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Business

Wall Street totters after mixed earnings, trade halt glitch

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  • SEC investigating NYSE opening bell glitch
  • 3M slides on downbeat Q1 forecast
  • J&J falls on sales warning; GE down on weak profit view
  • Microsoft to report quarterly earnings after market close
  • Indexes: Dow up 0.18%, S&P 500 off 0.13%, Nasdaq down 0.25%

NEW YORK, Jan 24 (Reuters) – Wall Street was mixed on Tuesday as a raft of mixed earnings took some wind out of the sails of the recent rally.

The session got off to an rocky start, as a spate of NYSE-listed stocks were halted at the opening bell due to an apparent technical glitch, which caused initial price confusion and prompted an investigation by the U.S. Securities and Exchange Commission (SEC).

More than 80 stocks were affected by the glitch, which caused wide swings in opening prices in stocks, including Walmart Inc (WMT.N) and Nike Inc (NKE.N).

“It looks like NYSE got on it real early,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “Now they’re trying to determine what opening trade prices were.”

“Everyone involved in trade settlements is going to have a long day today.”

All three indexes sputtered near the starting line, with little apparent momentum in either direction.

Fourth quarter earnings season is in full swing, with 72 of the companies in the S&P 500 having reported. Of those, 65% have beaten consensus, just a hair below the 66% long-term average, according to Refinitiv.

On aggregate, analysts now expect S&P 500 earnings 2.9% below the year-ago quarter, down from the 1.6% year-on-year decline seen on Jan. 1, per Refinitiv.

“Earnings don’t make a bull or bear case for the market yet, but there’s an anxiousness among investors to be long when the Fed is done raising rates,” Sroka added. “We’re hitting a ramp in the earnings cycle, and by next week we’ll have a lot more information on the direction of the market.”

Economic data showed shallower-than-expected contraction in the manufacturing and services sector in the first weeks of the year, suggesting that the Federal Reserve’s restrictive interest rates are dampening demand.

The Dow Jones Industrial Average (.DJI) rose 60.69 points, or 0.18%, to 33,690.25, the S&P 500 (.SPX) lost 5.36 points, or 0.13%, to 4,014.45 and the Nasdaq Composite (.IXIC) dropped 28.39 points, or 0.25%, to 11,336.03.

Among the 11 major sectors of the S&P 500, industrials was down the most.

Intercontinental Exchange Inc (ICE.N), owner of the New York Stock Exchange, dropped 2.5% as SEC investigators searched for the cause of Tuesday’s opening bell confusion.

Alphabet Inc (GOOGL.O) shares dipped 1.8% after the Justice Department filed a lawsuit against Google for abusing its dominance of the digital advertising business.

Johnson & Johnson’s (JNJ.N) profit guidance came in above analyst expectations. Even so, its stock softened 0.3%.

Industrial conglomerates 3M Co (MMM.N) and General Electric Co (GE.N) both provided underwhelming forward guidance due to inflationary headwinds.

3M’s shares were off 5.1% while General Electric’s were modestly lower.

Aerospace/defense companies Lockheed Martin Corp (LMT.N) and Raytheon Technologies Corp (RTX.N) were a study in contrasts, with the former issuing a disappointing profit forecast and the latter beating estimates on solid travel demand.

Lockheed Martin and Raytheon were up 1.5% and 2.5%, respectively.

Railroad operator Union Pacific Corp missed profit estimates as labor shortages and severe weather delayed shipments. Its shares shed 2.7%.

Microsoft Corp (MSFT.O) is due to report after the bell.

Advancing issues outnumbered declining ones on the NYSE by a 1.16-to-1 ratio; on Nasdaq, a 1.06-to-1 ratio favored decliners.

The S&P 500 posted 27 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 69 new highs and 21 new lows.

Reporting by Stephen Culp; Additional reporting by Shreyashi Sanyal and Johann M Cherian in Bengaluru; Editing by Aurora Ellis

Our Standards: The Thomson Reuters Trust Principles.

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Business

Oil settles mixed after hitting 7-week high on strong China outlook

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  • Brent, U.S. crude hit highest since early December
  • G7 seeks two price caps for Russian oil products
  • India’s crude imports hit 5-month high in December

NEW YORK, Jan 23 (Reuters) – Oil prices settled mixed on Monday, retreating as investors cashed in on a jump to a seven-week high on optimism about a possible recovery in demand of top oil importer China as the economy recovers this year from pandemic lockdowns.

Brent crude settled 56 cents higher at $88.19 a barrel. The session high was $89.09 a barrel, the highest since Dec. 1. U.S. West Texas Intermediate (WTI) crude settled 2 cents lower at $81.62 a barrel, off the session high $82.64 a barrel, the highest since Dec. 5.

