US stocks slip as weak Amazon sales forecast clouds the outlook for tech giants

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A trader blows bubble gum during the opening bell at the New York Stock Exchange (NYSE) on August 1, 2019, in New York City.

US stocks slipped Friday as a weak sales forecast from Amazon clouds the outlook for technology stocks.

On Thursday after the market close, Amazon’s quarterly earnings fell short of expectations, as the Seattle-based firm missed quarterly sales estimates for the first time since 2018. Its sales and profit forecasts were below expectations, further worrying investors about the economic outlook. Shares of the ecommerce giant slipped about 7% at the opening bell.

Tech giants have been some of the pandemic’s biggest winners. However, Amazon’s latest report underscores the challenge of keeping the strong pace of sales as the economy reopens.

“Consumers’ online shopping levels are returning normal as they shift some spending to other entertainment sources and offline shopping,” Dan Romanoff, equity analyst at Morningstar, said in a note. “We see no cracks in the long-term story as Amazon remains well-positioned to prosper from the secular shift toward e-commerce and the public cloud over the next decade.”

Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Friday:

US stocks in recent weeks have climbed mostly higher as investors cheered robust corporate earnings and the accelerating pace of global economic recovery. The COVID-19 Delta variant, along with inflationary concerns, have dampened the positive sentiment.

Still, the benchmark S&P 500 is on track to close out a sixth straight month of gains.

The yield on the 10-year Treasury note was 1.251%, down by 1.8 basis points.

The Personal Consumption Expenditures price index – a closely monitored measure of nationwide inflation – gained 0.5% last month, suggesting that prices continued to climb amid supply chain issues across the US.

The reading exceeded the median estimate of a 0.4% increase from economists surveyed by Bloomberg. It also matched the May print of 0.5% growth.

Oil prices were mixed. West Texas Intermediate crude slipped 0.16%, to $73.50 per barrel. Brent crude, oil’s international benchmark, increased 0.9%, to $76.12 per barrel.

Gold slipped 0.41% to $1,823.04 per ounce.

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Dow falls 500 points as fears grow over spread of COVID-19 Delta variant

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US stocks fell Monday as investors eye a spike in global COVID-19 cases led by the Delta variant, creating a roadblock to a full recovery of the economy.

The Dow Jones Industrial Average fell over 500 points at the open.

The yield on the 10-year Treasury note was 1.217%, down 8.2 basis points on the day, reflecting the pickup in investor desire for safe-haven assets.

The rising cases, which may result in a new wave of lockdown restrictions, weighed on markets. The Delta variant, according to health experts, is the most transmissible variant yet.

“The market appears ready to take on a more defensive character as we experience a meaningful deceleration in earnings and economic growth,” Morgan Stanley strategists led by Michael Wilson said in a note on Monday. “Inventory builds are unlikely to offset if order books prove to be inflated as we suspect.”

On Friday, US stocks closed lower, recording their first weekly loss in a month.

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

Billionaire investor Bill Ackman has scrapped his plan to buy 10% of Universal Music for $4 billion through his SPAC after federal regulators cast doubt on the proposed transaction, he told shareholders in a letter on Monday.

Robinhood is aiming to raise as much as $2.3 billion in its upcoming stock market debut, the company said in a filing with the Securities and Exchange Commission.

In cryptocurrencies, bitcoin has continued its slide, trading at $30,742.54 and inching near its widely viewed key technical support level of $30,000. All other major cryptocurrencies – ether, cardano, ripple, dogecoin, polkadot , and solana – were trading lower Monday morning.

Oil fell after OPEC+ reached a deal on supply, overcoming the deadlock between Saudi Arabia and the UAE.

West Texas Intermediate crude fell as much as 3.68%, to $69.17 per barrel. Brent crude, oil’s international benchmark, dropped 3.41%, to $71.08 per barrel.

Gold fell 0.63%, to $1,804.27 per ounce. The precious metal has shed roughly $30 compared to the monthly high on July 15.

