|Day's Range||2,993.73 - 3,006.21|
|52 Week Range||2,346.58 - 3,027.98|
The Federal Open Market Committee takes centerstage Wednesday when it delivers its rate decision.
Stocks on Wall Street rose Tuesday as investors' worries over oil supply faded. Saudi Arabia's energy minister said oil production has been fully restored after the weekend attacks on its oil facility. The S&P 500 gained a quarter percent as Federal Reserve policy makers met to decide about interest rates. Stocks traded in a narrow range. Spartan Capital Securities chief market economist, Peter Cardillo: SOUNDBITE: SPARTAN CAPITAL SECURITIES CHIEF MARKET ECONOMIST, PETER CARDILLO (ENGLISH) SAYING: "Volume is very low today but you know, I would say that's somewhat tradition. Every time we get a two-day Fed meeting which is consistent obviously, we see cautiousness ahead of that. That's what we're seeing today." Apache, Marathon Oil, and other energy companies that were among Monday's biggest gainers were Tuesday's biggest losers. Corning shares tumbled. The glass maker producing Apple's iPhone screens lowered its volume forecast for the current quarter. Home Depot shares fell for the second straight day. Guggenheim Securities downgraded the home improvement retailer's shares to "neutral" from "buy," citing its relative valuation. The stock has gained 33% this year and zoomed to a record high last week. ---------- Stocks on Wall Street Tuesday slid after oil prices gave back some of Monday's outsized gains. A source told Reuters Saudi Arabia was close to restoring 70% of its oil production lost after the weekend attacks on its refinery. The S&P 500 _____% as stocks traded in a narrow range. Spartan Capital Securities chief market economist, Peter Cardillo: SOUNDBITE: SPARTAN CAPITAL SECURITIES CHIEF MARKET ECONOMIST, PETER CARDILLO (ENGLISH) SAYING: "XXX." Apache, Marathon Oil, and other energy companies that were among Monday's biggest gainers were Tuesday's biggest losers. Corning shares tumbled. The glass maker whose Gorilla glass is used in Apple's iPhones lowered its volume forecast for displays for the current quarter. Home Depot shares fell for the second straight day. Guggenheim Securities downgraded the home improvement retailer's sahres to "neutral" from "buy," citing its relative valuation. The stock has gained 33% this year and zoomed to a record high last week.
A spike in oil prices and escalating trade tensions are among the many news developments weighing on the Federal Reserve as it announces its next policy-setting decision on Wednesday.
"When everything's doing records all the time, and there's a lot of geopolitical uncertainty, it's usually like a wake-up call."
Since last year real GDP growth has been slowing. The chair of the Federal Reserve has been signaling that, while growth is slowing, there is no recession risk and the Fed is forecasting continued positive growth. Warning signs in the economy, including an inverted yield curve, have been ignored and stock markets continued to make new highs in July. In August a correction took a place and subsequently a rally ensued into early September.
