ReportWire

Tag: a

  • Stocks could fall ‘another easy 20%’ and next drop will be ‘much more painful than the first’, Jamie Dimon says

    Stocks could fall ‘another easy 20%’ and next drop will be ‘much more painful than the first’, Jamie Dimon says

    JPMorgan Chase & Co.
    JPM,
    -0.93%
    CEO Jamie Dimon warned investors on Monday that he expects markets to remain volatile for the foreseeable future, and that the S&P 500 could easily fall another 20% as the Federal Reserve continues to raise interest rates.

    Asked by CNBC about where he expects stocks to bottom, Dimon said he couldn’t say for sure, but that it’s easy to imagine the S&P 500 falling by another 20% as volatile markets become even more “disorderly” as rates continue to climb.

    “It may have a ways to go. It really depends on that soft-landing, hard-landing thing and since I don’t know the answer to that it’s hard to answer…it could be another easy 20%,” Dimon said.

    “The next 20% could be much more painful than the first. Rates going up another 100 basis points will be a lot more painful than the first 100 because people aren’t used to it, and I think negative rates, when all is said and done, will have been a complete failure.”

    Europe is already in a recession, Dimon said, and he expects a recession in the U.S. will arrive within “six to nine months.”

    An eventual economic downturn in the U.S. could range from “very mild to quite hard.” Ultimately, it will depend on the outcome of the war in Ukraine, Dimon added.

    Since it’s impossible to “guess” exactly how bad things might get for both the economy and markets, investors and companies should “be prepared” for the worst-case scenario, Dimon said.

    Companies should start shoring up their balance sheets now, Dimon said, adding that “if you need money, go raise it.”

    He also warned that cracks are starting to appear in credit markets, and that a full-blown panic could emerge somewhere in the universe of global debt.

    “The likely place you might see more of a crack or a little bit more of a panic is in credit markets. And it might be ETFs, it might be a country, it might be something you don’t suspect. If you make a list of all the credit crises…you cannot predict where they came from, although I think you can predict that this time it will happen,” he said.

    After assuring the public that the Fed would do its best to minimize the fallout for the U.S. economy, Federal Reserve Chairman Jerome Powell has recently adjusted his rhetoric to suggest that Americans likely won’t be spared from another recession as the Fed’s hopes for a “soft landing” dim.

    In September, the central bank cut its projections for U.S. economic growth to just 0.2% for 2022 and 1.2% in 2023.

    JPMorgan is already becoming “very conservative” with its lending standards, Dimon added. The New York-based megabank is expected to report third-quarter earnings on Friday.

    Dimon’s comments helped to drive U.S. stocks to their lows of the session on Monday as the main indexes were on track for a fourth day of losses. In recent trade, the S&P 500
    SPX,
    -0.75%
    was down 0.3%, the Dow Jones Industrial Average
    DJIA,
    -0.32%
    flat, and the Nasdaq Composite
    COMP,
    -1.04%
    off 0.5% as major indexes bounced off session lows.

    The longtime bank chief warned earlier this year that he saw an “economic hurricane” headed for the U.S. In August, he warned that chances of a “harder recession” were on the rise.

    Source link

  • Nasdaq closes at 2-year low after stocks fail to shake off Fed rate-hike gloom

    Nasdaq closes at 2-year low after stocks fail to shake off Fed rate-hike gloom


    AP

    U.S. stocks finished with losses on Monday, sending the Nasdaq Composite to its lowest close in more than two years, after investors failed to shake off worries about further Federal Reserve rate hikes and JPMorgan Chase & Co.’s Jamie Dimon warned of a potential 20% decline in the S&P 500.

    How stocks traded
    • The Dow
      DJIA,
      -0.32%
      closed down by 93.91 points, or 0.3% at 29,202.88.

    • The S&P 500
      SPX,
      -0.75%
      finished down by 27.27 points, or 0.8%, at 3,612.39.

    • The Nasdaq Composite gave up 110.30 points, or 1%, to end at 10,542.10 — the lowest close since July 28, 2020.

    Monday’s declines exacerbated losses which occurred at the end of last week. On Friday, the Dow fell 630 points, or 2.1%, the S&P 500 declined 2.8%, and the Nasdaq Composite dropped 3.8%. The Nasdaq Composite was down 31.9% for the year to date through Friday.

    What drove markets

    Major indexes finished lower for a fourth consecutive session on Monday as concerns about additional rate hikes by the Fed continued to damp sentiment. Dow industrials, the S&P 500 and the Nasdaq all fell to session lows after a CNBC interview with Dimon, chief executive of JPMorgan
    JPM,
    -0.93%    ,
    who said the S&P 500 could fall by “another easy 20%” from current levels.

    Read: Here are the 5 times traders and stock-market investors got fooled by Fed ‘pivot’ hopes in past year

    Soft data a week ago had raised hopes that the Fed would soon pause its monetary tightening cycle in its battle to suppress multidecade high inflation, and the market subsequently rebounded off its near two-year lows. But a strong jobs report on Friday crushed that Fed “pivot” narrative and stocks plunged again.

    On Monday, the CBOE Vix index
    VIX,
    +3.48%    ,
    a gauge of expected S&P 500 volatility, sat at 32.15, well above its long-term average of 20.

    “The low interest-rate environment forced investors to chase yield and bid up the asset prices too high. Eventually the market is fair and asset values have to achieve some sense of common ground or base level valuation. So it was inevitable that this valuation correction would happen,” said Siddharth Singhai, chief investment officer for New York-based hedge fund IronHold Capital.

    “Panic will swing the market towards excessive pessimism and then the valuations will be too cheap. That hasn’t happened yet. Upcoming rate hikes will most likely be a catalyst for panic, however,” he wrote in an email to MarketWatch on Monday.

    Coming into Monday’s session, trading had been expected to be somewhat thinned by the Columbus Day and Indigenous People’s Day holiday, which closed the Treasury market.

    Now, traders are looking toward more data later in the week for further guidance on Fed thinking and equity valuations. The U.S. producer price numbers will be released on Wednesday and the consumer prices report on Thursday, the last of their kind before the Fed’s policy decision on Nov. 2.

    Then on Friday, third-quarter corporate earnings season really kicks into gear when big banks like JPMorgan
    JPM,
    -0.93%
    and Citigroup
    C,
    -1.40%
    present their numbers.