Prices pulled back at the end of the session as investors took profits, said Phil Flynn, analyst at Price Futures Group.

Still, the market wants to preserve long positions in case Chinese growth resumes, said Sukrit Vijayakar, director of Mumbai-based energy consultancy Trifecta.

Data shows a solid pick-up in travel in China after COVID-19 curbs were eased, ANZ commodity analysts said in a note, pointing out that road traffic congestion in the country’s 15 key cities so far this month is up 22% from a year ago.

Crude oil prices in much of the world’s physical markets have started the year with a rally as China has shown signs of more buying and traders have worried that sanctions on Russia could tighten supply.

“While the (China) reopening itself will no doubt prove to be complicated, particularly over the holiday season, early indications suggest there has been a rise in activity, meaning the economy could perform better,” said OANDA analyst Craig Erlam.

Brent is expected to move back into a range between $90 and $100 as the oil market tightens, Erlam said.

Demand for products has lifted the oil market and refining margins, Flynn said. The 3-2-1 crack spread , a proxy for refining margins, rose to $42.18 per barrel on Monday, the highest since October.

The European Union and Group of Seven (G7) coalition will cap prices of Russian refined products from Feb. 5, in addition to the price cap on Russian crude in place since December and an EU embargo on imports of Russian crude by sea.

The G7 has agreed to delay a review of the level of the price cap on Russian oil to March, a month later than originally planned, to provide time to assess the impact of the oil products price cap.

In India, crude oil imports rose to a five-month high in December, government data showed on Monday, as refiners stocked up discounted Russian fuel amid a steady increase in consumption in the country.

Reporting by Stephanie Kelly in New York; additional reporting by Ron Bousso in London, Mohi Narayan in New Delhi and Sonali Paul in Melbourne
Editing by David Goodman, David Gregorio and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

Stephanie Kelly

Thomson Reuters

A New-York-based correspondent covering the U.S. crude market and member of the energy team since 2018 covering the oil and fuel markets as well as federal policy around renewable fuels.

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Technology

Apple mixed reality headset now expected in spring or later: Kuo

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Attendees wait for the start of the Apple World Wide Developers Conference

David Paul Morris | Bloomberg | Getty Images

Apple‘s long-awaited mixed reality headset could be announced in spring at the earliest, top Apple supply chain analyst Ming-Chi Kuo said on Twitter.

Ming-Chi Kuo, an Apple analyst at TF International, had initially predicted in June that Apple would announce a mixed reality headset by the end of January. But on Thursday, the widely respected analyst said he believes Apple will postpone “mass shipment” of any product to the second or third quarter of 2023, citing a combination of mechanical and software issues.

Kuo anticipates an announcement occurring in a “spring media event or WWDC based on current development progress.” WWDC is Apple’s annual developer conference, typically held in June.

Whenever it arrives, the product would create immediate competition for Meta, formerly Facebook, which is focused on building a digital world called the metaverse and sells its own Meta-branded virtual reality headsets.

Apple’s headset is expected to cost between $2,000 and $3,000 and will have more than 10 cameras on the exterior and interior of the device, according to Bloomberg. The mixed reality device will run on an operating system called xrOS, with mixed reality adaptations of Apple’s Messages, FaceTime and Maps apps, according to Bloomberg.

An announcement during WWDC makes sense if the company wants to show off the headset with the latest software tools that developers will use to build apps for it. WWDC is where Apple unveils the annual software updates and some new features for iPhones, iPads, Macs, the Apple Watch and more, and it has breakout sessions where developers can learn about the latest ways to integrate their apps into Apple’s hardware.

Kuo has broken scoops on Apple product releases before, including news on the size and design of the iPhone X in 2016 before the product launched. The Apple analyst also predicted the controversial removal of the headphone jack in the iPhone 7 series.

Apple did not immediately respond to a request for comment.



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Sports

Joe Burrow: Bengals quarterback says team has ‘mixed’ feelings about playing next game

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CNN
 — 

Cincinnati Bengals quarterback Joe Burrow says he “probably wants to play” his team’s next game but also understands that others don’t in the aftermath of Damar Hamlin’s collapse on Monday.

Buffalo Bills safety Hamlin suffered a cardiac arrest when playing against the Bengals, an incident which left players from both teams visibly distressed and led to the game’s postponement.

While the world waits anxiously for more updates on Hamlin’s condition, the NFL announced Wednesday that the Bengals’ game against the Baltimore Ravens is still scheduled for 1 p.m. ET in Cincinnati on Sunday.

