U.S. jobless promises established a a lot more than 50-calendar year low very last 7 days as the pink-scorching labor current market exhibits handful of indications of cooling in the in close proximity to-term.
The Labor Department produced its latest weekly jobless claims report Thursday at 8:30 a.m. ET. Below were the key metrics from the print, compared to consensus estimates compiled by Bloomberg:
First jobless statements, 7 days ended March 19: 187,000 vs.210,000 expected and a revised 215,000 throughout prior week
Continuing statements, 7 days ended March 12: 1.350 millionvs.1.400 million envisioned and a revised 1.417 million during prior 7 days
At 187,000, new jobless claims improved for a again-to-again week and arrived at the cheapest degree given that September 1969. Continuing claims also fell even more to get to 1.35 million — the minimum given that January 1970.
The labor market has remained a position of power in the U.S. economy, with work openings even now elevated but coming down from record ranges as additional employees rejoin the labor power from the sidelines.
“Internet, net, no one particular is shedding their job with companies keeping on limited to their personnel despite the stressing indicators of economic downturn on the horizon from rising gasoline costs, inventory industry corrections and the horrific Planet War II photos coming out of Europe,” Chris Rupkey, main economist at FWDBONDS, wrote in an email Thursday early morning. “No speculate worker wages are soaring as business administrators provide carrots where they utilized to give out sticks. The omicron variant is acquiring no affect on the labor sector and the anecdotal experiences of large labor market place shortages are incredibly, incredibly true.”
Going ahead, on the other hand, some economists warned that new instances of the rapidly-spreading sub-variant of Omicron, identified as BA.2, could at least briefly disrupt mobility and economic activity across the nation. As of this week, about just one-third of COVID-19 instances in the U.S. have been attributed to the sub-variant, although over-all new infections have still been trending down from January’s document large. The impression on the labor marketplace — and on demand in the assistance sector specially — stays to be seen.
“Right now, U.S. instances are in the sweet location concerning the base of the preliminary Omicron wave and the impending explosion in BA.2 conditions, but this almost certainly will not last long,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note previously this week. “Our guess … is that the coming BA.2 wave will set off a modest but noticeable pull-again in the discretionary expert services sector, therefore dampening consumption in the to start with month of the next quarter.”
However, several economists and policymakers have pointed out that the labor current market withstood prior disruptions thanks to the Omicron wave earlier this 12 months. Non-farm payrolls grew a lot more than anticipated in just about every of January and February irrespective of the outbreak.
And Federal Reserve Chair Jerome Powell reiterated his evaluation of the labor market’s toughness previously this 7 days, just days just after contacting the recent position sector “limited to an harmful degree” in his post-Fed conference push convention previous 7 days.
“The labor current market has significant momentum. Employment progress powered as a result of the complicated Omicron wave, adding 1.75 million work opportunities above the past a few months,” Powell stated in a speech Monday. “By lots of steps, the labor market place is extremely tight, significantly tighter than the quite potent position sector just just before the pandemic.”
The tightness of the labor current market has also strongly educated the Fed’s choices in urgent in advance with tightening monetary policy, with the financial system showing clear indicators of energy and the ability to cope with significantly less accommodative monetary disorders. Last 7 days, the Fed lifted curiosity premiums by 25 foundation points in its 1st charge hike due to the fact 2018. And St. Louis Fed President Jim Bullard, the lone dissenter of that conclusion who experienced called for a far more aggressive 50 foundation level level hike previous week, justified his vote in component given the power of the U.S. labor market place even in the face of decades-high fees of inflation.
“U.S. labor markets are nowadays presently more powerful than they have been in a technology,” Bullard mentioned in a assertion.
The Federal Open Current market Committee is scheduled to convene on Could 3 and 4.
Stocks extended declines on Monday and oil prices soared as investors nervously considered the potential for even higher inflation and greater global economic damage from Russia’s war in Ukraine and sanctions that have ensued.
The S&P 500 closed down nearly 3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} at 4,200.89, its worst day in more than a year, while the Dow fell 2.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to 32,813.56. The Nasdaq Composite dropped 3.62{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} at 12,380.96 clocking in its worst day in more than a month, and formally entered a bear market after dropping more than 20{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} from its recent record high. The German DAX index (DAX) as well as the STOXX 50 (FEZ) also each sank to drop into bear markets. Traders piled into safe haven assets, and gold prices (GC=F) briefly jumped above $2,000 per ounce for the first time since September 2020. U.S. Treasury yields advanced.
