Global shares pull back as concern over US growth, Asia tech rout weigh on investor confidence

Traders work on the floor of the New York Stock Exchange
Traders work on the floor of the New York Stock Exchange

  • Global shares fell on Friday after US GDP and unemployment data came in weaker than expected.
  • Investor concern about Chinese regulatory crackdowns, especially in the tech sector, continued.
  • Higher-than-expected inflation readings undermined European markets, despite strong EU growth.
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Global shares fell on Friday after US GDP and unemployment data the previous day reflected slower economic growth than expected, while a looming threat of a Chinese regulatory crackdown on tech stocks continued to weigh on investor confidence.

US futures fell, with Dow Jones futures 0.34% down, S&P 500 futures down 0.7% and Nasdaq futures down by 1.16% at 5:43 am E.T.. The benchmark indices neared record highs on Thursday, leaving the S&P 500 less than 0.1% off an all-time peak.

Weaker-than-expected US economic growth in the second quarter and a slower fall in unemployment that many economist had forecast soured investor optimism over the outlook for recovery, analysts said.

Meanwhile, Amazon’s quarterly earnings fell short of expectations, as the e-commerce giant missed quarterly sales estimates for the first time since 2018, while sales and profit forecasts were below expectations, further worrying investors about the economic outlook. The company shares fell as much as 7% in pre-market trading.

Yields on 10-year Treasury notes were last at 1.251%, down by 1.8 basis points ahead of inflation and personal spending data.

Rising Covid-19 cases and Chinese regulatory pressure on tech stocks also weighed on markets. Earlier in the week, Chinese officials had said they would be more considerate of volatility when making regulatory decisions, but the calming words had little lasting impact.

“The fact the tech-heavy Nasdaq futures have led US index futures lower suggests that they, and China, Japan, and South Korean markets are suffering a dose of pre-weekend China regulatory risk jitters,” Jeffrey Halley, senior market analyst at OANDA, said.

Asian markets closed lower on Friday, with Tokyo’s Nikkei 225 falling 1.8%, the Shanghai Composite declining by 0.42% and Hong Kong’s Hang Seng index dropping by 1.28% as a surge in delta variant cases and regulatory concerns dominated sentiment throughout the region.

In Europe, London’s FTSE 100 was last down 0.93%, the EuroStoxx 50 had declined by 0.69% and Frankfurt’s DAX was last down 0.99%. A measure of eurozone inflation rose more than anticipated in July, coming in at 2.2% compared to an expected 2%. This was its highest since October 2018.

The impact of this could not be set off by a strong read of eurozone GDP, which rose 2% quarter-on-quarter in the the three months to June, breaking two straight quarters of contraction, despite initial difficulties with the vaccination rollout, rising delta variant cases and continuing supply-chain issues.

“Looking ahead at 3Q, we would note that the delta variant is causing some delays in the easing of restrictions and that supply chain problems continue to weigh on manufacturing production. Still, we expect growth to come in very strong – currently pencilled in at 2% quarter-on-quarter – as domestic and foreign demand remain very robust.” ING analysts said.

Oil prices fell on Friday, reversing some of the previous day’s losses. Slower economic growth and recovery could indicate lower demand for a longer than expected time. Brent crude was last down 0.31% at $74.87 per barrel, while WTI crude was last at $73.36, down 0.35%.

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S&P 500, Dow close on the brink of records as investors bet on the Fed’s continued economic support after weak GDP data

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US stocks rose Thursday as the latest batch of economic data eased investor concerns over inflation and the Federal Reserve’s plan to eventually taper bond purchases. All three major indexes closed just shy of record highs.

Robinhood fell as much as 12% to $33.35 a share before paring losses in a volatile first day of public trading. The company priced its IPO late Wednesday night at $38 per share, representing the bottom end of its targeted range and giving Robinhood a valuation of $32 billion.

Here’s where US indexes stood shortly after the 4 p.m. ET close on Thursday:

The S&P 500’s flirtation with all-time highs may be a sign to sell, according to Bank of America. The firm said in a Tuesday note that investors should take advantage of the benchmark’s strength and sell stocks to raise cash as bearish indicators begin to pile up.

