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U.S. stocks were trending lower overnight as the retail sector will be in focus this week with several key names set to report quarterly results.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 32196.66 | +466.36 | +1.47% |
| SP500 | S&P 500 | 4023.89 | +93.81 | +2.39% |
| I:COMP | NASDAQ COMPOSITE INDEX | 11805.001497 | +434.04 | +3.82% |
Among the big names reporting will be Walmart and Home Depot on Tuesday; Target, Lowes and TJX Companies on Wednesday; Ross Stores, BJ’s Wholesale Club, and Kohl’s on Thursday; and Foot Locker on Friday morning.
Investors will pay close attention to the numbers, and especially guidance, for clues about the health of the consumer, and the impact that inflation pressures, supply-chain constraints and a tight labor market are having on profitability.
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To date, 459 companies in the S&P 500, or just over 90% of the benchmark index, have posted January through March results, with the numbers coming in well ahead of forecasts.
Some analysts worry that if the U.S. Federal Reserve raises interest rates too quickly, or by too much, that could set of a recession. A slowdown in the U.S. would almost certainly hurt the Asian region, which exports and manufacturers for the U.S. economy.
U.S. stocks were trending lower overnight as the retail sector will be in focus this week with several key names set to report quarterly results. (Courtney Crow/New York Stock Exchange via AP)
The Fed has said it will continue to raise interest rates to temper rising inflation. The benchmark short-term interest rate was at a record low of near zero during much of the coronavirus pandemic.
“Many others had spotted recession risk out in 2024, but we have been aggressive from the outset in our forecast for a potential U.S. recession this year,” said Clifford Bennett, chief economist at ACY Securities.
Even if concern over interest rate increases has been allayed somewhat, investors are still watching closely for what Fed Chariman Jerome Powell might say next, said Stephen Innes, managing partner at SPI Asset Management.
“That does not mean the bear market is over, especially with the recession on everyone’s mind,” Innes said.
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Wall Street ended last week with a broad rally, but the market still recorded its sixth straight weekly drop, the longest such streak since 2011.
The S&P 500 rose 2.4% to 4,023.89. The index is now down 15.6% for the year. The Dow gained 1.5% to 32,196.66, while the Nasdaq rose 3.8% to 11,805. Smaller company stocks also staged a solid rally. The Russell 2000 gained 3.1% to 1,792.67.
Although some technology shares rose, Twitter fell 9.7% Friday, after Tesla CEO Elon Musk said he was putting his deal to acquire the social media company on hold. Tesla rose 5.7%.
Markets have slumped since late March as traders worry the Fed may not succeed in its delicate mission of slowing the economy to rein in the highest inflation in four decades without causing a recession.
Markets have slumped since late March as traders worry the Fed may not succeed in its delicate mission of slowing the economy to rein in the highest inflation in four decades without causing a recession. (Courtney Crow/New York Stock Exchange via AP)
Meanwhile, Asian shares were trading mixed Monday, as investors eyed surging energy costs and prospects for interest rate hikes in the U.S.
Benchmarks edged up in Japan and Australia, while falling in South Korea and China.
Japan’s benchmark Nikkei 225 gained 0.2% in morning trading to 26,492.29. SoftBank Group stock rose despite reporting hefty losses on its investments last week. Retail chain Uniqlo also rose after falling in previous weeks on worries about the lockdown in China.
In other regional trading, Australia’s S&P/ASX 200 edged up 0.2% to 7,092.30. South Korea’s Kospi fell 0.1% to 2,601.41. Hong Kong’s Hang Seng lost 0.2% to 19,851.63. while the Shanghai Composite shed 0.3% to 3,074.79.
In energy trading, benchmark U.S. crude lost $1.61 to $108.89 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $4.36 to $110.49 on Friday. Brent crude, the international standard, fell $1.68 to $109.87 a barrel.
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In currency trading, the U.S. dollar edged down to 128.89 Japanese yen from 129.28 yen. The euro cost $1.0397, down from $1.0402.
