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  • Health of several key sectors, including the U.S. consumer, plus an outlook from Fed’s Powell on radar this coming week

    Health of several key sectors, including the U.S. consumer, plus an outlook from Fed’s Powell on radar this coming week

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    Recession fears are rising. Nothing beats fear better than good information and that’s what we will get this week. Investors and economists will get good insight into the mood of U.S. consumers and hear the last words of Federal Reserve Chair Jerome Powell ahead of the central bank’s next interest-rate meeting on Dec. 12-13.

    November consumer confidence

    Tuesday, 10:00 a.m. Eastern

    Economists surveyed by the Wall Street Journal expect that consumer’s view on the outlook have soured over the past few weeks. Geopolitical…

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  • Hamas releases first group of hostages under truce agreement with Israel

    Hamas releases first group of hostages under truce agreement with Israel

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    DEIR AL-BALAH, Gaza Strip (AP) — Hamas released the first batch of hostages under a ceasefire deal that began Friday, including 13 Israelis who have been held in the Gaza Strip since the militant group staged a raid on Israel nearly seven weeks ago, according to officials and media reports.

    Twelve Thai nationals were also released, according to Thai Prime Minister Srettha Thavisin.

    Dozens of Palestinian prisoners are expected to be freed by Israel.

    The ceasefire between Israel and Hamas began Friday, setting the stage for the exchange and allowing sorely needed aid to start flowing into Gaza.

    Don’t miss: A secret line of communication and a pivotal U.S. role: How the hostage-release deal evolved — and nearly fell apart — in final days

    There were no reports of fighting after the truce began. The deal offered some relief for Gaza’s 2.3 million people, who have endured weeks of Israeli bombardment and dwindling supplies of basic necessities, as well as for families in Israel worried about loved ones taken captive during Hamas’s Oct. 7 attack, which triggered the war.

    The truce raised hopes of eventually winding down the conflict, which has flattened vast swaths of Gaza, fueled a surge of violence in the occupied West Bank and stirred fears of a wider conflagration across the Middle East. Israel, however, has said it is determined to resume its massive offensive once the ceasefire ends.

    Under the deal, Gaza’s ruling Hamas group pledged to free at least 50 of the about 240 hostages it and other militants took in the Oct. 7 raid. In exchange, Hamas said Israel would free 150 Palestinian prisoners.

    It was not expected that captive Americans would be among those released late Friday afternoon, but the Biden White House said in a statement that it continued to work to ensure that U.S. nationals, including an Israeli-American girl who turns 4 on Friday, are among the initial 50.

    Both sides agreed to release women and children first, in stages starting Friday, and as planned 13 Israelis were released, according to Israeli media, citing security officials. An Israeli official, meanwhile, confirmed that the Thai captives left Gaza and were en route to a hospital in Israel.

    The official spoke on condition of anonymity because she was not authorized to discuss the releases with the media.

    Israel said the deal calls for the truce to be extended an extra day for every additional 10 hostages freed.

    Early in the day, ambulances were seen arriving at the Hatzerim air base in southern Israel, preparing for the release. Those freed will then be taken to hospitals for assessment and treatment, Israeli officials said.

    See: Ambulances positioned at Israeli military base ahead of Hamas hostage release

    Among the Israeli citizens freed some have a second nationality, according to a Hamas official who spoke on condition of anonymity because he was not authorized to discuss details with the media.

    Israel’s Justice Ministry published a list of 300 Palestinian prisoners eligible for release. Thirty-nine — 24 women, including some convicted of attempted murder for attacks on Israeli forces, and 15 teenagers jailed for offenses like throwing stones — were expected to be freed Friday, Palestinian authorities said.

    On Friday, the truce brought quiet after weeks in which Gaza saw heavy bombardment and artillery fire daily as well as street fighting as ground troops advanced through neighborhoods in the north. The last report of air-raid sirens in Israeli towns near the territory came shortly after the truce took effect.

    Not long after, four tankers with fuel and four with cooking gas entered the Gaza Strip from Egypt, Israel said.

    Israel has agreed to allow the delivery of 130,000 liters, or 34,340 gallons, of fuel per day during the truce — still only a small portion of Gaza’s estimated daily needs of more than 1 million liters.