“We haven’t had that discussion as a team,” Burrow told reporters when asked if the team felt comfortable playing at the weekend.

“There’s definitely some side discussions about that, but that’s not where we’re at right now. So we’ve got a game to play on Sunday.”

Hamlin’s heartbeat was restored on the field as staff tended to him, the Bills have said, before he was taken to the University of Cincinnati Medical Center.

Hamlin remains under intensive care, though he has been showing “signs of improvement” his team said in a statement Wednesday.

It is still unclear what led to the cardiac arrest. CNN has requested comment from the hospital system, which is not releasing information about Hamlin or providing interviews with his medical staff.

Burrow, who was on the field when Hamlin collapsed, says there is no consensus within his team regarding fulfilling their next fixture.

“We have not been asked that,” added Burrow when asked if the players had been consulted about playing.

“I’m sure if you polled the locker room there would be mixed votes on that. Personally, I think playing is going to be tough, but there’s people that want to play, too, and there’s people that don’t.

“Personally, I probably want to play. I think getting back to as normal as you can as fast as you can is personally how I kind of deal with these kinds of things. But like I said, everyone has a different way of dealing with it.”

Burrow added that the team has been preparing as usual for Sunday’s game but that it remains “a scary, emotional time” for everyone involved.

“Unfortunate as it is, we got a game to play on Sunday,” he said.

“It’s our job to get out there and execute and play the game the way that we need to play it to go and win. It is what it is.

“We’ve had discussions as a team about what happened and about where we’re at going forward and that’s where we’re at.”

– Source:
CNN
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If you don’t know how to perform CPR, watch this

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Business

Asia-Pacific markets trade mixed as region kicks off 2023

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India’s cement stocks to perform well on government infrastructure spending, says IIFL Securities

India’s domestic cement stocks are set to rise on increased government spending on infrastructure, said Sanjiv Bhasin, director at investment management firm IIFL Securities.

“The government spending on both commercial and real estate, and [developments on] the infrastructure, is going to see cement companies do well,” Bhasin said on CNBC’s “Street Signs Asia” on Tuesday.

He said his firm is positive on companies such as Larsen & Toubro, Ultratech India, and Kotak Mahindra Bank, adding that cement prices in India is expected to rise as the country enters a period of high levels in construction activity.

Australian miners, metal prices fall as China Covid cases rise

Shares of mining companies listed in Australia fell in Tuesday’s afternoon trade as prices of metals fell in Shanghai as Covid infections soared in mainland China.

The February copper contract trading on the Shanghai Futures Exchange fell 0.7% to 65,670 yuan per ton while aluminum fell 2.7% to 18,175 yuan per ton.

Sandfire Resources inched 0.18% lower while Oz Minerals traded 0.25% higher – Rio Tinto fell more than 1% while Yancoal Australia shed more than 4.6% and Whitehaven fell 5.89%. Fortescue Metals lost 0.73% and South32 traded 0.5% lower.

— Jihye Lee

Consumer growth in Asia remains a ‘massive challenge’ for region, says Singapore Exchange

Consumer growth in Asia remains a “massive challenge” for the region, as its economic growth is significantly dependent on trade, Geoff Howie, markets strategist at the Singapore Exchange said.

Howie pointed to South Korea and Taiwan’s declines in exports since May 2021 as well as Singapore’s non-oil exports contracting by 14.6% in November.

There have been “much hinges on trade and tech, and we are expecting moderation in global trade,” he said on CNBC’s “Street Signs Asia” on Tuesday. “Consumer growth is an area that we have to really watch,” Howie said.

– Charmaine Jacob

‘Rough front half, better second half for tech stocks’: Jefferies shares 2023 outlook

The first half of 2023 is going to be a “tough setup” for tech stocks, Brent Thill, managing director and senior analyst of investment firm Jefferies, told CNBC’s “Street Signs Asia” Tuesday.

“You still have the economic overhang that is going to be impacting earnings as we go into the beginning of this year. Companies have to lower numbers and expectations are still coming down,” said Thill.

He projected things to turn around in the second half of 2023, as it “takes time” for effects from macro economic conditions such as rising interest rates to unravel and “investors start to look at 2024 numbers being reset.”

“I think the worst-case scenario is that 2023 could be a total wash,” said Thill, adding that Jefferies is expecting a recession to hit the third quarter, which is later than most expect.

– Sheila Chiang

Oil prices to fall to $70-levels by end of 2023, says analyst

The price of Brent oil will fall to the lower end of $70 a barrel by year’s end, according to Citi’s global head of commodities research, Ed Morse, adding volatility surrounding the oil markets will remain.