    Read: JPMorgan, Citi, Morgan Stanley and Wells Fargo kick off bank earnings season in choppy waters and S&P 500 would be in an ‘earnings recession’ if not for this one booming sector — but that may not last long

    Investors were also keeping an eye on the strong U.S. dollar, which is considered a drag on the earnings of U.S. multinationals. The dollar index
    DXY,
    +0.25%
    rose 0.3% to 113.12 as the euro intermittently broke below $0.97 after Russia sent missiles into cities across Ukraine.

    See: A rampaging U.S. dollar is wreaking havoc in financial markets. Here’s why it’s so hard to stop it.

    “We expect a lot more volatility in markets for the remainder of the year as the inevitability of higher rates sinks in and the economic consequences become more pronounced,” said Arthur Laffer Jr., president of Nashville-based Laffer Tengler Investments. Fed Chairman Jerome Powell “will not be a very popular person but it seems his legacy is focused on fighting any resurgence of 1970s inflation in the U.S. at all costs.”

    Companies in focus
    • Rivian Automotive Inc.
      RIVN,
      -7.28%
      intends to recall about 13,000 vehicles due to a possible safety issue that has so far been found to have affected several units, the company said Friday night. Shares finished down by 7.3%.

    • Tesla Inc.
      TSLA,
      -0.05%
      reported record monthly sales of China-made electric vehicles in September, as it continues to ramp production in the world’s number-two economy. The electric-vehicle maker delivered 83,135 EVs from its Shanghai plant in September, an 8% rise from August, according to a report by the China Passenger Car Association. Tesla shares nonetheless finished down by less than 0.1%.

    –— Jamie Chisholm contributed to this article.

    Source link

  • Stock futures struggle for direction amid Fed rate-hike gloom

    Stock futures struggle for direction amid Fed rate-hike gloom

    U.S. stock futures were looking for direction Monday as worries about Fed rate rises persisted, with major indexes trading not far off their 2022 lows set at the end of last month.

    Investors were looking ahead to key inflation data due later this week, as well as minutes of the Fed’s September policy meeting and the start of earnings season.

    How stocks are trading
    • S&P 500 futures
      ES00,
      -0.04%
      erased earlier losses to tick up 3.50 points, or 0.1%, to 3,656.75.

    • Dow Jones Industrial Average futures
      YM00,
      +0.34%
      rose 63 points, or 0.2%, to 29,416.

    • Nasdaq 100 futures
      NQ00,
      -0.54%
      were down 9.50 points, or 0.1%, at 11,092.

    On Friday, the Dow Jones Industrial Average
    DJIA,
    +0.11%
    fell 630 points, or 2.1%, the S&P 500
    SPX,
    -0.31%
    declined 2.8%, and the Nasdaq Composite
    COMP,
    -2.61%
    dropped 3.8%. The Nasdaq Composite was down 31.9% for the year to date through Friday.

    What’s driving markets

    U.S. stocks were in line for a fourth consecutive session of losses as concerns about additional interest rate rises by the Federal Reserve continued to dampen sentiment.

    Trading was expected to be somewhat thinned by the Columbus Day and Indigenous People’s Day holiday, which closed the Treasury market.

    Soft data a week ago raised hopes that the Fed would soon pause its monetary tightening cycle in its battle to suppress multi-decade high inflation, and the market subsequently rebounded off its near two-year lows. But a strong jobs report on Friday crushed that Fed “pivot” narrative and stocks plunged again.

    See: Why stock-market investors keep falling for Fed ‘pivot’ talk — and what it will take to put in a bottom

    The 5-day round trip saw an average move for the S&P 500 of 1.9%. Little surprise then that the CBOE Vix index
    VIX,
    +5.20%    ,
    a gauge of expected S&P 500 volatility, sat on Monday at 31.4, more than 50% above its long term average of 20.

    “The market response to Friday’s U.S. jobs report was characteristic of a bear market in equities. U.S. indices reversed sharply in the absence of the bad economic news required to shake the Fed’s hawkish determination,” said Ian Williams, strategist at Peel Hunt.

    Now traders will look toward more data due later in the week for further guidance on Fed thinking and equity valuations.

    The U.S. producer price numbers will be released on Wednesday and the consumer prices report on Thursday, the last of their kind before the Fed’s rate-setting meeting on Nov. 2.

    Then on Friday, third-quarter corporate earnings season really kicks into gear when big banks like JPMorgan
    JPM,
    +0.47%
    and Citigroup
    C,
    -0.31%
    present their numbers.

    Read: JPMorgan, Citi, Morgan Stanley and Wells Fargo kick off bank earnings season in choppy waters

    “The estimated earnings growth rate for the S&P 500 is 2.4%. If 2.4% is the actual
    growth rate for the quarter, it will mark the lowest earnings growth rate reported by the index since Q3 2020 (-5.7%),” said John Butters, senior earnings analyst at Factset.

    Further hurting risk appetite on Monday was additional gains for the dollar, whose strength is considered a drag on the earnings of U.S. multinationals. The dollar index
    DXY,
    +0.28%
    rose 0.3% to 113.15 as the euro broke back below $0.97 after Russia sent missiles into cities across Ukraine.

    Companies in focus
    • Rivian Automotive Inc.
      RIVN,
      -8.25%
      intends to recall about 13,000 vehicles due to a possible safety issue that has so far been found to have impacted several units, the company said Friday night. Shares were down 7.1% in premarket trade.

    • Tesla Inc.
      TSLA,
      +0.06%
      reported record monthly sales of China-made electric vehicles in September, as it continues to ramp production in the world’s number-two economy. The electric-vehicle maker delivered 83,135 EVs in September, an 8% rise from August, according to a report by the China Passenger Car Association on Sunday. Tesla shares were down 0.2%.

    Source link

  • Putin says military strikes against Ukraine were retaliation for bridge attack

    Putin says military strikes against Ukraine were retaliation for bridge attack

    MOSCOW — Russian President Vladimir Putin said that a series of strikes Monday across Ukraine came in retaliation against the Ukrainian attack on a bridge to Crimea and other attacks in Russia that he described as “terrorist” actions.

    Putin said the Russian military launched precision weapons from the air, sea and ground to target key energy and military command facilities.

    He warned that if Ukraine continues to mount “terrorist attacks” on Russia, Moscow’s response will be “tough and proportionate to the level of threats.”

    The intense, hours-long attack marked a sudden military escalation by Moscow. It came a day after Putin called the explosion Saturday on the huge bridge connecting Russia to its annexed territory of Crimea a “terrorist act” masterminded by Ukrainian special services.

    Source link

  • U.K. to bring forward budget review to Oct. 31

    U.K. to bring forward budget review to Oct. 31

    The U.K. Treasury announced Monday it was bringing forward the publication of an independent review into its budget plans to the end of October.