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Oil holds above $75 as investors weigh OPEC+ deadlock with fresh talks ahead

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Oil futures held above $75 a barrel on Monday morning, as markets wait to see whether OPEC+ talks today can resolve the deadlock on an output deal driven by a clash between the United Arab Emirates and Saudi Arabia.

The OPEC+ group of major oil-producing countries failed last week to come to agreement on output quotas for 2021 and on extending the underlying internal supply deal by seven months, to December 2022. A fresh round of talks is due on Monday.

Brent crude futures were last up 0.24% at 4:45 am E.T., trading at $76.37 per barrel. WTI futures on Globex were up 0.23% at $75.32.

Saudi Arabia and Russia are pushing for a slow increase of 400,000 barrels a day each month for the rest of 2021, which most OPEC+ members back. The snag came with the extension to the deal that denotes how much oil each country contributes to overall supply from the group. The UAE refused to accept the extension without an adjustment to its contribution quota, which it sees as out of line with its output capacity and unfair compared with Saudi Arabia’s arrangement.

Should the deadlock in OPEC+ not be resolved, then the July ouput agreement could automatically run throughout August by default, said Kevin Solomon, energy economics analyst at StoneX.

“This would be troubling scenario for the global economy; the oil market would tighten at an even faster rate and prices could quickly exceed $80/bbl, which would hamper the global economic growth prospects through inflationary pressures,” Solomon said in a note.

Demand for oil is likely to rise as a result of the easing of pandemic restrictions, so the restrictions on supply could cause prices to skyrocket, he said. Ensuing price rises could in turn slow down global economic recovery.

Alternatively, OPEC+ could break apart over the deadlock. That would likely flood the oil market with supply as producers rushed to take advantage of a lack of quotas, some analysts say. In that scenario, prices would slump as supply outstripped demand.

With futures at their current level, the likelihood is for OPEC+ to find a way to resolve the impasse, Bjarne Schieldrop, commodities chief analyst at SEB said.

“However, with a Brent crude oil price of USD 76/bl the current oil market is too much of a joy to ruin by not finding a solution. We thus think that there will be some kind of compromise in the end where both Saudi Arabia, Russia and the UAE all get a little bit of what they want. But it could certainly drag on for several more days before a deal is reached,” Schieldrop said in a note.

This report has been updated to correct the figure for the proposed output increase.

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US stocks hover near record high as investors await Fed comments on inflation

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  • US stocks hovered near record high Tuesday as investors await comments from the Federal Reserve.
  • The FOMC decision is due Wednesday after a two-day policy meeting, with most economists anticipating the central bank will leave its policy mostly unchanged.
  • Bitcoin rose past $40,000 after Elon Musk tweeted about Tesla and payments.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US stocks hovered near record highs Tuesday as investors await comments from the Federal Open Market Committee about a timetable for scaling back on its accommodative policies.

The FOMC decision is due Wednesday after a two-day meeting, with most economists anticipating the central bank will leave its policy mostly unchanged. Investors will be focusing on tapering discussions, the latest economic projections, and inflation.

“It is going to be increasingly difficult for the Fed to soothe markets with its dovish stance, as they probably will be discussing tapering and will have to revise up forecasts for economic growth and inflation,” Bank of America said in a note on Tuesday.

While the central bank can exhibit patience this time, the situation will not be the same by the July and September FOMC meetings, Bank of America added.

In March, Fed officials saw consumer prices rising 2.4% in the fourth quarter of 2021 from a year earlier. That pace, they said, would be consistent with their goal of 2% average annual inflation over the long run.

The S&P 500 closed at a record high on Monday for the second trading day in a row. The tech-heavy Nasdaq also closed at a record.

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

Meanwhile, US retail sales fell 1.3% in May, the Census Bureau said Tuesday. Economists surveyed by Bloomberg held a median estimate for a 0.7% decline. The decline places monthly sales at $620 billion and just below the record-high seen in April. The April sales data was revised higher to a 0.9% jump from an initially unchanged reading.