(Bloomberg) -- Call it Canadian modesty.While President Donald Trump has tweeted about the U.S. stock market more than 30 times this year, his Canadian counterpart Justin Trudeau hasn’t mentioned stocks once on his Twitter feed, even as indexes in both countries hit record highs.Trump has used the words “stock market” and “Dow” on Twitter and sprinkled “Nasdaq” and “S&P” references to comment on equities, according to data compiled by Bloomberg. By contrast, Trudeau hasn’t tweeted “stock” or “TSX” all year - not even this week as a rally in gold and oil stocks pushed the main equity gauge to a fresh all-time high.The S&P 500 Index in the U.S. has climbed about 20% in 2019, extending its bull run for almost its 11th year. Canada’s S&P/TSX Composite Index isn’t far behind with an 18% surge, on pace for its best year since 2016. In U.S. dollar terms, Canadian stocks have outperformed this year, though they’ve trailed U.S. equities since 2015.Records aren’t novel in either country lately. That’s given Trump lots to crow about, though it’s been nothing but crickets from the Trudeau camp even in the heat of an election campaign. The S&P/TSX has hit a record almost 30 times since the end of 2015, while U.S. equities have set 116 new highs in the same period. Canada’s market is valued at more than $2 trillion, while the U.S. is 16 times larger.Read more: This Is What Stocks Do When Trump Talks About the Trade WarFor this year alone, the S&P/TSX has hit record highs five times -- topping the four set by the Dow Jones Industrial Average -- amid solid economic growth, strong earnings and a rally in commodity prices. Stocks in Canada have added about $400 billion in value this year.Trump had this to say last month about the stock market, well ahead of the Fed meeting Wednesday:South of the border, concerns are mounting about U.S.-China trade tensions, along with slower economic and profit growth. That’s likely to prompt a rate cut by the Fed this week.It’s been much calmer in Canada. The ratio between the U.S. fear gauge and Toronto’s S&P/TSX 60 VIX Index is at its widest in at least a decade, according to Bloomberg data.\--With assistance from Sarah Ponczek.To contact the reporters on this story: Divya Balji in Toronto at firstname.lastname@example.org;Brandon Kochkodin in New York at email@example.comTo contact the editors responsible for this story: Madeleine Lim at firstname.lastname@example.org, David Scanlan, Jacqueline ThorpeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Stocks drifted as investors marked time until the Federal Reserve concludes its policy meeting Wednesday at which officials are expected to cut interest rates again and possibly move further to calm overnight lending markets. Treasuries pushed higher with the dollar.The Stocks Europe 600 index swung from a loss to a modest gain led by mining and real estate shares. Contracts on the S&P 500 Index nudged lower. Equities slipped in Tokyo and Sydney, were little changed in Hong Kong and ticked higher in Seoul and Shanghai.Treasury 10-year yields slipped to around 1.78% after sinking for a second session Tuesday, when the Fed injected cash for the first time in a decade to soothe money markets. Oil stabilized on signs Saudi Arabia is relatively quickly restoring production following the debilitating weekend attack.While Fed officials are widely expected to cut their benchmark rate by a quarter-point, some investors including DoubleLine Capital’s Jeffrey Gundlach are saying the central bank may also boost its balance sheet to stabilize the volatile repo market. Traders also are keeping an eye on the risk of a potential oil shortage weighing on the global economy, and on preparations by the U.S. and China for top officials to meet on trade in October.“Markets want to hear that the Fed is there if needed, the Fed is a backstop,” Alec Young, managing director for global markets research at FTSE Russell, told Bloomberg TV. Alec Young, TK. “There is concern, obviously, from trade, manufacturing, and we’re seeing that bleed into some job-growth weakness, and these are all the big questions that Chairman Powell is going to be getting.”Elsewhere, oil steadied after tumbling Tuesday. Saudi Aramco said it had revived 41% of capacity at a key crude-processing complex days after a devastating aerial attack that wrecked vital equipment and rocked global energy markets. The pound fell as the U.K. Supreme Court begins a second day of hearings on the legality of the prime minister’s Brexit strategy.These are some key events to keep an eye on this week:The Federal Reserve is widely expected to lower U.S. interest rates in response to slowing global economic growth and muted inflation. Chairman Jerome Powell will hold a post-decision press conference Wednesday.The Bank of Japan monetary policy decision is on Thursday, followed by a briefing from Governor Haruhiko Kuroda.Bank Indonesia and Bank of England also decide policy on Thursday.Australia jobs figures are out Thursday.Friday is quadruple witching day for U.S. markets. When the quarterly expiration of futures and options on indexes and stocks occurs on the same day, surging volatility and trading can follow.Here are the main moves in markets:StocksThe Stoxx Europe 600 Index increased 0.1% as of 9:28 a.m. London time.Futures on the S&P 500 Index decreased 0.1%.Italy’s FTSE MIB Index advanced 0.5%.The MSCI Emerging Market Index gained 0.3%.CurrenciesThe Bloomberg Dollar Spot Index increased 0.1%.The British pound fell 0.3% to $1.2463.The euro declined 0.2% to $1.1052.The Japanese yen weakened 0.1% to 108.20 per dollar.The Australian dollar decreased 0.5% to 0.683 per dollar.The Indian rupee jumped 0.7% to 71.286 per dollar.BondsThe yield on 10-year Treasuries fell three basis points to 1.78%.The yield on two-year Treasuries declined two basis points to 1.71%.Britain’s 10-year yield dropped five basis points to 0.651%.CommoditiesWest Texas Intermediate crude fell 0.5% to $59.02 a barrel.Gold was little changed at $1,501.45 an ounce.\--With assistance from Adam Haigh.To contact the reporter on this story: Todd White in Madrid at email@example.comTo contact the editors responsible for this story: Christopher Anstey at firstname.lastname@example.org, Robert BrandFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
European and Asia-Pacific stocks struggled to find direction on Wednesday as attention turns to the US Federal Reserve’s policy decision later in the day, when it is expected to trim rates. European equities opened marginally lower, with the composite Stoxx 600 index shedding 0.1 per cent, mirroring similar falls in Frankfurt’s Dax 30 and Paris’s Cac 40, while London’s FTSE 100 was 0.3 per cent lower. All eyes will be on the Fed with the US central bank expected to lower its benchmark interest rate by 25 basis points at the conclusion of its meeting on Wednesday.
