U.S. stocks were volatile on Monday, but capitalized on Federal Reserve Chairman Jerome Powell’s vow to do whatever it takes to keep the economy strong and signaled there was no rush to cut interest rates in the future. Strong gains are still expected on a monthly and quarterly basis as homes react.
“Overall, the economy is strong, and we’re going to use our tools to keep it that way,” Powell said in a speech at the National Association for Business Economics in Nashville, Tennessee. Report.
In afternoon trading, the S&P 500 (^GSPC) was down 0.5% and the Nasdaq Composite Index (^IXIC) was down 0.6%. Meanwhile, the Dow Jones Industrial Average (^DJI) fell 0.8%.
Wall Street indexes were still looking for monthly gains heading into the final trading day of September, typically the cruelest month for stocks. Significant interest rate cuts from the Federal Reserve and signs of US economic resilience boosted confidence, with stocks posting their third straight weekly win. Profit taking and rebalancing also took place on the last trading day of the month and quarter.
Investors are now preparing for the September jobs report to be released on Friday, expected to be a key test for the recent rally in stocks. As markets consider whether the Fed acted aggressively to protect a healthy economy or support a struggling economy, the pressing question is how quickly the labor market is slowing. The question is whether progress is being made.
Chairman Powell’s comment that he would not rush the next interest rate decision also dampened expectations for another significant rate cut.
Read more: How Fed Rate Cuts Affect Bank Accounts, CDs, Loans, and Credit Cards
A growing pile of profit warnings from automakers clouded the mood early Monday. Shares of Stellantis (STLA, STLAM.MI) fell 13% after Chrysler’s parent company lowered its margin outlook, citing supply chain disruptions and weakness in China. General Motors (GM) and Ford (F) both fell about 4%. Aston Martin (AML.L, ARGGY) shares plunged more than 20% after the luxury automaker also issued a profit warning.
Overseas, China’s benchmark stock index (000300.SS) has entered a bull market, recording its biggest rise since 2008 as buyers rushed in ahead of the week-long holiday. In Japan, however, the Nikkei Stock Average (^N225) fell due to an unexpected vote by investors who had bet on an accommodative prime minister.
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Monday, September 30, 2024 11:51 PDT
Powell’s speech dampens expectations for further large-scale interest rate cuts
On Monday afternoon, Federal Reserve Chairman Jerome Powell vowed to do whatever it takes to keep the economy humming. However, his comments that made it clear that the central bank was not on a predetermined trajectory and in no hurry to cut rates quickly appeared to dampen expectations for another 50 basis point (bp) cut. .
Market expectations for another 0.5% rate cut fell to 35% on Monday afternoon, compared with 53% a day earlier, according to the CME FedWatch tool.
“Overall, the economy is strong, and we’re going to use the tools to help keep it that way,” Powell said in a speech at the National Association for Business Economics in Nashville, Tennessee. Report.
Powell said if the economy develops as expected, the Fed will lower rates “over time toward a more neutral stance.”
However, there is no need to rush, he made clear during the Q&A after his talk.
“This is not a committee that wants to cut rates quickly,” Powell added, referring to the Fed’s body, which determines the direction of interest rates.
Monday, September 30, 2024, 11:00 a.m. (Pacific Daylight Time)
Chevron stock rises as FTC clears Hess trade
This comes on the heels of news that the U.S. Federal Trade Commission has approved the company’s $53 billion acquisition of Hess Corporation but barred CEO John Hess from serving on Chevron’s board of directors. Chevron stock was up nearly 0.6% Monday afternoon.
According to Reuters, the final hurdle to the deal remains after the FTC’s order, with Exxon Mobile challenging the deal.
The FTC alleged that Mr. Hess openly communicated with members of the Organization of the Petroleum Exporting Countries (OPEC) to stabilize the global oil market. The FTC also said that allowing Mr. Hess to serve on Chevron’s board would “amplify Mr. Hess’ supportive message to OPEC and others, thereby allowing Chevron to reduce its production to OPEC and others in order to maintain higher prices.” “This will greatly increase the possibility of adjustments to production volume decisions.”
The deal with the second-largest U.S. oil company gives Chevron access to Guyana’s oil-rich offshore fields.
Monday, September 30, 2024 10:33 PDT
Stock prices rise in afternoon trading
Below are some of the stocks leading Yahoo Finance’s trend ticker page in Monday afternoon trading.
Stellantis (STLA): The company’s stock fell 14% on Monday afternoon, pushing other auto stocks lower after the company issued a stark warning about its North American operations.
Carnival (CCL): The cruise company fell 3% on Monday after the company beat analyst estimates for the third quarter and raised its full-year outlook. But the results were still not enough to satisfy investors looking for even better results.
META: The social media company is still riding on the optimistic mood sparked by last week’s developer conference, which featured updates in AI and mixed reality. Shares rose nearly 1% on Monday following analyst upgrade as Mones Crespi Hart & Co. raised price target from $570 to $620, citing Meta’s showcase and strength in future offerings. did.
Boeing (BA): The aircraft maker has fallen further into a slump as factory workers’ strikes enter their third week with no resolution in sight and negotiations with the company break down. Wall Street analysts lowered their price targets on Boeing’s stock, citing costs associated with the strike. Shares fell more than 2% on Monday.