Bitcoin finally hit the $40,000-level on Monday after trending below that level to date in June. Still, many, including investment adviser Rich Bernstein, believe that bitcoin is in a bubble, and the crypto mania is making investors ignore other asset classes that have more potential.

Bitcoin bull Michael Saylor’s MicroStrategy for its part plans to sell as much as $1 billion in common shares with an eye to adding to its huge holding in the cryptocurrency, it said in a filing with the Securities and Exchange Commission.

Oil edged higher. West Texas Intermediate crude was up 1.17% to $71.71 per barrel. Brent crude, oil’s international benchmark, gained 1.02% to $73.60 per barrel.

Gold slid 0.12% to $1,865.09 per ounce.

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US stocks climb as economic optimism overshadows rise in inflation

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The New York Stock Exchange stands in lower Manhattan.

  • US stocks trade higher on Friday as investors shrug off fresh data showing a rise in inflation.
  • The Personal Consumption Expenditures price index gained 0.6% in April and 3.6% year-over-year as American spending rebounded.
  • “This report puts the Fed in a really good place, inflation is up, but real yields are still low,” an expert said.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US stocks trade higher on Friday as investors shrug off fresh data showing a surge in inflation.

The Personal Consumption Expenditures price index – a key measure of domestic inflation – gained 0.6% through April, the Commerce Department announced Friday, as American spending rebounded.

The jump is the largest single-month gain since 2008, in line with the median estimate of a 0.6% increase from economists surveyed by Bloomberg.

The PCE index also notched a 3.6% year-over-year gain, surpassing the median estimate of 3.5%

“This report puts the Fed in a really good place, inflation is up, but real yields are still low,” Jamie Cox, managing partner for Harris Financial Group, said in a statement. “This is basically a transitory sweet spot.”

US stocks closed up Thursday, with the Dow Jones leading the S&P 500 and Nasdaq composite higher. The move came after weekly jobless claims fell to a fresh post-pandemic low, at 406,000.

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

Shares of AMC resumed their blistering rally in early Friday trading, jumping more than 10% to approach $30 – the highest price in years. As of Friday, AMC has been on a five-day hot streak amid hype from retail traders on Twitter and Reddit, and short-sellers are taking a major hit.

In the digital asset space, trading platform eToro added two decentralized finance tokens, Aave and Yearn.Finance YFI, to its trading offering this week, alongside crypto tokens Compound COMP and Decentraland MANA. DeFi has gained traction amongst crypto investors in recent weeks after having been long overlooked on account of its complex nature.

Meanwhile, the newly launched Crypto Council for Innovation, an industry group that includes heavyweights such as Square, Fidelity, Coinbase, and Paradigm, is looking for a new boss, DealBook first reported Friday. The news of CCI’s hunt for new leadership comes as authorities are mulling ways to increase oversight of crypto.

Oil prices were higher. West Texas Intermediate crude jumped as much as 0.70%, to $67.32 per barrel. Brent crude, oil’s international benchmark, rose 0.46%, to $69.78 per barrel.

Gold fell as much as 0.23%%, to $1,893.64 per ounce.

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Oil drops after Ever Given container ship blocking the Suez Canal is refloated

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The Ever Given was partially refloated on Monday

Oil prices fell on Monday and traders breathed a sigh of relief after the giant container ship Ever Given that has blocked the Suez Canal for almost a week was refloated.

Brent crude oil, the global benchmark price, fell as much as 2% before recovering somewhat to stand 0.6% lower at $64.03 a barrel on Monday morning. WTI crude was down 1.1% to $60.30 a barrel.

The fall in oil prices was a sign that the pressure on global supply chains is set to ease, with the local authorities saying they will act fast to try to clear the backlog of ships at the crucial trade route.

The Suez Canal Authority said on Monday the Ever Given ship, which has been lodged lengthways in the canal for almost a week, had been successfully refloated and brought away from the shore. It said the ship was not yet completely free, however.