Global stocks traded cautiously Wednesday, with investors focused on both the U.S. Federal Reserve's September rate decision later today in Washington and the impact of last weekend's attacks on two key Saudi oil facilities on world crude markets.
Dow Jones futures: The stock market rally neared highs even as Fed rate-cut odds fell to 50-50. Adobe, FedEx and Chewy fell on weak earnings or outlooks.
Oil prices cooled on Wednesday as Saudi Arabia said full oil production would be restored by month's end while caution ahead of an expected U.S. interest rate cut kept wider financial markets in tight ranges. European shares are expected to tread water, with pan-European Euro Stoxx 50 futures shedding 0.06%, German DAX futures losing 0.1% and FTSE futures down 0.14%. MSCI's broadest index of Asia-Pacific shares outside Japan ticked up 0.14 % while Japan's Nikkei dipped 0.18% after 10 straight days of gains and China's blue-chip share index rose 0.52%.
The main U.S. stock indexes closed flat on Tuesday as investors keep digesting the shock of the Saudi Arabian oil attack. Oil prices dropped after a nearly 15% gain on Monday. The Federal Reserve is meeting tomorrow.
U.S. stocks finish Tuesday’s session with modest gains on the back of defensive bets as investors focus on a decision on interest rates from the Federal Reserve set for Wednesday after a weekend attack in the Middle East that roiled global energy markets.
(Bloomberg Opinion) -- There’s still plenty of time for things to go off the rails, but 2019 is shaping up to be one of those rare years when the global stock, bond, commodities and foreign-exchange markets are all poised to deliver positive returns. The last time that happened was in 2010. Investors say three things would keep the good times rolling; unfortunately, two of those items are unlikely to happen, starting with the Federal Reserve’s monetary policy decision on Wednesday.The latest monthly survey of global fund managers by Bank of America Merrill Lynch found that German fiscal stimulus, a 50-basis-point rate cut by the Fed and Chinese infrastructure spending would be the most bullish policies for risk assets over the next six months. But the famously austere Germans look hesitant to fend off a slowdown in Europe’s largest economy just by spending. Finance Minister Olaf Scholz said last week that Germany would stick to a balanced budget, but was ready to act in moments of crisis. As for the Fed, the odds that policy makers on Wednesday will announce a half-point cut in their target rate for overnight loans between banks instead of a quarter-point reduction has shrunk to less than 15% from more than 40% last month. This follows a string of data showing that, thanks to the consumer, the U.S. economy is holding up pretty well amidst the ongoing trade war with China. There are even some economists and strategists, such as those at Brown Brothers Harriman, who say the Fed maybe doesn’t need to lower rates at all this time. The most likely scenario is that the central bank will ease monetary policy on Wednesday, while saying any further loosening will depend on the data, which is something that isn’t exactly priced into markets. “There is a risk that absent a strong signal that the Fed is clearly at the beginning of a sustained easing cycle, we could see some disappointment,” BNY Mellon strategist John Velis wrote in a research note Tuesday.So if the Germans and the Fed disappoint, that leaves the heavy lifting to China. Here, though, there is some good news. Bloomberg News reported last month that China is considering allowing provincial governments to issue more bonds for infrastructure investment. Policy makers may raise the annual quota for so-called special bonds from the current level of 2.15 trillion yuan ($305 billion), Bloomberg News reported, citing people familiar with the situation who asked not to be named as the matter wasn’t yet public.OIL MARKETS HAVE A DEEP THROATOne day after soaring almost 15% following an attack that wiped out about half of Saudi Arabia’s output capacity, oil plunged as much as 7% as Reuters reported the kingdom’s output will be fully back on line in the next two to three weeks, which is much sooner than the months some expected it would take. No matter that Reuters cited one unidentified Saudi source who was briefed on the timeline – traders wanted to believe. It helped that Saudi officials