In energy markets, Brent crude oil prices (BZ=F), the international standard, soared to as much as $137 per barrel, building on gains over the past several weeks. U.S. West Texas intermediate crude oil (CL=F), likewise, rose to as much as $130.50 a barrel.
The jump in energy prices came as the White House and European nations weighed an import ban on Russian crude oil in a further punitive move for the country’s invasion of Ukraine. Secretary of State Antony Blinken told CNN on Sunday that the Biden Administration was “now talking to our European partners and allies to look in a coordinated way at the prospect of banning the import of Russian oil,” while ensuring global markets remain sufficiently supplied.
The U.S. receives only a small portion of energy products from Russia, with just about 7.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of total petroleum imports including crude oil coming from the country in 2021, according to the Energy Information Administration. However, such a ban could more negatively impact European countries that have been more reliant on Russian crude oil as well as natural gas for energy. Prices for metals used in fuel cell batteries and other clean energy products including palladium and nickel also spiked on Monday as traders eyed an accelerated move toward renewable alternatives.
“Russia’s invasion of Ukraine—and the Western response to it—will exacerbate the supply-demand imbalance that lies at the heart of the global inflation surge,” Goldman Sachs economist Jan Hatzius wrote in a note Sunday. “Reducing trade with a current account surplus country via sanctions and boycotts means that the rest of the world needs to produce a larger share of what it consumes.”
Hatzius added that “the potential shift is fairly small at an aggregate level,” given Russia comprises less than 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of the global goods trade and gross domestic product. But in oil, Russia supplies 11{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of global consumption, and 17{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of natural gas — including as much as 40{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Western European consumption.
“If Western countries buy less Russian oil, China and India could in principle buy more Russian oil and correspondingly less Saudi and other oil, which can then flow to the West,” Hatzius added. “But this ‘rearrangement of the deck chairs’ isn’t perfect, not only because of increased transport costs and other technical frictions but also because China and India may be reluctant to increase their imports and corresponding payments sharply at a time when Russia is becoming a global pariah.”
The uncertainty over global trade and supplies of key goods has further stoked fears over a further surge in inflation. Later this week, the Bureau of Labor Statistics is set to release its February Consumer Price Index, which economists expect will show a 7.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} annual rise for the largest jump since 1982. And given the latest set of commodity price increases this month, a further rise is also possible.
“We had thought that February was going to mark the peak,” Michelle Girard, NatWest co-head of global economics, told Yahoo Finance Live on Friday. “However, with the rise in energy prices that we’re seeing, I don’t think we can any longer assume that’s going to be the case. Certainly, with respect to the headline numbers, I think, it’s likely that we’ll continue to see upward pressure.”
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4:00 p.m. ET: Stocks end at session lows
Here were the main moves in markets as of 4:00 p.m. ET:
S&P 500 (^GSPC): -127.98 (-2.96{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,200.89
Dow (^DJI): -801.24 (-2.38{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 32,813.56
Nasdaq (^IXIC): -482.48 (-3.62{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 12,830.96
Crude (CL=F): +$4.44 (+3.84{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $120.12 a barrel
Gold (GC=F): +$34.00 (+1.73{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $2,000.60 per ounce
10-year Treasury (^TNX): +2.7 bps to yield 1.7510{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
—
2:26 p.m. ET: Shares of U.S.-listed Chinese stocks slump amid risk-off move
Shares of major Chinese companies listed in the U.S. sank on Monday amid a broader risk-off tone across global equity markets, and as investors eyed the country’s rising COVID-19 cases.
The Nasdaq Golden Dragon China Index (^HXC), which tracks a basket of major U.S.-listed Chinese stocks, dropped more than 3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} Monday afternoon to set a record low in data spanning back to early 2017. Major components including Baidu (BIDU) and Chinese electric-vehicle maker XPeng (XPEV) also fell more than 4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} each intraday.
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12:26 p.m. ET: Stocks extend declines, indexes drop more than 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
The three major equity indexes dropped more than 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} during afternoon trading, building on earlier losses. Here’s where markets were trading after 12 p.m. ET:
S&P 500 (^GSPC): -97.90 (-2.26{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,230.97
Dow (^DJI): -675.37 (-2.01{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 32,939.43
Nasdaq (^IXIC): -300.53 (-2.26{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 13,012.09
Crude (CL=F): +$2.28 (+1.97{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $117.96 a barrel
Gold (GC=F): +$20.30 (+1.03{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,986.90 per ounce
10-year Treasury (^TNX): +1.4 bps to yield 1.736{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
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10:26 a.m. ET: ‘Look for these dips to offer opportunities that are shorter-term in nature’: Strategist
With major equity indices continuing to trend lower this year, at least one strategist suggested investors shift from pursuing the buy-and-hold strategy that paid off during the pandemic to a more tactical approach.
