Mon, 20th February 2017

Anirudh Sethi Report


Archives of “US Market” Category

Overnight US Market :Dow closed -52 points

U.S. stocks kicked off the new week in the red as investors await a big week of earnings reports and eye the final presidential debate and outlook for interest rates.

The Dow Jones industrial average fell 52 points, or 0.3%, to 18,086. The Standard & Poor’s 500 stock index was off 0.3% to 2126 and the Nasdaq composite fell 0.3% to 5,200.

More than 80 companies in the S&P 500 are set to report earnings this week, according to Thomson Reuters. So far, 34 companies have reported third-quarter results and 62% have topped forecasts, just above the long-term “beat” average of 59%.

Bank of America continued last week’s trend of banks posting results that beat expectations. The bank topped earnings per share forecasts by 7 cents. Shares of Bank of America (BAC) were up 0.3% to $16.05. Last week, JPMorgan Chase, Citigroup and Wells Fargo all topped forecasts. Goldman Sachs, another key financial stock, reports its earnings Tuesday.

In economic news, the September reading on industrial production rose 0.1%, a tad below the 0.2% expected. Later this week, investors will get fresh data on inflation at the consumer level, existing home sales and how the economy is faring in the Philadelphia region.

Overnight US Market :Dow closed +39 points

Stocks closed higher Friday but pulled back from earlier highs after three big U.S. banks reported quarterly profits that topped forecasts, boosting hopes on Wall Street that third-quarter earnings will be better than feared and mark the end of the so-called earnings recession.

Powered by upbeat bank earnings, the Dow Jones industrial average rose 39 points, or 0.4%, to 18,138 after being up as much as 160 points earlier. The broad Standard & Poor’s 500 stock index was up less than 0.1% to 2133 and the Nasdaq composite added less than 0.1% to 5214.

Before the opening bell, JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo(WFC), which is embroiled in a crisis over fraudulently opening customer accounts, all posted profit and sales numbers that exceeded analyst expectations. Bank shares were mixed after sharp early gains. Shares of JPMorgan were down 0.3% and Citigroup stock was 0.3% higher. Wells Fargo was flat.

Wall Street is hoping the S&P 500 will break a string of four straight quarters of contracting profit growth when the third-quarter earnings season is complete.

Overnight US Market :Dow closed -45 points (Intraday was down -185 points )

Stocks cut sharp losses but still closed lower Thursday as investors reacted to more bad news, with China trade data showing a sharp decline, interest rate hikes coming soon and ongoing investor edginess over corporate earnings as the reporting season rolls on.

The downbeat news and weak sentiment pushed the Dow Jones industrial average down as much as 185 points earlier in the session before recovering some and closing down 45 points, or 0.3%, to 18,099. The broad Standard & Poor’s 500 stock index fell 0.3% to 2133 and the Nasdaq composite was off 0.5% to 5213.

Giving investors pause was overnight data out of China that showed exports in the world’s second-biggest economy slumping 10%, raising fresh worries over the state of the global economy.

In economic news, Americans filing for first-time unemployment benefits were unchanged at 246,000, but still at a four-decade low.

Overnight US Market :Dow Closed +15 points

After yesterday’s down day on earnings worries, U.S. stocks closed mixed to slightly higher Wednesday as traders reacted to the release of the minutes of last month’s Federal Reserve meeting, which suggested an interest rate hike is coming “relatively soon.”

Most investors say the Fed minutes, which noted that it was a “close call” to hold off on rate hikes at the September meeting, suggests the Fed is still on track for a December rate hike if economic data, including the labor market, continues to come in strong. That message jibes with futures markets, which continues to price in a nearly 70% chance of a hike at the December meeting.

The Dow Jones industrial average rose 15.54 points, or 0.1%, to 18,144.20. The broad Standard & Poor’s 500 stock index gained 2.45, or 0.1%, to 2139.18 and the Nasdaq fell 7.77, or 0.2%, to 5239.02.

A poor start to the third-quarter earnings season Tuesday got Wall Street’s attention. A miss from aluminum maker Alcoa knocked the Dow down 200 points and raised concerns that the hoped-for profit rebound won’t materialize in the July-thru-September quarter. With just 27 companies in the S&P 500 having reported results so far, earnings are seen contracting 0.7%, according to earnings-tracker Thomson Reuters, putting earnings on track for their fifth straight quarter of negative growth.