later confirmed that at least one of the damaged facilities will be back to producing oil at pre-attack levels by the end of the month. However, oil traders might be wise to be a bit more skeptical. It’s not crazy to think that Saudi officials would want to downplay the success of the strikes at a time when its military is getting a lot of criticism for not detecting and stopping whatever it was that crippled the facilities. “We flip from worst case scenario to best case scenario in less than 24 hours,” John Kilduff, a partner at Again Capital LLC, told Bloomberg News. “We still need damage assessments and what it takes for those repairs.”CAN’T SPELL FUNDING WITHOUT ‘FUN’The repurchase, or repo, market went haywire for a second straight day on Tuesday, forcing the Fed to inject billions of dollars of cash into the system for the first time in a decade to temper a surge in short-term rates. All of this sounds concerning, especially since the financial crisis was partly exacerbated by a seizing up of the funding market. But that’s not what’s happening here. Market participants say the spike in short-term rates is a result mainly of a confluence of technical events, including the sudden withdrawal of cash from money-market funds by companies needing to pay taxes. But there are still reasons to be concerned. The first is that this all comes with the new York Fed still without a formal head of its markets group following the abrupt departure of the widely respected Simon Potter earlier this year. The implication is that if Potter were still around, traders at the central bank might have been better prepared to handle any unforeseen stresses in funding markets. The second reason for concern is that the move in the repo market has definitely had some knock-on effects, especially in overnight bank funding costs. Those reached 45 basis points Monday before easing to 41.9 basis points Tuesday, levels that are more in line with times of broad market turbulence. Bank earnings are already under pressure from a flat yield curve, and this spike in funding cost won’t help, which may explain why the KBW Bank Index fell the most in more than two weeks on Tuesday.SHAKING THE BEARS OUTTo say it hasn’t been a good month for the U.S. Treasury market would be an understatement. The Bloomberg Barclays U.S. Treasury Index was down 1.96% in September through Monday, putting the benchmark on track for its worst monthly performance since it dropped 2.67% in November 2016 following President Donald Trump’s election victory. The swift decline has many wondering whether the bond market is at the beginning of a sustained turn for the worse. The evidence, though, suggests the move has been more about positioning than anything fundamental. That is seen in the Bank of America survey. For the second straight month, it found that being “long” Treasuries was the most crowded trade in global markets, followed by being “long” technology and growth stocks and being “long” gold. So, with so many investors and traders leaning one way, it doesn’t take much for a move in the opposite direction to force traders to rebalance. On the positive side, JPMorgan Chase & Co.’s widely followed weekly survey of bond traders released on Tuesday suggested that the sell-off may be ending. Its index tracking clients who are “short” is back near its lowest level since 2016, suggesting all those who want to bet against the bond market have already done so.EARNINGS DON’T MATTERThe latest Bloomberg News survey of where Wall Street strategists expect the S&P 500 to end the year came out on Tuesday, and the results confirm just how reliant equities are on low interest rates. It’s not so much that strategists see the S&P 500 ending the year at 3,000, or little changed from current levels; it’s that they expect equities to be resilient in the face of ever lower profit forecasts. They now forecast 2019 earnings per share of $166.35 for the gauge, down from their estimate of $172.25 at the start of the year. Also back then, the strategists we’re only expecting the S&P 500 to end the year at 2,913. So they’ve raised their forecasts for how high the index will go while also cutting their earnings estimates. That may seem counter-intuitive, until you consider that simple discounted cash-flow analysis shows how lower rates make future earnings more valuable now, justifying higher multiples for equities