In economic news, US gross domestic product grew at an annualized rate of 6.5% in the second quarter of 2021, missing the 8.5% jump estimated by economists. The quarter placed GDP above its pre-pandemic peak for the first time.

Meanwhile, jobless claims fell to 400,000 last week, lower than the prior week but higher than economists expected.

West Texas Intermediate crude rose as much as 1.8%, to $73.68 per barrel. Brent crude, oil’s international benchmark, increased 1.9%, to $76.15 per barrel, at intraday highs.

Gold climbed as much as 1.4% to $1,832.71 per ounce.

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US stocks trade mixed as Powell says economy is making progress

Jerome Powell
Jerome Powell

  • US stocks closed mixed on Wednesday after Fed Chairman Jerome Powell said the economy is making progress towards it tapering standards.
  • Despite the economic progress, Powell said the Fed is not yet ready to begin tapering its monthly bond purchases.
  • Investors were also digesting earnings results from mega-cap tech companies like Apple, Alphabet, and Microsoft.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US stocks were mixed on Wednesday, with the S&P 500 and Nasdaq 100 rising following comments from Federal Reserve Chairman Jerome Powell.

Powell said the economy is beginning to make progress towards it standards that would trigger the Fed to begin tapering its monthly bond purchases, but that the economy is not yet fully there. The Fed will continue its monthly bond purchases of $120 billion.

Investors were also digesting strong earnings results from mega-cap tech companies like Apple, Alphabet, and Microsoft.

All three tech giants easily surpassed analyst’s revenue and EPS estimates, helping boost shares of Microsoft and Alphabet in trades on Wednesday. Apple traded slightly lower as investors questioned if Apple’s strong growth rates were sustainable.

Here’s where US indexes stood after the 4:00 p.m. ET close on Wednesday:

The strong moves in US tech companies are in stark comparison to Chinese tech stocks, which continue to sell off as increased regulation from Beijing spreads to various industries. Cathie Wood’s Ark Invest continued to sell off their stakes in Chinese tech companies on Tuesday.

Robinhood’s expected IPO later this week will not be bought by some large asset managers, as they are reportedly going to sit out the offering in fear of retail-driven volatility. The retail brokerage app is now testing a new feature that will let users invest their spare change into select stocks.

Crypto-exchange Binance said it will step up its compliance efforts, including data-sharing with regulators and implementing a tax-tracking tool. The company has come under fire from a number of jurisdictions for its lack of compliance safeguards.

Crypto bull Mike Novogratz criticized Senator Elizabeth Warren’s anti-crypto stance on Tuesday, saying that DeFi is far more transparent than banks. Warren had sent a letter to Treasury Secretary Janet Yellen calling for tougher rules on cryptocurrencies.

Oil prices were higher. West Texas Intermediate crude was up as much as 0.66%, to $72.12 per barrel. Brent crude, oil’s international benchmark, jumped as much as 0.54%, to $74.88 per barrel.

Gold was up 0.34%, to $1,805.90 per ounce.

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US stocks close at record highs as investors cheer blockbuster earnings

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US stocks finished the week strong with all three major indexes closing at records Friday as investors cheered blockbuster tech earnings and looked towards next week’s Fed meeting.

Shares of Snap soared 23% after the social media app exceeded earnings expectations. Twitter also gained after beating estimates, and Bank of America analysts said the stock could rise another 30% as the social media platform stands to see further growth in advertising sales which have been recovering after the onset of the coronavirus pandemic. The good news lifted tech peers Facebook and Google both by more than 3%.

Here’s where US indexes stood at the 4:oo p.m. ET close on Friday:

The blank-check company backed by billionaire Thomas Barrack withdrew its application for an initial public offering Friday, just days after the 74-year-old was arrested and charged with seven felony counts involving lobbying the Trump administration on behalf of the UAE.

Stocks in Asia were mostly lower earlier Friday over concerns of tighter regulation. Regulators in China are said to be considering severe sanctions on Didi Global following its US IPO. The ride-hail giant has fallen a stunning 52% since going public.

Also, a Bloomberg report that China is considering turning tutoring companies into non-profitspushed Chinese education stocks lower Friday morning.

The 10-year US Treasury yield climbed 1.8 basis points to 1.285% after hitting a five month low at the start of the week.