    For most of the past seven weeks of war, Israel had barred the entry of fuel to Gaza, claiming it could be used by Hamas for military purposes — though it has occasionally allowed small amounts in.

    U.N. aid agencies pushed back against the claim, saying fuel deliveries were closely supervised and urgently needed to avert a humanitarian catastrophe since fuel is required to run generators that power water-treatment facilities, hospitals and other critical infrastructure.

    The Israeli military dropped leaflets over southern Gaza, warning hundreds of thousands of displaced Palestinians who sought refuge there not to return to their homes in the territory’s north, the focus of Israel’s ground offensive.

    Even though Israel warned that it would block such attempts, hundreds of Palestinians could be seen walking north Friday.

    Two were shot and killed by Israeli troops and another 11 were wounded. An Associated Press journalist saw the two bodies and the wounded as they arrived at a hospital.

    Sofian Abu Amer, who had fled Gaza City, said he decided to risk heading north to check on his home.

    “We don’t have enough clothes, food and drinks,” he said. “The situation is disastrous. It’s better for a person to die.”

    The hope is that “momentum” from the deal will lead to an “end to this violence,” said Majed al-Ansari, a spokesman for the Foreign Ministry of Qatar, which served as a mediator along with the United States and Egypt.

    But hours before it came into effect, Israeli Defense Minister Yoav Gallant was quoted telling troops that their respite would be short and that the war would resume with intensity and continue for at least two more months.

    Prime Minister Benjamin Netanyahu has also vowed to continue the war to destroy Hamas’s military capabilities, end its 16-year rule in Gaza and return all the hostages.

    Israel’s northern border with Lebanon was also quiet on Friday, a day after the militant Hezbollah group, an ally of Hamas, carried out the highest number of attacks in one day since fighting there began Oct. 8.

    Hezbollah is not a party to the ceasefire agreement but was widely expected to halt its attacks.

    The war erupted when several thousand Hamas militants stormed into southern Israel, killing at least 1,200 people, mostly civilians, and taking scores of hostages, including babies, women and older adults, as well as soldiers.

    The soldiers will only be released in exchange for all Palestinians imprisoned by Israel, according to the Islamic Jihad militant group, which is reportedly holding about 40 hostages.

    It is not clear how many of the hostages are currently serving in the military or whether the militants also consider reserve soldiers to be “military hostages.”

    According to the Palestinian Prisoners’ Club, an advocacy group, Israel is currently holding 7,200 Palestinians on security charges or convictions, including about 2,000 arrested since the start of the war.

    The Israeli offensive has killed more than 13,300 Palestinians, according to the Health Ministry in Hamas-ruled Gaza, which resumed its detailed count of casualties in Gaza after stopping for weeks because of the health system’s collapse in the north.

    The ministry says some 6,000 people have been reported missing, feared buried under rubble.

    The ministry does not differentiate between civilians and militants in its death tolls. Women and minors have consistently made up around two-thirds of the dead, though the new number was not broken down. The figure does not include updated numbers from hospitals in the north.

    Israel says it has killed thousands of Hamas fighters, without presenting evidence for its count.

    MarketWatch contributed.

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  • How the Hamas hostage-release deal evolved — and nearly fell apart — in final days

    How the Hamas hostage-release deal evolved — and nearly fell apart — in final days

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    WASHINGTON (AP) — The negotiations hardly ran smoothly. But, in the end, persistence paid off.

    Six weeks ago, not long after Hamas killed more than 1,200 people in Israel and took scores of others hostage in a surprise assault, the government of Qatar quietly reached out to the United States to discuss how to secure the release of those who were taken captive by the militant group.

    But…

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  • U.S. economy growing only at a subdued rate in early November, S&P Global says

    U.S. economy growing only at a subdued rate in early November, S&P Global says

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    The numbers: The U.S. economy expanded but at a relatively subdued pace in early November, latest data from S&P Global show.

    The S&P Global “flash” U.S. services index rose to 50.8 in November from 50.6 in the prior month, the highest level in four months. Economists surveyed by the Wall Street Journal had forecast a reading of 50.2.

