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Stocks slipped Tuesday to give up some of the previous day’s gains as stocks stabilized on concerns about the way forward for monetary policy.
The S&P 500 has plunged into the red. The Dow Jones also fell, a day after the 30-stock index rose the most since March. The Nasdaq was down slightly. Cryptocurrency prices were significantly lower as concerns about China’s tightening regulatory measures continued to weigh in and tokens from Bitcoin (BTC-USD) to memes-based Dogecoin (DOGE-USD) added to the losses. Bitcoin prices fell below $ 30,000 and wiped out the cumulative gains for the year at their intraday lows.
Monday’s session saw traders plunge back into some of the cyclical areas of the stock market that came under the most pressure last week, when the outlook for increased inflation from the Federal Reserve raised fears that higher prices weighed in. ultimately on the economic recovery. However, according to some traders, now that the Fed has signaled it will take action to stem rapidly rising inflation, some of the long-term appeal of cyclical trading may be lifted.
“I think the question is going to arise here is that our price was very accommodating when the Fed entered. We now seem to have a pretty belligerent price. Obviously the right result is somewhere in the middle. “, Stuart Kaiser, Head of UBS Equities. derivatives research, Yahoo Finance said. “So, will energy benefit from a rebalancing of these expectations?” Potentially. I think right now though, what we’re seeing is that people are readjusting their expectations, a little less excited about these industries, in quotes, “reflation” and maybe focused a bit more on tech to the moment.”
Others have offered a similar point of view.
“One of the things we are watching very closely is how much inflationary pressure would tip some growth stocks,” Ann Berry, chief investment officer at Wheelhouse, told Yahoo Finance on Monday. “What we saw today, which is the upward movement again on the Nasdaq, the upward movement again on some of the key tech stocks… is very much in line with what we expected, because people are watching where to put their capital in a rising inflationary environment, this return to growth seems natural. ”
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“We’re really looking now as people post announcements on what the second half of the year looks like, we’re looking at what new business models are likely to persist in this post-COVID environment,” she added.
As the second quarter earnings season accelerates over the next two weeks, investors are also bracing for a potentially repeat performance of strong corporate earnings, with earnings boosted by vaccinated and thrifty consumers eager to get out and about. spend. So far, analysts expect S&P 500 earnings to grow 61.9% year-over-year in aggregate, FactSet data shows, an estimate according to UBS’s Kaiser could further “need to be revised upwards”.
“I still believe that earnings will outperform. Expectations are getting better and better. But if you look at the explosion we had in the first quarter, I think there is enough momentum to continue, this that’s going to make stocks a worthwhile investment throughout the year, ”Mitch Roschelle, founding partner of Macro Trends Advisors LLC, told Yahoo Finance.“ There will likely be a correction somewhere during the year because there always are, but right now, heading into earnings season, I’m seeing tailwinds and not headwinds. “
10 a.m. ET: Existing home sales fell for a fourth consecutive month in May
Existing home sales fell for a fourth straight month last month as tight inventory levels and rising prices weighed on housing market activity.
Sales of previously owned homes fell 0.9% in May from April to a seasonally adjusted annualized level of 5.8 million, according to the National Association of Realtors monthly report. It was less steep than the expected 2.1% drop, based on Bloomberg data. In April, sales of existing homes fell 2.7%.
9:30 a.m. ET: Stocks open slightly lower
Here’s where the markets were trading right after the opening bell:
S&P 500 (^ GSPC): -1.90 (-0.04%) to 4,222.89
Dow (^ DJI): -28.69 (-0.08%) to 33,848.28
Nasdaq (^ IXIC): +0.59 (+ 0.00%) at 14,141.71
Crude (CL = F): -0.38 $ (-0.52%) to 73.28 $ per barrel
Gold (GC = F): -5.00 $ (-0.28%) to $ 1,777.90 per ounce
10-year Treasury (^ TNX): + 2.4 bps for a yield of 1.509%
9:15 a.m.ET: Bitcoin Dips Below $ 30,000 As Regulatory Concerns From China Drag On Crypto
Bitcoin prices fell more than 7% to briefly trade below $ 30,000, according to data from Yahoo Finance. The drop came on top of a recent slump in recent sessions, with concerns of a regulatory crackdown from China weighing on the prices of Bitcoin, Ethereum and other cryptocurrencies. Bitcoin, the largest cryptocurrency by market cap, approached around $ 500 in cumulative gains for the year, after entering 2021 just above $ 29,000.
Earlier this week, the People’s Bank of China, or central bank of China, said it had called a meeting with some of the country’s largest banks to urge companies to impose bans on trading in cryptocurrency and others. services. This added to the concerns of crypto holders after reports last week suggested that a major Chinese city was planning to shut down all Bitcoin and Ethereum mining operations within a year.
7:50 a.m. ET: GameStop completes sale of 5 million shares, raising more than $ 1 billion
Shares of GameStop (GME) rose more than 8% at the start of trading after the company said it had raised around $ 1.13 billion in a previously disclosed stock offering.
The company revealed on June 9 that it plans to sell 5 million common shares as part of a market sale of shares.
The proceeds from the offering will be used “for general corporate purposes as well as to invest in growth initiatives and maintain a strong balance sheet,” according to the video game retailer.
7:21 a.m. ET Tuesday: Stock futures hold higher, heading towards a positive open
Here’s where the markets were trading on Tuesday morning:
S&P 500 Futures (ES = F): 4,218.75, +5 points (+ 0.12%)
Dow Futures (YM = F): 33,782.00, +21 points (+ 0.06%)
Nasdaq Futures (NQ = F): 14,164.50, +34.5 points (+ 0.24%)
Crude (CL = F): -0.51 $ (-0.69%) to 73.15 $ per barrel
Gold (GC = F): + $ 3.30 (+ 0.19%) at $ 1,786.20 per ounce
10-year Treasury (^ TNX): -0.1 bps for a yield of 1.4840%
6:12 p.m. ET Monday: Stock futures add to the gains
Here’s where the markets were trading Monday night:
S&P 500 Futures (ES = F): 4,218.75, +5 points (+ 0.12%)
Dow Futures (YM = F): 33,802.00, +41 points (+ 0.12%)
Nasdaq Futures (NQ = F): 14,140.5, +10.5 points (+ 0.07%)
NEW YORK, NY – JUNE 02: Exterior view of the New York Stock Exchange and Wall St. as new Organon company start trading next Thursday in New York on June 02, 2021. Organon is looking to expand to provide treatment for other conditions unique to women, about 80% of the new company’s income will come from outside the United States (Photo by Kena Betancur / VIEWpress)
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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