Wall St falls as labor data spurs rate hike jitters before debt ceiling vote

Today’s Labor Department reports showing a continuing and unexpectedly strong job market spurred nerves again about more rate hikes to continue cooling inflation, cranking the odds up to 70% for a June hike and dropping the market down, the Dow some 300 points by 10 a.m.  The debt ceiling bill, though widely expected to pass, still sends some jitters as it is also expected to pass narrowly, the House vote coming Wednesday night, the Senate could be as late as June 4^th vs the June 5^th deadline. 

Shares close mixed, Nvidia's 3% rise offsets debt ceiling jitters

The Nvidia rally continued into its third day but was tempered with continuing nerves over what is expected to be a failed first vote on the debt ceiling, however with confidence that it will pass by June 5^th. The end result was modest losses on the Dow and modest gains on the Nasdaq and S&P, the Nasdaq benefitting from Nvidia rising another 3% and flirting with becoming just the 7^th company to hit the $1 trillion mark. The Dow suffered the most hitting a 200-point low in the morning before slowly rebounding. All in all, a mixed bag with volume at about 11 billion. 

10 of the Best Stocks to Buy for 2023

Continuing this holiday weekend's theme of best stock buy, here's another list of 10 best stocks for 2023.  Hope everyone had a great Memorial Day.  

7 Best Monthly Dividend Stocks to Buy Now

Continuing on this weekend's theme of beating volatility, here is the latest and greatest from U.S. News Invested of the best dividend stocks to be buying now.  Happy Memorial Day!  

Long Lasting Stock Strategies

Given the volatility that has characterized this market for so long, I thought this week's edition of Wealth Track seemed particularly appropriate with its discussion of the one strategy that makes volatility irrelevant -- investing for the long-term.  Enjoy the holiday weekend.  

Wall Street indexes end sharply higher on optimism about debt ceiling

Yesterday’s AI exuberance over Nvidia’s triumphs spread into another day with both the Nasdaq and S&P jumping big again, and this time also joined by the Dow.  Nvidia’s 2-day gain is now 26.5%. The 2-day gain on the tech index is 13%. The nerves over the debt ceiling seem to be abating with “all signs pointing to a deal getting done” but also cautioning that if we go through the holiday weekend without a deal, there will be a very unpleasant surprise awaiting investors Tuesday morning.  Consumer spending and, thus, inflation is up more than expected again so there are now 60/40 chances of a ¼ point vs no hike in June.  Volume was lighter than average at 9.8 billion. 

Wall Street ends higher as Nvidia sparks rush for AI stocks

Nvidia blowing way past expectations with its dominance in the AI market today made up 1/5 of all S&P trading with $60 billion in shares in Nvidia alone trading hands. AI is suddenly Wall Street’s new darling and the other heavy players also got a big boost along with the overall tech index soaring nearly 7%, its highest in more than a year. But as goes hi-risk tech, the traditional Dow usually goes the other way and was down over 200 by noon but recovered to only a modest loss by close. 

Wall St ends down as debt-ceiling clouds hover

It was a straight shot down for all the indexes from the open with the Dow closing down another 255 points after Tuesday’s 231-point loss, all due to jitters over a non-agreement with the debt ceiling.  As today’s expert put it, “Up until yesterday, investors have been optimistic around the debt ceiling resolution. Now we are seeing some caution again.”  The VIX is now at a three-week high and though the market still believes the Fed is heading towards a pause, today Fed officials again reiterated that an end [in June] to the hiking campaign is not likely. On the other hand, the minutes of the May meeting released today stated officials are “generally agreed” that further rate increases “had become less certain.”  With all the uncertainty over the debt ceiling, volume was again below average at 9.7 billion. 

Wall St ends sharply lower on deadlocked debt ceiling talks

All three indexes went deeply south right after the noon hour which must have been right about the time Biden and the Republicans ended today’s debt ceiling talks, and with no agreement in sight.  This shot up investor jitters as well as the yields on one-month Treasuries to just shy of 5.9%. Business activity rose to a 13-month high showing the economy holding its momentum, but all eyes will now be on Friday’s PCE reading, the Fed’s preferred inflation gauge.  

Wall Street ends mixed as investors await debt ceiling talks

The oddsmakers are putting a 60/40 chance that an agreement on the debt ceiling will be reached on time. That big news and more inflation data hovering on the horizon later this week, investors are typically staying on the sidelines awaiting more outcome with a flight into mega cap as the new defensive area and fleeing from the traditional cyclicals. Fed comments today still point to another ½ point rate hike which means investors are looking all the more closely at the data points coming later this week. Regional bank stocks were up, larger lenders not so much. As is always the case when big news is coming soon, volume was light at 9.6 billion. 

