While the benchmark S&P 500 (^GSPC) rose around 0.2%, the tech-heavy Nasdaq Composite (^IXIC) continued a remarkable run of gains, rising by 0.3%. The Dow Jones Industrial Average (^DJI) saw a rise of about 35 points, or 0.1%.
The 10-year Treasury note yield (^TNX) increased by almost 10 basis points to be trading close to 4.66%.
The main US market indexes surged on Friday as pay inflation decreased and US employment growth slowed more than anticipated, adding to the growing optimism that the Fed would soon stop raising interest rates. This euphoria lasted throughout the following week.
When many Fed officials take the podium this week, including Chair Jerome Powell twice, investors will be waiting for confirmation. Among those scheduled to speak are Raphael Bostic and John Williams, regional Fed presidents.
There are others on Wall Street who have advised against too optimistic predictions and to expect volatility in the stock market. The stock rebound from last week, Morgan Stanley strategist Mike Wilson said, “looks more like a bear market rally rather than the start of a sustained upswing.”
Quarterly earnings reports continue to flow into the market, and there are no major economic events scheduled for the foreseeable future. The big news is that Disney’s (DIS) earnings are expected on Wednesday.
Oil prices surged in the commodities market following the confirmation this weekend by major producers Saudi Arabia and Russia that they will persist with their voluntary further production cutbacks. The global benchmark Brent oil futures (BZ=F) added slightly less than 1% to trade under $86 a barrel, while the US standard West Texas Intermediate crude futures (CL=F) increased more than 1% to just under $82 a barrel.
As a result, Google is facing antitrust lawsuits on both sides of the US, according to Alexis Keenan of Yahoo Finance. On Monday, a trial to resolve the private anti-competitive charges of “Fortnite” developer Epic Games began in a federal court in California.
A 10-person jury will consider the Epic case, which charges Google of abusing its dominance in the mobile App Store market.
The new trial comes after over two months of courtroom arguments in Washington, D.C., where Google is battling the US Department of Justice and several US states. They contend that the IT behemoth gained and maintained its market dominance in the internet search business through unfair means. Sundar Pichai, the CEO of Google, testified as part of that court dispute, which started on September 12.
The Biden administration will move on with measures later this week to reduce tensions with China over matters of national security and the economy. The Department of Treasury said on Monday that Treasury Secretary Janet Yellen will have a two-day bilateral meeting in San Francisco with China’s Vice Premier He Lifeng, the country’s top economic leader.
The White House is holding the meeting in an effort to normalise the situation between the two biggest economies in the world.
Yellen made an effort to reassure Asian nations in a significant speech given prior to the summit last week that Biden’s strategy towards China wouldn’t compel Beijing’s neighbours to choose sides in a worldwide impasse. The idea of completely severing the economies was expressly rejected by her. “We have no interest in such a divided world and its disastrous effects,” she said.
After recording its best week of the year, Wall Street seems to be shedding the gloom that has been plaguing investors for the past several months, at least in terms of money. Corporate earnings continue to beat last quarter’s results, despite the fact that a large portion of the momentum change is due to fresh expectations that the Federal Reserve is prepared to cease its tightening. This is according to a recent research by JPMorgan.
about three-thirds of S&P 500 businesses—which make up about 80% of the companies currently reporting—are outpacing Q3 profits, as opposed to an average of 68% during the previous four quarters, according to the research. Furthermore, 58% of businesses exceed revenue projections. Third-quarter sales increase for businesses that have already released profits was 1.1% year over year, with net
However, the study that presents a generally positive image aligns with other data on investment behaviour that indicates a negative outlook. For example, data released at the end of last month by Bank of America Global’s equities strategy team revealed that stocks of firms that exceeded expectations did not do well in the week that followed these news. Companies who disclosed their most recent results to investors were performing significantly worse during this volatile time.
However, another 10% of S&P 500 businesses, or 4% of market capitalization, are expected to report this week. These companies include eBay (EBAY), Disney (DIS), and Robinhood (HOOD). Market observers will be closely observing if increased investor confidence will also go towards rewarding this week’s winners.
As investors increasingly gambled on the Federal Reserve ending its cycle of interest rate hikes, beat-down sections of the market attracted offers. And even with the index up more than 7.5%, Lori Calvasina, head of US equities strategy at RBC Capital Markets, sees potential as a number of established tailwinds for small caps continue to materialise.
“They tend to lag late in economic cycles, so there’s really a sense that you want to go bargain hunting in the small cap space in particular when times get dicey,” Calvasina said on Monday on Yahoo Finance Live.
In the present economic climate, this may be quite important. According to the most current jobs data, which was made public on Friday, unemployment is at its highest point in over two years.
According to Calvasina, aside from the financial picture, several elements indicate a strong position for small caps. First off, the markets are getting more optimistic that the Fed could be done raising rates, which is a known obstacle for small caps. This occurs at a time when index values appear to be getting more favourable.
According to Calvasina, the Russell 2000 hasn’t been this inexpensive in relation to the S&P 500 since the tech boom of the late 1990s and early 2000s.
With effect from December 4, the media behemoth will have Hugh Johnston, a former PepsiCo (PEP) executive, as its senior executive vice president and chief financial officer, the firm stated on Monday.
Johnston has spent 34 years working at PepsiCo, where he has occupied a number of executive roles, including CFO for over ten years.
In that capacity, he helped PepsiCo repel an attempt to split the business by activist investor Nelson Peltz. The stock has dropped to all-time lows, and Peltz is currently vying for numerous board seats at Disney.
Disney’s stock remained unchanged on Monday after the news.