New York: Shares rose wall Street The Monday before the week ends with an update on where inflation and corporate profits are headed.
The S&P 500 rose 10.58, or 0.2%, to 4,409.53, marking its second week of losses in the past eight. Dow Jones The industrial average climbed 209.52, or 0.6%, to 33,944.40, and the Nasdaq Composite rose 24.77, or 0.2%, to 13,685.48.
FMC, which sells herbicides, pesticides and other products to the agriculture industry, fell 11.1% for the biggest loss in the S&P 500 after it warned of a sudden drop in worldwide business in late May as partners dumped inventories. was burnt level. It added that an “unprecedented and unprecedented” decline would affect its results for the spring and for the full year.
On the winning side of Wall Street was Helen of Troy, which said profit and revenue fell short of analysts’ expectations last quarter. The company behind OXO, Hydro Flask and other brands jumped 18.5%. But it also warned about expectations of a slowing economy.
The big question on Wall Street is whether the US economy can avoid the long-expected recession despite higher interest rates to tame inflation. The expectation is that inflation is coming down enough that the Federal Reserve will soon hold off on raising rates, which has already created fissures in the banking industry and other parts of the economy.
A report on Wednesday will present the latest monthly update on consumer-level inflation, and economists expect it to show a further slowdown. They forecast consumer prices in June to be 3.1% higher than a year ago, down from 4% inflation in May.
irrigated has acknowledged that inflation has slowed since last summer, when it peaked above 9%, but has also indicated that it will have to keep inflation at a higher level before ensuring it returns to its 2% target. There may be one or two rate hikes this year.
Such talk has helped quell much of the speculation among traders that the Fed may not only hold off on raising interest rates this year, but also cut them. That led Treasury yields to their highest since March, before higher rates caused the collapse of many US banks, shaking confidence in the system.
Treasury yields fell back on Monday. The 10-year Treasury yield fell to 4.00% from 4.06% late Friday. It helps set rates for mortgages and other important loans.
The two-year Treasury yield, which trades higher on the Fed’s expectations, fell to 4.86% from 4.95%.
The expectation of higher yields is one reason Stifel Managing Director Barry Bannister says the S&P 500 could stall after the first half of the year and end 2023 at 4,400.
When bonds are paying more in interest, especially after inflation is taken into account, stock investors are unwilling to pay that much for every $1 in profits produced by companies. This puts downward pressure on stock prices.
Bannister expects the US economy to slow in the back half of 2023 but then slide into recession in early 2024. A resilient job market is now propelling the economy, but its strength could prompt the Fed to take a tighter stance on interest rates. Drive away inflationary pressures.
“Labor is very hot, making it difficult for the Fed to hit its inflation target,” Bannister wrote in a report. This prompts him to ask: “WWJD” – what would Jerome do?” in reference to Fed Chairman Jerome Powell.
Corporate profits, the other big factor in determining stock prices, will also come into focus later this week, when companies begin reporting how they fared during the spring.
Delta Air Lines and PepsiCo will report their results on Thursday, and JPMorgan Chase will headline a series of bank reports on Friday.
Companies in the S&P 500 are widely expected to report a 7.2% decline in second-quarter earnings per share from a year ago. If analysts’ forecasts prove correct, it would be the worst decline for the index since the spring of 2020, when the pandemic crippled the global economy.
In overseas markets, shares in China edged up on hopes of more stimulus offers from the government. Its economic recovery has faltered after the anti-Covid restrictions were lifted.
China said on Monday that producer prices fell 5.4% from a year earlier in June, down from a 4.6% drop in May, as growth continued to slow in the US and Europe. Consumer price inflation was flat, also indicating weak demand as activity slowed in the world’s second-largest economy
US Treasury Secretary Janet Yellen also completed a fence-mending visit to Beijing on Sunday, but with no major agreement or breakthrough in strained ties as expected. But Yellen said relations between the world’s largest economies are at a “certain level”.
Hong Kong’s Hang Seng added 0.6% and Shanghai shares added 0.2%. Stocks in the rest of Asia were mixed and Europe edged up marginally.