even without profit growth. So, logic would dictate that the lower rates go, the better for equities. This makes Wednesday’s Fed meeting all the more important for equities, especially with the S&P 500 trading at about 18.2 times this year’s expected earnings, which is the highest since January 2018.TEA LEAVESA big drop in mortgage rates is giving new life to the U.S. housing market despite a slowing economy. The National Association of Home Builders/Wells Fargo Housing Market Index released on Tuesday increased to 68 in September from an upwardly revised 67 in August. The current level is at an 11-month high. Also on Tuesday, the Mortgage Bankers Association said its data show that mortgage applications for new home purchases increased 33% in August from a year earlier. Both reports are good omens for Wednesday’s government report on housing starts and permits. The median estimate of economists surveyed by Bloomberg is for starts to have rebounded 5% in August after falling 4% in July. Permits are seen declining 1.3%, but that shouldn’t be worrisome after July’s outsized 6.9% gain, which was the biggest since 2017.DON’T MISS Chaotic Funding Market Fell Asleep at the Wheel: Brian ChappattaStock Pickers Are Just Imagining an Index Bubble: Nir KaissarConflicted Dealers Shouldn't Advise the Treasury: James BiancoDraghi Lets Lagarde Pick Up the Pieces: Ferdinando GiuglianoEmpty Hair Salons Can't Be Saved by a Central Bank: Daniel MossTo contact the author of this story: Robert Burgess at email@example.comTo contact the editor responsible for this story: Beth Williams at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Robert Burgess is an editor for Bloomberg Opinion. He is the former global executive editor in charge of financial markets for Bloomberg News. As managing editor, he led the company’s news coverage of credit markets during the global financial crisis.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Treasuries rallied and stocks eked out a gain a day before the Federal Reserve is expected to cut interest rates. Oil plunged as Saudi Arabia restarted the plant damaged in a weekend attack.Crude gave back some of Monday’s 15% surge as Saudi officials said they had restored just under half the output lost at the Abqaiq plant, one of the world’s biggest oil facilities. The S&P 500 Index posted a small advance, with dividend paying real-estate shares faring best. Ten-year Treasury yields fell toward 1.8% and the dollar weakened after the New York Fed took action to calm money markets, injecting billions in cash to quell a surge in short-term rates that was threatening to drive up borrowing costs for companies and consumers.As U.S. policy makers get ready to decide interest rates, investors are also trying to gauge the risk of a potential oil shortage weighing on a global economy that already seemed to be slowing down. Meanwhile, concerns linger about trade tensions, with U.S. and Chinese working-level negotiators set to resume talks in the next week, before a meeting of top officials in October.The Saudi attack has reminded investors about the risks of geopolitical tensions escalating, according to Nela Richardson, an investment strategist at Edward Jones in St. Louis.“We’ve pointed to U.S. trade escalation, we’ve pointed to Brexit, but we’ve seen that over the course of the last two years, unexpected triggers of risk can pop up,” she said. “And we don’t always know where that’s going to come from.”The Stoxx Europe 600 edged lower. Equities in Shanghai and Hong Kong slid after China’s central bank disappointed investors when it refrained from lowering a key interest rate. Italian bonds fell after former Prime Minster Matteo Renzi left the Democratic Party, raising the prospect of further government instability. Emerging-market stocks headed for their first decline in five sessions.These are some key events to keep an eye on this week:The Federal Reserve is widely expected to lower U.S. interest rates in response to slowing global economic growth and muted inflation. Chairman Jerome Powell will hold a post-decision press conference Wednesday.The Bank of Japan monetary policy decision is on Thursday, followed by a briefing from Governor Haruhiko Kuroda.Bank Indonesia and Bank of England also decide policy on Thursday.Australia jobs figures are out Thursday.Friday is quadruple witching day for U.S. markets. When the quarterly