    Bond yields were still higher on the day, but off their highest levels. The 2-year gilt
    TMBMKGB-02Y,
    4.189%
    yield , as high as 4.23%, was at 4.18%, while the 30-year gilt
    TMBMKGB-30Y,
    4.520%    ,
    which had a yield as high as 4.56%, was at 4.51%.

    Source link

  • Russia says truck bomb damages key bridge to Crimea

    Russia says truck bomb damages key bridge to Crimea

    KHARKIV, Ukraine (AP) — Russian authorities said that a truck bomb on Saturday caused a fire and the collapse of a section of a bridge linking Russia-annexed Crimea with Russia — a key supply artery for Moscow’s faltering war effort in southern Ukraine.

    The attack on the bridge comes a day after Russian President Vladimir Putin turned 70, dealing him a humiliating blow that could lead him to up the ante in his war on Ukraine.

    Russia’s National Anti-Terrorism Committee said that the truck bomb caused seven railway cars carrying fuel to catch fire, resulting in a “partial collapse of two sections of the bridge.” The committee didn’t immediately apportion blame.

    The Crimean Peninsula holds symbolic value for Russia and is key to sustaining its military operations in the south. If the bridge is made inoperable, it would make it significantly more challenging to ferry supplies to the peninsula. While Russia seized the areas north of Crimea early during the invasion and built a land corridor to it along the Sea of Azov, Ukraine is pressing a counteroffensive to reclaim them.

    The bridge has train and automobile sections. Russia’s National Anti-Terrorism Committee specified that the explosion and fire led to the collapse of the two sections of one of the two links of the automobile bridge, while another link was intact.

    Authorities have suspended commuter train traffic across the bridge until further notice. Putin was informed about the explosion and he ordered the creation of a government panel to deal with the emergency.

    The 19-kilometer (12-mile) bridge across the Kerch Strait linking the Black Sea and the Sea of Azov is the longest in Europe. It has provided an essential link to the Crimean Peninsula, which Russia annexed from Ukraine in 2014. Ukrainian officials have repeatedly threatened to strike the bridge.

    Russia opened the first part of the span to car traffic in May 2018. The parallel bridge for rail traffic opened the following year.

    The $3.6 billion project is a tangible symbol of Moscow’s claims on Crimea. It was Russia’s only land link to the peninsula until Russian forces seized more Ukrainian territory on the northern end of the Sea of Azov in heavy fighting, particularly around the city of Mariupol, earlier this year.

    In August, Russia suffered a series of explosions at an airbase and munitions depot in Crimea, which underlined its vulnerability.

    The truck bomb on the bridge occurred hours after explosions rocked the eastern Ukrainian city of Kharkiv early Saturday, sending towering plumes of smoke into the sky and triggering a series of secondary explosions.

    Kharkiv Mayor Ihor Terekhov said on Telegram that the early-morning explosions were the result of missile strikes in the center of the city. He said that the blasts sparked fires at one of the city’s medical institutions and a nonresidential building. There were no immediate reports of casualties.

    The blasts came hours after Russia concentrated attacks in its increasingly troubled invasion of Ukraine on areas it illegally annexed, while the death toll from earlier missile strikes on apartment buildings in the southern city of Zaporizhzhia rose to 14.

    On Friday, the Norwegian Nobel Committee awarded the Nobel Peace Prize to human rights organizations in his Russia and Ukraine, and to an activist jailed in Belarus, an ally of Moscow.

    Berit Reiss-Andersen, the committee’s chair, said the honor went to “three outstanding champions of human rights, democracy and peaceful coexistence,” though it was widely seen as a rebuke to Putin and his conduct of Europe’s worst armed conflict since World War II.

    Putin signed documents on Wednesday to illegally claim four regions of Ukraine as Russian territory, including the Zaporizhzhia region that is home to Europe’s largest nuclear power plant, whose reactors were shut down last month.

    That move was foreshadowed by Russia’s annexation of Crimea in March 2014, which was carried out after Moscow alleged residents of the peninsula had voted to join with Russia. That move was widely condemned, and prompted sanctions from the U.S. and the European Union.

    Source link

  • Dow books 630-point drop after strong jobs data rattles investors, but stocks cement weekly gains

    Dow books 630-point drop after strong jobs data rattles investors, but stocks cement weekly gains

    U.S. stocks finished sharply lower Friday, but still booked their best weekly gains in a month, after September jobs data showed an unexpected fall in the unemployment rate that’s anticipated to reinforce the Federal Reserve’s resolve to keep tightening monetary policy.

    Investors also weighed a profit warning at a leading microchip maker ahead of next week’s increase in quarterly earnings results.

    What happened
    • The Dow Jones Industrial Average
      DJIA,
      -2.11%
      fell 630.15 points, or 2.1%, ending at 29,296.79, but off the session low of 29,142.66.

    • The S&P 500
      SPX,
      -2.80%
      dropped 104.86 points, or 2.8%, closing at 3,639.66.

    • The Nasdaq Composite
      COMP,
      -3.80%
      shed 420.91 points, or 3.8%, to finish at 10,652.40.

    Stocks posted back-to-back losses, trimming weekly gains, but recorded their best weekly gains since Sept. 9, according to Dow Jones Market Data.

    Read: Will the stock market be open on Columbus Day?

    What drove markets

    Stocks recorded sharp losses Friday after the Labor Department said the U.S. economy added 263,000 jobs in September, while the unemployment rate declined to 3.5% from an August reading of 3.7%. Average hourly earnings rose 0.3%.

    Still, a powerful rally earlier in the week boosted all three major stock indexes to weekly gains, a departure from three straight weekly losses, according to Dow Jones Market Data.

    “It’s manic. We are all on edge,” said Kent Engelke, chief economic strategist at Capitol Securities Management, of the sharp market swings.

    “Any piece of good news is a cause for an explosive rally,” Engelke said by phone. On the flip side, he pegged technology-based trading “in an illiquid and emotional market” as exacerbating Friday’s selloff.

    “It’s a reflection that people have re-entered the mind-set that the Fed is going to be raising rates at a rapid clip, probably for longer than what they might have suspected at the start of the week,” said Robert Pavlik, a senior portfolio manager at Dakota Wealth Management, by phone.

    Pavlik expects the Fed to keep tightening financial conditions to try to head off inflation. “But once we turn the corner, and the economy slows down, the Fed probably will be more aggressive in cutting rates on the way down.”

    In addition, the Fed has been “draining liquidity from the system at a remarkable pace,” wrote Rick Rieder, BlackRock’s chief investment officer of global fixed income, in a Friday client note, while pointing to an astounding $1.3 trillion decline in the central bank’s balance sheet since the December 2021 peak.