The S&P 500 rose 10.58, or 0.2%, to 4,409.53, marking its second week of losses in the past eight. Dow Jones The industrial average climbed 209.52, or 0.6%, to 33,944.40, and the Nasdaq Composite rose 24.77, or 0.2%, to 13,685.48.
FMC, which sells herbicides, pesticides and other products to the agriculture industry, fell 11.1% for the biggest loss in the S&P 500 after it warned of a sudden drop in worldwide business in late May as partners dumped inventories. was burnt level. It added that an “unprecedented and unprecedented” decline would affect its results for the spring and for the full year.
On the winning side of Wall Street was Helen of Troy, which said profit and revenue fell short of analysts’ expectations last quarter. The company behind OXO, Hydro Flask and other brands jumped 18.5%. But it also warned about expectations of a slowing economy.
The big question on Wall Street is whether the US economy can avoid the long-expected recession despite higher interest rates to tame inflation. The expectation is that inflation is coming down enough that the Federal Reserve will soon hold off on raising rates, which has already created fissures in the banking industry and other parts of the economy.
A report on Wednesday will present the latest monthly update on consumer-level inflation, and economists expect it to show a further slowdown. They forecast consumer prices in June to be 3.1% higher than a year ago, down from 4% inflation in May.
irrigated has acknowledged that inflation has slowed since last summer, when it peaked above 9%, but has also indicated that it will have to keep inflation at a higher level before ensuring it returns to its 2% target. There may be one or two rate hikes this year.
Such talk has helped quell much of the speculation among traders that the Fed may not only hold off on raising interest rates this year, but also cut them. That led Treasury yields to their highest since March, before higher rates caused the collapse of many US banks, shaking confidence in the system.
Treasury yields fell back on Monday. The 10-year Treasury yield fell to 4.00% from 4.06% late Friday. It helps set rates for mortgages and other important loans.
The two-year Treasury yield, which trades higher on the Fed’s expectations, fell to 4.86% from 4.95%.
The expectation of higher yields is one reason Stifel Managing Director Barry Bannister says the S&P 500 could stall after the first half of the year and end 2023 at 4,400.
When bonds are paying more in interest, especially after inflation is taken into account, stock investors are unwilling to pay that much for every $1 in profits produced by companies. This puts downward pressure on stock prices.
Bannister expects the US economy to slow in the back half of 2023 but then slide into recession in early 2024. A resilient job market is now propelling the economy, but its strength could prompt the Fed to take a tighter stance on interest rates. Drive away inflationary pressures.
“Labor is very hot, making it difficult for the Fed to hit its inflation target,” Bannister wrote in a report. This prompts him to ask: “WWJD” – what would Jerome do?” in reference to Fed Chairman Jerome Powell.
Corporate profits, the other big factor in determining stock prices, will also come into focus later this week, when companies begin reporting how they fared during the spring.
Delta Air Lines and PepsiCo will report their results on Thursday, and JPMorgan Chase will headline a series of bank reports on Friday.
Companies in the S&P 500 are widely expected to report a 7.2% decline in second-quarter earnings per share from a year ago. If analysts’ forecasts prove correct, it would be the worst decline for the index since the spring of 2020, when the pandemic crippled the global economy.
In overseas markets, shares in China edged up on hopes of more stimulus offers from the government. Its economic recovery has faltered after the anti-Covid restrictions were lifted.
China said on Monday that producer prices fell 5.4% from a year earlier in June, down from a 4.6% drop in May, as growth continued to slow in the US and Europe. Consumer price inflation was flat, also indicating weak demand as activity slowed in the world’s second-largest economy
US Treasury Secretary Janet Yellen also completed a fence-mending visit to Beijing on Sunday, but with no major agreement or breakthrough in strained ties as expected. But Yellen said relations between the world’s largest economies are at a “certain level”.
Hong Kong’s Hang Seng added 0.6% and Shanghai shares added 0.2%. Stocks in the rest of Asia were mixed and Europe edged up marginally.