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Tag: New York Stock Exchange

  • US stocks open higher and gold tops $5,000 an ounce

    NEW YORK (AP) — U.S. stocks opened with modest gains Monday, as earnings season kicks into a higher gear and investors eye the next policy meeting of the Federal Reserve.

    Associated Press

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  • Stocks Settle Mixed as Tech Rally Loses Steam

    The S&P 500 Index ($SPX) (SPY) on Friday closed up +0.01%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.51%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.43%.  December E-mini S&P futures (ESZ25) rose +0.01%, and December E-mini Nasdaq futures (NQZ25) fell -0.44%.

    Stock indexes settled mixed on Friday, with the S&P 500, Nasdaq 100, and Dow Jones Industrials posting new all-time highs.  Stock indexes initially moved higher on Friday as chipmakers and AI-infrastructure stocks gained, driven by optimism that growth in the AI sector will translate into corporate profits.  However, higher bond yields on Friday sparked long liquidation in interest rate-sensitive technology stocks.  The 10-year T-note yield rose +4 bp to 4.12% on hawkish comments from Chicago Fed President Austan Goolsbee and Dallas Fed President Lorie Logan, who cautioned against additional rate cuts from the Fed.

    Stock indexes also fell back from their best levels on Friday to trade mixed after the Sep ISM services index dropped more than expected to a 4-month low.  Also, signs of price pressures in the service sector weighed on bond prices and stocks after the Sep ISM services price paid sub-index unexpectedly increased. Finally, the US government shutdown for a third day on Friday dented market sentiment.

    The government shutdown means a delay in the release of government reports, including Friday’s monthly payroll report.  A prolonged shutdown could also delay the government’s inflation data, scheduled for release on October 15.  The White House has warned that if the government shutdown lingered, it would trigger widespread dismissals of employees in government programs that don’t align with President Trump’s priorities.  Bloomberg Economics estimates that 640,000 federal workers will be furloughed during a shutdown, which would expand jobless claims and push the unemployment rate up to 4.7%.

    The US Sep S&P composite PMI was revised upward by +0.3 to 53.9 from the previously reported 53.6.

    The US Sep ISM services index fell -2.0 to a 4-month low of 50.0, weaker than expectations of 51.7. The Sep ISM services price paid sub-index unexpectedly rose +0.2 to 69.4, higher than expectations of a decline to 68.0.

    Chicago Fed President Austan Goolsbee cautioned against the Fed front-loading too many interest rate cuts, saying, “The uptick of inflation that we’ve been seeing, coupled with the jobs, payroll numbers deteriorating, has put the Fed in a bit of a sticky spot where you’re getting deterioration of both sides of the mandate at the same time.”

    Dallas Fed President Lorie Logan said the Fed “needs to be cautious about further rate cuts from here,” as inflation is further away from the Fed’s target than the maximum employment goal.

    Rising corporate earnings expectations are a bullish backdrop for stocks.  According to Bloomberg Intelligence, more than 22% of companies in the S&P 500 provided guidance for their Q3 earnings results that are expected to beat analysts’ expectations, the highest in a year.  Also, S&P companies are expected to post +6.9% earnings growth in Q3, up from +6.7% as of the end of May.

    The markets are pricing in a 98% chance of a -25 bp rate cut at the next FOMC meeting on Oct 28-29.

    Overseas stock markets on Friday settled higher.  The Euro Stoxx 50 closed up +0.10%.  China’s Shanghai Composite did not trade and is closed for the week-long Lunar New Year holiday.  Japan’s Nikkei Stock 225 climbed to a 1-week high and closed up +1.85%.

    Interest Rates

    December 10-year T-notes (ZNZ5) on Friday closed down by -8 ticks.  The 10-year T-note yield rose +3.6 bp to 4.119%.  Dec T-notes gave up an early advance and turned lower Friday due to hawkish comments from Chicago Fed President Austan Goolsbee and Dallas Fed President Lorie Logan, who cautioned against additional Fed interest rate cuts.  T-notes were also pressured after the Sep ISM services price paid sub-index unexpectedly rose, a sign of price pressures in the service sector.

    Dec T-notes initially moved higher on Friday and posted a 1-week high, and the 10-year T-note yield fell to a 2-week low of 4.077%.  T-notes garnered early support on Friday after the Sep ISM services index fell more than expected to a 4-month low.  The ongoing US government shutdown is also bullish for T-notes on concerns that a protracted shutdown could weaken the economy, a supportive factor for T-notes.

    European government bond yields moved lower on Friday.  The 10-year German bund yield fell to a 2-week low of 2.690% and finished down -0.2 bp at 2.698%.  The 10-year UK gilt yield fell -2.0 bp to 4.690%.

    Eurozone Sep PPI fell -0.3% m/m and -0.6% y/y, weaker than expectations of -0.1% m/m and -0.4% y/y, with the -0.6% y/y fall the largest year-over-year decline in 9 months.

    The UK Sep S&P composite PMI was revised downward by -0.9 to a 5-month low of 50.1 from the previously reported 51.0.

    ECB Governing Council member Wunsch stated that ECB policymakers have found the “perfect calibration” for interest rates and policy settings, which are appropriate to ensure that consumer prices rise in line with the 2% target in the medium term.

    Swaps are discounting a 1% chance for a -25 bp rate cut by the ECB at its next policy meeting on October 30.

