US stocks slip as weak Amazon sales outlook highlights growth challenges for tech giants

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US stocks closed lower on the last trading day of the month, as a weak sales forecast from Amazon clouds the outlook for technology stocks.

After the close on Thursday, Amazon reported quarterly earnings that fell short of expectations, with the company missing quarterly sales estimates for the first time since 2018. Its sales and profit forecasts were below expectations, stoking concern among investors.

Shares of the e-commerce giant took their biggest tumble since May 2020, falling by as much as 8%. This translated to a loss of around $148 billion to Amazon’s market value.

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.

“While outlook was disappointing, and bears could argue Amazon is investing in 1-Day fulfillment out of competitive necessity, we think Amazon remains in a solid position, with US retail growth likely above industry growth rates,” Bank of America analysts Justin Post and Michael McGovern said in a Friday note.

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

Pinterest shares tumbled by 19% to a two-month low after the company reported a quarterly loss in active users on the social media site as easing of COVID-19 restrictions led more people to engage in other activities.

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, has dampened positive sentiment.

The S&P 500 still managed to close out its sixth straight month of gains.

The yield on the 10-year Treasury note was 1.231%, down by 3.8 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 up. West Texas Intermediate crude rose 0.41%, to $73.92 per barrel. Brent crude, oil’s international benchmark, increased 0.37%, to $76.33 per barrel.

Gold slipped 0.93% to $1,813.49 per ounce.

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US stocks trade mixed with Nasdaq at a record high as investors weigh recovery signals

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US stocks closed mixed on Wednesday, with the S&P 500 making turning lower late in the day while the Nasdaq ended at a record high.

“US stocks are stabilizing as investors are clearly in wait-and-see mode over the current wave of inflationary pressures,” Edward Moya, senior market analyst at Oanda, said in a statement. “Equities have quickly bounced back from last week’s Fed-induced selloff as investors quickly realize interest rates will not move anytime soon.”

Equities were up and down throughout the day, dipping lower after Atlanta Fed President Raphael Bostic said the central bank could raise rates in 2022, as well as start tapering asset purchases in the near term. He also said higher inflation in the US could last up to nine month.

The US 10-year Treasury note was last at 1.492%. On Tuesday, yields fell 2 basis points, responding to the Fed’s more tempered policy outlook.

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

Microsoft still has 23% upside potential even after it surpassed a $2 trillion valuation on Tuesday, according to Wedbush analyst Dan Ives. He also increased his price target to $325 from $310 and reiterated his “outperform” rating on the stock.

Mortgage giants Fannie Mae and Freddie Mac plunged as much as 45% following a ruling from the Supreme Court. In a 7-2 decision, the court gave the US President authority to remove the head of the Federal Housing Finance Agency, complicating the prospects for their release from government control.

Meanwhile, the cryptocurrency space has been recovering from its most recent sell-off.

Bitcoin staged a rebound after wiping out all its gains for 2021 at one point the day prior. The world’s largest cryptocurrency climbed as much as 6% to $34,821.53.

Cathie Wood’s ARK ETFs took advantage of last week’s crypto carnage to load up on shares of Coinbase and Grayscale Bitcoin Trust, fund filings show.

Crypto exchange FTX announced it is partnering with Major League Baseball to become the first cryptocurrency exchange sponsor in professional sports.

Oil rose ahead of a meeting of the OPEC+ group next week.

West Texas Intermediate crude climbed 0.48% to $73.20 per barrel. Brent crude, oil’s international benchmark, jumped by $0.57% to $75.24 – edging to its highest since late 2018.

Gold slightly rose 0.03% to $1,778.03 per ounce.

Lumber fell as much as 3% to $859.8 per thousand board feet, extending the fall beneath $900 as the commodity’s rally continues to cool off.

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US stocks slip from record highs as investors mull weak retail-sales data ahead of Fed decision

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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 from record highs as investors mulled the disappointing retail sales ahead of the FOMC’s two-day meeting.
  • The 10-year Treasury yield has hovered near 1.5% for most of the day.
  • Crude oil traded at the highest level since 2018, while lumber, gold, and copper slipped.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US stocks slipped from record highs Tuesday as investors mulled the disappointing retail sales ahead of the Federal Open Market Committee’s two-day meeting.