Monday, September 30, 2024, 9:35 a.m. (Pacific Daylight Time)
Real estate leads the S&P 500
The real estate (XLRE) sector led the S&P 500 on Monday, rising more than 0.5% in a day of relatively subdued market activity. The benchmark index itself was up just 0.06% around 12:30 p.m. ET.
Meanwhile, the materials (XLB) sector was the worst laggard, falling 0.8%.
Source: Yahoo Finance
Monday, September 30, 2024, 8:45 a.m. (Pacific Daylight Time)
NVIDIA stock falls due to concerns about sales in China
Nvidia (NVDA) shares were down about 1% in early trading after falling as much as 2.8% in the premarket open. The decline follows a report in Bloomberg Friday that the Chinese government is encouraging Chinese companies to buy from domestic chipmakers instead of Nvidia’s popular GPUs.
Ever since the United States tightened restrictions on semiconductor exports to China from the end of 2022, NVIDIA has been designing chips specifically for China. NVIDIA is currently exporting a version of its Hopper chip called H20 to China that complies with stricter trade rules. Nvidia is reportedly working on bringing a version of its latest Blackwell chips online for China as well.
Analysts remain bullish on Nvidia despite trade tensions and historic volatility in the semiconductor sector. Roughly 90% of Wall Street analysts recommend the stock as a buy, and expect the stock to rise to $147.61 next year, according to Bloomberg consensus estimates.
Monday, September 30, 2024, 8:00 a.m. (Pacific Daylight Time)
Investors look for signs of growth in major economic indicators week
A slew of labor market data will grab investors’ attention this week, starting with the September jobs report. Updates on service sector and manufacturing activity will also be closely watched as market participants try to gauge how fast the U.S. economy is slowing.
Wall Street strategists say there is a clear reading on what kind of data supports further gains in stocks.
Stuart Kaiser, head of U.S. equity trading strategy at Citi, told Yahoo Finance that a scenario in which the Fed doesn’t cut interest rates because the economy requires it is “very bullish” for stocks. Therefore, a stronger-than-expected employment report is likely to be seen as positive for stock prices.
The September jobs report is expected to increase non-farm payrolls by 130,000 people and keep the unemployment rate steady at 4.2%, according to Bloomberg data. In August, the US economy added 142,000 jobs and the unemployment rate fell to 4.2%.
“It’s all about the growth side of the economy, it’s all about the consumer,” Kaiser said. “I think all the data that suggests that consumer spending is holding up and that we’re not seeing the kind of weakness that people are worried about and the Fed is worried about will be positive for the stock market.”
Then, if Friday’s jobs report is bad, it could have the opposite effect on stock prices.
“If it turns out that they started cutting rates because they were legitimately concerned about a weak labor market, then the rate cuts alone won’t be enough to support stock prices, and stock prices will fall,” Kaiser said. . “Then, the reason is [the Fed is cutting] It’s important here. And payroll can help answer that question. ”
Monday, September 30, 2024, 7:15 a.m. (Pacific Daylight Time)
Automakers fall as Stellantis lowers 2024 profit forecast
Stellantis (STLA) shares fell nearly 13% after the company lowered its 2024 earnings forecast.
Instead of being cash flow positive this year, Stellantis now projects negative cash flow in the range of $5.58 billion to $11.17 billion. The company also said it expects adjusted operating margins to be between 5.5% and 7% this year, which is lower than the double-digit margins Stellantis had originally expected.
“The deteriorating global industry backdrop reflects lower market forecasts for 2024 than at the beginning of the period, while competitive dynamics are intensifying due to both increased industry supply and increased competition from China. ” Stellantis said in a release.
Ford (F) and GM (GM) also fell on this news.
Monday, September 30, 2024, 6:35 a.m. (Pacific Daylight Time)
Stock prices fall as stocks move closer, and all eyes are on Mr. Powell
U.S. stocks fell on Monday, but are still expected to make big gains on a monthly and quarterly basis as investors awaited a speech from Federal Reserve Chairman Jerome Powell ahead of the important monthly jobs report. .
The S&P 500 (^GSPC), Nasdaq Composite Index (^IXIC), and Dow Jones Industrial Average (^DJI) all fell by about 0.2%.
There is little catalyst for the start of the week, with Powell’s speech on Monday afternoon expected to be key.
Monday, September 30, 2024, 5:50 a.m. (Pacific Daylight Time)
DirecTV to acquire Dish Network
In addition, new media acquisition was confirmed.
Yahoo Finance’s Alexandra Canal reports:
Satellite TV provider DirecTV (T, TPG) announced Monday that it will acquire rival Dish Network (SATS), which includes Dish’s streaming brand Sling TV, through a debt-swap deal. Financial terms were not disclosed.
The partnership, which still requires regulatory approval, will create one of the largest pay-TV providers in the United States.
“The combination of DirecTV and Dish will benefit American video consumers by creating a stronger competitive edge in a video industry dominated by streaming services owned by big tech companies and programmers,” the companies said in a joint statement. It will bring.”
Shares of Echostar (SATS), which owns Dish Network, rose about 1% in premarket trading on the news. Shares rose nearly 10% on Friday as rumors of a takeover intensified.