expiration of futures and options on indexes and stocks occurs on the same day, surging volatility and trading can follow.Here are the main moves in markets:StocksThe S&P 500 Index rose 0.2% at the close of trading in New York.The Stoxx Europe 600 Index slid less than 0.1%.The Shanghai Composite Index declined 1.7%.CurrenciesThe Bloomberg Dollar Spot Index fell 0.2%.The British pound rose 0.6% to $1.25.The Japanese yen was little changed at 108.16 per dollar.The euro rose 0.7% to $1.1072.BondsThe yield on 10-year Treasuries declined four basis points to 1.8%.Germany’s 10-year yield rose one basis point to -0.48%.Britain’s 10-year yield was little changed at 0.69%.CommoditiesGold climbed 0.3% to $1,503.13 an ounce.WTI crude dropped 6.1% to $59.06 a barrel.\--With assistance from Gregor Stuart Hunter, Andreea Papuc and Laura Curtis.To contact the reporters on this story: Vildana Hajric in New York at email@example.com;Brendan Walsh in Austin at firstname.lastname@example.orgTo contact the editors responsible for this story: Samuel Potter at email@example.com, ;Jeremy Herron at firstname.lastname@example.org, Brendan Walsh, Todd WhiteFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
U.S. stocks finished with modest gains Tuesday, a day ahead of the outcome of a Federal Reserve policy meeting that's expected to deliver a rate cut. The Dow Jones Industrial Average rose around 31 points, or 0.1%, to end near 27,108, according to preliminary figures, while the S&P 500 gained around 8 points, or 0.3%, to close near 3,006. The Nasdaq Composite finished near 8,186, a gain of around 32 points, or 0.4%. Stocks bounced back from modest losses seen a day earlier when oil prices spiked in response to a weekend attack on oil-production facilities in Saudi Arabia. Oil fell sharply on Tuesday, however, extending a decline after the country's energy minister said supply would be restored by the end of the month.
The Federal Reserve is expected to lower interest rates when it issues its policy statement on Wednesday at the close of a two-day meeting. It would be the central bank's second reduction this year, on the heels of a 25 basis point cut at the July policy meeting, the first rate cut since 2008. As recently as last week, markets were pricing in a greater than 90% probability that the Fed will shave another quarter point from its overnight lending rate, which is currently set in a range of 2.00% to 2.25%.
Investors have bid up stocks in September as recession fears have faded and hopes for a U.S.-China trade deal have grown, and equity market positioning now has hit its highest level in 2019, according to an analysis by Goldman Sachs. “Today our sentiment indicator shows that aggregate equity positioning is 1.2 standard deviations above average, indicating that positioning poses a downside risk to S&P 500 index returns in the near future,” wrote Goldman equity analysts, led by Arjun Menon, in a Tuesday research note. Month-to-date, the S&P 500 index (SPX) Dow Jones Industrial Average (DJIA) and Nasdaq Composite index (COMP) have all gained roughly 2.5%.
The idea, bankers said, was to hatch partnerships between old companies that are replete with cash and searching for growth, and fledgling companies that are gobbling up market share and need working capital. One of the blue-chip titans that benefited from Citi's matchmaking was Kimberly Clark Corp . Such tie-ups help Citigroup bankers improve relationships with large-cap clients while also building connections with privately held companies that may one day go public, said Elinor Hoover, Citigroup’s co-head of consumer investment banking.
Not all U.S. rate-cutting cycles are created equal, at least when it comes to how the stock market reacts. The Federal Reserve is expected to lower interest rates when it issues its policy statement on Wednesday at the close of a two-day meeting. It would be the central bank's second reduction this year, on the heels of a 25 basis point cut at the July policy meeting, the first rate cut since 2008.
Wall Street was mixed on Tuesday as investors awaited a widely expected Fed interest rate cut on Wednesday, while the impact of weekend attacks on Saudi Arabia's biggest oil refinery faded. Equity markets took a hit on Monday after the attacks wiped out nearly half of Saudi Arabia's oil production, sending oil prices soaring and fuelling geopolitical tensions.