Stocks stretch gains, hovering near record highs

Stocks gained on Tuesday, hovering near all-time highs as optimism about earnings and the economic reopening at least temporarily offset lingering concerns about the virus and monetary policy changes.

The S&P 500 rose slightly. Major tech stocks including (AMZN) increased their gains and the Nasdaq outperformed to set an intraday high. ‘Reopening’ stocks, including airlines and cruise lines, also rose after rising on Monday, with optimism about a broader recovery in leisure and travel after the U.S. Food and Drug Administration United has granted full approval to Pfizer (PFE) and BioNTech (BNTX) COVID-19 vaccine.

Shares of Chinese tech companies rose, erasing steep declines in recent weeks amid a regulatory crackdown on major tech companies in China. The jump came after Ark Investment Management – led by closely watched investor Cathie Woods – snatched up shares of Chinese e-commerce company JD.com (JD) following better-than-expected quarterly results from the business. Peers like Alibaba (BABA) and Baidu (BIDU) also rose, and the Hang Seng Index (^ HSI) rose 2.5%.

Investors are also eagerly awaiting the Federal Reserve’s Jackson Hole Virtual Symposium which kicks off Thursday. The event is expected to serve as an additional forum for central bank officials to discuss their assessment of economic conditions and provide guidance on when the Fed may announce and possibly begin the process of scaling back its asset purchase program. in a time of crisis.

New economic data released earlier this week disappointed compared to Wall Street estimates, with index tracking activity in the US service sector cooling to an eight-month low as concerns over the Delta variant began to weigh on demand.

Despite the lingering risks of the virus, however, three major factors have helped keep stock markets moving towards new all-time highs, according to a strategist.

“The first is extremely low discount rates. The 10-year Treasury yield is barely at its August low,” Michael Darda, chief economist at MKM Partners, told Yahoo Finance. “So, all other things being equal, if interest rates are low, if discount rates are low, valuations will tend to be higher due to a lack of competition.”

“On top of that, we have a very high liquidity environment… and earnings have been incredibly strong,” he added. “Usually when long-term interest rates go down, earnings or the economy falter. In this case, earnings have been pretty robust, really historic. So we’re really going to need to see one of these. three pillars disrupted in some fashion for a sharp decline in stock prices. ”

Others offered an equally optimistic view of the trajectory of US stocks.

“We think the main trend is upwards”, Keith Lerner, Truist Wealth’s chief market strategist told Yahoo Finance. “You are only a year away from this economic expansion. Economic expansions last about five years. And the earnings season that we just came out of has been once again phenomenal.”

“Even though this is a peak of growth, we still think it will be strong growth,” he said. “You have earnings going up and then you look at the relative comparison of stocks versus bonds and they’re still attractive… Overall, we think the right position is to overweight stocks.”

9:45 am ET: Peloton shares gain after company says it will resume treadmill sales after recall

Peloton Fitness Equipment Company (PTON) announced Tuesday that its cheaper connected treadmill will go on sale in the US, UK and Canada starting August 30, marking the return of the product following a recall after a series of reported injuries related to the device earlier this year. The United States Consumer Product Safety Commission called for the recall of the higher priced Tread and Tread + in May.

Tread resuming sales at the end of this month will cost $ 2,495

“We’ve worked hard to make sure the new tread really wins its place in member’s homes,” Peloton CEO and co-founder John Foley said in a press release. “We will always continue to innovate in hardware, software and security features to live up to our commitment to member safety and to improve the overall member experience. “

9:31 am ET: Stocks open higher, Nasdaq outperforms

All three major indices extended their gains on Tuesday morning, building on record highs since the start of the week. The Nasdaq set a new intraday record and the S&P 500 also hovered near its all-time high.

The rally in risk spread to oil, and West Texas intermediate crude oil futures were on track to post a consecutive session of gains. T-bill yields rose across the curve and the benchmark 10-year yield added more than 2 basis points to hold above 1.27%.

7:30 a.m. ET Tuesday: Stock futures hold overnight advances

Here’s where the markets were trading on Tuesday morning:

  • S&P 500 Futures Contracts (ES = F): +8.5 points (+ 0.19%) to 4,484.00

  • Dow Futures (YM = F): +57.00 points (+ 0.16%) to 35,338.00

  • Nasdaq Futures (NQ = F): +43.75 points (+ 0.29%) at 15,348.25

  • Raw (CL = F): + $ 1.19 (+ 1.81%) to $ 66.83 per barrel

  • Gold (CG = F): + $ 0.70 (+ 0.04%) to $ 1,807.00 per ounce

  • 10-year cash flow (^ TNX): +1 bps for a yield of 1.265%

6:15 p.m. ET Monday: Stock futures extend gains

Here’s where the markets were trading Monday night:

  • S&P 500 Futures Contracts (ES = F): +5 points (+ 0.11%) at 4,480.50

  • Dow Futures (YM = F): +43.00 points (+ 0.12%) to 35,324.00

  • Nasdaq Futures (NQ = F): +20 points (+ 0.13%) to 15,324.50

Traders work in the dealing room of the New York Stock Exchange in New York, United States on August 19, 2021. The S&P 500 Index closed at 4,405.80 points, up 5.53 points, or 0.13%. The Dow Jones Industrial Average closed at 34,894.12 points, down 66.57 points, or 0.19%. The Nasdaq Composite Index closed at 14,541.79 points, up 15.88 points, or 0.11%. (Photo by Wang Ying / Xinhua via Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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