Stocks Rebound One Week Before Big Tech Earnings: Markets Roundup

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Stocks Rebound One Week Before Big Tech Earnings: Markets Roundup

(Bloomberg) – U.S. stocks rose in a late-day reversal as retreating buyers emerged ahead of a busy week for earnings at major tech companies.

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The S&P 500 rallied again in a choppy afternoon session to finish near the day’s highs, after dipping to lows near the 4200 level. The tech-heavy Nasdaq 100 is up more than 1%. Twitter Inc. has expanded. His gains came after billionaire businessman Elon Musk agreed to buy the social media platform. alphabet inc and Apple Inc. and Amazon.com Inc. and Meta Platforms Inc. All must report.

“This week could easily be a fork in the road for equities,” JC O’Hara, chief market technician at MKM Partners, wrote in a note. “We have about a third of the S&P 500 and half of the Dow Jones indices to report. Bottom-up drivers will either confirm or deny what the challenging macroeconomic backdrop has given us over the last three weeks.”

Stocks in Europe and Asia fell as the COVID-19 outbreak in China continued to exacerbate fears of the Federal Reserve tightening even faster. The Stoxx 600 Europe index has fallen, with mining and energy companies leading the losses. West Texas Intermediate crude futures fell below $100 a barrel amid declines in other commodities. Bonuses skyrocketed.

Fears of broader restrictions in Beijing are already raising investor concerns about the risks of a global slowdown as the Federal Reserve raises interest rates to rein in inflation. A broad gauge of Chinese stocks fell to a nearly two-year low as policymakers locked down some areas of capital amid the government’s unwavering commitment to Covid-zero policy.

Morgan Stanley’s Mike Wilson warned that the S&P 500 is about to drop sharply as investors struggle to find shelter amid fears that aggressive action by the Fed could trigger a recession. Strategists at Morgan Stanley said in a note on Monday that the rapidly tightening Fed was looking for “a slowdown” and that crowded defensive stocks were no longer paying.

The flight to the safe haven lifted global government bonds, with benchmark US bond yields falling 10 basis points. The dollar extended its advance, while the euro fell even after Emmanuel Macron’s victory in the French elections removed a major risk to markets. Gold sheds about 2%.

Monday’s drop in high commodity prices since Russia’s invasion of Ukraine did little to allay fears about hyperinflation.

Read more: Fears of inflation sweeping global markets will not abate

Last week, Fed Chairman Jerome Powell outlined a more aggressive approach to curb price gains and the ECB signaled stronger tightening.

However, China’s central bank is in a different position as it seeks to support its economy. And on Monday, it cut the amount of money banks need as reserves for their foreign currency holdings, prompting the yuan to ease recent declines.

“We continue to believe that US/global equities will not bottom until markets stop pricing in more aggressive Fed rate policy,” wrote Nicholas Colas, co-founder of DataTrek Research. It’s not that the current news flow is bad. The problem is that the range of possible economic outcomes is too wide to predict future corporate profits with any certainty.

Things to watch this week:

  • Tech gains include Alphabet, Meta Platforms, Amazon and Apple

  • Oil Inventory Report from the Energy Information Administration, Wednesday

  • Australian CPI Wednesday

  • Bank of Japan monetary policy decision, Thursday

  • US Q1 GDP Weekly Jobless Claims Thursday

  • The European Central Bank publishes this Thursday its economic bulletin

Some of the main movements in the markets:

stories

  • The S&P 500 was up 0.6% at 4 p.m. New York time.

  • The Nasdaq 100 is up 1.3%.

  • The Dow Jones Industrial Average rose 0.7%

  • MSCI World Index fell 0.4%

coins

  • The Bloomberg Cash Dollar Index rose 0.3%.

  • The euro fell 0.7 percent to $1.0714.

  • Sterling fell 0.8 percent to $1.2740.

  • The Japanese yen rose 0.4% to 128.03 per dollar.

captivity

  • The 10-year Treasury yield fell seven basis points to 2.83%.

  • Germany’s 10-year bond yield fell 13 basis points to 0.84%

  • Britain’s 10-year bond yield fell 12 basis points to 1.84%.

estate

  • West Texas Intermediate crude fell 2.9 percent to $99.06 a barrel.

  • Gold futures fell 1.8 percent to $1,900 an ounce.

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