“What we saw late last year was a pretty significant loss of long-term upside momentum developing, and of course that’s manifested itself in a pretty sizable corrective phase at this point in thee major indices,” Katie Stockton, Fairlead Strategies founder, told Yahoo Finance Live on Monday. “So that loss of upside momentum suggests that the market has moved into a trading range perhaps, and with a trading range environment, when you just buy and hold long-term, it doesn’t tend to pay off.”
“However, if you can be more short to intermediate term in your focus, with a time frame of perhaps a couple months maybe, that would be a little bit of a safer bet in terms of adding exposure into corrective phases in a trading range,” she added. “So that’s what our recommendation has been: To look for these dips to offer opportunities that are shorter-term in nature as opposed to having the kind of buy and hold market that we had last year and even part of the year before off of the COVID corrective low.”
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9:50 a.m. ET: Mobileye, Intel’s self-driving unit, files confidentially for an IPO
Mobileye, the self-driving unit of Intel (INTC), filed confidentially for an initial public offering on Monday, according to a statement from Intel.
While Intel did not provide many details about the IPO, the deal could value the automotive tech unit at more than $50 billion, according to a report from Reuters. Intel first bought Mobileye for $15.3 billion in 2017.
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9:30 a.m. ET: Stocks mixed, coming off overnight lows
Here’s where stocks were trading Monday morning just after market open:
S&P 500 (^GSPC): -7.19 (-0.17{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,321.68
Dow (^DJI): -111.09 (-0.33{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 33,503.71
Nasdaq (^IXIC): +14.94 (+0.14{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 13,332.30
Crude (CL=F): +$0.57 (+0.49{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $116.75 a barrel
Gold (GC=F): +$8.90 (+0.45{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,975.50 per ounce
10-year Treasury (^TNX): -6.5 bps to yield 1.787{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
—
8:19 a.m. ET: Bed Bath & Beyond shares soar by more than 90{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} after activist Ryan Cohen discloses nearly 10{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} stake
Ryan Cohen’s investment firm RC Ventures disclosed a 9.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} stake in Bed Bath & Beyond (BBBY) on Monday, sending shares of the retailer soaring by more than 90{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in pre-market trading.
Cohen, the co-founder of Chewy and chairman of GameStop, also wrote a letter to the board of Bed Bath & Beyond calling for a sweeping set of operational changes and for the board to consider alternatives including a full sale of the company. Cohen was also critical of the compensation of its top executives even as the company experienced share price declines and market share losses.
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7:40 a.m. ET Monday: Stocks head for a sharply lower open
Here’s where stocks were trading Monday morning:
S&P 500 futures (ES=F): -47.75 points (-1.10{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,279.50
Dow futures (YM=F): -365.00 points (-1.09{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 33,218.00
Nasdaq futures (NQ=F): -177.5 points (-1.28{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 13,662.25
Crude (CL=F): +$7.66 (+6.62{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $123.34 a barrel
Gold (GC=F): +$25.40 (+1.29{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,992.00 per ounce
10-year Treasury (^TNX): +5.5 bps to yield 1.777{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
NEW YORK, NEW YORK – MARCH 04: Traders work on the floor of the New York Stock Exchange (NYSE) on March 04, 2022 in New York City. The Dow fell over 300 points in morning trading despite a positive jobs report as the war in Ukraine continues to worry investors. (Photo by Spencer Platt/Getty Images)
Stock futures headed for a lower open Friday morning as investors awaited a key update on the labor market’s recovery and continued to monitor for global economic fallout from Russia’s war in Ukraine.
Contracts on the S&P 500 fell to extend declines from Thursday. Treasury yields pulled back further as traders piled into safe havens including bonds and gold, and the benchmark 10-year yield dropped to below 1.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. The risk-off tone Friday morning came amid news that Russia had seized Europe’s largest nuclear power plant in Ukraine, after Russian shelling set fire to the facility earlier.