    On the…

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  • Nvidia stock under pressure after report of AI chip delay for China

    Nvidia stock under pressure after report of AI chip delay for China

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    Shares of Nvidia Corp. fell in premarket trading on Friday, following a report that the tech giant will delay the launch of one of its new artificial intelligence chips destined for China.

    Nvidia will now roll out one of three big AI chips for that market early next year Reuters reported, citing sources. Earlier this month, a report surfaced that Nvidia planned the trio of AI chips for China after the U.S. government blocked it from selling high-end chips in that country.

    The…

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  • Walmart, Nvidia, Novo Nordisk, Vista Outdoor, GM, and More Stock Market Movers

    Walmart, Nvidia, Novo Nordisk, Vista Outdoor, GM, and More Stock Market Movers

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    Stock futures pointed higher Friday as Wall Street returned for a shortened trading session following the Thanksgiving holiday. Retailers will be in focus on Black Friday, which marks the unofficial start to the Christmas shopping season.

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  • Nvidia ends an earnings recession and is helping to reshape corporate profits

    Nvidia ends an earnings recession and is helping to reshape corporate profits

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    With yet another blowout earnings report, Nvidia Corp. has ended an earnings recession in the U.S. and helped to solidify the continuation of a drastic change to corporate profits.

    Nvidia NVDA on Tuesday rode enduring demand for hardware that is essential for artificial-intelligence tasks to yet another record quarter, as revenue tripled and profit zoomed more than 1,300% higher year over year. Nvidia recorded earnings of more than $9 billion in just three months, a total it had never achieved in a full year before 2022.

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  • S&P 500 futures stall near four-month highs as traders eye Nvidia earnings

    S&P 500 futures stall near four-month highs as traders eye Nvidia earnings

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    U.S. stock futures on Tuesday showed the November rally stalling ahead of results from AI chipmaker Nvidia.

    How are stock-index futures trading

    On Monday, the Dow Jones Industrial Average DJIA rose 204 points, or 0.58%, to 35151, the S&P 500 SPX increased 33 points, or 0.74%, to 4547, and the Nasdaq Composite COMP gained 159 points, or 1.13%, to 14285.

    What’s driving markets

    Stock-index…

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  • Here’s how much aid the U.S. gives to Israel — and why it may get billions of dollars more

    Here’s how much aid the U.S. gives to Israel — and why it may get billions of dollars more

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    Israel’s military campaign against Hamas has entered its sixth week, and the country is facing a growing backlash against the humanitarian toll of the war as well as uncertainty over the fate of a U.S. military aid package that has stalled amid partisan bickering in Washington, D.C.

    President Joe Biden has requested $14.3 billion in military assistance for Israel as it seeks to destroy Hamas after the group killed 1,200 Israeli citizens and took more than 200 hostage last month. More than 12,000 Palestinians have died in…

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  • How a second set of Trump tax cuts could jack up the national debt

    How a second set of Trump tax cuts could jack up the national debt

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    If Donald Trump were to be elected president in 2024, what would it mean for U.S. tax policy and the national debt?

    There are growing expectations that he could deliver another round of big tax cuts, with the reductions coming right as those enacted in 2017’s Tax Cut and Jobs Act are due to expire in 2025.

    “If Republicans hold their House…

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  • How the Biden-Xi meeting in San Francisco could help prevent a world war

    How the Biden-Xi meeting in San Francisco could help prevent a world war

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    President Joe Biden will meet with his Chinese counterpart Xi Jinping near San Francisco Wednesday, and hanging over the summit is the threat of war over the island of Taiwan, a conflict that would likely cripple the world economy and plunge the U.S. and its allies into a devastating global conflict.

    Experts are divided on how Biden can best avoid such an outcome, but there is a consensus that a war with China would be extremely costly in economic, political and human terms. China has long seen self-ruled Taiwan as a breakaway province.

    Also read: Biden says his goal for Xi meeting is to get U.S.-China communications back to normal

    “The U.S. Air Force and Navy would have to operate in an environment unlike anything they’ve seen since World War II,” said Mark Cancian, a former Marine Corps colonel, Defense Department official and senior adviser at the Center for Strategic and International Studies.