    Pavlik at Dakota Wealth said he anticipates the Fed will start slowing interest rate hikes by mid-next year, which likely means continued pressure for the stock market, particularly with a backdrop of big oil-price
    CL00,
    +5.37%
    gains this week after global crude producers voted to cut monthly production and with the U.S. dollar’s
    DXY,
    +0.44%
    surge this year against a basket of rival currencies.

    U.S. crude oil prices climbed for a fifth day in a row on Friday to settle at $92.64 a barrel, while booking at 16.5% weekly gain.

    New York Fed President John Williams said Friday that benchmark interest rates likely need to hit 4.5% over time. The Fed’s policy rate now sits in a 3%-3.25% range, up from a zero-0.25% range a year ago.

    The benchmark 10-year Treasury rate
    TMUBMUSD10Y,
    3.889%
    climbed to 3.883% Friday, as the key metric used to gauge the affordability of credit for businesses, household and the economy posted 10 straight weeks of gains, according to Dow Jones Market Data.

    Read: Bond markets facing historic losses grow anxious of Fed that ‘isn’t blinking yet’

    Investors continued to hope for relief on the inflation front and will be monitoring next week’s release of the September consumer-price index, as well as corporate earnings season as it picks up.

    Companies in focus
    • Twitter Inc.
      TWTR,
      -0.43%
      shares fell 0.4% Friday after a judge delayed a looming trial between the company and Elon Musk to allow the Tesla Inc.
      TSLA,
      -6.32%
      CEO more time to close his $44 billion acquisition of the social media platform.

    • Besides the jobs report, investors weighed a profit warning from microchip maker Advanced Micro Devices Inc. AMD, which said the PC market weakened significantly during the quarter. AMD shares fell 13.9%, and rivals including Nvidia Corp. NVDA and Intel Corp. INTC also closed lower.

    • U.S. cannabis stocks were choppy Friday, with the AdvisorShares Pure US Cannabis ETF
      MSOS,
      -2.80%
      ending lower, following steep gains earlier in the week after President Joe Biden said the U.S. would consider de-scheduling cannabis from its current position as a Schedule 1 narcotic under federal law.

    —Steven Goldstein contributed reporting to this article

    Source link

  • Treasury yields climb as U.S. unemployment drops and wage growth remains strong

    Treasury yields climb as U.S. unemployment drops and wage growth remains strong

    Treasury yields rose Friday after the U.S. September payrolls report showed a surprise decline in unemployment as well as strong growth in wages, making a pivot in Fed policy less likely.

    What’s happening
    What’s driving markets

    The U.S. created 263,000 nonfarm jobs in September — roughly in line with expectations — with the unemployment rate falling to 3.5% from 3.7%, while the year-over-year growth rate in hourly wages was 5%.

    The unemployment decline was a surprise to economists who had anticipated a steady jobless picture.

    Federal Reserve Gov. Christopher Waller late on Thursday said he didn’t expect the jobs report to change anyone’s thinking at the central bank. New York Fed President John Williams will have the opportunity to comment on the data when he speaks at 10 a.m. Eastern.

    Ahead of the release, strategists at ING said the price action this week suggests the market has moved away from the early Fed policy pivot idea. “We may well have seen the structural top at 4% for the 10 year, or thereabouts, but we also feel we’re liable to see it at least one more time. There is a large fall in market rates to come, but we’re not at that point just yet,” they added.

    Source link

  • Nobel Peace Prize awarded to activists from Belarus, Russia, Ukraine

    Nobel Peace Prize awarded to activists from Belarus, Russia, Ukraine

    OSLO, Norway (AP) — This year’s Nobel Peace Prize is going to jailed Belarus rights activist Ales Bialiatski, the Russian group Memorial and the Ukrainian organization Center for Civil Liberties, the award’s judges said Friday.

    Berit Reiss-Andersen, chair of the Norwegian Nobel Committee, said the judges wanted to honor ”three outstanding champions of human rights, democracy and peaceful coexistence in the neighbor countries Belarus, Russia and Ukraine.”

    “Through their consistent efforts in favor of human values and anti-militarism and principles of law, this year’s laureates have revitalized and honored Alfred Nobel’s vision of peace and fraternity between nations, a vision most needed in the world today,” she told reporters in Oslo.

    The award follows a tradition of highlighting groups and activists trying to prevent conflicts, alleviate hardship and protect human rights.

    Last year’s winners have faced a tough time since receiving the prize. Journalists Dmitry Muratov of Russia and Maria Ressa of the Philippines have been fighting for the survival of their news organizations, defying government efforts to silence them

    They were honored last year for “their efforts to safeguard freedom of expression, which is a precondition for democracy and lasting peace.”

    A week of Nobel Prize announcements kicked off Monday with Swedish scientist Svante Paabo receiving the award in medicine for unlocking secrets of Neanderthal DNA that provided key insights into our immune system.

    Three scientists jointly won the prize in physics Tuesday. Frenchman Alain Aspect, American John F. Clauser and Austrian Anton Zeilinger had shown that tiny particles can retain a connection with each other even when separated, a phenomenon known as quantum entanglement, that can be used for specialized computing and to encrypt information.

    The Nobel Prize in chemistry was awarded Wednesday to Americans Carolyn R. Bertozzi and K. Barry Sharpless, and Danish scientist Morten Meldal for developing a way of “snapping molecules together” that can be used to explore cells, map DNA and design drugs that can target diseases such as cancer more precisely.

    French author Annie Ernaux won this year’s Nobel Prize in literature Thursday. The panel commended her for blending fiction and autobiography in books that fearlessly mine her experiences as a working-class woman to explore life in France since the 1940s.

    The 2022 Nobel Prize in economics will be announced on Monday.

    The prizes carry a cash award of 10 million Swedish kronor (nearly $900,000) and will be handed out on Dec. 10. The money comes from a bequest left by the prize’s creator, Swedish inventor Alfred Nobel, in 1895.

    Source link

  • GDP set to turn positive again due to shrinking U.S. trade deficit and end ‘rule-of-thumb’ recession

    GDP set to turn positive again due to shrinking U.S. trade deficit and end ‘rule-of-thumb’ recession

    The numbers: The U.S. international trade deficit fell in August to a 15-month low of $67.4 billion, paving the way for a resumption of growth in gross domestic product in the third quarter.

    The deficit narrowed 4.3% from $70.5 billion in July, the government said Wednesday. It was the fifth decline in a row.

    Economists polled by The Wall Street Journal had forecast a deficit of $67.7 billion.

