumers expressed less pessimism over future prospects for their personal finances than over future business conditions."
"Looking into the long term, a majority of consumers expected their financial situation to improve over the next five years; this share is essentially unchanged during 2022," Hsu added. "A stable outlook for personal finances may currently support consumer spending. Still, persistently negative views of the economy may come to dominate personal factors in influencing consumer behavior in the future."
—
9:32 a.m. ET: Stocks open higher
Here were the main moves in markets as of 9:32 a.m. ET:
S&P 500 (^GSPC): +32.86 (+0.81%) to 4,090.70
Dow (^DJI): +56.27 (+0.17%) to 32,693.46
Nasdaq (^IXIC): +165.04 (+1.41%) to 11,905.69
Crude (CL=F): -$0.12 (-0.11%) to $113.97 a barrel
Gold (GC=F): +$10.30 (+0.56%) to $1,864.20 per ounce
10-year Treasury (^TNX): -3.1 bps to yield 2.7250%
—
8:58 a.m. ET: Goods trade deficit narrows more than expected in April after record reading in March
The U.S. goods trade gap declined more than anticipated in April after reaching an all-time high of nearly $126 billion in March.
The advance goods trade balance showed a deficit of $105.9 for the U.S. in April, the Commerce Department said Friday. This followed a gap of $125.9 billion in March, which was upwardly revised from $125.3 billion last month.
The print suggests trade produced slightly less of a drag on the U.S. economy at the start of the second quarter compared to the first. In the first quarter, net exports shaved 3.23 percentage points off headline U.S. gross domestic product (GDP). GDP fell at a 1.5% annualized rate in the first three months of the year.
—
8:42 a.m. ET: Real personal spending accelerates in April, while saving rate slides to lowest since 2008
U.S. consumers kept spending last month even as inflation remained elevated, as one of the key contributors to U.S. economic activity held up into the spring. However, the personal saving rate dwindled to the lowest level in over a decade, raising some concerns over how much longer spending might manage to prop up the economy.
Real personal spending rose 0.7% month-on-month in April, the Bureau of Economic said Friday, accelerated from March's 0.2% rise. Unadjusted for inflation, personal spending was up 0.9%, exceeding consensus economist expectations for a 0.8% increase, according to Bloomberg data. This metric had risen by 1.1% in March.
Personal income, however, decelerated slightly last month, rising 0.4% after March's 0.5% increase. And the personal saving rate, or proportion of disposable personal income set aside to savings, fell to 4.4% from March's 5.0%, reaching the lowest level since 2008. After soaring during the pandemic, the saving rate has now come in well below the average of 2019 before the outbreak, when the saving rate had averaged over 7%.
—
8:38 a.m. ET: Inflation eases just slightly in April as PCE rises 6.3% year-over-year
Inflation as measured by the Bureau of Economic Analysis' personal consumption expenditures (PCE) index eased only modestly in April compared to March, with fast-rising prices showing few signs of slowing down across the U.S. economy.
The broadest measure of PCE rose 0.2% in April month-on-month, which matched consensus economist expectations, according to Bloomberg data. This compared to a 0.9% monthly increase in March. On a year-over-year basis, however, PCE still soared by 6.3%, coming in slightly hotter than expected and moderating only slightly from March's 6.6% annual rise.
Core PCE, which excludes volatile food and energy prices, also remained hot and rose 4.9% in April over last year. That matched estimates, and followed a 5.2% rise in March. February's reading of 5.3% had been the highest since 1983.
—
7:23 a.m. ET: Stock futures rise as indexes look to log weekly gains
Here's where markets were trading Friday morning:
S&P 500 futures (ES=F): +11 points (+0.27%) to 4,066.75
Dow futures (YM=F): +26 points (+0.08%) to 32,626.00
Nasdaq futures (NQ=F): +54.25 points (+0.44%) to 12,333.50
Crude (CL=F): -$0.46 (-0.40%) to $113.63
Gold (GC=F): +$8.80 (+0.47%) to $1,862.70 per ounce
10-year Treasury (^TNX): -3.3 bps to yield 2.725%
—
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
Read the latest financial and business news from Yahoo Finance
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40.
S&P 500 on track for best day in two weeks, travel stocks lead market rebound
2022-05-26 19:11:17 by Yahoo Finance VideoYahoo Finance's Emily McCormick breaks down how stocks are trading on Thursday afternoon.
41.