Bitcoin hovered just above $32,000.

West Texas Intermediate crude gained 0.21%, to $72.06 per barrel. Brent crude, oil’s international benchmark, gained 0.39%, to $74.08 per barrel.

Gold was little changed around $1,802.30.

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Dow stages 550-point comeback after harsh sell-off as investors remain optimistic on growth

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US stocks staged a comeback Tuesday after a harsh sell-off the previous day, with the Dow rebounding tk points as investors bought the dip and bet on the continued strength of the economic recovery.

Industrials, real estate, and financial stocks gained the most out of any sectors in the S&P 500. Industries that hinge on the economic re-opening like restaurants, travel, and lodging all ended the day in the green.

On Monday the S&P 500 faced its steepest decline since May while the Dow Jones saw its largest daily drop for the year.

Here’s where US indexes stood at the 4:00 p.m. ET close on Tuesday:

JPMorgan’s head of US equity strategy increased his year-end S&P 500 price target to 4,600 from 4,400, representing potential upside of 8% from Monday’s close. Dubravko Lakos-Bujas remained constructive on equities, and views the latest fears of slowing economic growth “premature and overblown,” according to a Tuesday note.

Billionaire investor Bill Ackman is also bullish about the economy. He told CNBC in a recent interview that he expects a “massive” economic boom in the fall.

Robinhood, the brokerage app set to go public in the coming weeks, said it expects to pay a $30 million penalty in relation to an anti-money laundering probe of its cryptocurrency business, according to an amended S-1 filed with the SEC on Monday.

The yield on the US 10-yr Treasury jumped 3.8 basis points to 1.219%, after hitting its lowest level since February on Monday.

Bitcoin slipped to $29,828 Tuesday, over 50% lower than record highs achieved in April.

West Texas Intermediate crude climbed 1.36%, to $67.32 per barrel. Brent crude, oil’s international benchmark, jumped 1.59% to $69.71 per barrel.

Gold was flat at $1,809.

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Dow plummets 726 points for worst day of 2021 as virus variants threaten global recovery

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US stocks cratered on Monday as investors eyed a spike in global COVID-19 cases led by the Delta variant, throwing up a roadblock to a full recovery of the economy.

The Dow Jones industrial average fell 726 points, or about 2.1%, for its worst day since October 2020, while the benchmark S&P 500 and tech-heavy Nasdaq Composite also tumbled.

The yield on the 10-year Treasury note declined as much as 12.2 basis points to 1.177%, its lowest level since February as investors flocked to safe-haven assets.

Here’s where US indexes stood at the 4:00 p.m. ET close on Monday:

Read more: ‘More weakening beneath the surface’: A Wall Street strategist who warned investors before last year’s 35% crash lays out the latest signs that another slump into a bear market is looming

“COVID has returned to the front burner of investor concerns right now,” David Donabedian, CIO of CIBC Private Wealth, said in a note. “Last week we had high inflation readings. Now we have concerns that the rise in COVID cases is dimming the economic outlook. While the second-quarter earnings reports have so far beat expectations, this is old news now.”

Shares of airlines, cruise operators, and other travel companies slumped on concerns that the Delta variant would derail the recovery.

American Airlines and airplane maker Boeing all slipped roughly 5% each. Expedia Group and hotel chain Marriott both declined by roughly 3% each. Meanwhile, Carnival, Norwegian Cruise Line Holdings, and Royal Caribbean Cruises all fell as well.

Energy stocks tumbled, including Texas-based oil equipment maker NOV and Diamondback Energy.

Some argue the plunge on Monday is nothing to fear. The sell-off in stocks is a “healthy pullback” that will likely be short-lived and could present a buying opportunity, said technical analyst Katie Stockton of Fairlead Strategies.

In cryptocurrencies, bitcoin continued its recent slide, falling as much as 3.4% to $30,646.90. All other major cryptocurrencies – ether, cardano, ripple, dogecoin, polkadot, and solana – traded lower on Monday.

Despite the downturn, mining bitcoin has been a lot easier. The asset’s “network difficulty,” which measures how much computing power is needed to mint a new bitcoin, has plummeted.

Oil fell on news over the weekend that OPEC+ reached a deal on supply, overcoming the deadlock between Saudi Arabia and the UAE.