    GDP contracted in the first two quarters, meeting an old rule-of-thumb for when an economy is in recession.

    The group of prominent economists that makes the official declaration, however, uses a broader definition that suggests the economy has avoided a recession.

    Big picture: The U.S. trade deficit has tumbled since peaking at a record $106.9 billion in March. Exports have risen and imports have declined, particularly because of falling oil prices.

    Lower trade deficits add to GDP, the official scorecard of the economy. The shrinking trade gap is set to add a whopping 3 points to third-quarter GDP, according to estimates from S&P Global Market Intelligence.

    That’s the mirror opposite of what happened in the first quarter, when the record trade gap caused GDP to turn negative for the first time since early in the pandemic.

    The result: GDP is set to rise for the first time in three quarters, ending at least for now any talk that the U.S. is already in recession.

    Which way the trade deficit trends in the months ahead is less clear. A strong dollar is hurting U.S. exporters while a slowing economy could force Americans to reduce spending on imports even though they are cheaper to buy.

    Ditto for the economy. While it’s still growing, the pace of expansion is expected to slow as the Federal Reserve jacks up interest rates to try to tame high inflation.

    Key details: Exports slipped 0.3% in August to a $258.9 billion, but it’s still the second highest level on record.

    Imports dropped 1.1% to $326.3 billion, marking the lowest level since early 2021.

    Looking ahead: “The further sharp decline in the trade deficit… means that net exports provided a big boost to third-quarter GDP growth,” said senior U.S. economist Andrew Hunter at Capital Economics. “But the twin drags from the surging dollar and the deteriorating global economy suggest that strength will fade soon.”

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    +0.27%
    and S&P 500
    SPX,
    +0.20%
    sank in Wednesday trades following a two-day rally.

    Source link

  • U.S. stocks finish choppy session with losses, snap 2-day winning streak as investors assess positive economic data

    U.S. stocks finish choppy session with losses, snap 2-day winning streak as investors assess positive economic data

    U.S. stock indexes ended modestly lower on Wednesday, despite briefly turning positive in the final hour of trading, while data showed steady growth in private-sector jobs and in the service sector, indicating more scope for the Federal Reserve to continue to raise interest rates.

    How stocks traded?
    • The Dow Jones Industrial Average
      DJIA,
      +0.03%
      lost 42.45 points, or 0.1%, to finish at 30,273.87

    • The S&P 500
      SPX,
      +0.21%
      was off 7.65 points, or 0.2%, ending at 3,783.28

    • The Nasdaq Composite
      COMP,
      +18.82%
      shed 27.77 points, or 0.2%, to end at 11,148.64

    On Tuesday, the Dow jumped 825 points, or 2.8%, while the S&P 500 increased 3.1% and the Nasdaq Composite rallied 3.3%.

    What drove markets?

    Wall Street stocks finished in the red after three main indexes bounced back from earlier losses in the final hour of trade, following a strong September private employment report in the morning.

    Data released Wednesday showed that private-sector payrolls rose by 208,000 in September, indicating steady growth and supporting the view that the Fed has enough scope to keep raising interest rates. Economists surveyed by The Wall Street Journal had expected a rise of 200,000.

    The report came two days before the closely watched nonfarm payrolls data issued by the Bureau of Labor Statistics. Investors are eying on it for important guidance on the Fed’s policy stance in the November meeting.

    Friday’s employment report is expected to show the economy added 275,000 jobs in September, compared with 315,000 new positions added in August, according to a survey polled by Dow Jones.

    See: Hiring and job creation seen falling to a 1 1/2-year low in U.S. September jobs report

    “That certainly could move the needle,” said Kristina Hooper, chief global market strategist at Invesco. “Again, it doesn’t mean that it actually is going to change the market, but it could be the catalyst for short term rally if we get a disappointing jobs report.”

    “But keep in mind, that’s just the anticipation of a Fed pivot based on data. But that does not ensure a Fed pivot. And so it could be one of those short-term rallies like the one we saw earlier this week,” Hooper said.

    In other data Wednesday, an ISM barometer of U.S. business conditions in the service sector dipped to 56.7% in September but still showed steady growth and rising employment in a sign the economy is still expanding.

    The U.S. trade deficit in August fell to $67.4 billion, the lowest level since mid 2021, paving the way for a resumption of growth in gross domestic product in the third quarter.

    See: Why investors shouldn’t expect a break from the stock-market whiplash, says this strategist

    The S&P 500 had just enjoyed its largest two day percentage gain since April 2020 on Monday and Tuesday, and the best start to a quarter since 1938, according to Dow Jones Market data.

    The bounce followed three quarters of declines, the worst such run since 2008, during which time the S&P 500 fell 24.8% to a near two-year trough as investors worried that the Federal Reserve’s interest rate hikes to crush inflation would harm the economy.

    Brian Mulberry, client portfolio manager at Zacks Investment Management, believes the volatility in the stocks will continue because markets are getting a very “consistent message” from the Fed.

    “Given what has happened over the last five trading sessions alone, we would be basically telling our clients to tighten your seatbelt a little bit because it’s definitely going to continue to be a bumpy ride,” Mulberry told MarketWatch in a phone interview on Wednesday. “If we get a ‘Goldilocks’ (jobs) report, that would mean decent economic activity is going on. That’s good for earnings overall in the market, but it’s not growing to a point where interest rates would have to be ratcheted up another 125 basis points by the end of the year.”

    See: The stock market is surging as the U.S. dollar retreats. It’s all about bonds.

    One major reason behind the rise early this week was the view that the Fed would pivot away from its aggressive monetary tightening.

    Johanna Chua, chief Asia economist at Citi, said that though U.S economic growth remained in better shape than other countries and Fed officials continued to sound hawkish, the market risked being wrongfooted by any signs that interest rates could soon peak.

    “Even as the overall fundamental setup has not changed… trimming of bearish risk/bearish rates/bullish USD positions has driven a sharp reversal,” Chua said.

    Mary Daly, president of the Federal Reserve Bank of San Francisco said Wednesday that the Federal Reserve needs to keep raising its benchmark interest rate in order to cool inflation that hit a 40-year high earlier this year and has shown little signs of cooling. Atlanta Fed President Raphael Bostic will speak at 4 p.m. Eastern.

    Meanwhile, the OPEC+ group said Wednesday that it will reduce its collective crude production levels by 2 million barrels a day starting next month, the biggest cut since the start of the pandemic. Oil futures headed higher with West Texas Intermediate crude for November delivery
    CL00,

     
    CLX22,

    rose $1.24, or 1.4%, to settle at $87.76 a barrel on the New York Mercantile Exchange.

