The Nasdaq 100 increased 1.2% as the S&P 500 came close to 4,500. As Morgan Stanley predicted that the Dojo supercomputer may increase in worth by much to $500 billion, Tesla Inc. saw a 10% increase. After Apple Inc. extended a contract with the chipmaker, Qualcomm Inc. rose. The launch of the iPhone maker’s new product was anticipated by traders as well. After coming to an arrangement with Walt Disney Co. to stop blocking ESPN for millions of pay-TV subscribers, Charter Communications Inc. surged. Oracle Corp. experienced a decline in the late hours as cloud sales growth slowed.
The Biden administration sent key officials to help facilitate the talks as traders closely watched the United Auto Workers and automakers’ negotiations to avoid a strike. In order to reach a deal by the deadline of September 14th, the UAW union says it is prepared to talk day and night with General Motors Co., Ford Motor Co., and Stellantis NV.
To learn more, see Just a 10-Day UAW Strike Could Cost the Economy $5.6 Billion.
Inflation predictions among US consumers remained largely steady in August, but a Fed Bank of New York survey found that households were becoming more worried about their finances and gloomy about the employment situation. The consumer price index report on Wednesday will offer the most recent information regarding how far the Fed may need to raise interest rates in order to bring inflation back to its target.
Chris Larkin, managing director of trading and investing at E*Trade from Morgan Stanley, predicted that this week would be more of a “good news is good, bad news is bad” scenario. The market’s potential for a short-term recovery may depend on this week’s inflation data, particularly Wednesday’s CPI.
According to Morgan Stanley strategist Michael Wilson, the market is in a late-cycle background, when the Fed is anticipated to stop or reverse its hawkish policy position, and more conservative equities indicators, such high cash and low debt, have started to outperform. He reaffirmed his belief that the risk of a recession is not yet being reflected by stock markets.
According to John Stoltzfus, chief investment strategist at Oppenheimer & Co., “bullishness is relatively high while the Fed remains shy of its inflation target.” Investors, he advised, should “right-size expectations” and temper their enthusiasm for a protracted rate halt or even a rate cut.
In the coming month, almost 26% of participants in the most recent MLIV Pulse survey said they intend to reduce their exposure to the US stock benchmark. That is twice as many as those who intend to purchase. Only 13% of those surveyed indicated they might increase their exposure.
View this article: ‘Hold-Your-Breath Moment’ Puts Wall Street on Edge: Surveillance
After a bullish run, the dollar fell as Asia’s largest central banks reacted in various ways to its recent surge. The head of the Bank of Japan took a more subdued tone when he hinted at the prospect of an eventual policy move, pushing the yen up almost 1%. The People’s Bank of China issued a forceful caution to speculators to avoid destabilising the yuan.
Bitcoin fell to its lowest level since June. The largest digital token in the world developed a pattern known as a “death cross,” in which the 50-day moving average dips below the 200-day level. Such a crossover often indicates a decline in short-term momentum and impending more selling pressure.
While 10-year rates dipped slightly to around 4.3%, Treasury two-year yields were little changed at around 5%. The three-year note auction on Monday attracted the highest yield since 2007, underscoring the recent decline in the bond market caused by expectations that the Fed will keep interest rates high until 2019.
After gaining over 10% in recent weeks, oil stabilised near its year-high levels, with technical indicators that suggest its gains may be overdone sapping the benefit of the risk-on mood in broader markets.
In the meantime, short sellers are making money by betting against small-cap stocks, a segment of the US equities market that is mostly ignored by investors.
S3 Partners LLC estimates that the group has made paper profits of up to $13 billion this year by betting on a decline in the values of small-, micro-, and nano-cap shares based on the typical number of short positions in the market. Contrast that with the roughly $140 billion in losses from short sales of mid-, mega-, and large-cap stocks that rose for the majority of the year as the economy defied pessimistic predictions, the Fed moved closer to ending its rate hikes, and technological advancements sparked a frenzied rally in tech stocks.
If history is any indication, the US stock market’s wind may be about to change, according to Bank of America Corp. According to strategists led by Savita Subramanian, with equities in the “recovery” stage of the business cycle, this year’s underperformers, including as value and small-capitalization companies, are poised to outperform, upending the growth and large-cap leadership that has dominated 2023’s bull run.
In an effort to allay antitrust worries regarding its impending acquisition of the low-cost carrier, JetBlue Airways Corp. has agreed to transfer some Spirit Airlines Inc. gates and flight slots at three airports. Shares of Spirit rose.
In an effort to decrease a $13.7 billion portfolio of unneeded loans, Citizens Financial Group Inc.’s Chief Financial Officer John Woods swore the company wouldn’t enter into agreements that would force it to record losses. Shares increased.
As part of its efforts to reduce spending by $750 million in the coming months, Truist Financial Corp. will implement “sizable” employment cutbacks.
J.M. Smucker Co. fell after deciding to purchase Hostess Brands Inc., the company that makes Twinkies, for around $5.6 billion, advancing a rising trend of consolidation among the businesses that supply the central aisles of supermarkets that are home to shelf-stable products.
After lowering its full-year sales forecast, RTX Corp. fell. The business significantly increased the range of necessary engine checks at its Pratt & Whitney division, a move that will have an impact on nearly all of its fleet of turbines powering the most recent Airbus SE A320 and put hundreds of the single-aisle aircraft on the ground for months.
According to recently released delivery numbers, Lockheed Martin Corp. may have more than $800 million in payments blocked through next June until it receives certification for the software powering the most sophisticated version of the F-35. The stock price fell.
The initial public offering of Arm Holdings Ltd. is already ten times oversubscribed, and bankers want to cease taking orders by Tuesday afternoon, according to sources with knowledge of the situation.
The supermarket delivery industry may be valued at up to $9.3 billion in an IPO led by Instacart and its supporters, less than one-fourth of what it was worth at the height of the Covid-19 outbreak. The business is aiming to raise up to $616 million.