    US Stock Movers

    Humana (HUM) closed up more than +10% and added to Thursday’s +4% jump to lead managed health care companies higher and gainers in the S&P 500 after it reaffirmed its earnings guidance for 2025.  Also, Centene (CNC) closed up more than +5%, and Cigna Group (CI) closed up more than +4%.  In addition, Molina Healthcare (MOH) and Elevance Health (ELV) closed up more than +3%, and UnitedHealth Group (UNH) closed up more than +1% to lead gainers in the Dow Jones Industrials.

    Fair Isaac Corp (FICO) closed up more than +3%, adding to Thursday’s +17% surge after announcing it will sell credit scores directly to mortgage resellers, reducing their reliance on credit bureaus.

    Knight-Swift Transportation Holdings (KNX) closed up more than +3% after Stifel upgraded the stock to buy from hold with a price target of $45.

    Zillow Group (ZG) closed up more than +2% after Gordon Haskett upgraded the stock to buy from hold with a price target of $90.

    Freeport-McMoRan (FCX) closed up more than +2% after UBS upgraded the stock to buy from neutral with a price target of $48.

    Entergy (ETR) closed up more than +1% after Scotiabank upgraded the stock to sector outperform from sector perform with a price target of $105.

    Occidental Petroleum (OXY) closed up more than +1% after Mizuho Securities upgraded the stock to outperform from neutral with a price target of $60.

    US-listed Macau-linked casino stocks retreated on Friday after Citigroup said national passenger data from China’s travel ministry for the first two days of the Golden Week holiday was weaker than expected.  Wynn Resorts Ltd (WYNN) and Las Vegas Sands (LVS) closed down more than -7%.  Also, MGM Resorts International (MGM) closed down more than -2%.

    Chip makers and AI-infrastructure stocks gave up early gains and turned lower on Friday, which weighed on the Nasdaq 100.  KLA Corp (KLAC) closed down more than -3%.  Also, Applied Materials (AMAT) closed down more than -2% after saying its net revenue for fiscal year 2026 is set to decrease by $600 million due to a new rule by the US Department of Commerce’s Bureau of Industry and Security.  In addition, Advanced Micro Devices (AMD) closed down more than -2%, and Intel (INTC) and Texas Instruments (TXN) closed down more than -1%. 

    Weakness in most of the Magnificent Seven technology stocks was a drag on the overall market.  Meta Platforms (META) closed down more than -2%, and Tesla (TSLA) and Amazon.com (AMZN) closed down more than -1%.  Also, Nvidia (NVDA) closed down -0.67%.

    Palantir Technologies (PLTR) closed down more than -7% to lead losers in the S&P 500 and Nasdaq 100 after Reuters reported that an Army memo stated the company’s battlefield communications network has serious “fundamental security” flaws.

    Hecla Mining (HL) closed down more than -1% after Roth Capital Partners downgraded the stock to sell from neutral with a price target of $8.75.

    Earnings Reports(10/6/2025)

    Aehr Test Systems (AEHR), Constellation Brands Inc (STZ).

    On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com

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  • Markets are selling off after Powell said six words investors don’t want to hear: ‘Equity prices are fairly highly valued’ | Fortune

    • Markets fell after Fed Chairman Jerome Powell warned that stocks are “highly valued.” U.S. stocks dropped, with tech leading losses on skepticism over Nvidia’s $100 billion OpenAI deal. Europe and U.K. markets opened lower.

    U.S. Federal Reserve Chairman Jerome Powell gave a speech in Rhode Island yesterday and, afterwards, was asked whether the Fed was keeping an eye on the markets. His reply contained six words that investors didn’t want to hear: “Equity prices are fairly highly valued.”

    The S&P 500 lost 0.55% on the day. Markets in the U.K. and Europe are all down this morning. The picture is mixed: Asia largely had a good day and U.S. futures are marginally up, so it’s not a tsunami.

    Powell’s remarks weren’t controversial. 

    Everyone knows that most major indexes have hit record highs this year. But it is clear that investors are wary of any sign that the Fed thinks “irrational exuberance”—as former Fed chair Alan Greenspan once called it—has kicked in. That would be a point at which the Fed could be expected to start raising interest rates in order to pierce an economic bubble. And that would be bad for stocks.

    Powell said: “We do look at overall financial conditions, and we ask ourselves whether our policies are affecting financial conditions in a way that is what we’re trying to achieve … But you’re right, by many measures, for example, equity prices are fairly highly valued.”

    UBS’s Paul Donovan interpreted it this way: “Powell apparently just wants investors’ confidence to be somewhat less certain.”

    One thing they are not confident about is tech stocks. The Nasdaq Composite lost nearly a full percentage point yesterday as traders expressed skepticism over Nvidia’s $100 billion investment in OpenAI. “There were as many questions as answers” about the deal, according to a note from Jim Reid and the team at Deutsche Bank this morning. A number of analysts are questioning how sustainable the AI boom is. Nasdaq futures are up this morning, premarket, however.

    Why are futures rising when the underlying indexes lost ground yesterday? Because the broad thrust of Powell’s speech contained worries about the softening labor market—which implies the Fed will stay on its rate-cutting path in the near-term.