    The S&P 500’s energy sector
    SP500.10,
    -0.07%
    rose 2.1% following the news, up 12.6% over the last three trading days. According to Dow Jones Market Data, it was the best three-day percentage gain since November 2020 when it gained 16.1%. Shares of Schlumberger 
    SLB,
    +0.77%
    gained 6.3% at the close, while Exxon Mobil
    XOM,
    +1.32%
    shares advanced 4%.

    Companies in focus
    • Shares of Helen of Troy Ltd. 
      HELE,
      -2.75%
      finished 3.4% higher Wednesday, after the consumer products company, with brands including OXO, Hydro Flask and Braun, reported fiscal second-quarter earnings that beat expectations but cut its full-year outlook, as rising inflation has prompted consumers to change their spending patterns.

    • Shares of Monopar Therapeutics Inc.
      MNPR,
      +6.36%
       gained 1.8% after the company said it completed enrollment in a Phase 2b clinical trial evaluating its experimental therapy aimed at preventing severe oral mucositis in patients undergoing chemoradiotherapy for oropharyngeal cancer.

    • Shares of Eiger BioPharmaceuticals Inc.
      EIGR,
      +0.85%
       tumbled 5% after the company said it will not pursue emergency authorization of its experimental treatment for mild and moderate COVID-19 infections.

    • Shares of Lamb Weston Holdings Inc.
      LW,
      +2.45%
       ended 4.2% higher Wednesday, after the potato supplier reported fiscal first-quarter profit that beat expectations, higher prices helped offset a volume decline.

    —Jamie Chisholm contributed reporting

    Source link

  • U.S. stock futures weaken after best start to a quarter since 1938

    U.S. stock futures weaken after best start to a quarter since 1938

    U.S. stock index futures dipped on Wednesday as a more cautious tone prevailed following a strong start to the fourth quarter.

    How are stock index-futures trading
    • S&P 500 futures
      ES00,
      -0.80%
      dipped 31 points, or 0.8%, to 3772

    • Dow Jones Industrial Average futures
      YM00,
      -0.80%
      fell 242 points, or 0.8%, to 30123

    • Nasdaq 100 futures
      NQ00,
      -0.82%
      eased 90 points, or 0.8%, to 11550

    On Tuesday, the Dow Jones Industrial Average
    DJIA,
    +2.80%
    rose 825 points, or 2.8%, to 30316, the S&P 500
    SPX,
    +3.06%
    increased 113 points, or 3.06%, to 3791, and the Nasdaq Composite
    COMP,
    +7.79%
    gained 361 points, or 3.34%, to 11176. The Nasdaq Composite was up 5.7% from its 52-week closing low, but it remains down 28.6% for the year to date.

    What’s driving markets

    Wall Street was on course Wednesday for a relatively mild pullback, as stock index futures suffered some selling after a sturdy rally over the past two sessions.

    The S&P 500 has just enjoyed its largest two day percentage gain since April 2020, and the best start to a quarter since 1938, according to Dow Jones Market data.

    The bounce followed three quarters of declines, the worst such run since 2008, during which time the S&P 500 fell 24.8% to a near two-year trough as investors worried that the Federal Reserve’s interest rate hikes to crush inflation would harm the economy.

    However, recent soft U.S data, covering job openings and manufacturing, have encouraged some traders to trim bets on aggressive Fed interest rate rises.

    A week ago markets were forecasting the Fed’s benchmark interest rate would peak at nearly 4.8% by April 2023, but that figure has come down to 4.5%.

    Atlanta Fed President Raphael Bostic will speak at 4 p.m. Eastern.

    Johanna Chua, chief Asia economist at Citi, said that though U.S economic growth remained in better shape than other countries and Fed officials continued to sound hawkish, the market risked being wrongfooted by any signs that interest rates could soon peak.

    “Even as the overall fundamental setup has not changed… trimming of bearish risk/bearish rates/bullish USD positions has driven a sharp reversal,” Chua said.

    This view that oversold conditions and overly bearish sentiment was a key contributor to the latest advance was endorsed by Tom Lee, head of research at Fundstrat, though he accepted that bulls may be chastened by the recent past.

    “Given the generally poor win-ratio for rallies in 2022, investors are naturally viewing the gains over the past two days as just another ‘bear market rally’,” said Lee in a note to clients.

    Still, a number of shifting factors suggest the positive run could continue according to Lee.

    These included the dip in Fed fund futures; a 5% pullback in the dollar index
    DXY,
    +0.73%
    ; and the Vix volatility index
    VIX,
    +1.07%
    moving back below 30 with Vix futures back in contango.

    In addition: “the Nasdaq 100 was ‘100% bid’ Tuesday…since 1996, this has only happened 6 times, and 6 of 6 times the [Nasdaq 100] is higher 6M and 12M later with average gains of 27% and 34%,” said Lee.

    U.S. economic updates set for release on Wednesday include the September ADP employment report at 8:15 a.m.; international trade balance data for August at 8:30 a.m.; the September S&P Global service sector PMI survey at 9:45 a.m.; and the September ISM services report at 10 a.m.

    The ADP report sets up the market for heightened nervousness when the nonfarm payrolls data for September is published at the end of the week.

    “All eyes are on the employment data on Friday, which has priced in tremendous one day volatility in the options market,” said Stephen Innes, managing partner at SPI Asset Management.

    Source link

  • Former Northeastern employee charged in campus bomb hoax

    Former Northeastern employee charged in campus bomb hoax

    BOSTON — A former Northeastern University employee who said he was injured when a package he was opening on the Boston campus exploded last month was charged Tuesday with fabricating the incident.

    Jason Duhaime, formerly the new technology manager and director of the university’s Immersive Media Lab, was charged with “conveying false and misleading information related to an explosive device” and then lying to federal investigators, federal authorities said.

    “This alleged conduct is disturbing to say the least,” U.S. Attorney Rachael Rollins said at a news conference. “Our city, more than most, knows all too well that a report or threat of an explosion is a very serious matter and necessitates an immediate and significant law enforcement response, given the potential devastation that can ensue.”

    Duhaime told investigators that the hard plastic case exploded when he opened it on Sept. 13, causing “sharp” objects to fly from the case and injure his arms, but his arms only had superficial marks and there was no damage to his shirt, investigators said.

    According to an FBI affidavit, “The inside and outside of the case did not bear any marks, dents, cracks, holes, or other signs that it had been exposed to a forceful or explosive discharge of any type or magnitude.”