Artificial Intelligence Stocks: The 10 Best AI Companies

Continuing on this AI-themed weekend, and despite my personal misgivings as a creative soul about the horrors of novels and songs being written by AI, here is the latest and greatest from U.S. News Invested about the best AI stocks.  

AI or Bust!

This weekend, the theme shall be AI, beginning with a comprehensive analysis of the topic below courtesy of Heritage Capital Research.  Tomorrow we'll look at some of the best AI companies.  

Wall Street closes down, dollar dips as debt ceiling talks stall

Yesterday the hint that debt ceiling negotiations were nearing a solution sent the markets soaring. Today the hint the talks had stalled sent it all tumbling though losses were moderate. As today’s expert put it, “It’s like watching a nuclear standoff and hoping the other guy isn’t crazy enough to hit the button.” In remarks today, Powell continued his stance that there was still too much uncertainty to say whether more tightening will happen. But the fact that the bank crisis has created tighter lending it is hoped will cause the Fed to at least pause. The graph below shows clearly that both CPI and PCE have steadily declined with each rate hike. Volume remains below average at about 9.9 billion. 

Growing debt ceiling deal hopes send stocks higher

The Dow was down as much as 200 points by 2 pm, then zoomed up to close at a +115.  The Nasdaq and S&P spent most of the session firmly in the black but again, at 1:30 pm, took a nosedive only to turn around at 2 pm and head further into positive territory.  The one bit of bad news that could have caused the nosedive was jobless claims fell more than expected suggesting a continuing tight labor market and thus more room for more rate hikes. It was probably around 2 p.m. that the news came in that a debt ceiling deal could be reached by week’s end, thus building on yesterday’s euphoria. 

Wall St rallies on debt ceiling optimism, regional bank rise

It was a shot straight up all day when suddenly the market’s pessimism over the debt ceiling turned to optimism with the simple catalyst of both Biden and McCarthy saying “we are close.” So naturally investors with their indomitable need for good news jumped to the assumption that “some kind of agreement” was coming. Even Fed officials continuing their stance that they are not ready to cut rates soon could not stifle the optimism and the market continues to ignore this and price in a pause very soon and cuts by year-end.  The slowing economic data has encouraged all this.  Volume was a bit below average at 10.35 billion. 

Wall Street closes lower after Home Depot outlook, US retail sales

Except for the Nasdaq which had a healthy day in the black until about 3:30 p.m. when it dropped through the floor, all the indexes spent the day well into the red and, again, dropping dramatically right about 3:30 p.m.  Most of the downside was triggered by a decline in Home Depot attributed to people weary of spending on the house and switching their spending to going out and doing other things, prompting the retailer to a cut in their sales and profits forecast. Lowe’s also fell.  

Dow, S&P edge up as data, debt ceiling curb gains

It was a similar pattern to Friday with all three indexes spending a good chunk of the morning in the red, the Dow down some 140 points, and then all three began a steady recovery and ended the day modestly in the black. Once again, it’s the tug of war going on between weak data signaling that inflation is coming down but combined with fears that the data may be too weak to prevent a recession.  Today it was the New York manufacturing activity number tumbling substantially more than expected.  

Contrarian Bullishness

For Mother's Day, the WealthTrack program this week is offering up one of Wall Street's leading contrarians.  Savita Subramanian, head of U.S. Equity and Quantitative Strategy at B of A Research agrees with Jerome Powell that the banking crisis is being contained and that the markets are in much better shape than most leading institutional investors are willing to acknowledge.  Her current recommendation is to buy, buy, buy! This is a perspective that Consuelo Mack believes deserves some serious attention.  Hope everyone had a great weekend.  

U.S. Debt-Ceiling Deadline: What Investors Should Know

Given that the debt ceiling crisis has been the biggest headline getter for at least the last month, this week's issue of U.S. News Invested does an excellent of explaining the whole thing.  Enjoy the weekend.  

Stocks slip as US consumer confidence slumps, dollar gains

All three indexes went deeply red right at the outset, the Dow down 200 points by 2 pm, and then right at 2 pm all the indexes did a dramatic rebound to close almost even. The news is consumer sentiment dropping to a six-month low (though the VIX has been hovering around 17 all week and anything under 30 is considered good), compounded by the fears over the debt ceiling. 

Dow, S&P 500 fall with Disney; PacWest leads regional banks lower

One day PacWest does well and the market goes up, another day not so well and the market sinks as it did today. It’s a wonder that a single small bank is seen as a barometer for the whole regional banking sector which, in turn, is seen as a potential threat to all banking despite all evidence to the contrary. So the S&P and Dow spent much of the day deeply in the red, the Dow down as much as 400 points at a couple points.  The Nasdaq fared better with most of the day in the black and eking out a modest gain. The good news for the banks is that 116 major lenders have pitched in to reimburse the FDIC for the $16 billion bailout of the smaller regional banks.  The impending debt ceiling crisis is also causing volatility.  Volume was below average at 10.05 billion. 