A fresh set of economic data due for release Friday morning is expected to reaffirm to investors that the U.S. economy has recovered sufficiently to allow monetary policymakers to ease their crisis-era supports. The Labor Department’s February jobs report is expected to show a fourteenth consecutive month of payroll gains, with jobs rising by more than 400,000 and the unemployment rate edging lower to 3.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} — or the lowest since February 2020 before the pandemic. Such a result would mirror the much better-than-expected private payrolls data out from ADP earlier this week.
And already, Fed officials have declared victory on fulfilling their employment mandate for the economy. In congressional testimony this week, Fed Chair Jerome Powell said that most Federal Open Market Committee (FOMC) members would agree that the labor market in the U.S. is now at a level consistent with maximum employment.
And even ahead of the February jobs report, Powell said he would back a 25 basis point interest rate hike at the Fed’s March meeting, putting to rest speculation that the central bank might press ahead with a more aggressive 50-basis point hike to jump-start its efforts to bring down inflation. But persistent price increases have left open the question of how aggressively the Fed will need to tighten monetary policy over the rest of the year.
Inflationary concerns have only compounded as crude oil prices spiked to hover at multi-year highs, with both West Texas intermediate and Brent crude oil prices rising more than 40{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} for the year-to-date and holding well over $100 per barrel. But for monetary policymakers, these concerns have had to be weighed against the uncertainty now generated by the crisis in Ukraine.
“The recent action over the last week, given the combination of the Russia-Ukraine situation but also the continued prints from inflation, have moved expectations down within the market to closer to five hikes, maybe even lower,” Matt Kishlansky, GenTrust Wealth Management Principal, told Yahoo Finance Live. “So I think the Fed needs to signal to that effect that they think that that’s really where they’re going to be.”
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7:22 a.m. ET: Stocks head for lower open
Here’s where stocks were trading Friday morning:
S&P 500 (^GSPC): -42.5 (-0.96{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,317.50
Dow (^DJI): -322 (-0.95{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 33,416.00
Nasdaq (^IXIC): -126.25 (-0.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 13,904.25
Crude (CL=F): +$2.43 (+2.26{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $110.10 a barrel
Gold (GC=F): +$15.20 (+0.79{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,951.10 per ounce
10-year Treasury (^TNX): -6.5 bps to yield 1.779{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
—
6:13 p.m. ET Thursday: Stock futures rise
Here were the main moves in markets Thursday evening:
S&P 500 futures (ES=F): +6.5 points (+0.15{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 4,365.75
Dow futures (YM=F): +54 points (+0.16{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 33,792.00
Nasdaq futures (NQ=F): +31.25 points (+0.22{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 14,061.75
A trader works at the New York Stock Exchange in New York, the United States, Feb. 28, 2022. U.S. stocks closed mixed on Monday as investor eyed updates regarding the Russia-Ukraine conflict.The Dow Jones Industrial Average fell 166.15 points, or 0.49 percent, to 33,892.60. The S&P 500 decreased 10.71 points, or 0.24 percent, to 4,373.94. The Nasdaq Composite Index rose 56.78 points, or 0.41 percent, to 13,751.40. (Allie Joseph/NYSE/Handout via Xinhua)
European stocks dropped, oil charges rallied, the rouble plunged and investors herded into the dollar and very rated federal government financial debt immediately after new sanctions imposed on Russia heightened tensions throughout economic markets.
The regional Stoxx 600 share index fell 1.6 per cent, Germany’s Xetra Dax misplaced 1.8 for every cent and the UK’s FTSE 100 fell 1.5 for each cent. The moves arrived soon after Russian President Vladimir Putin place his country’s nuclear forces on significant warn and western powers imposed sanctions on Russia’s central bank in reaction to the invasion of Ukraine.
A sub-index of European banks fell more than 7 for every cent as traders responded to uncertainty about the opportunity worldwide consequences of western allies locking some Russian loan providers out of the Swift payments method.
Hong Kong’s Hang Seng index fell as significantly as 1.6 for every cent to its least expensive level in nearly a yr. Brent crude, the intercontinental oil benchmark, rose 4.4 for every cent to $102.17 a barrel.
Worldwide equities experienced rallied on Friday in a shift analysts attributed to sanctions levelled versus Russia steering clear of focusing on the nation’s power exports. But following financial sanctions in opposition to Russia were ratcheted up about the weekend, fund supervisors moved to de-danger their portfolios, backing away from powerful bets on the global financial system and future central bank coverage though loading up on very low-possibility and easily tradeable belongings.