    The case also contained a rambling typed note full of misspellings and exclamation points that railed against virtual reality, referenced Facebook founder Mark Zuckerberg, and threatened to “destroy” the lab.

    “It has come to our attention that this VR lab is trying to change us as a world,” the note said.

    The letter also said: “We know you are working with Mr. Mark Zuckerberg and the U.S. government.”

    It later said: “We know you are working on a secret flying project to scan buildings across the world so Mark can take over google maps,” and “the robots your (sic) building are walking around NEU, MIT and into Harvard yard.”

    The FBI affidavit said the letter was “pristine” and “bore no tears, holes, burn marks, or any other indication that it had been near any sort of forceful or explosive discharge.”

    Investigators also discovered a word-for-word, electronic copy of the letter stored in a backup folder on a university computer in Duhaime’s office that had been written just hours before he called 911.

    Authorities said they could not comment on the specific motive because of the ongoing investigation.

    “In this case, we believe Mr. Duhaime wanted to be the victim but instead victimized his entire community by instilling fear at college campuses in Massachusetts and beyond,” Joseph Bonavolonta, Special Agent in Charge of the FBI’s Boston office said.

    Duhaime, who lives in Texas, was scheduled to make an initial court appearance Tuesday afternoon in San Antonio.

    An attorney for Duhaime did not immediately respond to a telephone message and an email seeking comment. Duhaime has previously denied staging the incident, saying in an interview with The Boston Globe that it was “very traumatic.”

    “I did not stage this … No way, shape or form … they need to catch the guy that did this,” he told the newspaper.

    Northeastern is a private university with about 16,000 students. The school in a statement Tuesday said Duhaime no longer works there.

    The reported explosion led to swarms of police including two bomb squads descending on the school, forced the evacuation of several campus buildings, and put the campus on edge even after reassurances from the school that it was safe.

    “His alleged actions diverted significant law enforcement resources away from essential public safety matters and caused fear and panic not only on campus, but also in the homes of the families and friends and loved ones of Northeastern students, faculty and staff,” Rollins said.

    It marked one of the first big scares in Boston since 2013, when two bombs planted near the finish line of the Boston Marathon killed three spectators and wounded more than 260 others.

    Source link

  • It was the worst September for stocks since 2002. What that means for October.

    It was the worst September for stocks since 2002. What that means for October.

    It was a September investors will remember — and not in a good way.

    A Friday drop left the S&P 500 and Dow Jones Industrial Average with their biggest monthly losses since March 2020. And it was the worst September performance for both indexes since 2002. Seasonally inclined investors may wonder what that means for October.

    Dow Jones Market Data took a look at how equities have done in the wake of particularly brutal Septembers.

    But first, how does the month just ended stack up? The S&P 500
    SPX,
    -1.51%
    fell 9.34%, while the Dow
    DJIA,
    -1.71%
    dropped 8.84% and the Nasdaq Composite
    COMP,
    -0.43%
    declined 10.5%. The Nasdaq’s drop marked its worst September performance since 2008.

    Deep Dive: These 20 stocks in the S&P 500 tumbled between 20% and 30% in September

    Sample size is limited. Not counting the current month, the S&P 500 has seen a September decline of 7% or more 11 times, according to data going back to 1928. The Dow has dropped 7% or more in September 13 times based on data back to 1928. The Nasdaq Composite has suffered a fall of 9% or more in September six times going back to 1986.

    See: Stocks and bonds are ‘discounting for a disaster’ after the worst stretch for investors in 20 years

    Dow Jones Market Data found that in Octobers that follow a 7% or larger fall in September, the S&P 500 rises 0.53% on average in October and sees a median gain of 1.81%. That’s better than the average for all Octobers at 0.47% and the median at 1.03%. October is positive in years following an outsize September loss 54.55% of the time, versus 57.45% for all Octobers (see table below).

    S&P 500
    Category

    		 7% or worse

    		 All
    Average

    		 0.53%

    		 0.47%
    Median

    		 1.81%

    		 1.03%
    Worst Performance

    		 -16.94%

    		 -21.76%
    Best Performance

    		 16.30%

    		 16.30%
    % of October’s higher

    		 54.55%

    		 57.45%

    Seasonal patterns, however, are only a guide. As MarketWatch’s Isabel Wang noted in a Friday report, many strategists are skeptical of October’s reputation as “bear killer.” They argued that a macroeconomic environment dominated by central banks aggressively tightening monetary policy in a bid to wring out inflation is likely to overshadow favorable seasonal factors.

    October is also associated with historical market crashes, including those in 1987 and 1929. The S&P 500 plunged nearly 17% in October 2008 following a 9.1% fall in September in the wake of the collapse of Lehman Brothers.

    Don’t miss: Stock-market bulls hope October will be another ‘bear killer.’ Why skeptics are unconvinced.

    Dow Jones Market Data, meanwhile, found that in Octobers following a September drop of 7% or more, the Dow has seen an average fall of 1.51% and a median drop of 1.46%. That compares with an average rise of 0.37% for all Octobers and a median gain of 0.79%. The S&P 500 has risen 46.15% of the time in Octobers that follow a 7% or more September decline, versus a rise 57.6% of the time for all Octobers (see table below).

    DJIA
    Category

    		 7% or worse

    		 All
    Average

    		 -1.51%

    		 0.37%
    Median

    		 -1.46%

    		 0.79%
    Worst Performance

    		 -20.36%

    		 -23.22%
    Best Performance

    		 10.60%

    		 10.65%
    % of October’s higher

    		 46.15%

    		 57.60%

    And here are the numbers for the Nasdaq in October following a September drop of 9% or more:

    Category

    		 9% or worse

    		 All
    Average

    		 2.19%

    		 0.73%
    Median

    		 4.26%

    		 2.16%
    Worst Performance

    		 -17.73%

    		 -27.23%
    Best Performance

    		 17.17%

    		 17.17%
    % of October’s higher

    		 50.00%

    		 54.90%

    Since 1950, September has been the worst performing month of the year for the Dow Jones Industrial Average, S&P 500 and Russell 1000 and the worst for the Nasdaq Composite since 1971 and the small-cap Russell 2000 since 1979, according to the Stock Trader’s Almanac.

    Stocks ended sharply lower on Friday after getting off to a choppy start.

    Need to Know: Short U.S. stocks and short-term Treasurys until Halloween, Bank of America strategist says

    Source link

  • Russia opens border draft offices as exodus continues in response to military call-ups

    Russia opens border draft offices as exodus continues in response to military call-ups

    Russian authorities are opening more military enlistment offices near Russia’s borders in an apparent effort to intercept some of the Russian men of fighting age who are trying to flee the country by land to avoid being called up to fight in Ukraine.