Overnight Dow sinks 200 points.S&P 500 Closed down by 27 points

U.S. stocks closed sharply lower Tuesday as investors hoping for signs of a rebound in corporate profits were greeted with a quarterly earnings miss from one company and a profit downgrade from another.

Investors also began turning their focus once again to interest rates, pushing long-term yields higher.

The Dow Jones industrial average closed down 200 points, or 1.1%, to 18,128.66, as aluminum maker Alcoa kicked off the unofficial start to the third-quarter earnings season by reporting sales and earnings that fell short of targets. Adding to the angst was biotech company Illumina, which cut its revenue forecast for both the quarter that ended in September and the final quarter of 2016.

The broad Standard & Poor’s 500 index fell 1.2% and the Nasdaq composite, which started Tuesday’s session within 0.2% of its record high, slid 1.5%.

The woes of Alcoa and Illumina hurt market sentiment, as investors are hopeful that third-quarter profit growth for the S&P 500 can finish positive, and end a dismal four-quarter streak of contracting earnings growth, according to Thomson Reuters data. Currently, analysts forecast earnings to contract a little less than 1% in the July thru September quarter.

U.S. long-term bond yields continued to rise amid fears the Federal Reserve will raise short-term rates later this year. The yield on the 10-year Treasury note was slightly higher at 1.76%. Earlier Tuesday, it hit 1.8% for the first time since early June, marking a four-month high.

Futures markets are now pricing in roughly 70% odds of a rate hike at the Fed’s December meeting, according to CME Group. Low rates have been a key driver of stock prices in the bull market, and more recently fears of rate hike have dragged down once-hot stocks that pay out plump dividends, or income, and are less appealing in an environment of rising rates.

Also hurting the broader market was a dip in the price of U.S.-produced crude, which fell 52 cents, or 1%, to $50.80 per barrel, putting the brakes on a big rally that has been fueled by hopes of an OPEC production cut, which gained more credence Monday when Russian President Vladimir Putin expressed his support.

Overnight US Market :Dow closed +89 points.S&P 500 + 10 Points

U.S. stocks kicked off the new week with sharp gains as oil prices rallied and Wall Street readies for the start of the third–quarter earnings season and awaits more news from the Federal Reserve and watches politics in the homestretch to the presidential election.

The Dow Jones industrial average rose 88.55 points, or 0.5%, to 18,329.04. The Standard & Poor’s 500 stock index was up 9.92, or 0.5%, to 2163.66 and the Nasdaq composite rose 36.27, or  0.7%, to 5328.67 and briefly traded above its record closing high.

A rally in the oil patch powered stocks, with U.S.-produced crude jumping 3% to $51.34 a barrel.

All eyes on Wall Street are on corporate earnings this week, as the reporting season kicks off unofficially Tuesday with results from aluminum maker Alcoa and gains more import on Friday with reports from three major banks (Wells Fargo, Citigroup andJPMorgan Chase). The outlook for overall profits for the S&P 500 is not bright, as analysts are expecting earnings to contract 0.7% in the third quarter, which if it occurs would mark the fifth straight quarter of negative growth, according to earnings tracker Thomson Reuters I/B/E/S.

The Federal Reserve and interest rates will also be a topic of discussion, following a solid but slight miss Friday on the September jobs report. The 156,000 new jobs created last month were below the 170,000 jobs analysts’ had expected, but job creation was still strong enough to keep the nation’s central bank on track for its first interest rate hike of the year later this year, with Wall Street placing odds of roughly 60% of a rate hike at the Fed’s December meeting.

Overnight US Market :Dow closed -28 points

U.S. stocks fell Friday but ended off their lows after the economy created a solid but less-than-expected 156,000 new jobs in September and traders reacted to a volatile trading session for the British pound.

The Dow Jones industrial average ended down 28 points, or 0.2%, after dropping more than 100 points earlier in the session. The Standard & Poor’s 500 stock index lost 0.3% and the Nasdaq composite also fell 0.3%.

The government monthly jobs report came in shy of the roughly 170,000 jobs economists’ expected, and the unemployment rate ticked up to 5%, from 4.9%, as more Americans returned to the job market in search of work.