“Investors are cutting down their lively bets,” said Michael Metcalfe, head of macro approach at Point out Avenue. “Right now is a time to consider stock, decrease positions and test to assess all the probable results that could arise” from the geopolitical situation, he additional.
The dollar index, which measures the currency from 6 other individuals, rose .5 for each cent. The generate on the two-12 months US Treasury take note dropped .09 share factors to nearly 1.5 for every cent, reflecting a substantial increase in the selling price of the credit card debt.
“It’s a flight to safety and funds is king at these occasions,” mentioned Tatjana Greil Castro, co-head of community marketplaces at credit score investor Muzinich & Co. “Asset managers will have worries about shoppers wanting to acquire revenue out and you want to pre-empt that by having liquidity to meet up with probable redemptions.”
The rouble dropped as a lot as 29 per cent to practically 118 towards the US greenback on Monday early morning. Russia’s central lender then extra than doubled curiosity rates to 20 for every cent and banned overseas offering of neighborhood securities in a bid to stem the fallout from sanctions.
In the meantime, futures joined to TTF, Europe’s wholesale natural gas value, rose far more than a fifth to €112 for every megawatt hour.
A FTSE index of rising industry stocks also outperformed on Monday, falling just .3 for every cent, as buyers backed out of a well-known trade primarily based on betting versus developing economies that stay impacted by superior costs of coronavirus.
“If buyers have sizeable positions away from their concentrate on benchmark, these positions could sense also dangerous at the moment,” Metcalfe said. “One of the energetic bets quite a few have experienced is to be underweight [emerging markets] so a little perversely they have to invest in back.”
In other places, shares in BP dropped 6.8 for every cent following the British group mentioned at the weekend it would divest its in close proximity to 20 for each cent stake in Russian condition oil supplier Rosneft.
Futures markets implied the US S&P 500 share index would fall 1.7 per cent in early New York dealings.
Unhedged — Markets, finance and strong viewpoint
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Stocks ended a volatile week lower, with investors rotating further away from growth and technology stocks that had outperformed early on during the pandemic.
The Nasdaq plummeted nearly 3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, clocking in its worst week since March 2020, while the S&P 500 and Dow accelerated losses. A day earlier, the Nasdaq Composite dropped more than 1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, adding to losses after sinking into a correction earlier this week. The Nasdaq has shed 12{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} for the year-to-date.
Shares of Netflix (NFLX) sank more than 20{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} after the company posted a first-quarter subscriber growth outlook that fell far short of expectations, with the streaming giant projecting 2.5 million new users for the first quarter of 2022 versus the 6.3 million anticipated, according to Bloomberg data. Shares of Disney (DIS) and Roku (ROKU) fell in sympathy. Meanwhile, Peloton (PTON) — which had been another darling of the so-called “stay-at-home” trade during the pandemic — recovered some losses after falling to a near two-year low on Thursday, after CNBC reported the company was cutting production of its fitness products due to flagging demand.
“It is these infamous stay-at-home plays … that had been bid up to valuations that get to the point where they’re priced for perfection,” Mark Luschini, chief investment strategist at Janney Montgomery Scott, told Yahoo Finance Live on Thursday. “Anything that is released about the companies’ investment results or prospects that doesn’t meet or exceed very elevated expectations leads to gigantic disappointment in the form of a share price decline.”
“This is indicative of companies that, again, have valuations that have been bid up by investors who, on disappointment, decide to sell first and ask questions later, and therefore leave huge carnage in their wake as valuations compress to better reflect prospects under a more normal economic climate,” Luschini added.
The drop in many closely watched, highly valued technology stocks — and the broader stock indexes — also came alongside ongoing investors jitters about a potential near-term move on interest rates from the Federal Reserve. The Fed’s next policy-setting meeting is set to take place next week, with market participants largely pricing in a first interest-rate hike out from the central bank after the Fed’s March meeting. These expectations for higher rates and less liquidity from the Fed this year have also been a key driver of recent equity price action, many strategists noted.
“I think there is a rotation going on towards those areas of the market that have been neglected for a long time — not just months, but years. Areas like financials and energy. Even health care, which is an area that had done a bit better during the pandemic, but really isn’t seeing any kind of multiples like it did in the past,” Jeffrey Kleintop, Charles Schwab chief global investment strategist, told Yahoo Finance Live on Thursday.