Stock market news live updates: Stocks end choppy session higher after FOMC minutes
2022-05-25 20:06:24 by Emily McCormick from Yahoo FinanceU.S. stocks pushed higher at the close of a choppy session on Wednesday as investors considered a slew of company warnings on the impact of inflation to earnings alongside the Federal Reserve's latest communications about using their policies to rein in rising prices. The Fed's May meeting minutes reaffirmed that central bank officials saw additional 50 basis point rate hikes as appropriate over the next couple meetings.
[Click here to read what's moving markets on Thursday, May 26]
The S&P 500 wobbled but then gained Wednesday afternoon after the release of the Fed minutes, which also noted that more aggressive tightening and "a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and risks to the outlook." The Dow and Nasdaq each also rose. Treasury yields mostly declined, and the benchmark 10-year yield fell to hold just above 2.75%.
Investors this week have also eyed a growing list of companies citing the effects that inflation have had and will have on results going forward. Retailers including from Walmart and Target last week to Dick's Sporting Goods (DKS) and Abercrombie & Fitch (ANF) this week slashed their earnings forecasts for the year as the companies absorbed rising goods and transportation costs. And elsewhere, Snap (SNAP) warned earlier this week that it would post weaker-than-expected sales and profit results this year as the macroeconomic environment "deteriorated further and faster than anticipated." This was taken as a harbinger of softer results for a bevy of ad-driven tech stocks, sending the Nasdaq Composite to its lowest close since Nov. 2020 on Tuesday.
As the grim company guidance piles up, Wall Street has been looking for signs that the Federal Reserve's interest rate hikes and monetary policy tightening will achieve bringing down inflationary pressures. The Fed's minutes from its early May meeting Wednesday afternoon reaffirmed that most monetary policymakers were considering rolling out additional 50 basis point rate hikes at the next two Fed meetings. The Fed raised rates by 50 basis points earlier this month for the first time since 2000, after having raised rates by just 25 basis point earlier this year.
"The challenge right now is we’re in this new chapter of the inflation story. If you’ll recall, last year it started with whether it’s transitory — turns out, it wasn’t. Then it became about the Fed at the end of last year and earlier this year, whether or not they would tighten significantly. And they did, and now all that’s priced in," James Liu Clearnomics founder and CEO, told Yahoo Finance Live. "And now what the market is looking at is are basically the fundamentals around how inflation affects corporate profitability and consumer demand."
And beyond the domestic concerns, a myriad of international concerns — from Russia's war in Ukraine, to China's ongoing COVID outbreak — have further infused volatility into the market.
"The Fed can't really do anything about what's going on between Russia and Ukraine, they can't really do anything about China's COVID zero policies ... and a lot of traders are starting to get concerned," Shawn Cruz, TD Ameritrade head trading strategist, told Yahoo Finance Live.
"The way the market to me is reacting to that, is one, there's de-leveraging going on. There are some liquidation events out there as well, and that is one of those 'selling begets more selling' type of environments. And then the other one is, there's just not enough confidence out there to come in there and meaningfully put money back to work," he added. "Once you start to see leverage start going back up, cash coming in from the sidelines, that to me would be an indication that there is at least a little bit more certainty in the outlook for a lot of these people on the sidelines to come back in."
—
4:05 p.m. ET: Stocks end choppy session higher after Fed minutes: Nasdaq gains 1.5%, Dow adds 192 points, or 0.6%
Here were the main moves in markets as of 4:05 p.m. ET:
S&P 500 (^GSPC): +37.25 (+0.95%) to 3,978.73
Dow (^DJI): +191.66 (+0.60%) to 32,120.28
Nasdaq (^IXIC): +170.29 (+1.51%) to 11,434.74
Crude (CL=F): +$0.97 (+0.88%) to $110.74 a barrel
Gold (GC=F): -$11.80 (-0.63%) to $1,853.60 per ounce
10-year Treasury (^TNX): -1.1 bps to yield 2.7490%
—
2:15 p.m. ET: Fed minutes show support for another two half-point rate hikes while adding 'a restrictive stance of policy' could become appropriate
The Federal Reserve's latest meeting minutes Wednesday afternoon reaffirmed Fed Chair Jerome Powell's prior assertions that the central bank was weighing two more half-point rate hikes.
"Most participants judged that 50 basis point increases in the target range would likely be appropriate at the next couple of meetings," according to the minutes. "Many participants assessed that the Committee’s previous communications had been helpful in shifting market expectations regarding the policy outlook into better alignment with the Committee’s assessment and had contributed to the tightening of financial conditions."