“We’re expecting volatility to be about what it was last year,” said Morse. “We’re looking at Brent prices going down by the end of the year to the low 70s,” he estimated.

A number of oil producing countries are facing extreme difficulties, Morse said. He also expects demand for oil to be kept low due to a prolonged recession in China.

Developments on Russia’s war on Ukraine will also add onto volatility in prices, Morse added.

Brent crude dipped 0.43% to $85.57 a barrel. The U.S. West Texas Intermediate crude traded down 0.39% to $79.95. 

—Lee Ying Shan

Japanese yen at strongest levels in seven months

The Japanese yen hovered around its strongest levels since early June, Refinitiv data showed.

The currency last traded at 129.7 against the U.S. dollar after strengthening past the key technical level of 130.4 that it last saw in August. Late last year, the yen depreciated significantly and hit its weakest levels in 32 years.

The currency weakened past 151 against the greenback in mid-October as the Bank of Japan maintained its ultra-dovish monetary policy and yield curve control strategy. But the yen has since strengthened after the central bank widened its YCC band last month.

– Jihye Lee

China’s Caixin PMI shows further factory activity decline

China’s factory activity slid further into contraction territory in December, a private sector survey showed.

The Caixin/Markit manufacturing purchasing managers’ index fell further to 49 in December after recording 49.4 in November – remaining below the 50-point mark that separates growth and contraction.

The survey saw improved optimism among businesses, the release said, adding that firms expressed confidence in China’s economic recovery following the relaxation of most of its stringent Covid measures.

Separately, China’s National Bureau of Statistics said the official manufacturing PMI fell to 47 for the month, marking the biggest drop since the start of the Covid outbreak in January 2020.

– Jihye Lee

Singapore economy grew 3.8% in 2022

Singapore’s economy saw full-year growth of 3.8% for 2022, according to data released by the Ministry of Trade and Industry on Tuesday.

The economy grew 2.2% in the fourth quarter compared with a year ago, the slowest pace since mid-2021 but beating expectations of 2.1% from a Reuters poll.

The latest figures reflected continued recovery in the service sector that followed lifting of domestic and border restrictions since April, the ministry said in a statement, adding that the accommodation sector expanded for the first time since mid-2021.

— Jihye Lee

Bank of Japan is reportedly considering hiking its inflation forecasts in January, according to Nikkei

Japan’s central bank is reportedly considering boosting its inflation forecasts in January to reflect price growth that’s closer to its 2% target in the 2024 fiscal year, according to a Dec. 30 report from Nikkei, citing sources familiar.

The move could be laying the groundwork for a shift toward tighter fiscal policy, according to the report.

The report arrives more than a week after the Bank of Japan changed its bond yield controls, allowing long-term interest rates to rise more. The rate on the 10-year bond will be allowed to fluctuate by half a percentage point above and below the nation’s target of 0% – up from a quarter-percentage point range.

Retail sales have also ticked higher in Japan, rising for a ninth consecutive month in November.

—Darla Mercado

Week ahead: PMIs in Asia-Pacific, trade data, inflation readings

Key economic events in the Asia-Pacific next week will be dominated by Purchasing Managers’ Index readings in the region.

China’s National Bureau of Statistics is scheduled to release the official manufacturing and non-manufacturing PMI prints on Saturday. Reuters expects China’s factory activity to show a contraction with a reading of 48.

South Korea is also slated to report its December trade data over the weekend, in which economists polled by Reuters predict will show a drop of 10.1% compared with a year ago.

Singapore is scheduled to release manufacturing PMI readings next week, while S&P Global is scheduled to release its PMI readings for South Korea, Indonesia and India on Monday.

Inflation prints for the Philippines and Indonesia will also be closely watched, with the releases scheduled for Tuesday and Monday, respectively.

Japan’s PMI reading and China’s private survey for services PMI will be released on Wednesday. Singapore will release November’s retail sales on Thursday as well as South Korea’s unemployment rate for December.

– Jihye Lee

CNBC Pro: Wall Street veteran names the stocks that could go to $0 — and his favorites in tech

2022 has marked the end of an era of cheap money, and that’s bad news for companies with a “growth at all costs” approach, said David Trainer, CEO of investment research firm New Constructs.

In the year ahead, investors will need to exercise due diligence in distinguishing between good and bad firms, he told CNBC Pro.

That’s because the U.S. Federal Reserve’s interest rate hikes in 2022 have “ended the era of super easy money,” and exposed many companies with bad business models. He calls those companies “zombie stocks” with heavy cash burn.

He highlights a list of such names to avoid and what to buy instead.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Final market stats for 2022

Friday was the final trading day of the 2022, but also for the quarter, month and year. Here’s how the major market averages fared over those time frames.

