|Day's range||1,546.02 - 1,557.40|
|52-week range||1,266.92 - 1,742.09|
There seems little doubt that if inflation expectations resume a trend lower, then the need for an aggressive response from the Federal Reserve increases and this will have a greater effect on rate cut expectations, bond yields, the USD, equities and gold.
A stock-market index of small caps is at its weakest versus the S&P 500 since the financial crisis, suggesting a liquidity problem is brewing.
It was a record-breaking week for U.S. stocks. With second-quarter earnings season approaching, can the optimism continue to hold on? Four experts share what lies ahead.
The rallies in the Dow Jones Industrial Average and the S&P 500 come despite bearish stock market breadth data. The number of declining stocks is outnumbering advancers by 1,448 to 1,243 on the NYSE and by 1,626 to 1,053 on the Nasdaq exchange. In addition, volume in declining stocks represents 55.3% of total volume on the Big Board and 50.2% on the Nasdaq. The Dow was up 183 points, or 0.7%, the S&P 500 gained 0.2% and the Nasdaq Composite tacked on 0.2%. The Russell 2000 index of small capitalization stocks , however, shed 0.6%.
Small caps have underperformed the broader market this year, and Miller Tabak's Matt Maley says it could be a warning signal for the rest of the market.
Shares rose Thursday in Asia, tracking gains on Wall Street after Federal Reserve Chairman Jerome Powell suggested the U.S. central bank is ready to cut interest rates for the first time in a decade.
Even as record highs this week in the major U.S. stock indexes telegraph confidence on Wall Street, caution abounds in other U.S. markets, where falling bond yields and flailing small-cap stocks indicate investors are torn about where to place bets. Hints from Federal Reserve policymakers that the central bank will cut interest rates have buoyed both U.S. stocks and Treasuries. Such a conundrum was evident on Friday as stocks fell in response to stronger-than-expected U.S. payrolls data, which dampened expectations of a Fed rate cut.
FTSE Russell will rebalance its suite of indexes at the close of trade Friday, and changes reflect several broad trends in equity markets over the past year.
(Bloomberg) -- The S&P 500 is at a record, but areas of the stock market with a reputation for economic prescience are sending warning signals that hearken to the global financial crisis.It’s small caps and transportation stocks, whose performance has deteriorated at a much faster clip than other parts of the market. Relative to the S&P 500, each group is on the brink of hitting its lowest point since 2009. For investors, the decline is another example of the growth debate churning underneath the market’s surface.“There’s still uncertainty as to what direction this market should go. It’s anybody’s guess,” said Jeff Carbone, managing partner at Cornerstone Wealth, which has about $1.3 billion in assets under management. “I just don’t know if we’re out of the woods yet.”Bears say the weakness in shipping and rail companies that rise and fall with the broader economy and small caps that depend on domestic demand for the bulk of their revenue is a warning not to be ignored. The losses in economically-sensitive stocks reinforce the signal from falling bond yields that suggests all is not well with the economy.Data Monday added to concern, when an unexpectedly weak factory output from the Dallas Fed was the third such gauge to miss estimates. While the S&P 500 only slipped 0.2%, the Russell 2000 Index sank 1.3%, while the Dow Jones Transportation Average tumbled 1.5%.For transports, the sell-off added to its worst performance versus the S&P 500 since 2012. Another day like Monday, and the ratio could drop to the lowest in a decade.FedEx Corp., one of the largest components of the transportation average, reports earnings Tuesday and analysts have warned that trouble looms. Lingering effects from the U.S.-China trade war, the slowdown seen in manufacturing data and weakness in Europe could mean the shipping company will cut guidance for the year-ahead, they say.Meanwhile, weakness in the Russell 2000 has taken it to the lowest level versus the S&P 500 since 2016, and it sits precariously close to the lowest level since 2009. Weakness in small caps has preceded broader sell-offs in the past. Most recently, the gauge peaked against the S&P 500 in June of last year, foreshadowing the fourth-quarter rout that almost ended the bull market.“You normally think of small caps as that’s where the dynamic growth of the economy is coming from,” said Peter Jankovskis, co-chief investment officer at Oakbrook Investments. “So to see the overall market doing well while they’re being left behind, it suggests that people are a little bit concerned about growth prospects.”For Morgan Stanley’s Mike Wilson, one of the most bearish equity strategists on Wall Street, a continuation of soft economic data could lay the groundwork for a 10% correction in the third quarter. As the Fed continues to make the case for data-dependency, the stock market will soon catch on, he said. And if the data continues to worsen, that could mean record highs won’t last long.\--With assistance from Vildana Hajric and Rita Nazareth.To contact the reporter on this story: Sarah Ponczek in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Chris NagiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Stock benchmarks lose some altitude Monday afternoon as investors look ahead to a meeting between President Donald Trump and Chinese leader Xi Jinping, while also tracking tensions between the U.S. and Iran.
The Dow Jones Industrial Average, bolstered by the Fed’s return to its easy-money mind-set, is on pace for its best June since 1938. And, the S&P 500, as of Friday’s intraday high, was up 7.7%, putting the broad-market gauge on track to be the sixth best June ever. What could possibly go wrong?