The Fed left room for further policy decisions to be informed by incoming data on the economy, which has recently softened. However, it also emphasized that its primary goal remained on bringing down inflation, and that as a result, a "restrictive stance of policy" could be needed.
"Participants agreed that the economic outlook was highly uncertain and that policy decisions should be data dependent and focused on returning inflation to the Committee’s 2% goal while sustaining strong labor market conditions," the minutes noted. "At present, participants judged that it was important to move expeditiously to a more neutral monetary policy stance. They also noted that a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook."
—
11:11 a.m. ET: Stocks extend gains, Nasdaq rises by 1%
Here were the main moves in markets as of 11:11 a.m. ET:
S&P 500 (^GSPC): +23.35 (+0.59%) to 3,964.83
Dow (^DJI): +87.30 (+0.27%) to 32,015.92
Nasdaq (^IXIC): +110.02 (+0.98%) to 11,374.47
Crude (CL=F): +$0.22 (+0.20%) to $109.99 a barrel
Gold (GC=F): -$17.20 (-0.92%) to $1,848.20 per ounce
10-year Treasury (^TNX): -0.9 bps to yield 2.7510%
—
9:31 a.m. ET: Stocks open lower before shaking off losses
Here were the main moves in markets as of 9:31 a.m. ET:
S&P 500 (^GSPC): -9.53 (-0.24%) to 3,931.95
Dow (^DJI): -114.27 (-0.36%) to 31,814.35
Nasdaq (^IXIC): -22.24 (-0.20%) to 11,242.21
Crude (CL=F): +$0.89 (+0.81%) to $110.66 a barrel
Gold (GC=F): -$13.90 (-0.75%) to $1,851.50 per ounce
10-year Treasury (^TNX): -2.6 bps to yield 2.7340%
—
9:12 a.m. ET: Durable goods orders disappoint in April
U.S. durable goods orders decelerated in April and were downwardly revised in March, offering an at least early sign that businesses may be pulling back on investments as economic uncertainties mount.
Orders for durable goods, or manufactured products intended to last at least three years, rose by 0.3% in April compared to March, the Commerce Department said Wednesday. This came in below the 0.6% rate consensus economists were expecting, according to Bloomberg data. In March, durable goods orders rose by 0.6%, with this rate revised down from the 1.1% previously reported.
Non-defense capital goods orders excluding aircraft also missed expectations, rising by 0.3% in April versus the 0.5% anticipated. This metric rose by 1.1% in March, and serves as a closely watched proxy for business investment. Still, non-defense capital goods shipments excluding aircraft, which factors into GDP, rose by a better-than-expected 0.8% last month.
"It’s entirely possible that the recent slowing is nothing more than a temporary reaction to the spike in energy prices; firms might be waiting to see how consumers respond," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in an email about the report. "So far, we see no evidence of any hit — housing excepted — but we also can’t rule out the idea higher rates are directly causing some capex [capital expenditures] to be deferred, even though firms are sitting on huge piles of cash accumulated during the pandemic."
"For now, a decent increase in capital spending on equipment in the second quarter seems assured, given the lags from previous strength in orders, but the outlook for H2 has become a bit more cloudy," he added.
—
7:55 a.m. ET: Dick's Sporting Goods becomes latest retailer to slash full-year outlook given 'evolving macroeconomic conditions'
Dick's Sporting Goods shares sank by more than 14% Wednesday morning after the retailer became one of the latest to lower its full-year earnings and sales guidance as economic uncertainty resurged.
The sporting goods retailer said it now sees adjusted earnings totaling between $9.15 and $11.70 per share for the 2023 fiscal year, with this range coming in well below the $11.70 to $13.10 a share seen previously. Comparable store sales will likely fall between 2% and 8% this year, the company added, compared to a prior outlook for sales to come in between unchanged and down 4%. Dick's Sporting Goods said it updated its outlook "to reflect the impact of evolving macroeconomic conditions," according to its earnings release Wednesday morning.
Following the release, the stock was on track to post a sixth straight day of losses, or its longest losing streak since early Dec. 2021, as shares fell in sympathy with other major retailers over the past week.