The Dow finished:

  • down 8.78% for the year
  • up 15.39% for the quarter
  • down 4.17% for the month
  • down 0.17% for the week

The S&P 500 finished:

  • down 19.44% for the year
  • up 7.08% for the quarter
  • down 5.90% for the month
  • down 0.14% for the week

The Nasdaq Composite finished:

  • down 33.10% for the year
  • down 1.03% for the quarter
  • down 8.73% for the month
  • down 0.30% for the week

The Russell 2000 small caps finished:

  • down 21.56% for the year
  • up 5.8% for the quarter
  • down 6.64% for the month
  • up 0.02% for the week

— Jesse Pound, Christopher Hayes

CNBC Pro: 2023 looks good for the market — especially for one ‘extremely attractive’ asset class: Fund manager

Markets have bottomed and things are looking up for stocks and bonds, which could rally more than 10% in 2023, according to one portfolio manager.

Jay Hatfield, CEO and portfolio manager at Infrastructure Capital Advisors, also highlighted the “conviction investment themes” he expects will be very attractive in 2023.

That includes one asset he said could beat its peers.

CNBC Pro subscribers can read more here.

— Weizhen Tan

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Business

Asia-Pacific markets mixed as Japan stocks see second day of losses

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Indonesia to ban bauxite exports starting June 2023

India’s central bank chief warns that the next financial crisis will come from private cryptocurrencies

The next financial crisis will come from private cryptocurrencies, Shaktikanta Das, India’s central bank governor said on Wednesday.

Speaking at the BFSI Insight Summit 2022 organized by Business Standard, Das said he stands firm that cryptocurrencies should be prohibited, adding that it has no underlying value and poses risks for macroeconomic and financial stability.

Bitcoin was last higher by about 0.24% at $16,840, according to Coin Metrics. Ether rose 14% to $1,211.77.

— Charmaine Jacob

Japan’s 2-year yield briefly tops zero for first time since 2015

The yield on 2-year Japanese government bonds briefly rose above zero for the first time since 2015 in Wednesday morning trade. The note gained 2.7 basis points to stand just below the flatline.

Japan’s 2-year yield rises above zero for the first time since 2015

The yield on the 10-year JGB jumped more than 3 basis points to stand at 0.451%, also reaching 2015 highs, while the yield on the 30-year JGB inched up 2 basis points to trade at 1.6%.

Yields move inversely to price, and a basis point is equal to 0.01%.

— Jihye Lee

HKEX launches New York office in boost to expand international reach

Hong Kong’s stock exchange operator launched its New York office in a bid to expand its international reach and grow its global client base.

The new office of the Hong Kong Exchanges and Clearing Limited (HKEX) will be promoting its connectivity with Mainland China’s markets and its liquid primary and secondary cash markets, it said.

“At HKEX, we are fully focused on supporting the growth ambitions of our customers around the globe,” said HKEX CEO Nicolas Aguzin.

“We look forward to deepening our relationships with investors, companies and risk managers across the region, connecting capital with opportunities and East with West,” he added.

About 41% of Hong Kong’s cash equities market trading turnover are attributed to international investors. HKEX currently has offices in Beijing, Shanghai and Singapore. 

— Lee Ying Shan

Bank stocks in Tokyo rise again as wider index falls

Japanese yen at strongest in more than four months

The Japanese yen strengthened further overnight, after the Bank of Japan announced to widen its yield curve control band.

The currency strengthened by more than 5% against the Australian dollar and the New Zealand dollar – while it strengthened past 3% against the U.S. dollar.

The yen strengthened after the Bank of Japan announced to expand its yield curve control band

CNBC Pro: Fund manager says a recession is ‘imminent’ — and names cheap stocks to play it

Market watchers are increasingly worried about a looming recession and fund manager Steven Glass is no exception.

Against this backdrop, he says he’s focusing on companies with earnings visibility that are trading at attractive valuations.

His picks include a Big Tech name that he said is “extremely cheap” with “huge margin potential.”

Pro subscribers can read more here.

— Zavier Ong

Stocks hold onto gains, snap 4-day loss streak

Stocks eked out a gain Tuesday, snapping a four-day streak of losses.

The Dow Jones Industrial Average rose 92.47 points, or 0.28%, to close at 32,850.01. The S&P 500 gained 0.11% to 3,821.73, while the Nasdaq Composite ticked up 0.01% to close at 10,547.11.

—Carmen Reinicke

Bank of Japan is more hawkish sooner-than-expected, signals

The Bank of Japan’s surprise policy shift sent interest rates rising globally, as investors reacted to more evidence central bankers around the world will continue to pressure interest rates higher.