    Here’s snapshot of the markets ahead of the opening bell in New York this morning:

    • S&P 500 futures were up 0.17% this morning. The index closed down 0.55% in its last session.
    • STOXX Europe 600 was down 0.28% in early trading. 
    • The U.K.’s FTSE 100 down 0.12% in early trading.
    • Japan’s Nikkei 225 was up 0.3%.
    • China’s CSI 300 was up 1.02%.
    • The South Korea KOSPI was down 0.4%.
    • India’s Nifty 50 was down 0.22% before the end of the session.
    • Bitcoin declined to $112.5K.
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    Jim Edwards

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  • ‘How big could this bubble get?’: Why a famed strategist says the government bond market could spoil a fragile bull rally

    FILE – In this Jan. 2, 2020, file photo traders monitor stock prices at the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EST on Thursday, Jan. 9. (AP Photo/Mark Lennihan, File)Associated Press

    • Albert Edwards warns of a tech stock bubble amid high valuations.

    • The tech sector is now 37% of the US stock market, surpassing the dot-com era peak.

    • But rising bond yields will eventually stop the rally, Edwards said.

    Like the high market valuation levels he warns about, Société Générale strategist Albert Edwards‘ bearish missives don’t tend to serve well as near-term market timing tools.

    He acknowledges as much.

    “An equity investor who heeded my words of caution on the US Tech ‘bubble’ will by now have taken to sticking pins in plasticine models of me,” Edwards wrote in an August 21 note to clients. “Indeed, my ankle has been hurting for over six months and although the physio says it is tendonitis, I strongly suspect otherwise.”

    But there’s no denying that Edwards, a stark contrarian amid the pervasively bullish attitude on Wall Street these days, has some concerning observations about where the market sits — particularly with respect to tech stocks, and in the context of government bond yields.

    Building on his argument that the market is in a bubble, he highlighted in his latest note that the tech sector now makes up 37% of the total US market, which is higher than at the peak of the dot-com bubble in 2000. Over the last few years, investors have piled into tech amid the frenzied excitement about AI.

    tech sector
    SOCIETE GENERALE

    Another metric showing that the tech sector has historically high valuations is a falling free cash flow yield. This means that current market prices are high relative to cash flow after expenses as tech firms dump money into AI development. The sector has a free cash flow yield of around two. This is also reflected in the S&P 500’s low dividend yield of 1.2%.

    Meanwhile, long-term government bond yields have surged at the same time as the tech rally, and offer virtually risk-free yields of over 4%.

    The ratio of 10-year Treasury yields to the market’s dividend yield has climbed to dot-com era levels.

    10y bond yield vs stock market dividend yield
    SOCIETE GENERALE

    Historically, rising bond yields have weighed on stock valuations, but that hasn’t seemed to be the case so far in this market. Edwards says it’s only a matter of time until that changes.

    “Only the other day, interest rates were rock bottom and equity bulls were telling us that sky high equity valuations were justified by TINA — There Is No Alternative,” he wrote. “But that TINA magic no longer works, now that interest rates are so much higher. So, how come the equity market is able to shrug off the relentless rise in long bond yields by feeding off news of strong profits from a handful of mega-cap tech stocks and the promise of more to come?”

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  • Palihapitiya returns to SPAC market with American Exceptionalism’s IPO filing

    (Reuters) -Venture investor Chamath Palihapitiya, dubbed Wall Street’s “SPAC king” for his high-profile blank-check deals, is set to take his latest special purpose acquisition vehicle public, marking his return to the market after several years.

    American Exceptionalism Acquisition Corp, chaired by Palihapitiya, will list on the New York Stock Exchange under the ticker ‘AEXA’, a filing showed late on Monday. The SPAC plans to raise $250 million to target companies in artificial intelligence, energy, decentralized finance and defense sectors.

    A SPAC is a shell firm that raises money through an IPO to merge with a private business and take it public, offering companies an alternative route to the market that bypasses the longer and more costly traditional IPO process.

    SPAC deals hit record levels in 2020 and 2021, before activity slowed sharply in the following years as regulatory scrutiny increased and investors soured on the once-popular vehicle.

    During the peak, several Wall Street heavyweights, including billionaire investors Bill Ackman and Michael Klein, joined Palihapitiya in betting on SPACs as the next big trend in the listings market.

    Despite backing from big-name investors, many SPACs failed to secure merger targets, while others completed deals with heavy redemptions or saw their shares plunge after debut.

    But Palihapitiya strongly believes in the vehicle. “When I raised my first SPAC in 2017, I wanted to help correct an increasingly unstable balance between the private and public markets,” he said in a letter to investors.

    “While SPACs are not the solution for every issue in the IPO process, I continue to believe that they have an important piece to play in capital formation – and especially now.”

    SoFi Technologies is among Palihapitiya’s most successful bets, with the consumer lender now valued at nearly $29 billion. In January 2021, it had agreed to go public in a blank-check deal valued at around $8.65 billion.

    (Reporting by Manya Saini in Bengaluru; Editing by Shinjini Ganguli)

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  • Traders who scooped up Warren Buffett’s Berkshire Hathaway shares at a massive $620,000 discount during glitch will have their deals canceled by the NYSE

    Traders who scooped up Warren Buffett’s Berkshire Hathaway shares at a massive $620,000 discount during glitch will have their deals canceled by the NYSE

    Investors who purchased shares in Warren Buffett’s Berkshire Hathaway yesterday at a huge discount will see their trades canceled following a technical issue on the stock exchange.

    On June 3, a data glitch led the global conglomerate’s stock price to fall to $185 a share, having previously closed at over $620,000. The drop meant a more than 99% discount on the Warren Buffett-led company.

    This means a trader who snapped up just $925 worth of the stock at the rock-bottom price would now see their investment worth over $3 million today.