The jobs report, Wall Street pros say, did little to change the market’s outlook for the economy, nor did it change the view that the Federal Reserve is on track to hike interest rates in December for the first time this year. Futures markets show that the odds of a December hike is roughly 65%, or a two in three chance, CME Group data show.

The yield on the 10-year Treasury note edged higher to 1.730%.

Overnight, markets got a scare when the British pound suffered a short-lived plunge of more than 6% vs. the dollar — a sharp move that traders referred to as a ‘flash crash.’ The move was exacerbated by a lack of liquidity at the time of the move and the work of machines, or computer algorithms reacting to the sharp declines, which set in motion trades electronically.

Overnight US Market :Dow closed -12 points.

Stocks closed mixed to modestly lower Thursday as traders await Friday’s key jobs report and digest oil’s climb back above $50 per barrel and a continued drop in the British pound on Brexit fears.

The Dow Jones industrial average fell 12.53 points, or 0.1%,to 18,268.50, according to preliminary calculations. At one point the blue-chip index was down as much as 118 points. The Standard & Poor’s 500 stock index was up 1.04, or 0.05%, to 2160.77 and the Nasdaq composite fell 9.17, or 0.2%, to 5306.85.

Stocks rallied Wednesday, ending a two-day losing skid, enabling the Nasdaq to climb within 0.4% of a fresh record high and putting the Dow and S&P 500 within 2% of their August peaks.

Wall Street is in a holding pattern ahead of the release of the September jobs report  Friday. Analysts are forecasting job gains of 170,000 to 175,000, following the creation of just 151,000 new jobs in August. A strong jobs report could give the Federal Reserve more reason to hike interest rates later this year for the first time in 2016. Low rates and borrowing costs have been a key driver of stock gains in the current bulll market, now well into its seventh year.

Rising long-term bond yields in the U.S. may also be weighing on stocks. The yield on the 10-year Treasury note jumped to 1.739%. Rates appear to be heading higher as odds of a late-year Fed rate hike remain firm.

Overnight US Market :Dow up 113 points.S&P 500 up 9 points

The Dow Jones industrial average notched a gain of more than 100 points Wednesday as Wall Street saw its first positive day of the fourth quarter after back-to-back losses to kick off the final three-month stretch of 2016.

The Dow climbed 113 points, or 0.6%, after dropping 85 points Tuesday and sliding 54 points Monday. The Dow entered Wednesday’s session down 0.8% in the fourth quarter.

The broad Standard & Poor’s 500 stock index ended 0.4% higher and the Nasdaq composite gained 0.5%.

Wednesday’s gains were driven by a strong rally in the oil patch. The price of U.S.-produced crude gained more than 2% and was getting close to breaking the $50 per barrel level.

A spate of solid economic news also got investors in a buying mood. A key measure of the U.S. services sector of the economy shot up more than expected in September, signaling the U.S. economy remains healthy. Barclays now sees the U.S. economy growing at a 2.7% clip on the just-ended third quarter, up from the slow 1% pace in the first half of 2016.

Overnight US Market :Dow closed -85 points.

U.S. stocks bounced around and ended lower Tuesday while the British pound sank to its lowest level versus the dollar since 1985 as Britain moves closer to  actually exiting the European Union.

The Dow Jones industrial average lost 85 points on the day, ending down 0.5%, after rising as much as 57 points.  The broader Standard & Poor’s 500 stock index ended down 0.5%, and the Nasdaq composite lost 0.2%.

After a solid 3.3% gain in the third quarter of 2016, U.S. equity markets kicked off the fourth quarter Monday slightly in the red as uncertainties related to Brexit, the presidential election and the coming third-quarter earnings season weighed on investor sentiment.

Currency markets were again in the spotlight Tuesday after comments over the weekend from UK Prime Minister Theresa May that noted that Britain would begin the long multi-year process of exiting the EU by the end of March 2017. May’s words sparked fear of a so-called “hard Brexit,” in which the UK would forego full access to the single-market trading bloc in order to have fuller control of its border. That strategy roiled markets, especially in the UK, as it has created fresh uncertainty as to how much Brexit would hurt the UK economy.