The Nasdaq is on track for seven days of losses, the longest since 2016
The Nasdaq Composite fell on Tuesday, heading for its seventh straight day of declines.
It’s a grim milestone for the tech index, which marks its longest losing streak since a 9-day slide in November 2016. It’s also a particularly painful drop for the Nasdaq, which is down nearly 9% in this last consecutive series. losses
Here is a list of notable losing streaks for the Nasdaq, dating back to 2000:
September 2022 -8.86%
January 2016 -9.09%
November 2011 -9.11%
October 2008 -21.36%
June 2001 -12.16%
December 2000 -22.63%
The Federal Reserve’s move to raise interest rates hasn’t helped the companies underlying the Nasdaq Composite. Rising interest rates reduce the value of future earnings in tech stocks.
-Donar la Mercat, Robert Hum
Dow, S&P 500 turn green
The Dow Jones Industrial Average and the S&P 500 reversed earlier losses to trade in positive territory heading into midday Tuesday.
Defensive stocks like Johnson & Johnson and Coca-Cola lifted the Dow, while the S&P 500 was boosted by Rollins, Illumina and Eli Lilly.
The Nasdaq was still lower on the day as tech stocks dragged the index lower. Pinduoduo, Okta and Moderna were the biggest losers in the index. Shares of Netflix, Datadog and Palo Alto Networks also fell.
– Carmen Reinicke
Defensive stocks help Dow
Defensive names gained on Tuesday, helping lift the Dow Jones Industrial Average off morning lows. The health services and health technology sectors lead the index.
Johnson & Johnson was the best performer in the Dow, up more than 2%. UnitedHealth Group gained 1.81% and Merck rose nearly 1%.
Consumer staples also helped lift the market. Coca-Cola gained 1.21% to be the third best performer on the Dow list. It was followed by McDonald’s, which rose 0.60%.
—Carme Reinicke
Tech stocks fall
Tech stocks fell, despite earlier gains, as rising rates threatened to slow their growth and expose their lofty valuations.
Information technology was among the biggest laggards in the S&P 500, with the sector down 1.3% in Tuesday morning trading.
Apple and Microsoft shares fell 1.3% and 1.2%, respectively. Tesla fell 1%. Nvidia fell 1.5%.
US Treasury yields rise
U.S. Treasury yields rose on Tuesday as investors weighed concerns that the Federal Reserve will remain aggressive in its fight to rein in rising prices despite its potential repercussions on economic growth.
The yield on the 2-year note was last up 11 basis points to 3.511% and traded at its highest level since November 2007, while the yield on the 10-year note was last up 15 basis points basic at 3.336%.
The moves came as investors digested a fresh batch of economic news, including August’s stronger-than-expected ISM data.
— Samantha Subin
ISM services PMI beat expectations for August
The Institute for Supply Management said its services purchasing managers’ index (PMI) came in at 56.9 in August, beating a Dow Jones estimate of 55.5. In other words, the US services sector expanded at a faster-than-expected pace last month.
The report pushed Treasury yields higher and sent stocks lower as it raised concerns about even higher rates from the Federal Reserve.
Of course, the US services PMI from &P Global showed the largest contraction in the services sector since May 2020.
– Fred Imbert
Verizon raises dividend
Telecom giant Verizon raised its quarterly dividend to 65.25 cents per share from 64 cents per share, a 2% increase. The new dividend will be paid on November 1. The move comes as Verizon shares struggle this year, losing 20% in 2022. The stock is also down 7% in the past month and 25% below its 52-week high.
– Fred Imbert
Shares rise at the open on Tuesday
U.S. stocks rose at the open on Tuesday as Wall Street looks to snap a three-week losing streak. The Dow Jones industrial average rose 117 points, or 0.38%, while the S&P 500 and Nasdaq Composite gained 0.28% and 0.08%, respectively.
“Bulls hoping for a rally will do so during a shortened Labor Day week that has historically run parallel to September and its track record of underperformance — losses have been somewhat less frequent over the past three decades, but volatility has been higher,” said Chris Larkin. , Managing Director of E*Trade Trading at Morgan Stanley.
—Carme Reinicke
Stoltzfus on September trading signals for the year
September is known to be a volatile trading month for the markets. Looking back at past Septembers may offer some clues as to what the month may have in store, John Stoltzfus, chief investment strategist, managing director at Oppenheimer Asset Management, wrote in a note Tuesday.