    While it hasn’t been confirmed how many people purchased the Class A stock during the technical error—which lasted for around an hour and a half—the New York Stock Exchange (NYSE) has swiftly undone their trades.

    In an update posted at 9 p.m. last night, NYSE said it would “bust” all the “erroneous” trades of Berkshire Hathaway stock at or below $603,718.30 a share.

    The issue, the exchange added, is related to a problem at the Consolidated Tape Association (CTA), which provides real-time information about quotes and trades on the exchange. The CTA oversees part of the Securities Information Processor (SIP) which consolidates all protected bid/ask quotes and trades into a single data stream.

    The CTA said it experienced problems with price banding which “may have been related to a new software release” on SIP. As a result the CTA has reverted to the previous version of the software. The CTA did not immediately respond to Fortune’s request for comment.

    During the blip, the NYSE placed halts on certain trades, and will seek to determine which are erroneous and thus eligible to be canceled. The technical issue has now been resolved, it added, with all tickers trading as normal.

    Traders who didn’t hop on a discounted Berkshire Hathaway stock but did buy heavily discounted shares in other brands will also be subject to having their trades struck off—with the ruling not eligible for appeal.

    Other tickers that were impacted include American restaurant chain Chipotle (CMG), mining company Barrack Gold Corporation (GOLD) and meme stock darling GameStop (GME).

    For Berkshire Hathaway, the good news is that its Class B Stock (BRK.B) was not impacted by the ticker problem, and its Class A stock closed at more than $631,000 a share.

    Berkshire Hathaway did not immediately respond to Fortune’s request for comment.

    Costly mistakes

    The Berkshire Hathaway mega-bargain is one of many hiccups experienced by various international stock exchanges—and is unlikely to be the last.

    Just last week, live data from the S&P 500 and the Dow Jones Industrial Average disappeared from traders screens for around an hour, the Financial Times reported. The system then returned to normal but the cause of the outage is being investigated.

    While the NYSE issue has been fixed with limited fallout, the same couldn’t be said for a LSE incident that has cost Wall Street giant Citigroup tens of millions.

    In May 2022, a London trader bypassed hundreds of warning notifications to create a basket worth $444 billion.

    While $255 billion was blocked from trading by Citi’s internal management systems, a basket worth $189 billion was still released to the global markets.

    A total of $1.4 billion of equities were sold across various European exchanges before the trader canceled the order. Citi was fined a near-$70 million by the UK’s Financial Conduct Authority for the oversight and related matters.

    This story was originally featured on Fortune.com

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  • How Did Europe Get Left Behind?

    How Did Europe Get Left Behind?

    The privileged ability to spend through the dollar’s global reserve status, though amounting to a national debt of unprecedented size, has allowed the U.S. to run circles around Europe in public spending and crisis-time stimulus while subverting debt crises. USGS via Unsplash

    If the United Kingdom or France joined the United States, they would become the poorest states in the country, with a GDP per capita lower than even Mississippi. Germany would be the second poorest. For most of the second half of the 20th century, Europe and the U.S. rivaled each other in GDP. In 2008, the EU and U.S. had GDPs of $14.2 trillion and $14.8 trillion, respectively. Closing 2023, the EU has seen little growth, with a GDP of around $15 trillion, while the U.S. has marched ahead to a GDP of $27 trillion.

    The EU GDP growth clocked in at 0.1 percent for 2023’s last quarter, a small fraction of the U.S.’s 3.4 percent during the same period. The UK fell into recession in the back half of last year, but the French economy looks to an optimistic forecast of 0.9 percent growth for 2024 to put six months of stagflation in the rearview mirror. While inflation has come down to just above 3 percent, similar to the U.S., the European Central Bank’s rate hikes have taken a larger toll on the nation-states.

    One reason Europe has fallen behind? A spending handicap.

    After the 2008 Global Financial Crisis (GFC), which originated in the U.S. real estate debt and loaning markets in 2007 and triggered a recession in Europe in the second quarter of 2008, the U.S. and Europe increased stimulus spending and access to liquidity. This increased the debt-to-GDP percent in the U.S. from 61.8 percent in 2007 to 82.0 percent in 2009 and from around 60 percent to 73 percent for the average EU government in the same time period. Because the U.S. benefits from the dollar’s reserve currency status, it can comfortably borrow large amounts at relatively low rates due to the high demand and liquidity of the U.S. treasury market. Europeans cannot take advantage of the same privilege, and thus saw a growing debt crisis in the years following the GFC in countries like Ireland, Greece, Portugal and Spain, which were having trouble paying back the debt their governments had borrowed. The crisis peaked in 2010 when Greece’s sovereign debt was downgraded to junk by rating agencies. Numerous European countries required bailouts from the IMF and EU and instituted new austerity policies that limited public spending.

    Such austerity policies became handicaps in dealing with future crises: during the COVID pandemic, the U.S. distributed $5 trillion in stimulus, while the U.K. and Germany spent $500 billion, France spent $235 billion, and Italy $216 billion, as per Moody’s. Though controversial then and a contributor to the steep inflation that followed, the cash cascade likely helped the U.S. spend itself out of a recession. Household savings were at dramatic highs following the pandemic, allowing consumer spending—contributing to 70 percent of the U.S. GDP—to be strong through the Federal Reserve rate hikes. Post-pandemic, the U.S. has continued its public investment streak with the Infrastructure Investment and Jobs Act, CHIPS Act and Inflation Reduction Act, contributing another $2 trillion to its manufacturing and construction sectors and far exceeding EU contributions.

