State Street Global Advisors managing director Michael Arone discusses what Federal Reserve chair Jerome Powell will talk about on Wednesday and later says the software and services industry is highly successful in the stock market.
U.S. equity markets sank Wednesday after a report from the Organisation for Economic Co-operation and Development described long-term damage from COVID-19 shutdowns and warned that a second wave before a vaccine is developed remains possible.
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“If a second outbreak occurs, triggering a return to lockdowns, world economic output is forecast to plummet 7.6 percent this year, before climbing back 2.8 percent in 2021, the alliance of wealthy nations said in a report published Tuesday on the pandemic.
The Dow Jones Industrial Average plunged 274 points, or 1.01 percent, wiping out earlier gains, while the S&P 500 fell 0.58 percent. The Nasdaq Composite rose 0.5 percent, reaching a new high at the start of trading after crossing the 10,0000 threshold yesterday.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 27037.56 | -234.74 | -0.86% |
| SP500 | S&P 500 | 3195.9 | -11.28 | -0.35% |
| I:COMP | NASDAQ COMPOSITE INDEX | 10003.654518 | +49.90 | +0.50% |
At the same time, investors were also awaiting the latest policy decision from the Federal Reserve, due at 2 p.m.
With the central bank expected to keep its benchmark interest rate near zero, market participants will be paying close attention to any updates from the central bank on the shape of the U.S. economy, the impact of its lending programs and any other tactics to buoy growth.
Looking at stocks, Tesla shares raced to a record high after CEO Elon Musk said in a memo seen by Reuters that the electric-vehicle maker would begin producing its Semi commercial truck at “volume production.” The announcement days after the stock-market debut of electric-truck maker Nikola Motors.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 1,001.67 | +61.00 | +6.48% |
| NKLA | NIKOLA | 74.00 | -5.73 | -7.19% |
Casinos on the Las Vegas Strip continue to move toward reopening, with MGM Resorts announcing Excalibur will restart operations on Thursday and others will resume on July 1.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MGM | MGM RESORTS INTERNATIONAL | 20.64 | -1.42 | -6.41% |
| LVS | LAS VEGAS SANDS CORP | 52.67 | -0.99 | -1.84% |
Movie theater chain AMC Entertainment plans to reopen most of its locations around the world in July. The company earlier this month warned it may not be able to “continue as a going concern for a reasonable period.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AMC | AMC ENTERTAINMENT HOLDINGS INC | 6.50 | +0.51 | +8.51% |
Looking at earnings, online pet food retailer Chewy reported its first-quarter loss widened to 12 cents a share, from 8 cents, as sales spiked 46 percent from a year ago. The company has 15 million active customers, up 33 percent year-over-year.
Video game retailer GameStop reported warnings and revenue that fell short of Wall Street estimates, but said e-ecommerce sales soared 519 percent from a year ago as the majority of its stores were shuttered amid the COVID-19 pandemic.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CHWY | CHEWY INC. | 51.45 | -0.06 | -0.12% |
| GME | GAMESTOP CORP | 5.19 | +0.23 | +4.64% |
West Texas Intermediate crude oil slid 2.16 percent to $38.10 a barrel while gold climbed 0.38 percent to more than $1,728 an ounce.
U.S. Treasurys gained ahead of the Fed’s policy decisions, pushing the yield on the 10-year note down by 2.5 basis points to 0.804 percent.
European markets were lower across the board, with Britain’s FTSE down 0.23 percent while France’s CAC and Germany’s DAX fell 0.79 percent and 0.76 percent, respectively.
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In Asia, China’s Shanghai Composite shed 0.42 percent while Japan’s Nikkei added 0.15 percent. Hong Kong’s Hang Seng was little changed, slipping 0.03 percent.