Nasdaq rallies as investors cheer inflation data, Alphabet

CPI coming in today at 4.9% vs the expected 5.0% was enough to send the markets cheering that inflation is improving enough for the Fed to put rate increases on pause, so much so that the futures traders have now priced in a mere 5% chance of another ¼ point hike, all this despite the fact that the Fed has said nothing about a pause, and that a 1/10% variance should logically not be considered sufficient for a change in direction from the Fed. 

Wall Street closes down as focus shifts to inflation data, debt talks

Awaiting Wednesday’s CPI and hoping it shows inflation continuing to ease and given a battery of choppy and weak Q1 reports, investors sat on the fence and sent the indexes mildly into the red pending more data. Stress over the debt ceiling also did not help. Pacwest closed up which brought some relief to regional banking. All in all it was a mild day with volume below average at 9.35 billion. 

Wall Street ends near flat ahead of inflation data

It was a lackluster day as there was no new good news to keep Friday’s rally going so investors sat on the sidelines awaiting several inflation reports coming later this week.  The Dow was down about a hundred points much of the day but rebounded to close 55 down.  The S&P and Nasdaq also spent much of the day in the red but rebounded to modest gains by close. As today’s expert put it, “The bigger picture is that we are heading into a recession and whether that’s going to be hard or soft remains to be seen. But until something disproves the recession thesis, the markets are going to be range bound.”  The rally in the regional banks was also short-lived. 

7 of the Best High-Dividend ETFs

 Continuing on this weekend's ETF theme:   

7 Best Actively Managed ETFs

To kick off May, here are the latest recommendations on the best ETFs.  Enjoy this beautiful weekend.  

Wall St ends up sharply with Apple; jobs data suggests strength

It was a big shot straight up from the open with the Dow gaining 546 points on the strength of an ebullient Q1 from Apple and a jobs report showing solid growth and good evidence that labor remains resilient despite the rate hikes.  As today’s expert put it, “The state of the U.S. economy is in a better position than previously expected.”  The regional banks also rebounded.  The good news once again boosted Q1 earnings decline estimates today to just 0.7% vs 5.1% a month ago. Who knows? Maybe this time next week it’ll actually be in positive territory again.  Volume was a tad below average at just under 10.6 billion. 

Wall Street ends down as PacWest fuels fears of deeper bank crisis

There was little good news today as all three indexes went well into the red right out the gate and stayed there all day, all due to spreading fears of the banks. The Dow was down nearly 500 points by noon but recovered to a 286 point loss by close.  The Nasdaq was in the red all day too but briefly reached break-even at 1:30 p.m.  Not only were the regional banks hit big (PacWest down 51%, Western Alliance 39%, First Horizon 33%) but the major banks like JPMorgan and Wells Fargo were hit too.  The VIX rose to its highest since late March. The only good news is that claims for jobless benefits increased so the labor market continues to soften cooling off the economy.  Volume was heavy at 12 billion. 

Wall Street ends down on nagging uncertainty about Fed rate path

The day ended down but the indexes were mostly in the black all day, the Dow up as much as 130 points. Then it all came crashing down right after 2 pm which is likely when Powell had his press conference announcing the expected May hike but in which he also stated it was too soon to stop the rate hikes. That dashed many hopes that this May hike would be the last. So the end of hikes remains inconclusive which prompted a wave of selling over continuing fears of the hikes triggering recession, bringing the Dow down 270.  Hiring was up in April though the labor market in general is softening but the consensus remains that higher prices will be around for some time to come, and so too likely more hikes.  Volume was again above average at about 12 billion. 

Indexes fall 1% as regional banks tumble, investors fret before Fed

It was a straight shot down right out the gate with the Dow losing over 600 points by 11:30 a.m. as it became apparent that yesterday’s downside was only the beginning of a resurrected panic over the regional banking crisis after the seizure and auction of First Republic.  This renewed panic is now threatening to spill over into real estate, a market commonly handled by regional banks.  Among the wounded were PacWest falling 27.8% and even Comerica sliding 12.4%. The good news includes corporate analysts on recent conference calls expressing less concern about recession and, with half of Q1 in, the earnings decline estimate has once again been boosted, today to 1.4% vs 1.9% on Friday vs 5.1% a month ago.  Volume was considerably above average at 12.3 billion. 

Wall Street near flat after First Republic news, awaiting Fed

Though the day ended near flat, it was actually a seesaw day all the way with all the indexes up, the Dow up over 150 at 1 pm, then a gradual descent that then dropped precipitously at 2:30 p.m.  The upside seems to be attributed to JPMorgan winning the FDIC auction to buy out First Republic and thus lending credence to the hope that this is the last of the banking crisis. The downside may have been triggered by today’s ISM report showing manufacturing rose last month, thus adding concerns about more rate hikes.