West Texas Intermediate crude fell as much as 8.06%, to $66.02 per barrel. Brent crude, oil’s international benchmark, dropped 7.39%, to $68.15 per barrel, at intraday lows.

Gold fell as much as 0.45%, to $1,807.56 per ounce.

Lumber gained modestly, rising 4.83% to $561.90 as supply catches up with demand. Prices are set to stay elevated despite recent declines, according to an economist,

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US stocks slump as investors digest inflation data showing prices surged in June

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US stocks fell Tuesday after inflation data showed prices rose more than expected in June.

The Consumer Price Index increased 0.9% in June, far higher than Bloomberg’s consensus estimate among economists of 0.5%. The reading marked the largest one-month change since June 2008.

On a year-over-year basis, prices increased 5.4%, higher than economists’ expectations for a 4.9% year-over-year increase. However, June 2020 was the lowest point for Core CPI during the pandemic shutdown, so year-over-year increases are expected.

Here’s where US indexes stood at the 4 p.m. ET close on Tuesday:

Mike Lowengart, E*Trade Financial managing director of investment strategy, said that the real question on investors’ minds after the CPI read is how long hot inflation numbers will last.

“Transitory has been the buzzword when it comes to inflation but it’s a tricky phrase. Does it mean a few months, a year, or even longer? Every successive high inflation read will make it harder and harder for the Fed to remain accommodative. And on the markets front, we may experience a bit of a tug of war as traders balance the economic data with strong bank earnings beginning to roll in,” he said.

Elsewhere in markets, Amazon, Apple, Alphabet, and Microsoft all hit record intraday highs today. The stalwarts are helping propel the S&P 500 to new all-time highs.

The benchmark index has notched 39 record closing highs through Monday’s session, according to Bespoke Investment Group. If it keeps up its current pace, it could close out 2021 with 74 record closing highs, the second-most of all time, Bespoke said.

The yield on the US 10-year Treasury gained 4.7 basis points to 1.41%.

Bank earnings began this morning, with JPMorgan and Goldman Sachs beating expectations.

West Texas Intermediate crude gained 1.58% to $75.27 per barrel. Brent crude, oil’s international benchmark, climbed 1.77%, to $76.49 per barrel.

Gold was flat at $1,807.2 per ounce.

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US stocks drop as inflation data shows prices rose more than expected in June

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A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 9, 2020.

US stocks dipped at the open after key inflation data showed prices rose more than expected in June.

The Consumer Price Index increased 0.9% in June, far higher than Bloomberg’s consensus estimate among economists of 0.5%. The reading marked the largest one-month change since June 2008.

On a year-over-year basis, prices increased 5.4%, higher than economists’ expectations for a 4.9% year-over-year increase. However, June 2020 was the lowest point for Core CPI during the pandemic shutdown, so year-over-year increases are expected.

“A white-hot June CPI print has the markets jittery this morning. Stripping away food and energy, it was the highest print for Core CPI since November 1991 on a year-over-year basis, however moving forward we expect these inflation numbers to begin to cool,” said Cliff Hodge, Cornerstone Wealth chief investment officer.

Here’s where US indexes stood at the 9:30 a.m. ET open on Tuesday:

Bank earnings began this morning, with JPMorgan beating expectations as the banking giant benefited from record investment-banking fees and the release of cash set aside to cover loan losses.

Goldman Sachs also handily exceeded analysts’ estimates. Investment banking generated its second highest quarterly net revenues ever, just behind the first quarter of 2021, thanks in large part to a robust IPO market. The strong numbers in that segment offset a slowdown in Goldman’s trading business.

Although CPI came in higher than expected, a June Bank of America survey reveals most fund managers believe the global economy has reached “Peak Boom.” Month on month, 2% fewer respondents to the bank’s monthly global fund manager survey believe economic growth and inflation will rise above current predictions. Overall, 74% of fund managers still expect growth and inflation to be “above trend.”

The yield on the US 10-year Treasury gained 1.5 basis points to 1.378%.

West Texas Intermediate crude rose 0.1%, to $74.18 per barrel. Brent crude, oil’s international benchmark, increased 0.4%, to $75.43 barrel.

Gold was flat at $1,805.70 per ounce.