“It was definitely a surprise. I don’t think there was anyone out there who expected it,” said Ben Jeffrey, rate strategist at BMO. The Japanese central bank moved sooner-than-expected to tighten policy. The BOJ changed its yield curve policy to allow the yield on the 10-year Japanese government bond to move 50 basis poins either side of its zero target rate, up from 25 basis points.

The announcement drove rates higher around the world, as yields on Japanese government bonds (JGBs) rose to 7-year highs. Rates move opposite yield. The U.S. 10-year jumped o 3.68%.

“They were definitely the last one standing in terms of being dovish, and now they’re still dovish but less so,” said Jeffrey. “It’s obviously bearish JGBs and fixed income globally, but in the longer term it should help the yen which will make Treasurys more attractive to Japanese investors next year.”

–Patti Domm

Expect a more challenging environment ahead, says Atlantic Equities

Atlantic Equities analysts are anticipating a more challenging backdrop for the global consumer in 2023.

“Inflation may well have peaked on a headline basis but input costs still remain elevated and companies will be looking to at least hold if not take further pricing in some cases,” analyst Edward Lewis said in a note Tuesday. “That may become more challenging as levels of elasticity are beginning to normalize with U.S. retailers starting to push back against pricing, in line with where European peers have been all year.”

He highlighted Coca-Cola and Pepsi as some of his favorite consumer picks, citing “category momentum, ongoing investment and strong execution supporting elevated growth.”

— Tanaya Macheel

Stock market has shed $11.7 trillion so far this year

It’s been a rough year for stocks, which are currently in a bear market and down year to date.

From the market’s yearly high on January 3 to this morning, U.S. stocks have shed $11.7 trillion in market cap, according to data from Bespoke Group.

“The max drawdown was $13.6 trillion at the low on 9/30, so we’ve seen market cap increase by just under $2 trillion since then,” analysts wrote Tuesday. “In dollar terms, this drawdown has been more extreme than anything investors have ever experienced. That’s pretty deflationary if you ask us!”

Of the $11.7 trillion, more than $5 trillion in losses come from just five companies – Apple, Microsoft, Amazon, Alphabet, Meta and Tesla.

—Carmen Reinicke

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Business

Stock futures mixed following Fed update and ahead of more economic data

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Stock futures were mixed Thursday morning following the Federal Reserve’s latest policy update.

Futures tied to the Dow Jones Industrial Average added 44 points. S&P 500 futures inched up 0.1% and Nasdaq 100 futures were fractionally lower.

In regular trading, the Dow fell 142 points, while the S&P 500 declined 0.61% and the Nasdaq Composite dropped 0.76%.

The major indexes reacted negatively as investors digested the Federal Reserve’s latest comments following a boost to its overnight borrowing rate. The central bank said it will continue hiking rates through 2023 and projected a higher-than-expected terminal rate of 5.1%. With Wednesday’s half a percentage point hike, the targeted range for rates is currently 4.25% to 4.5%, which is the highest in 15 years.

“The Fed just put a roadblock in front of Santa’s sleigh,” said Sylvia Jablonski, CEO and chief investment officer at Defiance ETFs.

She also noted the tone of Fed Chair Jerome Powell, who in speech Wednesday afternoon sounded “strict” and clear that he “doesn’t have a plan to pause or take a reversal path.”

“It’s going to be higher for longer and monetary policy is going to be more restrictive than thought,” Jablonski said. “The market is going to be handicapped by Fed policy for sometime longer. Though we like the news and like seeing CPI prints like the last one that led to a short-lived rally, this is going to give us some near-term volatility.”

Despite favorable improvements like modest growth, spending and production, Powell indicated he remains concerned job gains are too robust and the unemployment rate is too good for the Fed’s fight against inflation.

Investors will get another batch of economic data to digest Thursday. Retail sales, jobless claims and Philadelphia Fed manufacturing index are all due out at 8:30 a.m. ET.

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Business

Asia markets trade mixed amid recession fears; China to report trade data

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TSMC shares rise after Apple says it will use chips made in the U.S. by the Taiwan firm

China expected to see a further drop in exports and imports

China’s trade data for November is expected to show a further drop in both exports and imports, according to a Reuters poll of economists.

Average forecasts predict exports will drop 3.5% in November on an annualized basis after declining 0.3% in October, and imports are forecasted to fall 6% after slipping 0.7% the previous month.

The trade balance in U.S. dollars is predicted to narrow to $78.1 billion — smaller than the previous month’s $85.15 billion.