“With Q2 earnings season practically in the rearview mirror (with 99% of S&P 500 companies having reported by last Friday) and Q3 earnings season not expected to begin until mid- October, when the big banks report, the” what do you have? done by me lately” the market crowd is likely to weigh more on the near-term day-to-day and with its usual propensity for worry and negative outlook,” he wrote.
Counting back from 1994 to calendar year 2021, Stoltzfus counted 13 Septembers that had a negative return for the S&P 500 and 15 Septembers when the S&P 500 gave a positive return.
He also noted that of the last 13 Septembers that produced negative returns, only 6 of those years saw the S&P 500 negative for the entire year.
“Given the foregoing, we believe that while it is not unreasonable to consider potential volatility entering any given September, it is not necessarily a determinant of the performance of the S&P 500 in that month or, therefore, of the performance of the benchmark during the calendar year, ” He said.
– Carmen Reinicke
Billionaire investor Bill Ackman says there are signs inflation is easing
Billionaire investor Bill Ackman has said the Federal Reserve needed to be more aggressive in its rate hike plan to control inflation. Now, he says he is well on that path and there are some signs that inflation is easing.
“Our biggest fear was inflation, and that’s why I wanted the Fed to raise rates quickly and quickly. They’re doing that now, I think they have to. [continue]” the CEO of Pershing Square Capital said on CNBC’s “Squawk Box” on Tuesday morning. “What they’ve said they’re going to do, they have to do, which is raise rates to a little bit on the order of 4% or maybe little more. , keep it there for… a year or so.”
Markets are still down a lot for the year, but Ackman said that, for the most part, Pershing owns the same companies it has owned since early 2022.
“Ultimately, if you have big businesses, you can go through a tough time like this,” he said.
– Tanaya Machel
Credit Suisse’s Golub returns to the market to date
The S&P 500, roughly -16.1% year to date, “hides sharp underlying moves,” Credit Suisse’s Jonathan Golub wrote in a Monday note. Returns have been -22.5% year-to-date through mid-June, a further 17.7% through mid-August and -8.1% through the end of the month.
“Market leadership has been consistent throughout, with Value, Large Cap and Energy outperforming the downside moves, while Growth, Small Cap and TECH+ outperformed during the recent market rally” , Golub said.
Also, while the EPS grew 10.2% during the second-quarter earnings season, beating estimates of 4.6%, revisions have sunk amid concerns about the recession and bad orientation Now estimates are -5.5% for the third quarter and -3.7% for 2023.
“Energy reviews have been an outlier to the upside, TECH+ to the downside,” Golub said. “Historically, in inflationary periods, the EPA goes back to the start of a recession, 15 months ahead when inflation is low.”
Still, the employment data is not consistent with a recession, he said. Moreover, balance sheets and economists’ forecasts indicate that inflation could drop to around 2.5% by the end of 2023.
– Carmen Reinicke
Bed Bath & Beyond under pressure once again
US Treasury yields rise as investors monitor economic data
U.S. Treasury yields were higher as market participants awaited a fresh batch of economic data and Treasury auctions after Monday’s Labor Day recess.
The benchmark 10-year Treasury yield was up more than 7 basis points to 3.265% at around 3:40 a.m. ET, while the 30-year Treasury yield was up 6 basis points up to 3.408%.
The yield on the 2-year Treasury note rose nearly 7 basis points to trade at 3.466%.
—Sam Meredith
Sterling jumps on reports of UK Prime Minister’s new energy bill plans
Sterling rose 0.6% against the dollar in early trade on Tuesday after Bloomberg reported that incoming British Prime Minister Liz Truss has drawn up plans to freeze energy bills for UK households, with the aim of mitigating the spiral of the cost of living crisis in the country.
The pound changed hands at around $1.158 shortly after 8am in London, after falling below $1.15 on Monday.
The overnight report suggested Truss plans to set typical household gas and electricity prices at the current level of £1,971 ($2,300) a year. Britain’s energy regulator Ofgem recently announced an 80% increase in the country’s energy price cap from October 1, which would bring the cap to £3,548 a year.
– Elliot Smith
European markets rise as investors assess economic challenges
European markets rose on Tuesday, recouping losses from the previous session, as investors continued to assess recession risks in the region.
The pan-European Stoxx 600 added 0.8% in early trade, with retail stocks jumping 3.7% to lead gains as most sectors moved into positive territory. Oil and gas outliers fell 0.7%.
– Elliot Smith
Australia’s central bank raises rates by half a point
The Reserve Bank of Australia raised rates by 50 basis points, in line with analysts’ forecasts in a…