    The privileged ability to spend through the dollar’s global reserve status, though amounting to a national debt of unprecedented size, has allowed the U.S. to run circles around Europe in public spending and crisis-time stimulus while subverting debt crises.

    A variety of other factors

    The explanation of why the U.S. economy has outpaced Europe cannot be reduced to just one reason. Broad structural differences are at play: the U.S. enjoys a large single free trade zone, where capital and labor can unquestionably cross state boundaries without additional tax, tariff or currency conversion costs. Brexit and many other hurdles have tested the EU’s free trade zone. The U.S. is also unusually entrepreneurial: more start-ups are founded in the U.S. than in the European Union, and the U.S. leads the world in VC funding. Eight of the ten largest companies globally by market cap are American; none are European. The U.S. is also the globe’s most attractive place for investment, making the New York Stock Exchange larger than every European stock exchange combined (and that is just one of the U.S.’s equity exchanges). Recent events also serve as obstacles: energy embargos on Russia have been far more taxing on Europe, with the cost of electricity far higher than in the U.S. and not yet returning to pre-sanction levels.

    Recent events also serve as obstacles: energy embargos on Russia have been far more taxing on Europe, with the cost of electricity far higher than in the U.S. and not yet returning to pre-sanction levels.

    What’s next?

    European leaders are eager to act. “We’re in danger of falling out of touch. There is no time to waste. The gap between the European Union and the U.S. in terms of economic performances is becoming bigger and bigger,” former Italian Prime Minister Enrico Letta admitted in a recent report.

    Last week, European leaders gathered to discuss the “European Competitiveness Deal,” aimed at helping the continent catch up to the U.S. and China. The policy would upskill workers, make Europe more attractive for capital, reduce the cost of energy and strengthen trade, as per the European Commission. Among Europe’s long-term challenges is that its leaders ultimately need to make their markets an attractive place for Europeans to invest their savings; French President Emmanuel Macron noted that “Europe has more savings than the United States of America … and every year, around 300 billion euros of these savings go to finance the American economy.”

    The U.S. greatly benefits from a stronger Europe, giving it an ally to help curtail Chinese and Russian influence. However, the U.S. has recently levied tariffs against Europe while implementing trade and subsidy policies. European leaders have criticized it as protectionist, reducing Europe’s global competitiveness and growth potential.

    How Did Europe Get Left Behind?

    Shreyas Sinha

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  • Stock market today: Dow drops 475 points as Israel braces for potential attack from Iran

    Stock market today: Dow drops 475 points as Israel braces for potential attack from Iran

    Traders work on the floor of the New York Stock Exchange (NYSE) on June 01, 2023 in New York City.Spencer Platt/Getty

    • US stocks fell on Friday following reports of a potential Iranian attack against Israel.

    • Fears of an escalation of tensions in the Middle East sent oil prices higher and interest rates lower.

    • Investors also digested the first batch of first-quarter earnings, and they weren’t impressed.

    US stocks sold off on Friday, with the Dow Jones Industrial Average dropping by nearly 500 points amid fears of a possible Iranian attack against Israel.

    US intelligence reports indicated thata potential attack against Israel by Iran or its proxies was imminent within the next few days. The reports, which was confirmed by a US official, specified that a potential drone strike against Israel could target “possibly on Israeli soil” rather than Israeli interests outside of the country.

    Such an attack would come shortly after Israel launched a missile strike that killed seven Iranian military personnel in Syria.

    Fears of an escalation of tensions in the Middle East sent oil prices higher and bond yields lower.

    Investors also digested the first batch of first-quarter earnings results, and they weren’t impressed. Mega-banks JPMorgan, Wells Fargo, and Citigroup all reported better than expected results, but saw significant sell-offs in their stocks, with JPMorgan falling more than 6%.

    Here’s where US indexes stood at the 4:00 p.m. closing bell on Friday: 

    Here’s what else happened today: 

    In commodities, bonds, and crypto: 

    • West Texas Intermediate crude oil jumped by 0.49% to $85.44 a barrel. Brent crude, the international benchmark, climbed 0.48% to $90.17 a barrel.

    • Gold fell 0.57% to $2,359.40 per ounce.

    • The 10-year Treasury yield dropped 6 basis points to 4.52%.

    • Bitcoin declined by 4.50% to $66,874.

    Read the original article on Business Insider

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  • The stock market is looking a lot like it did before the dot-com and ’08 crashes, top economist says

    The stock market is looking a lot like it did before the dot-com and ’08 crashes, top economist says


    Traders work on the floor of the New York Stock Exchange October 13, 2008. REUTERS/Shannon Stapleton

    • The stock market looks similar to the periods that preceded the dot-com and 2008 market events.

    • David Rosenberg pointed to the exuberance for AI, which has sparked a “raging bull market.”

    • The “speculative mania” carrying the stock market could soon end, he warned.

    The stock market is flashing the same warning signs of “speculative mania” that preceded the crashes of 2008 and 2000, according to economist David Rosenberg.

    The Rosenberg Research president — who called the 2008 recession and who’s been a vocal bear on Wall Street amid the latest market rally — pointed to the “raging bull market” that’s taken off in stocks, with the S&P 500 surpassing the 5,000 mark for the first time ever last week.

    The benchmark index has soared around 22% from its low in October last year, clearing the official threshold for a bull market. The index has also gained for the last five weeks and has been up for 14 of the last 15 weeks — a winning streak that hasn’t been seen since the early 1970s.

