Wall Street today : On the other hand, U.S. equity markets consolidated mixed performances as investors await key economic data releases and remarks from Federal Reserve Chairman Jerome Powell, to be made later during the day. Powell is scheduled to discuss the economic outlook as part of a National Association for Business Economics event. Investors are particularly interested in how his remarks may relate to expectations over future monetary policy, especially when inflation, interest rate, and labor market data have been the most concerning to the economy.
Economic reports will fill the week ahead. Among the most eagerly watched would be the labor report for September, which could shed some light regarding the strength of the labor market and inform the decisions of the Feds regarding interest rates. Of course, there’s also scheduled for release of the S&P Global manufacturing and services Purchasing Managers’ Indexes. These indicators will shine a light on the manufacturing and services sectors, key pillars of the US economy. Investors are hungry to look at these numbers for insight into economic momentum with fears about recession lingering.
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Wall Street today : Market Open and Early Reactions
Traders saw the Dow Jones Industrial Average fall in its early hours of trading on Monday, falling 226.69 points, or 0.54%, in the process to 42,086.31. The S&P 500 also took a few points off, falling 4.52 points, or 0.08%, to end at 5,733.65. The Nasdaq Composite was on an uptick, adding 44.41 points, or 0.25%, to 18,164.00. The bias in trading was mixed in direction and relatively straight-forward, though the overall range again was accompanied by how cautious the investors remained due to the anticipation of key events throughout the week.
The Dow slipped 77.94 points, or 0.18%, to 42,235.06 at the open. The S&P 500 shed 11.43 points, or 0.20%, to 5,726.74. The Nasdaq Composite, which at one point gave up 44.76 points, or 0.25%, quickly rebounded and ended the day higher.
Top Stock Movers
It was the turn of several companies on Monday, but had all the reasons to be in the limelight and that was due to witnessing a major movement in the price of their respective stocks. Stock shares of the major U.S.-based automobiles Ford Motor and General Motors plummeted. Ford Motor was lower by 2.2%. Its competitor General Motors was withering at 3% after a disappointing news coming from its European counterpart, Stellantis NV that had also cut annual forecasts. Stellantis said that it was facing weaker-than-expected performance, which had started instilling negative sentiments about the automotive market at the world level as costs increased and supply chain lines were disrupted.
On the other hand, Chinese shares listed in the U.S increased sharply due to recent measures taken by China’s central bank. Over the weekend, the People’s Bank of China said that it would nudge the banks to cut down the interest rates for existing mortgages to spur the housing market. The news boosted investor sentiment in the A-share market for Chinese companies. Alibaba, one of the country’s biggest e-commerce giants, surged 3.5%. Li Auto, the leading EV manufacturer in China, surged 6%, and the PDD, another major Chinese e-commerce company, went up by 3.3%. All these gains indicated optimism about the investor’s hope that China’s policy support would end a much-needed boost to its real estate and broader economic recovery efforts.
On the other hand, shares of Carnival Corporation, the worlds largest cruise operator, fell by 4.1% even if it has just released strong profit and revenue for the second quarter. Its earnings managed to beat the expectations of the analysts but still, worries about surging fuel prices as well as shocks in travel demand may have sent its stock down.
Bond Market Stability
The bond market was relatively stable on Monday. The yield on the 10-year U.S. Treasury note, a key benchmark for borrowing costs, was steady at 3.75%. The 2-year Treasury yield, more sensitive to changes in Federal Reserve policy, ticked up to 3.59% from 3.56% in the previous session. However, bond yields tend to move opposite to prices, and these small movements indicated that investors were still in wait-and-see mode, probably expecting more from the speech from Powell and also waiting for data of late to be announced.
Oil Prices Fall on Supply Outlook
Crude oil declined on Monday, led by a buoyant supply view. Brent crude futures for November delivery, due to expire later in the session, dropped 35 cents, or 0.5%, to $71.63 a barrel at 1344 GMT. U.S. West Texas Intermediate crude futures gave back some of its previous gains, falling 12 cents, or 0.2%, to trade at $68.06 a barrel.
Oil prices continued to slide despite growing geopolitical risks and the possibility that major producers like Saudi Arabia and Russia would curtail production. Apparently, the market factored in expectations that global oil supplies were going to be adequate given rising concerns of potential disruptions. Other concerns weighing on crude prices are those regarding slowing growth in the global economy-particularly in its major markets like China and Europe.
Precious Metals and Commodities
Prices for bullion eased on Monday as increasing U.S. bond yields and a strengthening dollar made the precious metal less appealing to investors. Spot gold, often considered a safe-haven asset during uncertain times, fell 0.9% to $2,634.01 an ounce as of 1439 GMT. U.S. gold futures also dropped as it slipped 0.5% to $2,655.40 an ounce.
No, not precious metals, either. Those too declined as silver fell 1.6% to $31.13 an ounce. That selloff in precious metals captures much of the anxiety over rising interest rates, which have always lowered the allure of non-yielding assets like gold and silver. Higher interest rates also forced investors into better-yielding assets such as bonds and equities since the Federal Reserve continued with the course of tightening monetary policy amid inflation.
Looking Ahead: Key Data and Powell’s Speech
Investors continued to pin hopes on Fed Chair Jerome Powell’s speech for later today, when clues regarding the central bank’s take on inflation, interest rates, and growth are expected to be emanated. Comments from Powell will be crucial since the Fed is trying to balance its act in the delicate ballet of controlling inflation while maintaining support for economic growth. Inflation has slowed down but still lags the Fed’s 2% target, and the central bank has shown that it is willing to be higher for longer should conditions mandate it.
Outside Powell’s comments, though, the all-important data point for investors will come later this week in the form of the September jobs report. However, with its interactions with the labor market, in case of a healthy labour market, room might be left for the Fed to be a bit more hawkish, but the slippages in employment indicators will make it even more cautious. Beyond labor market indicators, S&P Global PMIs-both manufacturing and services-will also attract high attentions for early signs of resilient or weakening economic activity.
Monday’s trading session pointed out the cautious approach investors are taking, awaiting clearer direction on the U.S. economy’s future. The system obtained positive gains in some areas, such as Chinese stocks, while it has headwinds in other areas, like the automakers and cruise lines. Powell’s speech this week will be telling, accompanied by some key data releases, but most importantly these may figure rather crucially in shaping the sentiment of the market and therefore investment.