“I think those areas of the market have more durability here as we look at an environment where earnings growth is slowing so valuations matter more,” he added. “And many of these companies can look to generate earnings growth in this environment of rising interest rates and commodity prices, whereas tech is a bit more challenged as goods demand begins to slow.”
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4:02 p.m. ET: Nasdaq notches worst week since 2020
Here were the main moves in markets as of 4:02 p.m. ET:
S&P 500 (^GSPC): -85.00 (-1.90{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,397.73
Dow (^DJI): -449.89 (-1.30{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 34,265.50
Nasdaq (^IXIC): -385.10 (-2.72{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 13,768.92
Crude (CL=F): -$0.84 (-0.98{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $84.71 a barrel
Gold (GC=F): -$12.10 (-0.66{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,830.50 per ounce
10-year Treasury (^TNX): -8.6 bps to yield 1.7470{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
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1:04 p.m. ET: ‘I certainly think technology and growth is going to be a sector you want to be in’
As the Nasdaq sinks further into a correction and individual technology stocks come under considerable pressure, some analysts see the pick-up of tech earnings season next week as the start of a potential reprieve for at least some of these growth names.
“The re-thinking of valuations really just follows in the wake of rising interest rates. So we averaged 1.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} on the yield on the U.S. 10-year for all of last year, and this year we likely average somewhere between 1.75{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} and 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a},” National Chief Market Strategist Art Hogan, told Yahoo Finance Live on Friday. “So that price and value calculation is obviously putting pressure on multiples across the technology complex.”
“At some point in time we’ll look at this and say we’re probably overdone and we’ve taken too much multiple compression,” he added. “And what likely will be the signal that that’s the case will be when we get into earnings season in earnest next week … and see where the winners and losers really sit.”
“I certainly think technology and growth is going to be a sector you want to be in [for] 2022,” Hogan said. “But I think you want to be in it in companies that measure themselves in price to earnings.”
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10:40 a.m. ET: Leading Economic Index posts solid jump in December: Conference Board
An index tracking future domestic economic conditions accelerated in December, pointing to still-solid growth trends in the U.S. even amid ongoing concerns over the pandemic, inflation, and a more hawkish tilt to monetary policy.
The Conference Board’s closely watched Leading Economic Index (LEI) rose 0.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in December, matching consensus estimates, according to Bloomberg data. This picked up from November’s 0.7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} clip, which was downwardly revised from the 1.1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} gain previously reported.
“The U.S. LEI ended 2021 on a rising trajectory, suggesting the economy will continue to expand well into the spring,” Ataman Ozyildirim, senior director of economic research at The Conference Board, said in a press statement.
“For the first quarter, headwinds from the Omicron variant, labor shortages, and inflationary pressures—as well as the Federal Reserve’s expected interest rate hikes—may moderate economic growth,” Ozyildirim added. “The Conference Board forecasts GDP growth for Q1 2022 to slow to a relatively healthy 2.2 percent (annualized). Still, for all of 2022, we forecast the US economy will expand by a robust 3.5 percent—well above the pre-pandemic trend growth.”
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9:31 a.m. ET: Stocks open lower
Here’s where markets were trading Friday morning:
S&P 500 (^GSPC): -12.92 (-0.29{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,470.23
Dow (^DJI): -69.52 (-0.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 34,645.87
Nasdaq (^IXIC): -57.82 (-0.41{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 14,095.93
Crude (CL=F): -$0.60 (-0.7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $84.95 a barrel
Gold (GC=F): +$0.10 (+0.01{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,842.70 per ounce
10-year Treasury (^TNX): -7.8 bps to yield 1.756{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
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9:27 a.m. ET: Bitcoin extends declines, falling to around $38,000
Cryptocurrency prices tracked the volatility across risk assets this week.
Bitcoin, the largest cryptocurrency by market capitalization, saw prices sink by 10{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to below $38,000 at Friday’s lows, according to Yahoo Finance data. That marked the lowest level since early August.
Other major cryptocurrency prices also sank. Ethereum fell by more than 12{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to about $2,800 Friday morning in New York. Solana prices sank 15{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to below $120.