    Earlier this year, Cancian led a wargame simulation of what would happen if China attempted an amphibious invasion of Taiwan and found that if the U.S. intervened to defend the island, it would likely lead to the loss of dozens of ships, hundreds of aircraft and 15,000 U.S. casualties in just the first month of the war.

    Other experts argue that this is too optimistic a scenario. Lyle Goldstein, director of the Asia Engagement program at the think tank Defense Priorities, criticized the war game in a recent panel discussion as too optimistic in its estimate of the forces China would bring to bear in a Taiwan invasion, arguing that the Chinese would use their coast guard and merchant marine as well as military vessels to invade the island.

    “The idea that we would have anywhere near the munitions to sink tens of thousands of ships that would be involved is a major fallacy,” he said, adding that a war with China would make the conflicts in Ukraine and Gaza “look like small brushfires.”

    Biden and Xi last met about a year ago in Indonesia, and the U.S. leader at the time told his Chinese counterpart that he objected to China’s “coercive and increasingly aggressive actions” toward Taiwan. Speaking with reporters on Nov. 9, a senior Biden administration official said the U.S. is concerned about “a ramping up of military activities around Taiwan in ways that are unprecedented, that are dangerous, that are provocative.”

    Now see: Taiwan says more than 100 Chinese warplanes flew toward the island in past day

    Economic fallout

    The CSIS report underscores the damage that U.S. armed forces and those of its allies would suffer in a war with China, but the economic fallout would also have a profound affect on Americans at home.

    “It’s almost hard to calculate the just how bad a Chinese invasion of Taiwan would be economically,” said Zack Cooper, a senior fellow at the American Enterprise Institute and former National Security Council official under President George W. Bush.

    Barron’s: China’s clout undimmed as U.S. companies line up to meet Xi Jinping. Why it’s a two-way street.

    He noted that because of Taiwan’s central importance in the supply chain for advanced semiconductors
    SMH,
    it could grind to a halt markets for advanced electronic devices as well as consumer goods like automobiles that increasingly rely on computer chips.

    “I think we’d be looking at a global financial crash that’s more in line with what we’ve seen in World War I and World War II than anything we’ve seen recently,” he said.

    Market observers have latched onto the idea that China’s recent economic woes make it less likely that it will behave aggressively on the global stage.

    “If Chinese consumers have been spooked by COVID lockdowns and a cascading property collapse, imagine how an escalating confrontation might shatter their outlook,” wrote Christopher Smart, managing partner at Arbroath Group, in a recent note.

    But some U.S. policymakers disagree, including Republican Rep. Mike Gallagher of Wisconsin, chairman of the House select committee on competition with China, who said at a recent event that it’s “plausible that as China confronts serious economic and demographic issues, Xi Jinping could get more risk accepting, and could get less predictable and do something very stupid.”

    Biden’s task

    The foreign policy community in Washington is divided over what the best strategy for deterring a Chinese invasion, with some emphasizing restraint and others the need to show strength in the face of a progressively belligerent Xi Jinping.

    “Taiwan is increasingly discussed as being a critical strategic location for the United States that it must defend and can’t allow to fall to China because it will have a domino effect across the region,” said Michael Swaine, a China expert and senior research fellow at the Quincy Institute for Responsible Statecraft.

    He added that this is a departure from the stance the U.S. adopted in 1979 when it established official relations with the People’s Republic of China, which was that it does not seek Taiwanese independence and would not stand in the way of a peaceful reunification.

    Biden has underscored this drift with several statements in recent years that the U.S. would defend Taiwan if China were to try to take it by force, a change from the so-called strategic ambiguity that has guided U.S. policy in the past.

    Swain argues that the Biden administration must do more to foster communication with China on a broad set of issues and take seriously Chinese concerns that the U.S. alliance system in Asia is seeking to contain Chinese growth with military means.

    Others argue that Xi Jinping is a rational actor and U.S. efforts to foster alliances in the region are necessary to show China that a Taiwanese invasion would be costly and potentially threaten the Chinese Communist Party’s rule.