    But the stellar gains are a double-edged sword for investors, as the market looks dangerously similar to the environment prior to the dot-com and 2008 crashes, Rosenberg wrote in a note on Monday.

    “With each passing day, this has the feel of being a cross between 1999 and 2007. It is a gigantic speculative price bubble across most risk assets, and while AI is real, so was the Internet, and so were the high-flying stocks that populated the Nifty Fifty era,” he said, referring to the group of 50 large-cap stocks that dominated the stock market in the 60s and 70s, before falling by around 60%

    Other Wall Street strategists have warned of the parallels between today’s market and similar stock booms in the past. The hype for artificial intelligence pushed the Magnificent Seven stocks to dominate most of the S&P 500’s gains last year, and a major price correction is on the way as valuations soar to unsustainable levels, Richard Bernstein Advisors said in an October 2023 note.

    “This is the problem when a  group of mega cap ‘concept’ stocks trade at double the multiple of the rest of the market. The lesson is that (i) the higher they are, the harder they fall, and (ii) there are dangers when too much growth gets priced in,” Rosenberg said. “Being real in an economic sense does not mean we have not entered a realm of excessive exuberance when it comes to the financial markets,” he added, referring to the hype surrounding AI.

    The outlook for stocks is also shadowed by an uncertain economic picture. Geopolitical risks, recession risk, and the risk that the Fed will disappoint investors hoping for rate cuts aren’t being priced into markets at the moment, Rosenberg added.

    “I don’t find speculative manias a turn-on and in my personal finances, I avoid them like the plague. Not everyone likes to hear that, especially since I missed so much of this rally but that’s how I roll,” he said.

    Rosenberg has warned investors to tread carefully before, given the slew of risks he sees ahead for markets. Previously, he said that the S&P 500 looked “eerily similar” to 2022, the year the index plunged 20%. That’s partly because a recession that “few see and few are positioned for” is coming for the economy, he wrote in a post on LinkedIn last month.

    Read the original article on Business Insider



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  • Someone bet against the Israeli stock market in the days before Hamas’ Oct. 7 attack

    Someone bet against the Israeli stock market in the days before Hamas’ Oct. 7 attack

    Five days before the deadliest attack in Israel’s history, a warning may have appeared on stock exchanges.

    A study by researchers from Columbia University and NYU called “Trading on Terror?” suggests that a trader may have been aware of the coming attack, bet against the Israeli economy and walked away with a profit by short selling on the U.S. and Israeli stock exchanges.

    Short selling is a trading strategy aimed at making a profit off an asset that is expected to drop in price; the seller “borrows” a security and sells it on the open market with the goal of buying it back later at a lower price and pocketing the difference.

    The study looked at the Israel Exchange-Traded Fund, a common way for people to make investments in Israel, which on any given day has around 2,000 shares shorted. On Oct. 2, that number shot up to over 227,000 shares. 

    According to Columbia Law School Professor Joshua Mitts, one of the authors of the study, “that’s extremely unusual.” It was also profitable: the shares sold short for one Israeli company alone yielded a profit of nearly $900,000.

    Israel Stock Exchange and Market as Shekel Recoups Most War Losses
    Workers participate in a memorial ceremony to mark a month since the Oct. 7 attack by Hamas militants, inside the Tel Aviv Stock Exchange in Tel Aviv, Israel, on Nov. 7, 2023.

    Kobi Wolf/Bloomberg via Getty Images


    Mitts and his co-author, Professor Robert J. Jackson Jr., ran a number of comparisons over the past 13 years to see whether the same thing had happened before other major moments of instability in Israel, like the 2014 Israel-Gaza war, the COVID-19 pandemic, or the judicial reform initiative that led millions of Israelis to take to the streets in protest.  

    They found that the short-selling activity in early October was “really extraordinary, even when you compare it to those periods of instability, which there were many.”

    Something similar had happened before, though — on April 3, a couple of days before the Jewish holiday of Passover. The study links this to an Israeli media report claiming Hamas had initially planned its attack for the eve of Passover.

    “It’s almost the same magnitude.What are the odds?” asks Mitts.

    “The other thing we know,” he adds, “is that this looks to have been the product of a single trader, based on what we can see in the data. This is extraordinarily unusual.”

    All of this led them to their conclusion that the trades were not a coincidence, but a tactic by someone who knew the attack was coming. 

    “We think it’s virtually impossible this happened by chance,” Mitts told CBS News.

    Finding out exactly who made the trades, and the profit, would be “exceedingly difficult,” and Mitts says he is “pretty pessimistic” that whoever was betting against the Israeli economy will be found. Similarly, Mitts says it’s “not so easy to stop this sort of trading” from happening. Instead, he suggests a different goal.

    “What we really need to be asking is how do we internalize this sort of trading information in the public consciousness, from an intelligence standpoint, from a public discussions standpoint, from a policy standpoint. What are these signals? What are they teaching us?”

    There is growing evidence of the massive intelligence failures that preceded the Oct. 7 attacks. An Israeli soldier told CBS News last week that her team reported unusual activity on the Gaza side of the border beginning six months before the attack to her superiors in the IDF, but “they didn’t take anything seriously.”

    Mitts says this study shows yet another missed signal: “The stock market was screaming, “There’s something going on!””

    In response to the study, the Israel Securities Authority has said: “The matter is known to the authority and is under investigation by all the relevant parties.”