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7:31 a.m. ET Friday: Stock futures hold lower, Netflix weighs on Nasdaq
Here’s where markets were trading Friday morning:
S&P 500 futures (ES=F): -19.75 points (-0.44{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 4,455.00
Dow futures (YM=F): -68 points (-0.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 34,548.00
Nasdaq futures (NQ=F): -115.5 points (-0.78{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 14,725.50
Crude (CL=F): -$1.38 (-1.61{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $84.17 a barrel
Gold (GC=F): -$8.60 (-0.47{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,834.00 per ounce
10-year Treasury (^TNX): -5.3 bps to yield 1.781{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
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6:01 p.m. ET Thursday: Stock futures open lower
Here’s where markets were trading Thursday evening:
S&P 500 futures (ES=F): -17 points (-0.38{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 4,457.75
Dow futures (YM=F):—41 points (-0.12{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 34,575.00
Nasdaq futures (NQ=F): -128.25 points (-0.86{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 14,712.75
NEW YORK, NEW YORK – JANUARY 20: Traders work on the floor of the New York Stock Exchange (NYSE) on January 20, 2022 in New York City. The Dow Jones Industrial Average was up over 200 points in morning trading following days of declines. (Photo by Spencer Platt/Getty Images)
Stocks extended losses on Wednesday, retreating from this week’s record highs with investors fixing their attention on a key inflation report that showed a greater-than-expected jump in consumer prices last month.
The S&P 500 Index is coming off its first session of losses following eight straight days of gains, with the Dow and Nasdaq each also pulling back from record-setting runs.
One of the most closely watched reports Wednesday morning was the Labor Department’s Consumer Price Index (CPI) for October, which counterbalanced strong jobless claims that sank to their lowest of the COVID-19 era.
Consumer prices soared 6.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in October compared to last year, accelerating from September’s 5.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} year-over-year rate. This was a bigger jump than the 5.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} rise anticipated, based on Bloomberg consensus data. And it represented the fastest annual rise in consumer inflation since 1990.
The staying power and magnitude of inflationary pressures has become a critical question for market participants, with companies across industries reporting rising input costs and price hikes in order to pass on these expenses and preserve margins. While third-quarter earnings results have showed that S&P 500 companies have largely been able to navigate these cost pressures, the possibility remains that lasting inflation could exert a greater impact, especially if consumers ultimately prove unwilling to pay higher prices.
“That’s going to be one of the big things going forward, to see whether or not that consumer sentiment can bounce back, whether consumers will be resilient in the face of these price pressures, or whether they’ll start to pull back a bit and decide they’re going to hold off on spending and wait to see when prices come down or at least stabilize before they spend more in the new year,” Yung-Yu Ma, BMO Wealth Management’s chief investment strategist, told Yahoo Finance.
“So that remains to be seen, and that is a big question mark as we go into 2022,” Ma added.
Inflation data so far has reflected still-elevated pressures in the recovering economy, even as Federal Reserve officials maintained that the supply-related factors creating these heightened costs would eventually wane. Tuesday’s Producer Price Index from the Bureau of Labor Statistics showed that prices paid to producers jumped by a marked 8.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in October compared to last year, representing the fastest rise in data extending back to 2010. And last week’s October jobs report showed average hourly earnings jumped 4.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} last month compared to the same period last year, accelerating from September’s 4.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} annual rise.
Meanwhile, a bevy of companies will report quarterly earnings results, including Disney (DIS), Bumble (BMBL), Wish (WISH) and Beyond Meat (BYND) after market close.
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4:03 p.m. ET: Tech shares lead stock drop after hotter-than-expected inflation print; Nasdaq posts worst day since early Oct.
Here were the main moves in markets as of 4:03 p.m. ET:
S&P 500 (^GSPC): -38.55 (-0.82{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,646.70
Dow (^DJI): -240.04 (-0.66{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 36,079.94
Nasdaq (^IXIC): -263.84 (-1.66{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 15,622.71
Crude (CL=F): -$2.87 (-3.41{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $81.28 a barrel
Gold (GC=F): +$22.30 (+1.22{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,853.10 per ounce
10-year Treasury (^TNX): +12.8 bps to yield 1.5600{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
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12:17 p.m. ET: Amazon-backed Rivian shares to begin trading after $11.9 billion IPO
Electric-vehicle maker Rivian, backed by companies including Amazon and Ford, is set to see shares begin trading publicly on Wednesday after an upsized initial public offering. The company priced its IPO at $78 per share late Tuesday to raise $11.9 billion, in the sixth largest IPO ever on a U.S. exchange, according to Bloomberg data.