    “There’s a big difference between Xi Jinping and Vladimir Putin,” AEI’s Cooper said. “Most experts don’t see Xi as a risk taker, and we need to be doing everything we can to have the deterrence capability to convince him not to start a conflict.”

    The summit

    It’s unlikely that the public will will see evidence from Wednesday’s meeting of thawing tensions over the Taiwan issue, as the two sides have already said there will be no joint statement issued, Swaine of the Quincy Institute said.

    “They will repeat their talking points on Taiwan and move on,” he said. “But it’s possible we could see them state very clearly their commitment to resuming a crisis communication dialogue” between each country’s militaries, which was cut off following former House Speaker Nancy Pelosi’s visit to Taiwan last year.

    Cooper of AEI said that the reason for the meeting isn’t concrete deliverables, but mutual understanding that can result from a leader-to-leader dialogue.

    “The real value of the Xi meeting is the administration’s ability to interact with him directly and try to understand better how he’s thinking, what information he’s getting,” he said. “It’s not something you’ll see in a statement, it will be done behind closed doors and judging the aftermath will be difficult.”

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  • Apple, Microsoft, Nvidia—What Tech Stocks Hedge Funds Are Buying and Selling

    Apple, Microsoft, Nvidia—What Tech Stocks Hedge Funds Are Buying and Selling

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    It’s filing season for a string of major hedge funds, and big tech names like Apple, Microsoft, and Nvidia were among the most-traded equities in the third quarter.

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  • Alstom to Cut Jobs, Scrap Dividend to Accelerate Debt Reduction — Update

    Alstom to Cut Jobs, Scrap Dividend to Accelerate Debt Reduction — Update

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    By Adria Calatayud

    Alstom plans to cut around 1,500 full-time equivalent positions and scrap its dividend as part of a cost-savings plan to reduce debt and boost profitability.

    The French train maker said Wednesday that it is also considering equity and equity-like issuances, as well as a capital increase, among potential options to accelerate its debt-reduction plans.

    Alstom’s measures are part of a plan that seeks to secure its mid-term profit and cash-generation targets and come after the company said last month that it burned cash in the six months to September.

    The company also said it would overhaul its governance to improve accountability and financial discipline. Its board intends to propose former Safran Chief Executive Philippe Petitcolin as a director and then as chairman, separating the chair role from that of CEO. Henri Poupart-Lafarge will keep the CEO role, the company said.

    Alstom said it is targeting a reduction of 2 billion euros ($2.18 billion) in its net debt by March 2025 and that it is considering a range of transactions to accelerate that effort. These include an asset-sale plan that has already been launched, with proceeds of up to EUR1 billion targeted, in addition to equity issues and a capital increase, it said.

    As of March 2023, Alstom employed more than 80,000 people, according to its annual report.

    Write to Adria Calatayud at adria.calatayud@dowjones.com

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  • Soros snaps up tech stocks in Q3, but dumps some of the biggest names

    Soros snaps up tech stocks in Q3, but dumps some of the biggest names

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    Soros Fund Management, the investment firm founded by billionaire George Soros, took new positions or bulked up on IPOs and a number of tech names during the third quarter.

    But it sold off small holdings of some of the largest — like Nvidia Corp. and Microsoft Corp. — as well as electric-vehicle maker Rivian Automotive.

    According to a filing on Tuesday, the firm during the third quarter bought up 325,000 shares of chip designer Arm Holdings
    ARM,
    +3.37%
    ,
    which went public in September, for $17.4 million. It also bought smaller stakes in recent IPOs such as Maplebear Inc.
    CART,
    +1.25%
    ,
    better known as grocery-delivery platform Instacart, and digital-marketing firm Klaviyo Inc.
    KVYO,
    +6.90%
    .
    Those purchases were disclosed as investors remain cautious on new IPOs.

    Elsewhere, the fund took a new position, of around 41,000 shares, in Apple Inc.
    AAPL,
    +1.43%
    .
    And it did so as well for Datadog Inc.
    DDOG,
    +4.58%
    ,
    buying 62,000 shares during the quarter. It also bought up 574,962 shares of Splunk, and took fresh positions in Snowflake Inc.
    SNOW,
    +4.51%

    and Taiwan Semiconductor
    TSM,
    +2.58%
    .

