![]() In markets overseas, stock indexes closed mostly lower in Europe and were mixed across Asia overnight.ĪP w riters Joe McDonald and Matt Ott contributed to this report. The two-year yield, which moves more on expectations for Fed action, fell to 3.95% from 4.11%. It helps set rates for mortgages and other important loans. In the bond market, the yield on the 10-year Treasury fell to 3.39% from 3.50% late Monday. If it and other banks pull back on lending, it could lead to lower growth across the economy.Īll told, the S&P 500 fell 65.41 points to 4,071.63. First Republic said its deposits have stabilized since late March, but it’s still working to cut expenses. ![]() banking industry could tighten the brakes even further on the economy. Fed policymakers meet next week, and much of Wall Street expects them to raise interest rates at least one more time before pausing.īeyond higher interest rates, Wall Street is also worried that the struggles of the U.S. Much of the slowdown is due to the Fed’s barrage of hikes to interest rates over the last year. Economists expect to see that growth cooled to a 1.9% annual rate, down from 2.6% at the end of 2022. will give its first estimate of how much the economy grew during the first three months of the year. The housing industry has been under pressure because higher mortgage rates are squeezing buyers. economy.Ī separate report was more encouraging, saying sales of new homes rose by more than expected. That’s a discouraging signal when consumer spending makes up the biggest part of the U.S. They also pointed to “the risk of something breaking” in the financial system because of high rates.Ī report Tuesday showed that confidence among consumers fell more sharply in April than expected, down to its lowest level since July. With so much uncertainty about whether inflation can return to the Federal Reserve’s target without causing a recession, “we remain skeptical that markets are out of the woods,” Barclays strategists led by Stefano Pascale said in a report. Big chunks of the economy outside the job market have already begun to slow or contract. High rates can stifle inflation, but only by putting the brakes on the entire economy and hurting investment prices. The economy is under stress from high interest rates meant to get inflation under control. inflation eases but stays high, putting Fed in tough spotĬonsumer prices are rising faster than the Fed wants, but some economists still expect the central bank to suspend its year-long streak of rate hikes. But volatility strategists at Barclays said the calm was unlikely to last for the long term.īusiness U.S. The S&P 500 barely budged last week and ticked up just 0.1% on Monday. Because they’re two of the biggest companies on Wall Street by market value, their stock movements carry extra weight on the S&P 500 and other market indexes.īroad stock indexes had been making only modest moves this earnings reporting season. Microsoft and Google’s parent company, Alphabet, both rose in after-hours trading following their reporting of profits above expectations. The heart of earnings reporting season is arriving, and more heavy hitters are coming after the close of the day’s trading. Home builder PulteGroup rose 1.7% after also topping forecasts. On the winning side, PepsiCo rose 2.3% after beating profit expectations. Analysts pointed to it the conglomerate trimming back its forecast for a key revenue measure over the course of the year. It also said its results for the full year probably will come at the low end of its prior forecast, citing a challenging economy and other factors.ĭanaher was another big weight on the market, falling 8.8% despite reporting better earnings and revenue than expected. ![]() United Parcel Service fell 10% after it met profit forecasts but said it made less in revenue than expected. That’s why Wall Street is focused just as much, if not more, on what companies say about their future prospects as they do about their last three months. Analysts are forecasting the worst drop in S&P 500 earnings since the spring of 2020, when the pandemic froze the global economy. The majority of companies this reporting season have been topping expectations, but the bar was set considerably low. That overshadowed First Republic’s beating analysts’ expectations for earnings at the start of the year, and its stock plunged 49.4%. ![]() banking system and the risk of an economy-sapping pullback in lending. The size of the drop in deposits renewed worries about the U.S. From Silicon Valley Bank’s failure to the rescue of First Republic, keep up with the latest developments in the crisis of confidence afflicting banks in California and beyond.
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