It added: “Navigation shall be resumed immediately upon the complete restoration of the vessel’s direction.”

The Ever Given, an enormous container ship almost the length of the Empire State Building, has been stuck in the canal since Tuesday, completely blocking the route and snarling up global trade.

Almost 15% of world shipping goes through the Suez Canal, which cuts through Egypt from the Mediterranean to the Red Sea.

The blockage sent oil prices sharply higher, as backlogs of energy shipments built up. Brent crude had fallen to close to $60 a barrel on Monday, but rose near $65 over the week.

Other factors affected oil prices too, however, with uncertainty surrounding demand as economies recover and a meeting of the Opec oil cartel and its allies later this week.

“Brent has been trading soft in the morning session today after reports emerged that the ship blocking the Suez Canal has been refloated though it’s still unclear how soon the trade route could be reopened,” Warren Patterson, head of commodities strategy at Dutch bank ING, said.

Jefferies analyst David Kerstens said the Suez blockage would worsen global trade, which has already been disrupted by the coronavirus crisis.

He said shipping capacity on the Asia-Europe route will be “temporarily reduced by c.25%, while port congestion is set to further increase, in a market already characterised by supply chain bottlenecks and equipment shortages, which has resulted in record-high freight rates.”

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Oil climbs 4% after a grounded container ship blocks key Suez Canal trade route

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The tanker is blocking the Suez Canal.

  • Crude oil prices climbed as much as 4% on Wednesday to roughly $60 per barrel, boosted by concern over a supply bottleneck.
  • A container ship is blocking the Suez Canal, which is one of the busiest trade routes in the world.
  • Oil prices have been highly volatile throughout the pandemic and lockdown cycles.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Oil rose as much as 4% on Wednesday after a huge container ship ran aground and blocked the Suez Canal, a key shipping route for crude and refined products. The blockage raised some concern about fuel supply.

Overall, the price of oil is set to fall for the third consecutive week this week. Another round of lockdowns in Europe could threaten the recovery in demand growth and have undermined some of the recent strength in the oil market.

One of the biggest container ships in the canal ran aground early on Tuesday and is stuck at a right-angle to the passage. Hundreds of cargo ships are now unable to pass through the canal, forcing them to divert their routes. It is unclear when the issue will be resolved. “This could have an impact on movement of oil and consumer goods.” Deutsche Bank strategist Jim Reid said in a daily report.

Throughout the pandemic and subsequent cycles of lockdowns and travel bans, oil prices have been highly volatile. Over the last 12 months, Brent crude oil prices have fluctuated from as little as $16 a barrel to as much as $71. As demand for oil, and therefore its price, is inherently linked to sectors that are impacted heavily by lockdown measures, such as travel, they have been sensitive to the developments of the pandemic. Over the last two weeks, prices have fallen by around 12% and are still on course for a third weekly fall, in spite of Wednesday’s rally.

The price response to the hold-up at the Suez Canal may not reflect expectations for a prolonged improvement in demand, analysts said. The futures market has eliminated a bullish structure known as “backwardation” – where prompt contracts trade at a premium to further-out futures contracts, which reflects bullishness among traders and investors about the demand outlook.

“The reprieve seems temporary, though, as the spot price fall overnight has completely removed the backwardation in the oil futures market for prompt deliveries. With speculative markets still long, it seems, oil is likely to be a sell on rallies until Covid-19 and economic recovery sentiment swings back into the black.” Jeffrey Halley, senior market analyst at OANDA, said.

Read more: MORGAN STANLEY: Buy these 10 stocks quickly that will roar higher as M&A heats up – including one with a potential upside of 114%

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Oil surges 5% following reports OPEC+ will extend production cuts through April

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Workers extract oil from wells in the Permian Basin in Midland, Texas.