    Soros also packed on more to some of its other tech holdings. It added 125,000 shares to its stake in Uber Technologies Inc.
    UBER,
    +3.14%
    ,
    boosting its position by 16.6% for a total of 878,955 shares. It also bought 42,000 more shares of another gig-economy player, DoorDash Inc.
    DASH,
    +4.37%
    ,
    a 30.9% increase for 178,075 shares.

    While Soros boosted its stake in General Motors
    GM,
    +4.83%
    ,
    it sold off its 4.2 million shares in Rivian
    RIVN,
    +4.39%
    .
    The firm also sold off its positions — of roughly 10,000 shares apiece — in tech giants Microsoft
    MSFT,
    +0.98%

    and Nvidia
    NVDA,
    +2.13%
    .

    Soros Fund Management also sold off its stake in Walt Disney Co.
    DIS,
    +1.82%
    .

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  • Canadian Solar Stock Sinks on Earnings Miss and Weak Outlook

    Canadian Solar Stock Sinks on Earnings Miss and Weak Outlook

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    Shares of Canadian Solar were falling sharply after the company fell short on quarterly earnings and sales.

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  • Dow Jones slips after strong run as inflation data looms

    Dow Jones slips after strong run as inflation data looms

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    U.S. edged lower early Monday ahead of important inflation data in coming days, while gauging the possibility of a shutdown of the federal government at the end of the week.

    What’s happening

    • The Dow Jones Industrial Average
      DJIA
      was down 42 points, or 0.1%, at 34,242.

    • The S&P 500
      SPX
      fell 19 points, or 0.4%, to 4,396.

    • The Nasdaq Composite
      COMP
      shed 93 points, or 0.7%, to 13,705.

    The Dow, S&P 500 and Nasdaq Composite rose Friday to score back-to-back weekly gains.

    What’s driving markets

    The S&P 500 has jumped 7.2% over the past two weeks, helped by benchmark borrowing costs
    BX:TMUBMUSD10Y
    falling swiftly from 16-year highs on hopes that recent softer jobs data means inflation can ease further and the Federal Reserve has thus finished its campaign of interest rate rises.

    However, after that strong rally a more cautious tone prevails at the start of the new week as the market awaits a U.S. consumer-price index report for October, due Tuesday, that thus has the heft to underpin the latest bull run or bring it to a halt.

    Read: Stock-market rally faces make-or-break moment. How to play U.S. October inflation data.

    Core CPI growth — which strips out volatile items such as food and energy — is expected to remain steady at 0.3% month-on-month. The producer prices report for October will be published on Wednesday.

    See: This week’s October inflation data looms large on Washington’s economic radar

    October retail sales data is also on the docket this week, offering further clues to the health of the consumer on Wednesday.

    “Most eyes will be focused on the latest inflation numbers, but retail sales and retail earnings will also help set the tone,” Chris Larkin, managing director of trading and investing at E-Trade from Morgan Stanley, said in emailed comments.

    He warned that the market “may be a little more jittery than usual,” following a downgrade of the U.S. credit outlook by Moody’s Investors Service and the possibility of a shutdown of the federal government at the end of the week.

    Also see: House Republicans look to pass two-step package to avoid partial government shutdown

    Worries over a dysfunctional government contributed to Moody’s Investors Service late Friday cutting its outlook on the U.S. sovereign credit rating to negative from stable.

    “This week, we will plunge back into the U.S. political saga, as the government short-term funding deadline is due 17th of November and not much progress has been made to seal a fresh deal,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

    “Depending on the new funding resolution – or the lack thereof – we could see the U.S. 10-year yield return above 4.80%,” Ozkardeskaya added.

    Investors will also be keeping an eye out for a slew of earnings reports from retailers, including Home Depot Inc.
    HD,
    -1.24%

    on Tuesday, Target Corp.
    TGT,
    -0.50%

    on Wednesday and Walmart Inc.
    WMT,
    +0.15%

    on Thursday. Their comments on the health of the consumer may also play into thinking on the Fed.