    A new draft office opened at the Ozinki checkpoint in the Saratov region on Russia’s border with Kazakhstan, regional officials said Thursday. Another enlistment center was set to open at a crossing in the Astrakhan region, also on the border with Kazakhstan.

    Earlier this week, makeshift Russian draft offices were set up near the Verkhny Lars border crossing into Georgia in southern Russia and near the Torfyanka checkpoint on Russia’s border with Finland. Russian officials said they would hand call-up notices to all eligible men who were trying to leave the country.

    Over 194,000 Russian citizens have fled to neighboring Georgia, Kazakhstan and Finland — most often by car, bicycle or on foot — since Russian President Vladimir Putin last week announced a partial mobilization of reservists. In Russia, the vast majority of men under age 65 are registered as reservists.

    The Kremlin has said it plans to call-up some 300,000 people, but Russian media reported that the number could be as high as 1.2 million, a claim that Russian officials have denied.

    Background: Putin’s ‘all instruments’ remark perceived as nuclear threat as Russia mobilizes some 300,000 reservists

    Russia’s Defense Ministry has promised to only draft those who have combat or service experience, but according to multiple media reports and human rights advocates, men who don’t fit the criteria are also being rounded up.

    The official decree on mobilization, signed by Putin last week, is concise and vague, fueling fears of a broader draft.

    In an apparent effort to calm the population, Putin told Russia’s Security Council on Thursday that mistakes had been made in the mobilization. He said that Russian men mistakenly called up for service should be sent back home, and that only reservists with proper training and specialties should be summoned to serve.

    “It’s necessary to deal with each such case independently, but if there is a mistake, I repeat, it must be fixed. It’s necessary to bring back those who were drafted without proper reason,” Putin stressed.

    The mass exodus of Russian men — alone or with their families or friends — began Sept. 21, shortly after Putin’s address to the nation, and continued all this week. Airline tickets to destinations abroad have sold out days in advance, even at unprecedentedly high prices.

    Long lines of cars formed on roads leading to Russia’s borders. Russian authorities tried to stem the outflow by turning back some men at the borders, citing mobilization laws, or setting up draft offices at border checkpoints.

    The bus stations in Samara and Tolyatti, two large Russian cities in the Samara region, on Thursday halted service to Uralsk, a border city in Kazakhstan.

    See: Officials say 98,000 Russians enter Kazakhstan after military call-up

    Finland announced that it would ban Russian citizens with tourist visas from entering the country starting Friday. With the exception of Norway, which has only one border crossing with Russia, Finland has provided the last easily accessible land route to Europe for Russian holders of European Schengen-zone visas. The Nordic country has taken in tens of thousands of people fleeing the military call-up in recent days.

    Source link

  • Dow falls 500 points Friday as stocks book third straight quarterly loss, set new 2022 lows

    Dow falls 500 points Friday as stocks book third straight quarterly loss, set new 2022 lows

    U.S. stocks dropped sharply Friday, with major indexes posting their lowest finishes since 2020 and logging a third straight quarterly decline as investors grew more fearful that aggressive interest rate hikes by the Federal Reserve will drive the economy into a downturn in an attempt to quell inflation.

    What’s happening
    • The Dow Jones Industrial Average
      DJIA,
      -1.71%
      dropped 500.10 points, or 1.7%, to close at 28,725.51.

    • The S&P 500
      SPX,
      -1.51%
      dropped 54.85 points, or 1.5%, to end at 3,585.61.

    • The Nasdaq Composite
      COMP,
      -0.43%
      shed 161.88 points, of 1.5%, finishing at 10,575.61.

    The drop left the Dow and S&P 500 at their lowest since November 2020, while the Nasdaq posted its lowest close since July 29, 2020. The Dow dropped 8.8% in September, while the S&P 500 tumbled 9.3% and the Nasdaq lost 10.5%.

    For the quarter, the Dow dropped 6.7%, the S&P 500 declined 5.3% and the Nasdaq gave up 4.1%.

    What’s driving the market

    In keeping with the historical pattern, U.S. stocks suffered during the month of September as an assertive Federal Reserve helped push Treasury yields and the dollar higher, which in turn undermined equity valuations.

    See: It’s the worst September for stocks since 2008. What that means for October.

    Investors on Friday digested a reading from the personal consumption expenditure inflation index for August, which showed that core consumer prices climbed by 0.6% last month, more than Wall Street’s forecast of 0.5%. The core inflation measure excludes volatile food and energy prices.

    See: Cheaper gas holds down inflation, PCE shows, but the cost of everything else is still going up fast

    “That means the Fed will remain hell-bent on killing inflation. And the best way to do that is to increase rates, kill the housing market, and get rental costs down. The PCE doesn’t have housing and rents as a big component as the CPI does, so the fact that it is rising is a warning sign,” said Louis Navellier, founder of Navellier & Associates, in emailed comments.

    Read: Will October be another stock-market ‘bear killer’? Why investors need to tread carefully around seasonal trends.

    The reading largely confirmed similar data from the consumer-price index, another closely watched inflation barometer, which sent stocks lower earlier this month. Since that report was released just over two weeks ago, the S&P 500 has fallen more than 10%.

    Helping to underscore this point, data out of the eurozone showed inflation accelerated at a record pace last month.

    See: Eurozone Inflation posts new record high of 10% in September

    In other news, investors also heard from Fed Vice Chair Lael Brainard, who reiterated that the central bank would keep interest rates elevated to combat inflation, even if it harms the economy.

    See: Fed won’t pull back from rate hikes prematurely, Brainard says

    Since it will take time for high interest rates to bring inflation down, Brainard said the Fed is “committed to avoiding pulling back prematurely.”

    Investors were also keeping an eye on megacap tech stocks. Apple Inc. AAPL fell 3% on Friday after leading markets lower a day earlier following a downgrade by Bank of America.

    Need to know: Here’s why investors should start betting on Apple and the stock market now

    A final reading on the University of Michigan consumer-sentiment index for September showed consumers’ view of the economy improved somewhat during the month due to falling gas prices, even as their outlook remained broadly pessimistic.

    Investors are now facing “what may be one of the most important earning seasons in a very long time, with a major rally in the cards if earnings don’t disappoint, and if the bears are right, lead to a further leg down if earnings disappoint and 4th quarter estimates are cut,” Navellier said.

    See: U.S. consumers remain pessimistic about economy even as inflation fears wane

    Stocks in focus

    — Steve Goldstein and Barbara Kollmeyer contributed to this article

    Source link