—
7:23 a.m. ET: Stock futures edge lower
Here's where markets were trading Wednesday morning:
S&P 500 futures (ES=F): -5.25 points (-0.13%) to 3,935.25
Dow futures (YM=F): -55 points (-0.17%) to 31,825.00
Nasdaq futures (NQ=F): -9.5 points (-0.08%) to 11,761.50
Crude (CL=F): +$1.47 (+1.34%) to $111.24
Gold (GC=F): -$14.10 (-0.76%) to $1,851.30 per ounce
10-year Treasury (^TNX): -2.6 bps to yield 2.734%
—
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn
42.
Retail, energy stocks higher as markets extend gains
2022-05-25 19:25:18 by Yahoo Finance VideoYahoo Finance's Jared Blikre breaks down how stocks are performing after the Fed meeting minutes were released.
43.
The 4 Best ETFs for Bargain Hunters to Buy Now
2022-05-24 23:30:23 by Josh Enomoto from InvestorPlace- While the market volatility has shaken many investors, daring contrarians have an opportunity to pick up some of the best ETFs (exchange-traded funds) at bargain prices.
- Invesco QQQ Trust(QQQ): Although tech has been one of the hardest-hit sectors, over the long run, the QQQ could be one of the best ETFs for a comeback.
- Vanguard Mid-Cap Growth Index Fund ETF (VOT): With mid-capitalization names providing a solid mixture between growth and stability, VOT is among the best ETFs in this environment.
- Renaissance IPO ETF (IPO): New listings are always risky but distributing the danger may be enticing for certain gamblers.
- ProShares Bitcoin Strategy ETF (BITO): Only an idea for the most daring of contrarians, BITO is on discount due to the cryptocurrency fallout.
Source: Maxx-Studio/ShutterStock.com
Although the market volatility is worrying investors, it’s also fair to point out that some of the biggest gains can be made by zigging while others are zagging. Even better, you can spread out your risk through exchange-traded funds (ETFs) instead of picking individual stocks. In turn, ambiguous circumstances may favor the best ETFs for bargain hunters.
For one thing, putting your money into an individual company always ramps up the underlying risk profile. Despite electing a viable industry, for instance, you just never know what might happen with your specific idea. With the best ETFs, however, you can distribute your risk across a wide canvas, thus mitigating the potential that one bad apple could spoil the whole crate.
Another reason to focus your efforts on finding the best ETFs to buy is the overriding risk-off sentiment. With so many market segments awash in red ink, the chances of you finding just the right individual idea are slim. Instead, present economic dynamics suggest that you should go with sector funds, improving your odds for buying winners.
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
So, with all of that in mind, let’s dive in and take a closer look at these four best ETFs for investors
| QQQ | Invesco QQQ Trust | $284.16 |
| VOT | Vanguard Mid-Cap Growth Index Fund ETF | $178.50 |
| IPO | Renaissance IPO ETF | $28.36 |
| BITO | ProShares Bitcoin Strategy ETF | $18.17 |
Best ETFs to Buy Now: Invesco QQQ Trust (QQQ)
Source: shutterstock.com/bangoland
When digging through the bargain bin for the best ETFs, it’s important not to just focus on the price. Rather, you want to find funds that feature relatively robust trading volume. Otherwise, your money could end up going to feed zombie ETFs or funds that feature little interest and therefore low activity.
Never say never but you probably won’t have to worry about the Invesco QQQ Trust (NASDAQ:QQQ) joining the ranks of the undead. Featuring a volume level of nearly 91 million shares, QQQ is rarely if ever short on traders. More importantly, Invesco QQQ counts among its core holdings some of the world’s leading technology firms.
In the spirit of full disclosure, some of the companies are names that I’m a bit skeptical about. However, there are plenty of enterprises that, over the long run, should prove to be incredibly viable. Therefore, QQQ is one of the best ETFs to buy if you’re seeking a bargain.
Vanguard Mid-Cap Growth Index Fund ETF (VOT)
Source: Shutterstock
Typically, mid-capitalization stocks provide an attractive balance between proven stability and upside growth potential. It’s not always healthy to be fully on one side of the spectrum or the other, making the Vanguard Mid-Cap Growth Index Fund ETF (NYSEARCA:VOT) an appropriate choice for investors feeling things out.
Nevertheless, the broader market volatility has not been too kind to VOT stock. Year-to-date (YTD), the mid-cap ETF has declined by almost 30%, noticeably more than the benchmark SPDR S&P 500 ETF Trust (NYSEARCA:SPY), which has declined 18.1% during the same period. However, for the patient investor, once circumstances eventually normalize, the upside potential for VOT should be distinctly greater.