    Indeed, the earnings season in general should have provided fundamental support to investor sentiment, according to analysts. “For Q3 2023, with 92% of S&P 500 companies reporting actual results, 81%…have reported a positive earnings per share surprise and 61%…have reported a positive revenue surprise,” said John Butters, senior earnings analyst at FactSet.

    The U.S. federal budget update for October will be published at 2 p.m. Eastern. Fed Governor Lisa Cook was due to deliver opening remarks at a Fed conference Monday morning.

    Companies in focus

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  • Home Prices Could Come Down. What It Would Take for an Ugly Slide.

    Home Prices Could Come Down. What It Would Take for an Ugly Slide.

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    Home prices keep going up, defying mortgage rates at 23-year highs and a housing market that hasn’t been this unaffordable since the 1980s. Everything looks steady on the surface but prolonged national U.S. home price declines could be around the corner for the first time in more than a decade, according to one housing expert.

    Continue reading this article with a Barron’s subscription.

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  • Dow ends nearly 400 points higher as tech rally leads stocks to highest close since September

    Dow ends nearly 400 points higher as tech rally leads stocks to highest close since September

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    U.S. stocks ended sharply higher Friday, more than shaking off weakness seen the previous session in the aftermath of a poor Treasury bond auction and fresh signs that interest rates may stay higher for longer.

    Technology stocks drove the bounce, with the Nasdaq Composite leading major indexes to the upside as it and the S&P 500 logged their highest finishes since September.

    What happened

    • The Dow Jones Industrial Average
      DJIA
      rose 391.16 points, or 1.2%, to close at 34,283.10.

    • The S&P 500
      SPX
      ended with a gain of 67.89 points, or 1.6%, at 4,415.24.

    • The Nasdaq Composite
      COMP
      advanced 276.66 points, or 2%, to finish at 13,798.10.

    The rally left the Dow with a weekly gain of 0.7%, while the S&P 500 advanced 1.3% and the Nasdaq booked a rise of 2.4%. The Dow saw its highest close since Sept. 20, while the S&P 500 ended at its highest since Sept. 19 and the Nasdaq at its highest since Sept. 14.

    Market drivers

    Tech was in the driver’s seat. Shares of Microsoft Corp.
    MSFT,
    +2.49%

    jumped 2.5%, with the Dow component scoring its third record close in four sessions. Intel Corp. shares
    INTC,
    +2.80%

    rose 2.8% to lead Dow gainers.

    Meanwhile, the S&P 500 tested important chart resistance at the 4,400 to 4,415 level, which marks the confluence of previous resistance and the 61.8% Fibonacci retracement of the July-October drop, according to Matthew Weller, global head of research at Forex.com, in a note (see chart below).


    Forex.com

    “From a bigger picture perspective, bulls will need to see the index conclusively break above 4415 before declaring that the post-July streak of lower lows and lower highs is over,” Weller wrote.

    The S&P 500 and Nasdaq Composite ended their longest winning streaks since November 2021 on Thursday, after a poorly-received $24 billion sale of 30-year Treasury bonds.

    A calmer bond market may have helped set the tone for stocks. The yield on the 30-year Treasury bond
    BX:TMUBMUSD30Y
    fell 3.2 basis points to 4.733%, after it nearly notched its biggest one-day jump since June 2022. The yield still saw a weekly decline, its third straight.

    It was unclear whether the Treasury auction had been affected by a reported ransomware attack against the U.S. unit of the Industrial & Commercial Bank of China that apparently disrupted the U.S. Treasury market.

    See: How ransomware attack on ICBC rattled the Treasury market and shook up a 30-year bond auction

    Thursday’s setback was also tied to comments from Federal Reserve Chairman Jerome Powell, who told an International Monetary Fund panel on Thursday that the central bank was wary of “head fakes” from inflation, and the “2% goal was not assured.”

    Much of Powell’s language was nearly identical to remarks he made on Nov. 1, when investors rallied stocks and bonds after the Fed chair didn’t explicitly commit to a further interest rate hike. But the subsequent rally for stocks after the Nov. 1 Fed meeting, with the S&P 500 jumping more than 6% over eight days, and a 50 basis point drop in the 10-year Treasury yield were “overdone and not governed by facts,” said Tom Essaye, founder of Sevens Report Research, in a note.