— Jihye Lee

CNBC Pro: ‘A gift to investors’: BlackRock says it’s time to rethink bonds

It’s time to rethink bonds, according to the BlackRock Investment Institute, which said “the lure of fixed income is strong” right now.

“Higher yields are a gift to investors who have long been starved for income. And investors don’t have to go far up the risk spectrum to receive it,” Philipp Hildebrand, vice chairman of BlackRock, and Jean Boivin, head of the BlackRock Investment Institute, wrote in a note last week.

They outlined their top ways to cash in.

Pro subscribers can read more here.

— Zavier Ong

Australia’s economy saw slower growth in the third quarter

Australia’s economy grew by 0.6% from the previous quarter, official data showed – missing estimates expecting a 0.7% quarterly growth predicted in a Reuters poll.

The latest gross domestic product showed subdued growth from the second quarter’s expansion of 0.9% from the first three months of the year.

On an annualized basis, GDP in the third quarter added 5.9%, which the Australian Bureau of Statistics said reflects “sustained economic growth since the effects of the Delta outbreak in September quarter 2021.”

“Growth was largely driven by strength in household spending,” it added.

The annualized figure also missed expectations in a separate Reuters poll for a 6.2% gain.

Australia’s dollar was little changed after the report and the S&P/ASX 200 maintained 0.7% lower.

— Abigail Ng

CNBC Pro: UBS says shares in this global airline are set to soar by 55%

Shares of a global airline are set to soar by 55% over the next year, according to UBS.

The investment bank raised its price target after the pan-European airline said it expects to see bumper demand during Christmas.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Stocks finish lower, build on Monday’s losses

Stocks tumbled Tuesday, building on losses from the previous session.

The S&P 500 shed 1.44% to close at 3,941.26, while the Nasdaq Composite sank 2% to finish at 11,014.89. The Dow Jones Industrial Average dropped 350.76 points, or 1.03%, to settle at 33,596.34.

— Samantha Subin

Oil falls to lowest level since Dec. 27, 2021

Oil prices slumped Tuesday, weighed down by economic uncertainty even amid a Russian oil price cap and potential demand uptick thanks to China’s reopening.

U.S. West Texas Intermediate crude for January delivery fell more than 4% to $73.85 in the afternoon Tuesday. Brent crude for February delivery slipped 4.34% to $79.09 per barrel.

The U.S. also said it sees oil production increasing next year, reversing its future outlook after five months of cuts. A monthly report from the Energy Information Administration said production is forecast to hit 12.34 million barrels a day in 2023, more than the daily record of 12.315 million barrels a day in 2019.

—Carmen Reinicke

Inflation is eroding consumer wealth and may bring 2023 recession, Dimon says

Dimon said in June that he was preparing the bank for an economic “hurricane” caused by the Federal Reserve and Russia’s war in Ukraine.

Al Drago | Bloomberg | Getty Images

American consumers are still doing well and supporting the U.S. economy, but that may change next year, according to JPMorgan Chase CEO Jamie Dimon.

Consumers have $1.5 trillion in excess savings from pandemic stimulus programs and are spending 10% more than in 2021, he said Tuesday on CNBC’s “Squawk Box.”

“Inflation is eroding everything I just said, and that trillion and a half dollars will run out sometime mid-year next year,” Dimon said. “When you’re looking out forward, those things may very well derail the economy and cause a mild or hard recession that people worry about.”

Dimon also opined on cryptocurrencies, the necessity of fossil fuels and other topics during the wide-ranging interview.

— Hugh Son

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World

Iran: mass strike starts amid mixed messages about abolishing morality police | Iran

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Iranian shopkeepers and lorry drivers staged a walkout in nearly 40 cities and towns on Monday after calls for a three-day nationwide general strike from protesters as the government declined to confirm a claim by a senior official that the morality police had been abolished.

Iranian newspapers instead reported an increase in patrols, especially in religious cities, requiring women to wear the hijab, and shop managers being directed by the police to reinforce hijab restrictions.

The confusion may be partly due to mixed messages being sent out by a divided regime as it seeks to quell the protests.

Iran has been rocked by 11 weeks of unrest since a 22-year-old Kurdish woman, Mahsa Amini, died in police custody after being arrested by the morality police.

The show of strength in the shop strike satisfied protesters since it demonstrated discontent with the government was still rife in major cities like Tehran, Karaj, Isfahan, Mashhad, Tabriz and Shiraz. Kurdish Iranian rights group Hengaw reported that 19 cities had joined the strike movement in western Iran, where most of the country’s Kurdish population live.

Political prisoners called for the three-day protests to be supported. Posters also appeared in streets urging that the strike be respected.