Spending at US retailers for the month of May slumped for the first time since February as more economic restrictions were reversed and Americans settled into a new sense of normal.

US retail sales fell 1.3% in May, the Census Bureau. 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.

Meanwhile, investors continue to weigh inflationary pressures ahead of the FOMC decision due Wednesday. Most economists are anticipating that the central bank will leave its policy mostly unchanged. Investors will be focusing on tapering discussions, the latest economic projections, and inflation.

“Despite the ‘transitory’ message regarding inflation, some on the Committee must be twitching a little uncomfortably,” said Marcus Dewsnap, head of fixed income strategy at IGM, which is part of Informa Financial Intelligence.

Hard data so far hasn’t quite suggested the sort of second-quarter that will force economic growth to hit the Fed’s 2021 projection, Dewsnap added.

The 10-year Treasury yield hovered near 1.5% for most of the day.

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.

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

Online gaming company DraftKings plunged as much as 12% on allegations by a short seller of illegal activity. A report from Hindenburg Research, a short seller, claimed DraftKings is hiding “black market operations.”

Meanwhile, short-sellers betting against meme stock AMC Entertainment lost $512 million on Monday when the movie theater chain rallied 15%, according to Reuters, citing data from analytics firm Ortex.

Solid Power, an electric-vehicle battery producer, announced it’s going public by merging with blank-check firm Decarbonization Plus Acquisition Corporation III in a deal valued at $1.2 billion.

In cryptocurrencies, bitcoin finally hit the $40,000-level on Monday after trending below that level to date in June.

Still, a new survey found that hedge fund bosses are planning to ramp up their holdings of cryptocurrencies, predicting that an average of 7.2% of their assets under management will be held in digital tokens by 2026.

Crude oil traded at the highest level since 2018. West Texas Intermediate crude was up 1.96% to $72.27 per barrel. Brent crude, oil’s international benchmark, gained 1.78% to $74.16 per barrel.

Gold slid 0.45% to $1,858.92 per ounce.

Copper also tumbled to a seven-week low amid concerns that China will gradually release its stockpiles in the coming months.

Lumber joined the downturn, sliding for the 10th straight day before mounting a recovery as the pandemic-driven boom in the commodity continues to show signs of weakness.

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US stocks climb to end the week higher as recovery optimism grows

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Deutsche Bank said retail investors have been key players in the stock market rally

US stocks closed higher on the last trading day of the week as optimism around the pace of economic recovery continues to grow.

“For now, the market is looking through these high readings and shares the Fed’s views that inflation is transitory,” Cliff Hodge, Cornerstone Wealth CIO, wrote in a statement. “We’ll likely have at least two more lofty prints before settling back down.”

Hodge said the “true gut check” will come in July and August when the country has gotten past the worst of the pandemic. This, he said, is when the window of risk for the markets really opens up.

“If inflation proves to be more sticky and we get a taper announcement that could be a double whammy for stocks,’ he added.

The Personal Consumption Expenditures price index – a key measure of domestic inflation – gained 0.6% in 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.”

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

GameStop continued its rally amid a meme-stock resurgence with shares rising as much as 5.39%. In the past month alone, shares of GameStop are up nearly 50%, while fellow Reddit darling AMC has seen an incredible rise of nearly 200% over the same period.

AMC short-sellers, in fact, aren’t letting up. Instead, they’re digging in further. A week ago, the number of AMC shares on loan, used to short the stock, was 124 million. As of Friday, the number of shares on loan was 132 million, new data from ORTEX shows.

In the digital asset space, South Korea is moving forward with plans to impose a 20% income tax on capital gains from cryptocurrency transactions, according to a report. Starting next year, these will be classified as “miscellaneous income” and must be reported when filing for general income taxes in May 2023.

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 mixed. West Texas Intermediate crude fell by 0.61%, to $66.44 per barrel. Brent crude, oil’s international benchmark, rose 0.27%, to $69.65 per barrel.

Gold fell as much as 0.23%%, to $1,902.19 per ounce.

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