    “Meanwhile, if we think about what the Fed said last week, namely that the rise in the 10-year yield was doing the Fed’s work for it and as a result they may not have to hike rates, then the short/sharp decline in the 10-year yield we’ve seen could essentially remove the reason for the Fed not having to hike rates — and that could put a rate hike back on the table!” he wrote. “That’s essentially what Powell reminded us of yesterday and that, along with the poor Treasury auction, pushed yields higher,” setting up pressure on stocks.

    U.S. consumer sentiment fell in November for the fourth month in a row due to worries about higher interest rates as well as war in the Middle East. The preliminary reading of the sentiment survey declined to 60.4 from 63.8 in October, the University of Michigan said Friday. It’s the weakest reading since May.

    Investors were also tuning into more comments by Fed officials Friday, including San Francisco Fed President Mary Daly, who said she didn’t know if rates were high enough to bring inflation back down to the central bank’s 2% target.

    Companies in focus

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  • Plug Power, Trade Desk, Doximity, Unity Software, Illumina, Wynn, and More Stock Market Movers

    Plug Power, Trade Desk, Doximity, Unity Software, Illumina, Wynn, and More Stock Market Movers

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    These Stocks Are Moving the Most Today: Plug Power, Trade Desk, Doximity, Unity Software, Illumina, Wynn, and More

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  • Virgin Galactic to cut staff to focus on lower-cost Delta spacecraft

    Virgin Galactic to cut staff to focus on lower-cost Delta spacecraft

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    Commercial space-flight operator Virgin Galactic Holdings Inc. on Tuesday said it would cut staff in an effort to focus on developing its new class of Delta spacecraft that are expected to cost less and bring more profit.

    Management, in an email to employees, did not offer specific figures on the cuts, while citing a shaky investing environment as part of the reason for them. The message said the company would offer more details during its third-quarter earnings call on Wednesday.

    Virgin Galactic
    SPCE,
    +2.96%
    ,
    when reached on Tuesday, declined to offer additional information. Executives over the summer said they expected commercial service for Delta ships to begin in 2026, after testing in 2025.

    Shares were little changed after hours on Tuesday. The stock has fallen 50.4% so far this year.

    The cuts follow a handful of space flights this year from Virgin Galactic, which was founded by billionaire Richard Branson. But Chief Executive Michael Colglazier, in the email, said that following successes from the spaceship Unity and its carrier mothership, Eve, the company needed to “reduce our reliance on unpredictable capital markets.”

    “To profitably scale our business, we must first invest upfront capital to create a fleet of ships based on a standardized production model — the Delta Class ships,” Colglazier said in the email.

    He added that “uncertainty has grown in the capital markets,” with higher interest rates pressuring borrowing and “geopolitical unrest” making for a more cautious environment. He said the Delta spacecraft played a key role in expanding flight service and profitability, and that it was crucial to focus on bringing them into service.

    “Interest rates remain high, which adds pressure to companies who are investing today for profits that will come in the future,” he said. “Geopolitical unrest continues to expand, and the combination of these factors makes near-term access to capital much less favorable.”

    “The Delta ships are powerful economic engines,” he continued. “To bring them into service, we need to extend our strong financial position and reduce our reliance on unpredictable capital markets. We will accomplish this, but it requires us to redirect our resources toward the Delta ships while streamlining and reducing our work outside of the Delta program.”

    He said employees would be notified of their job status between Tuesday and Thursday. Employees will be working from home for the rest of the week, Colglazier said, adding that on-site work locations would be unavailable through that time.

    “Delta ships have been designed to have a relatively low unit-production cost and have a material improvement flight cadence relative to our initial ship, VSS Unity,” Colglazier said on Virgin Galactic’s earnings call in August.

    “The Delta development process has yielded some excellent enhancements to the ship’s architecture, particularly with regard to manufacturability and maintainability,” he said. “And we are tracking well against our primary ship-performance criteria.”

     

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