Government officials continued to claim the protests are over, but also admitted many shops had been shut, blaming intimidation that they said would lead to criminal charges.

At the same time senior politicians, including the president, Ebrahim Raisi, and parliament speaker, Mohammad Qalibaf, said they will visit Tehran universities on Wednesday to debate reforms with the striking students, a tactic that has previously backfired.

In a sign that the government is not relaxing the hijab rules, the semi-official Tasnim News Agency reported on Monday that an amusement park at a Tehran shopping centre was closed by the judiciary because its operators were not wearing the hijab properly.

The reformist-leaning Ham-Mihan newspaper said that morality police had increased their presence in cities outside Tehran, where the force has been less active over recent weeks.

The controversy of whether the force had been shut down arose when the attorney general, Mohammad Jafar Montazeri, was asked about the morality police at a conference, at which he said: “The morality police have been shut down from where they were set up”.

He added they “had nothing to do with the judiciary” and “the judiciary would continue to monitor behavioural actions at the community level”.

Why protesters in Iran are risking everything for change – video explainer

Iran’s official authorities have not yet formally reacted to the controversy. Iranian foreign minister, Hossein Amir-Abdollahian, was asked about disbanding the morality police during a visit to Serbia on Sunday, saying “In Iran, everything is moving forward well in the framework of democracy and freedom.”

A journalist from Tehran told the Guardian: “The security forces and the police are all focused on suppressing the protests, so they don’t have the resources to use to deal with women without veils. The guidance patrol in the form we used to see in the streets has completely disappeared and does not exist. On one of the days of demonstrations in Tehran, I passed through the IRGC guard forces without a hijab. They only looked at me. Their looks were furious, but they had no other interaction.”

She also added that Basij paramilitary forces were still active at night, and probably more so outside Tehran.

In Rasht, a women’s rights activist says that she had not seen the so-called guidance patrol forces and cars in the last two and a half months.

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Business

Wall Street ends mixed; Salesforce selloff pressures Dow

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  • Salesforce drops on co-CEO exit plan
  • Dollar General falls on slashing annual profit view
  • U.S. manufacturing shrinks for first time in 2-1/2 years in Nov

Dec 1 (Reuters) – Wall Street ended mixed on Thursday as a selloff in Salesforce weighed on the Dow, while traders digested U.S. data that suggested the Federal Reserve’s interest rate hikes are working.

On Wednesday, the S&P 500 surged over 3% on optimism the Fed might moderate its campaign of interest rate hikes.

U.S. manufacturing activity shrank in November for the first time in 2-1/2 years as higher borrowing costs weighed on demand for goods, data showed, evidence the Fed’s rate hikes have cooled the economy.

The personal consumption expenditures (PCE) price index rose 0.3%, the same as in September, and over the 12 months through October the index increased 6.0% after advancing 6.3% the prior month.

Excluding the volatile food and energy components, the PCE price index rose 0.2%, one-tenth less than expected, after gaining 0.5% in September.

“On a normal day, the package of data this morning would be pretty risk-on, but after the rally yesterday, I think it’s not quite good enough to push another leg higher,” said Ross Mayfield, an investment strategy analyst at Baird.
Wednesday’s rally drove the S&P 500 index (.SPX) above its 200-day moving average for the first time since April after Fed Chair Jerome Powell said it was time to slow the pace of interest rate hikes.

Traders now see a 79% chance the Fed will increase its key benchmark rate by 50 basis points in December and a 21% chance it will hike rates by 75 basis points.

Salesforce Inc (CRM.N) tumbled after the software maker said Bret Taylor would step down as co-chief executive officer in January.

Dollar General Corp (DG.N) fell after the discount retailer cut its annual profit forecast, while Costco Wholesale Corp (COST.O) dropped after the membership-only retail chain reported slower sales growth in November.

According to preliminary data, the S&P 500 (.SPX) lost 2.31 points, or 0.06%, to end at 4,077.80 points, while the Nasdaq Composite (.IXIC) gained 15.22 points, or 0.13%, to 11,483.21. The Dow Jones Industrial Average (.DJI) fell 193.24 points, or 0.56%, to 34,397.42.

A report from the Labor Department on Thursday showed initial claims for state unemployment benefits dropped 16,000 to a seasonally adjusted 225,000 for the week ended Nov. 26.

Investors now await nonfarm payrolls data on Friday for clues about how rate hikes have affected the labor market.

With a month left in 2022, the S&P 500 is down about 14% year to date, and the Nasdaq has lost about 27%.

Reporting by Ankika Biswas and Shreyashi Sanyal in Bengaluru, and by Noel Randewich in Oakland, Calif.; Editing by Shounak Dasgupta and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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