Investors are already bidding up the stock price further. As of Wednesday afternoon, the stock was indicated to open at $111 apiece, marking a jump from its IPO pricing. The price discovery process was still under way as of 12:17 p.m. ET.
Rivian has yet to begin delivering its vehicles at scale, and it is expected to produce just 1,200 units by. the end of this year at its flagship plant in Illinois. It expects annual production to hit 150,000 vehicles at this facility by the end of 2023. Amazon has a contract with Rivian to be provided with 100,000 of its vehicles by 2024.
The company remains unprofitable, however, and its net loss came in at $994 million in the first six months of 2021, compared with a loss of $377 million in the same period in 2020.
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12:08 p.m. ET: Biden says reversing elevated inflation is a ‘top priority’
President Joe Biden said on Wednesday that he was committed to combatting rising prices, after new data showed consumer prices rose at their fastest pace in more than three decades.
“Inflation hurts Americans’ pocketbooks, and reversing this trend is a top priority for me,” Biden said in a statement following the Bureau of Labor Statistics’ October Consumer Price Index.
“The largest share of the increase in prices in this report is due to rising energy costs—and in the few days since the data for this report were collected, the price of natural gas has fallen,” Biden added. “I have directed my National Economic Council to pursue means to try to further reduce these costs, and have asked the Federal Trade Commission to strike back at any market manipulation or price gouging in this sector.”
He noted that other price increase reflected the “ongoing struggle to restore smooth operations in the economy” as supply chain snarls continue to weigh on corporate America. He noted he believed his more than $1 trillion infrastructure plan, which passed the House late last week, would help address these concerns.
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9:30 a.m. ET: Wall Street opens on a down note
Here were the main moves in markets as of 9:30 a.m. ET:
Crude (CL=F): $83.91 per barel,-$0.24 (-0.29{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a})
Gold (GC=F): $1,857.30 per ounce,+$26.50 (+1.45{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a})
10-year Treasury (^TNX): +0.43 bps to yield 1.4760{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
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8:41 a.m. ET: Consumer Price Index posts biggest annual rise since 1990
The Consumer Price Index (CPI) jumped by a much bigger-than-expected margin in October compared to. last month and last year, with inflationary pressures continuing to weigh on the recovering economy.
The CPI rose 0.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in October over September, the Bureau of Labor Statistics said Wednesday, accelerating from September’s 0.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} monthly rise. Consensus economists were looking for a just 0.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} month-on-month increase in October, according to Bloomberg data.
Over last year, the broadest measure of CPI jumped 6.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, or by the most since 1990.
Energy was a major contributor to the headline jump in CPI, with energy prices up 4.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} month-on-month, and fuel oil prices alone up 12.3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. Groceries also became more expensive, with food at home prices rising by 1.0{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. Used car and truck prices rose 2.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to reverse course after back-to-back months of price drops. The Bureau of Labor Statistics noted that airline fares and alcoholic beverages were two of the only categories to post price declines during the month.
Even excluding more volatile food and energy prices, consumer prices accelerated markedly last month. This so-called core measure of CPI was up 0.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} on a month-over-month in October, or three times September’s 0.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} rise. And over last year, the core CPI rose 4.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, or by the most since 1991.
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7:50 a.m. ET: Stock futures point to a lower open ahead of CPI data
Here’s where markets were trading Wednesday morning:
S&P 500 futures (ES=F): -12.5 points (-0.27{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 4,665.75
Dow futures (YM=F): -57 points (-0.16{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 36,152.00
Nasdaq futures (NQ=F): -82.75 points (-0.51{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 16,130.00
Crude (CL=F): -$0.46 (-0.55{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $83.69 a barrel
Gold (GC=F): -$3.30 (-0.18{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,827.50 per ounce
10-year Treasury (^TNX): +2.5 bps to yield 1.474{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
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6:02 p.m. ET Tuesday: Stock futures drift lower ahead of inflation data
Here’s where markets were trading Tuesday evening:
S&P 500 futures (ES=F): -3.75 points (-0.08{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 4,674.50
Dow futures (YM=F): -33 points (-0.09{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 36,176.00
Nasdaq futures (NQ=F): -16.5 points (-0.1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 16,196.25
NEW YORK, NEW YORK – SEPTEMBER 30: Traders work on the floor of the New York Stock Exchange (NYSE) on September 30, 2021 in New York City. In afternoon trading the Dow was down over 250 points as investors continue to worry about inflation, wages and supply chain issues. (Photo by Spencer Platt/Getty Images)