    “I don’t mean to say we found the next prediction of the future,” Mitts says, but he believes their work points to a tool that must be incorporated into the intelligence arsenal. “We shouldn’t have to write the paper two months later that reveals this.”

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  • The stock market’s latest rally is about to fizzle amid a barrage of concerns, JPMorgan says

    The stock market’s latest rally is about to fizzle amid a barrage of concerns, JPMorgan says

    Traders work on the floor of the New York Stock Exchange (NYSE) on June 01, 2023 in New York City.Spencer Platt/Getty

    • The stock market’s latest rally is set to fizzle, according to JPMorgan’s Marko Kolanovic.

    • He highlighted a number of looming concerns for investors, from valuations to higher-for-longer interest rates.

    • “We believe that equities will soon revert back to an unattractive risk-reward,” Kolanovic said.

    Last week’s stock market rally is about to fizzle, according to JPMorgan’s chief global markets strategist Marko Kolanovic.

    The S&P 500 surged 6% last week, representing its strongest weekly gain of the year. The jump was driven in part by a cooler-than-expected October jobs report that sent bond yields plunging. But Kolanovic isn’t buying it because of a barrage of risks that are starting to converge.

    “We believe that equities will soon revert back to an unattractive risk-reward as the Fed is set to remain higher for longer, valuations are rich, earnings expectations remain too optimistic, pricing power is waning, profit margins are at risk and the slowdown in topline growth is set to continue,” he said.

    On top of that, the idea that bad news for the economy is good news for the stock market is extremely precarious, as a further deterioration in economic data could sound the alarms that an economic recession is imminent.

    “It is difficult to distinguish between a healthy slowdown and the initial stages of recession without the benefit of hindsight,” Kolanovic said.

    Markets currently expect the Federal Reserve to keep rates steady until the spring, when a cut rather than a hike is being priced in.

    While stock market investors would like to see interest rates drop, the reason behind any potential cut is what matters the most.

    A Fed that is easing monetary policies because inflation has been tamed and the economy remains solid would be bullish for stocks, whereas the Fed cutting interest rates because of a weakening economy would be bearish.

    And if the Fed doesn’t cut or hike interest rates and instead keeps them at current levels, that could be an even bigger problem for the stock market.

    “As the Fed is set to remain higher for longer at the short end, markets could start to price in a policy mistake, leading to lower long yields down the line, and that might not ultimately be helpful for stocks, especially if 2024 earnings projections start to reset lower,” Kolanovic said.

    Kolanovic isn’t the only bear on Wall Street. Morgan Stanley’s Mike Wilson reiterated his view on Monday that the recent rally in stocks is nothing more than a bear market rally.

    Both investment strategists have been consistently bearish towards stocks this year, even in the face of a strong rally throughout much of 2023.

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  • A ‘baby rally’ has taken hold in the stock market this week, and it could lead to bigger gains ahead

    A ‘baby rally’ has taken hold in the stock market this week, and it could lead to bigger gains ahead

    Victoria Parrinello sits inside her father’s booth on the floor of the New York Stock Exchange, November 27, 2015.REUTERS/Brendan McDermid

    • A “baby rally” has unfolded in the stock market that could be the start of a broader year-end rally.

    • That’s according to Fundstrat’s Tom Lee, who highlighted fundamental and technical reasons for a rally.

    • “There are a few structural reasons to expect stocks to have some positive traction in coming weeks,” Lee said.

    A “baby rally” has taken hold of the stock market in recent days, and it could represent the start of a larger year-end surge in stock prices.

    That’s according to a Friday note from Fundstrat’s Tom Lee, who highlighted several fundamental and technical factors that should support stock prices over the next few weeks.

    “Incoming macro developments have been favorable in a way that, in our view, sets the stage for stocks to gain in the near-term,” Lee said. “So far, it is a ‘baby rally’ but this could turn into a larger rally.”

    For one, Lee said that a soft October jobs report “would be unequivocally positive” for stock prices. That’s exactly what happened, with 150,000 jobs added to the economy last month, below consensus estimates for a gain of 180,000 jobs.

    That softness in the jobs report gives the Federal Reserve more breathing room in its trajectory path of interest rates. The 10-year US Treasury yield fell 15 basis points to 4.50% on Friday after hitting a multi-year high of more than 5% last week.

    Meanwhile, corporate earnings results for the third-quarter have remained overwhelmingly positive. So far, 80% of S&P 500 companies have reported earnings, and 82% of those companies beat earnings by a median of 7%, according to data from Fundstrat.

    Other positive fundamentals developing in markets, according to Lee, includes the stock market fear gauge (the VIX) plunging from the 20 level to just above 15, the end of tax loss harvesting trades for mutual funds in October, and a meaningful move lower in long-term interest rates.

    From a technical perspective, Lee said “there are a few structural reasons to have some positive traction in coming weeks.”

    Those reasons include the percentage of stocks trading above their 200-day moving average falling to just 23%, which is a bottom decile reading since 1994. When stocks have gotten this oversold, the median six-month forward gain is 9.7% with a 80% win-ratio, according to Lee.

    Meanwhile, the Nasdaq 100 saw 15 consecutive days when the 5-day return was negative. This has happened only 14 times since 1985, and excluding the dot-com bubble, the median 12-month forward gain was 19% with a 91% win-ratio.

    “These are meaningful quantitative/structural arguments for why a durable bottom was formed in late October. And if so, this is a case for this ‘baby rally’ to strengthen,” Lee said.

