July 4, 2022

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Stocks jump ahead of Powell's comments as markets try to come back

Stocks jump ahead of Powell’s comments as markets try to come back

US stocks advanced on Tuesday as indexes attempted to return from last week’s heavy selling amid concerns about persistent inflation levels and the possibility of an economic slowdown.

Investors are bracing for more Fed talk this afternoon, when Central Bank President Jerome Powell is scheduled to speak at a conference hosted by the Wall Street Journal.

The S&P 500 jumped 1.5%, and the Dow Jones Industrial Average jumped 375 points, or 1.1%. The heavy Nasdaq Composite Index rose 1.9%. The moves come after six consecutive weeks of declines for the S&P 500, the longest period of losses in more than a decade, and seven consecutive weeks of declines for the Dow Jones Industrial Average, the largest period of weekly losses for the index since 2001.

Uncertainty about the pace and magnitude of the Fed’s rate hike cycle added to pressure across markets that continued throughout the year. In 2022 so far, the S&P 500 has fallen about 17% from its all-time high on January 3, while the Dow has fallen about 13% over the same period and the Nasdaq has fallen deeper into a bear market – more than 20% below the price of Standard closing in November.

“Markets are driving the economy,” David Palin, chief investment officer at Citi Private Bank, told Yahoo Finance. “The fact that markets are low at this point means that the consumer is slowing down, and the global economy is slowing down.”

Stock markets have suffered “severe technical damage” in recent months, with the S&P 500 dropping below the important 4,000 level last Monday before testing bear market levels near 3850 last Thursday, noted John Lynch, chief investment officer at Wealth Management. Comerica, in an email note.

“It is curious that comments from Federal Reserve Chairman Jerome Powell suggesting the potential for economic pain in order to meet the central bank’s inflation-lowering targets may have been the catalyst for a rally in the S&P 500 that began Thursday afternoon and continues into the close,” Lynch wrote. Friday”. “However, we caution investors that the severe technical damage he has sustained over the past several months will take longer than a good few days to repair.”

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Investors will have more from the Fed to consider in the coming days, including Powell’s remarks scheduled for Tuesday afternoon, and speaking of other central bank officials’ engagements due through Friday.

“The inconvenient truth is that the Fed will need to raise rates more quickly and to a higher level than many had hoped,” Chris Zacarelli, chief investment officer at Alliance, the independent advisor, said in a recent email note. “There will be at least four rate increases of 50 basis points this year and not three or less, and we will continue to be vigilant on risky assets.”

9:44AM ET: Retail sales rose 0.9% in April, underlining the strength of US consumers

US retail sales rose at a solid pace in April, indicating the continued strength of the US economy, as consumer spending remains resilient despite persistently high inflation.

The Commerce Department said Tuesday that US retail sales rose 0.9% in April, boosted by increased sales of cars, electronics and restaurants. Economists had expected a 1.0% advance, according to Bloomberg Consensus data.

“The desire to spend is strong among American consumers,” Jimmy Cox, managing partner of Harris Financial Group, said in a note. “The Americans have broken the restrictions of Covid and will not return. Numbers like these call into question any predictions of a 2022 recession in the United States.”

9:30 a.m. ET: Stocks tried to come back from heavy selling last week

Here’s where the major indices trade on the open market on Tuesday:

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7:16AM ET: Walmart Q1 earnings beat estimates while sales grow more than expected

Walmart (WMT) Reported mixed results for the first quarterStrong consumer spending helped support giant retail sales while earnings fell short of expectations.

Shares are down more than 6% in pre-market trading.

The world’s largest retailer reported adjusted earnings per share of $1.30 compared to the $1.48 analysts had expected, according to Bloomberg estimates. Revenue came in at $141.57 billion versus $139.09 expected.

Walmart saw sales growth slow from its peak rate during the peak of the pandemic domestically, when an increase in pantry stocking and stimulus checks helped boost results. However, the company maintained revenue growth as demand remained resilient for the company’s range of products, even as consumer prices rose across the country.

“The end results were unexpected and reflective of the extraordinary environment,” Walmart President and CEO Doug McMillon said in a statement. “US inflation levels, particularly in food and fuel, have created more pressure on the margin mix and operating costs than we had anticipated. We adjust and will balance our customers’ value needs with the need to drive profit growth for our future.”

7:11AM ET: Stock futures rise as investors digest retail profits

Here are the most important movements in early trading before Tuesday’s opening:

  • S&P 500 futures contracts (ES = F.): +63.00 (+1.57%) to 4067.75

  • Dow futures contractsYM = F.): +406.00 (+1.26%) to 32565.00

  • Nasdaq futures contractsNQ = F.): +232.74 (+1.90%) to 12477.50

  • raw (CL = F.): + $0.68 (+0.60%) to $114.88

  • He went (GC = F.): + $11.50 (+0.63%) to $1,825.50 per ounce

  • Treasury for 10 years (^ degeneration): 0.00 basis points to produce 2.8770%

7:03 a.m. ET: Home Depot stock is up 4% following strong quarterly results

Home Depot sharesHD) rebounded early in trading Tuesday after the company Disclosed financial results for the first quarter It beat analyst estimates and raised its full-year forecast.

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The company announced net income of $4.23 billion, or $4.09 per share, in the three months ended March 31, compared to $4.15 billion, or $3.86 per share, in the same period last year. Home Depot also had net sales of $38.9 billion for the first quarter of fiscal 2022, an increase of $1.4 billion, or 3.8%, over a year ago. Analysts expected adjusted earnings of $3.71 per share on revenue of $36.83 billion, according to Bloomberg estimates.

“The strong performance in the quarter is even more impressive as we were comparing to historical growth last year and had a slower start to the spring this year,” CEO and President Ted Decker said in a statement.

The company also raised its full-year guidance, with sales growth expected at 3% and earnings per share growth expected to come in single-digit averages.

6:17PM ET Monday: Stock futures changed little after a narrow recovery in the markets

Here is where stock futures were in extended trading prior to Monday’s evening session:

  • S&P 500 futures contracts (ES = F.): -1.00 (-0.02%) to 4003.75

  • Dow futures contractsYM = F.): -4.00 (-0.01%) to 32155.00

  • Nasdaq futures contractsNQ = F.): +4.50 (+0.04%) to 12249.25

  • raw (CL = F.):- $0.51 (-0.45%) to $113.69

  • He went (GC = F.): + $10.20 (+0.56%) to $1,824.20 per ounce

  • Treasury for 10 years (^ degeneration): -5.8 basis points to produce 2.8770%

NEW YORK, NY – May 12: Traders work on the floor of the New York Stock Exchange (NYSE) on May 12, 2022 in New York City. The Dow Jones Industrial Average declined in morning trading as investors remained concerned about inflation and other global issues. (Photo by Spencer Platt/Getty Images)

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter Tweet embed

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