  • Oil prices surged by more than 5% after OPEC and its allies reportedly agreed to keep output levels steady. 
  • Saudi Arabia committed to sticking with a voluntary oil supply cut of 1 million barrels per day.
  • The supply decision by OPEC+ is “incredibly bullish” for the oil market, says one analyst.  
  • Visit the Business section of Insider for more stories.

Oil prices soared Thursday in the wake of reports that major oil producers have agreed to keep their supply cuts intact through next month.

OPEC and its allies had been discussing whether or not to restore as much as 1.5 million barrels a day of oil production. The group ultimately decided that it will leave output at current levels, according to a Bloomberg report

Saudi Arabia, meanwhile, committed to extend its voluntary cut of 1 million barrels of oil per day. The oil market officials meet via video-conference. The discussion took place at a time when recovery in the oil market is still taking hold after a plunge in demand because of the COVID-19 pandemic. 

Prices for Brent crude, the international benchmark, jumped as much as 5.3% to an intraday high of $67.47, with the gain later trimmed to 4.7%.

The decision by OPEC+ was “incredibly bullish,” and Saudi Arabia’s decision “was shocking as it leaves them vulnerable to losing market share next month when the oil market is in deficit by a couple million barrels,” said Edward Moya, senior market analyst at Oanda, in a note.

West Texas Intermediate oil futures also popped up as much as 5.3% to an intraday high of $64.51. The continuous contract was later up by 4.6%.

The Energy Select Sector SPDR exchange-traded fund climbed 3.8% and the United States Oil Fund, a popular oil ETF, moved up 6%.

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US oil and natural gas prices rise as freezing temperatures leave millions without power in Texas

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Temperatures have plunged in Texas, causing energy prices to spike

US oil and natural gas prices rose on Tuesday, as freezing cold weather battered Texas’s energy infrastructure, leaving millions without power.

WTI crude oil was up 0.52% to $59.77 per barrel as of 6.10am ET. That was just off a more than one-year high of more than $60.80 touched on Monday as plunging temperatures hit Texan oil plants.

Natural gas futures were up 5.8% to $3.079 per million British thermal units on Tuesday, trading at around the highest levels since November.

More than 3 million people have been left without power in Texas and close to 5 million around the US as a whole, according to poweroutage.us, as a rare winter storm sweeps the country.

Temperatures fell to 4F (-16C) overnight in Dallas, Texas, and have plunged across Oklahoma, Kansas, New Mexico, Colorado and elsewhere.

It has been challenging for Texas’s energy grid, which does not pay generators to keep capacity in reserve. The weather has forced many generators to stop production.

Read More: EXCLUSIVE: An asset manager overseeing nearly $100 billion divested from Exxon on concerns it is failing to move fast enough to address climate change

Wholesale energy prices have skyrocketed, at times above the market cap of $9,000 per megawatt hour, compared to prices of around $25 to $50 per MWh before the winter storms.

The frigid temperatures have hit oil production and natural gas supplies and led to a surge in demand for energy, causing prices to spike.

Heating oil futures – a proxy for diesel – were up 2.58% to $1.817 per gallon on Tuesday morning. Gasoline futures were up 4.11% to $1.7621 a gallon.

Texas is also home to some of the country’s biggest oil refineries, as well as the heart of the shale basin. 

Jeffrey Halley, senior market analyst at currency firm Oanda, said he thought the US oil market had been due a correction after a surge in prices in recent weeks. But he said the current weather situation “will likely continue to offset that.”

Read More: GOLDMAN SACHS: These 40 heavily shorted stocks could be the next GameStop if retail traders target them – and the group has already nearly doubled over the past 3 months

“Until the weather moderates in the United States… oil is a ‘buy on dips’ in the short-term.”

Brent crude oil, the international benchmark, was down 0.33% to $63.11 a barrel, still around a one-year high.

JPMorgan last week predicted a commodities “supercycle” would take hold in 2021, as economies reopen and drive up production and demand for energy.

The “roaring 20s” will be accompanied by easy monetary and fiscal policy, a weak US dollar and stronger inflation, all supportive for commodity prices, JPMorgan said.

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