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    Fundstrat

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  • Morgan Stanley’s top strategist Mike Wilson warns investors not to get their hopes up for a Santa Claus rally

    Morgan Stanley’s top strategist Mike Wilson warns investors not to get their hopes up for a Santa Claus rally

    That’s the question on the lips of many stock market investors trying to decipher whether equities are set for one final rally before the year is out.

    One big name on Wall Street, though, is betting against that happening.

    In a Sunday note to clients, Mike Wilson, Morgan Stanley’s chief investment officer and chief U.S. equity strategist, doubled down on his year-end target of 3,900 points for the S&P 500.

    Wilson—who was ranked No. 1 in last year’s Institutional Investor survey after correctly predicting the selloff in stocks—said in his note that while investor sentiment had recovered somewhat after September’s sell off, his team saw a fundamental setup that is “different than normal this year.”

    Narrowing market breadth, falling earnings revisions, and dwindling consumer confidence were slashing the chances of a year-end uptick in valuations, he argued, noting that monetary and fiscal policy were “unlikely to provide relief” for traders as they could still tighten further.

    “Bottom line, we think the S&P 500 price action into year-end is more likely to come down to where the average stock is trading rather than rallying to higher levels because breadth typically leads price,” Wilson wrote. “Based on our fundamental and technical analysis, we remain comfortable with our long-standing 3,900 year-end target for the S&P 500.”

    The blue-chip index—a benchmark for America’s biggest publicly listed companies—is currently trading around 10% lower than its July peak, although it has still returned almost 8% since the beginning of the year.

    To reach Wilson’s projected 3,900 points, the S&P 500 will have to shed a further 5% from current levels.

    Deteriorating rally prospects

    Wilson has been arguing over the last month that the chances of a fourth-quarter rally are deteriorating, despite bullishness lingering elsewhere on Wall Street.

    He reiterated on Sunday that his observations of the market and economic backdrop “tell a different story than the consensus, which sees a rally into year-end.”

    “Some of the more economic- and interest rate-sensitive sectors like autos, banks, transport, semiconductors, real estate and consumer durables [have been] underperforming significantly over the past three months,” he said. “More recently, many defensive sectors and stocks have started to outperform together with energy… We think this performance backdrop reflects a market that is incrementally more concerned about growth than higher interest rates and valuations per se.”

    Wilson also noted that investors had been reacting more negatively to third-quarter corporate earnings than they had to the previous quarter’s earnings reports —stressing that this appeared to be the case whether earnings reports were good or bad.

    “Most importantly for the headline S&P 500 index, most of the mega-cap leaders that have reported so far have not traded well post their [third quarter] results,” he said. “With this group unable to reverse the ongoing correction and keep the index above key technical levels, this is just another reason why a rally into year-end looks more unlikely to us.”

    Long-time bear

    Wilson, one of Wall Street’s most prominent bears, has long been making gloomy predictions about U.S. stocks, warning investors in May not to be fooled by the rally that was unfolding across the S&P 500 at the time.

    However, his warnings have not always come to fruition.

    Earlier this year, he predicted that a 20% downturn was imminent for U.S. stocks—and has since reflected on why his projections missed the mark.

    “We were wrong,” he conceded in a note to clients over the summer. “2023 has been a story of higher valuations amid falling inflation and cost-cutting.”

    Wilson isn’t a lone voice when it comes to taking a warier approach to stocks in recent months, however.

    Earlier this month, JPMorgan’s top strategist warned stocks could be about to nosedive 20%, saying he was “not sure how we’re going to avoid” a recession.

    Some calculations suggest that the S&P 500 is headed below 3,000 points—which would be a decline of at least 27% from current levels.

    Wall Street bulls Goldman Sachs and Citigroup, meanwhile, have lowered their year-end price targets for the S&P 500 index.

    Chloe Taylor

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  • Investors react as consumer prices rise at slowest rate in 2 years

    Investors react as consumer prices rise at slowest rate in 2 years

    Investors react as consumer prices rise at slowest rate in 2 years – CBS News


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    Stocks closed relatively flat Wednesday following the release of Consumer Price Index data for April. Wells Fargo senior global markets strategist Scott Wren joins CBS News to explain what the new inflation numbers mean for consumers and investors.

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  • U.S. consumer spending still strong despite slowing GDP, expert says

    U.S. consumer spending still strong despite slowing GDP, expert says

    U.S. consumer spending still strong despite slowing GDP, expert says – CBS News


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    The stock market closed in positive territory Thursday despite the latest GDP report from the the Commerce Department showing that the economy grew at an annual rate of only 1.1% in the first quarter of 2023. Lori Bettinger, president of BancAlliance, spoke with CBS News about what the latest GDP figures mean for investors and consumers going forward.

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  • Stocks fall as First Republic Bank shares plummet

    Stocks fall as First Republic Bank shares plummet

    Stocks fall as First Republic Bank shares plummet – CBS News


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    The Dow Jones closed in the red Wednesday as investors reacted to earnings reports and falling shares of First Republic Bank. Axios markets correspondent Emily Peck joined CBS News to discuss what this means for investors and the economy.

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  • Stocks close slightly down as investors react to earnings reports

    Stocks close slightly down as investors react to earnings reports

    Stocks close slightly down as investors react to earnings reports – CBS News


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    Stocks closed down slightly on Thursday as investors reacted to mixed earnings reports and new weekly jobless claims numbers. CenterSquare Investment Management senior strategist Uma Moriarity joined CBS news to discuss what the developments mean for investors.

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