As the name of the ETF implies, VOT is well balanced. It features the heaviest exposure to tech, providing the growth potential. However, its significant ties to healthcare, financial services and energy offer the much-needed stability that’s so valuable at this juncture.
Best ETFs to Buy Now: Renaissance IPO ETF (IPO)
Source: Shutterstock
As one of the hardest-hit ETFs, the Renaissance IPO ETF (NYSEARCA:IPO) must come with a disclaimer: only place a wager on it with money you can afford to lose. Even then, it’s really a platform for true battle-hardened gamblers. As the name suggests, this fund focuses on companies that recently launched an initial public offering (IPO). And while this arena is compelling, it is also extraordinarily risky.
Nonetheless, if you happen to get the call correctly, buying a newly listed company when shares are offered in the secondary market — or better yet through a pre-IPO placement — could yield dramatic gains. At the same time, you must consider the opposite scenario: you could suffer extraordinary losses. As the debacle surrounding many special purpose acquisition companies (SPACs) have proven, IPOs can be dangerous.
Still, this market subsegment can provide exposure to groundbreaking businesses. Therefore, if you really like the idea of being a pioneer, the Renaissance IPO could be among the best ETFs to buy.
ProShares Bitcoin Strategy ETF (BITO)
Source: Sittipong Phokawattana / Shutterstock.com
Okay, so let’s get some disclosures out of the way. As a long-term concept, I’m a big believer in cryptocurrencies. I also have some Bitcoin (BTC-USD), which is the core focus of ProShares Bitcoin Strategy ETF (NYSEARCA:BITO). However, I’m simultaneously a proponent of reading the room and what the room tells me is that cryptos may be due for a serious correction.
Since this is the internet, I’m fully aware that some of you, perhaps most of you disagree with me. That’s fine. For those on the opposite side of the fence, you have BITO, which, per its underlying website, allows “investors an opportunity to gain exposure to bitcoin returns in a convenient, liquid and transparent way.”
Therefore, with so many concerns about cyberattacks and other nefarious activities impacting crypto-related ventures, BITO may be one of the best ETFs to buy if you simply want your Bitcoin without all the unnecessary — and sometimes disheartening — drama.
On the date of publication, Josh Enomoto held a LONG position in BTC. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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Market check: Nasdaq, Dow drop following Snap earnings warning
2022-05-24 15:10:53 by Yahoo Finance VideoYahoo Finance's Jared Blikre and Julie Hyman break down why markets are moving lower on Tuesday.
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Market check: Nasdaq drifts higher, stocks mixed after heavy selling
2022-05-19 14:28:28 by Yahoo Finance VideoYahoo Finance's Ines Ferré and Julie Hyman break down mixed stocks and how sectors are performing.
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Stock futures fall after Wednesday’s rout, S&P 500 approaches bear market
2022-05-19 13:23:23 by Yahoo Finance VideoYahoo Finance Live anchors discuss stock futures after Wednesday’s steep decline.
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Investing in the new high-inflation, slowing-growth paradigm
2022-05-18 20:06:04 by Yahoo Finance VideoVolatility is whipsawing investors in 2022, as a secular change in economic realities is rattling both retail and Institutional traders. Callie Cox, US Investment Analyst at eToro USA, joins Yahoo Finance's Jared Blikre to break down the current macro trends -- persistently high inflation, hawkish central banks, and an uncertain earnings outlook -- and how investors can use this knowledge to play defense and even find opportunities in the markets. Blikre demonstrates how to leverage the power of Yahoo Finance Plus for market technicals, fundamentals and portfolio management. Not a subscriber? Start your free trial to join future webinars live!
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Market check: Stocks accelerate losses, Dow falls by 700+ points
2022-05-18 16:10:23 by Yahoo Finance VideoYahoo Finance's Akiko Fujita and Brian Cheung give a check of the markets as stocks extend losses.
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Stocks making moves today: Walmart, Home Depot, Paramount, Tesla
2022-05-17 15:07:18 by Yahoo Finance VideoYahoo Finance's Julie Hyman breaks down how stocks are trading on Tuesday afternoon.
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Economist: Recession risk is ‘increasing’ — especially for 2023
2022-05-17 14:30:07 by Yahoo Finance VideoBeth Ann Bovino, chief U.S. economist for S&P Global Ratings, joins Yahoo Finance Live to discuss April retail sales, inflation, recessionary risks, and Fed rate hikes.