The Dow Jones Industrial Average , S&P 500 and Nasdaq Composite all edged higher, even though broader stock market internals were negative. The number of declining stocks on the NYSE topped advancers 1,454 to 1,327 on the NYSE and 1,641 to 1,137 on the Nasdaq exchange, while declining volume represented 56.4% of total volume on the Big Board and 55.0% of total volume on the Nasdaq. Meanwhile, the Dow gained 45 points, or 0.2% and the S&P 500 tacked on 0.1%. The Nasdaq Composite tacked on less than 0.1% and the Nasdaq 100 advanced 0.2%. The gains in the larger capitalization indexes was offset by weakness in smaller-cap companies and the economically sensitive transport sector. Russell 2000 fell 0.5% and the Dow Jones Transportation Average shed 0.7%.
The prospect of lower interest rates in Europe and the U.S. has driven the stock market into a bullish stampede. The S&P 500 Index (SPX) broke out to a new all-time high — and did it strongly, blasting through the old highs at 2,940-2,950 points. The Nasdaq Composite Index (COMP) as well as the Invesco QQQ Trust exchange traded fund (QQQ) are a bit further behind, although not much.
The minor gain in the Dow Jones Industrial Average , and the declines in the Arms Indexes, belie the clearly negative breadth in the overall stock market. The Dow was up 14 points, with 14 of its 30 components gaining ground. Meanwhile, the number of declining stocks outnumbered advancers 1,714 to 903 on the NYSE and 1,884 to 763 on the Nasdaq exchange. The S&P 500 fell 0.1%, the Nasdaq Composite shed 0.3% and the Russell 2000 dropped 0.9%. The volume in declining stocks represented 62.1% of total volume on the Big Board and 58.6% of total volume on the Nasdaq. The Arms Index, a volume-weighted breadth indicator that tends to rise above 1.000 when stocks fall, slipped to 0.900 on the NYSE and fell to 0.595 on the Nasdaq.
(Bloomberg) -- U.S. stocks surged to an all-time high as global central banks signaled a rising willingness to stimulate growth, sending bond yields tumbling to multiyear lows.The S&P 500 jumped 1% at 9:31 a.m. in New York, surpassing its all-time closing high of 2,945.83 set April 30. The Dow Jones Industrial Average rallied 245 points, withing striking distance of its first record since October. Stocks had plunged 6.6% in May as President Donald Trump pressed his trade war with China and the bond market rallied, signaling a potential slowdown in the economy.The Federal Reserve’s dovish turn Wednesday sparked a late-day rally in risk assets, as investors consensus grew that the central bank is ready to cut as soon as July if economic data flags. Overnight, the Bank of Japan and Bank of England both indicated they stand ready to add to stimulus. The reaction in global bond markets was fierce, with German bund yields sliding deeper into negative territory and the rate on two-year and 10-year Treasuries touching multiyear lows.“What’s the alternative with rates in the market this low?” said Donald Selkin, chief market strategist at Newbridge Securities Corp. “What’s the point of keeping up inflation? I’m surprised of the extent of this but that has to be the rationale. It’s not a perception of a better economy or better profits.”The swiftness of the rebound in equities has been remarkable -- the S&P 500 took just 13 sessions to wipe out May’s pain, the fastest bounce back from a 5% sell-off in five years. Measures of relative strength signaled the index was oversold as recently as June 3. Those are now flashing warnings that the buying is about to go too far too quickly.Defensive shares have paced the June rally, with real-estate and consumer-staple producers leading. Through Wednesday, the only other sectors higher since April are utilities and health-care. The groups pay relatively high dividends, making them attractive to investors seeking consistent payouts now that sovereign bond yields have plunged around the world.“You can continue to see the markets overall melt higher due in part to unusual accommodations from the Federal Reserve,” said Chad Morganlander, a money manager at Washington Crossing Advisors. “It’s all been ebbing and flowing based on how quickly the Fed and ECB have done an about-face.”It’s not all rosy for American stocks. Small caps in the Russell 2000 Index remain more than 10% from their all-time highs set last year, while the Dow Jones Transportation Average is more than 9% from its record. Both indexes are full of stocks considered more sensitive to economic cycles than their large-cap peers.To contact the reporters on this story: Vildana Hajric in New York at firstname.lastname@example.org;Sarah Ponczek in New York at email@example.comTo contact the editor responsible for this story: Jeremy Herron at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
THE TRADER Bad news poured down this past week, yet the market kept on dancing in the rain. There was bad geopolitical news as the U.S. blamed Iran for attacking two tankers carrying petroleum products.
With the exception of a two-month period in January and February, the Russell 2000 index has been declining steadily versus the S&P 500.
Can people please stop talking complete, unmitigated claptrap on the subject of President Donald Trump, Mexican tariffs and the U.S. economy? The panic over the last few days about possible Mexican tariffs is even more ridiculous than the panic we had last month about the China tariffs — and that was bad enough. The S&P 500 is now higher than it was just before Trump shook his little fist at the Mexicans.
BANGKOK (AP) — Shares in Europe are bouncing back Tuesday and Wall Street appears headed for gains as Mexico tries to ease trade tensions with the U.S., while President Donald Trump meets with Britain's prime minister and leading CEOs amid questions over Brexit.
Stocks closed out a turbulent month on Wall Street with another round of sharp losses Friday after President Trump announced plans to expand a trade war to Mexico. The move shocked investors who already worried that a global trade war could crimp economic and corporate growth. MEXICO CITY (AP) -- President Andrés Manuel López Obrador says Mexico won't panic over U.S. President Donald Trump's threat of coercive tariffs.