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S&P 500 closes at record high as FOMC minutes show little changes to rate outlook

Jerome Powell reads document while speaking in front of the Senate.
  • The S&P 500 closed at a record high on Wednesday as minutes from the last FOMC meeting signaled minimal changes to the central bank’s narrative on inflation, interest rates, and asset purchases.
  • The minutes showed officials are continuing to make progress towards reaching the threshold to scale back asset purchases.
  • The yield on the US 10-year Treasury fell as low as 1.295%, the lowest point since late February.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The S&P 500 closed at a record high on Wednesday amid falling Treasury yields as minutes from the Federal Reserve’s June meeting showed policymakers are continuing to make progress towards reaching their threshold to scaling back asset purchases.

The minutes showed that several participants are still uncertain about the outlook for growth and inflation, saying it’s “too early to draw firm conclusions about the paths of the labor market and inflation.” Fed officials also discussed tapering asset purchases but there was no consensus on the timeline.

Here’s where US indexes stood at the 4 p.m. ET close on Wednesday:

Read more: How to earn up to 100% interest on your crypto: A TikTok influencer shares 5 platforms he uses to stake bitcoin and 8 altcoins – and the interest each one offers

“We didn’t expect much from today’s FOMC Minutes, and our expectations were met. The majority of the new information delivered by the Fed was already distributed to the markets via the Summary of Economic Projections and the ‘dots’,” said economists from Jefferies.

Jefferies expects more details on the future of policy to emerge from the Fed’s meeting at Jackson Hole later this summer.

The yield on the US 10-year Treasury fell as low as 1.295%, the lowest point since late February.

The S&P 500 has hit a record closing high in eight of the past nine trading days.

Amid massive US stimulus and record high stocks, BlackRock strategists have switched to a neutral stance on US stocks while upgrading their views on European and Japanese equities, which they see as growing beneficiaries from the further reopenings of economies shut down by the COVID-19 crisis. The BlackRock Investment Institute outlined, among other items, its six to 12-month tactical views on selected assets in a mid-year report released Wednesday.

Bitcoin traded just under $35,000 on Wednesday after briefly overtaking the level.

Oil prices recovered after falling on Tuesday, despite rising sharply earlier in the day after a meeting between the OPEC+ group of oil-producing countries was abruptly called off.

West Texas Intermediate crude fell as much as 3.1%, to $71.07 per barrel. Brent crude, oil’s international benchmark, dropped 2.6%, to $72.60 per barrel, at intraday lows.

Gold climbed as much as 0.7%, to $1,810 per ounce.

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US stocks rise and bond yields fall to 5-month lows as investors await FOMC minutes for clues on inflation

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US stocks rallied back Wednesday after the S&P 500’s seven-day record-high winning streak ended the previous day amid services sector data that suggested activity peaked in June.

The Federal Reserve is set to release its minutes from its June FOMC meeting at 2 p.m. ET. Investors will be eagerly searching for clues on the central bank’s approach to inflation and its plan to taper asset purchases.

“Given the recent rate of change in yields, we suspect the market has largely priced in a less hawkish tone buried within the minutes,” Craig Johnson, Piper Sandler chief market technician said.

The yield on the US 10-year Treasury fell six basis points to 1.30%, the lowest point since late February.

Here’s where US indexes stood at the 9:30 a.m. ET open on Wednesday:

US stocks kicked off the second half of 2021 with a record-setting rally, with some strategists anticipating that re-opening momentum and accommodative fiscal and monetary policy will continue to drive the stock market.

“Fear over runaway inflation has receded along with interest rates, setting up a potential passing of the baton from value to growth,” said Piper Sandler’s Johnson. “While we do not expect stocks to continue posting record-highs on a daily basis, we do believe the fundamental and technical backdrop supports a buy the dip strategy for investors.”

Bitcoin traded just under $35,000.

Oil prices recovered after falling on Tuesday, despite rising sharply earlier in the day after a meeting between the OPEC+ group of oil-producing countries was abruptly called off.

West Texas Intermediate crude rose 0.71% to $73.90 per barrel. Brent crude, oil’s international benchmark, gained 0.68%, to $75.04 per barrel.

Gold climbed 0.6% to $1,805 per ounce.

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