Month: July 2023

(C) Reuters

By Yasin Ebrahim

Investing.com — The S&P 500 rallied Friday, as data showing inflation cooled more than expected triggered bullish bets on stocks, keeping the broader market on track to deliver its best first-half performance since 2021.

The S&P 500 rose 1.3%, the Dow Jones Industrial Average added 0.9%, or 319 points, and the Nasdaq rose 1.5%.

Cooling Inflation Calms Hawkish Fed Fears (For Now)

The personal consumption expenditures price index, the Federal Reserve’s preferred inflation measure, rose 0.1% last month, well below expectations for 0.6% and below the 0.4% from a month earlier. In the 12 months through May, PCE rose 3.8%, missing economists forecasts of 4.6%.

The slower pace of inflation may not be enough to stop the Fed hiking in July, Pantheon Macroeconomics says, if next month’s inflation data and monthly jobs report come in hot.

“Our base case, though, is that these data will be on the softer side, so we think the chance of a further hike is about 40%,” it added. “And if they don’t hike in July, they’re probably done.”

Apple Value Hits $3 Trillion as Tech Racks Up Gains

The broader market melt-up was led by an Apple-infused charge in tech after iPhone maker’s market cap rose above $3 trillion.

The move in Apple Inc (NASDAQ:AAPL) comes at time when the “Street has severely underestimated the massive installed base upgrade opportunity around iPhone 14,” Wedbush said, touting “mini supercycle” ahead for iPhone upgrades with the release of iPhone 15 expected later this year.

Meta Platforms (NASDAQ:META), meanwhile, jumped 3% after the UK closed its probe into the social media giant’s sale of Giphy to Shuttershock.

Crypto Stocks Waver After SEC Throws Shade on Bitcoin ETF Optimism

Cryptocurrency-related stocks including Coinbase Global Inc (NASDAQ:COIN), Riot Platforms (NASDAQ:RIOT), and Marathon Digital Holdings Inc (NASDAQ:MARA) were mostly higher after moving off session lows even as the U.S. Security and Exchange Commission said the recent slew of bitcoin exchange-traded funds filings – that have triggered a rally in cryptos -0 were inadequate. Blackrock, Invesco and Fidelity are among the biggest names that have applied for a spot bitcoin ETF.

Nike Slips Up on Earnings Stage, But Wall Street Remains Bullish

Nike (NYSE:NKE) fell more than 2% after the sportswear giant reported its first earnings miss in more than three years as margins were hurt by higher costs and a stronger dollar.

Still some on Wall Street continued to back the stock and flagged Nike’s efforts to improve inventory as key takeaway.

“We believe the key take coming out of the print is the company’s much improved inventory position (total dollars flat YOY with units down double-digits across both footwear and apparel), which we think signals the start of promotional pressure relief across the athletic space,” Deutsche Bank said in a note.

(C) Reuters

Investing.com — Apple shares closed above $3 trillion in market value for first time Friday as the tech giant wrapped up the first half of the year with strong gains.

Apple Inc (NASDAQ:AAPL) closed up 2.3% to $193.97, taking its market cap to $3.05T. Apple topped the $3 trillion mark for the first time in January 2022, but failed to close above the milestone.

The nearly 50% rally in Apple in the first half of the year comes as some suggest that Wall Street has underestimated how many iPhone users upgraded their phones last year, with more likely to do the same, when Apple releases its iPhone 15.

“The Street has severely underestimated the massive installed base upgrade opportunity around iPhone 14 and now a mini super cycle iPhone 15 ahead with roughly 25% of Apple’s golden customer base not upgrading their iPhones in over 4 years,” Wedbush said, touting further gains for Apple ahead.

“We believe Apple’s fair valuation could be in the $3.5 trillion range with a bull case $4 trillion valuation by 2025,” it added.

(C) Reuters.

By Yasin Ebrahim

Investing.com — The Dow rallied Friday, wrapping up a strong first half of the year as data showing inflation cooled more than expected triggered bullish bets on stocks.

The Dow Jones Industrial Average added 0.8%, or 283 points, and the Nasdaq rose 1.5%, and the S&P 500 rose 1.5%.

Cooling Inflation Calms Hawkish Fed Fears (For Now)

The personal consumption expenditures price index, the Federal Reserve’s preferred inflation measure, rose rose 0.1% last month, well below expectations for 0.6% and below the 0.4% from a month earlier. In the 12 months through May, PCE rose 3.8%, missing economists forecasts of 4.6%.

The slower pace of inflation may not be enough to stop the Fed hiking in July, Pantheon Macroeconomics says, if next month’s inflation data and monthly jobs report come in hot.

“Our base case, though, is that these data will be on the softer side, so we think the chance of a further hike is about 40%,” it added. “And if they don’t hike in July, they’re probably done.”

As well cooling inflation, data showing weaker-than-expected consumer spending also eased worries that the Fed is likely to lean hawkish.

Apple Value Closes Above Record $3 Trillion as Tech Racks Up Gains

The broader market melt-up was led by an Apple-infused charge in tech after iPhone maker closed above $3 trillion for the first time ever.

The move in Apple Inc (NASDAQ:AAPL) comes at time when the “Street has severely underestimated the massive installed base upgrade opportunity around iPhone 14,” Wedbush said, touting “mini supercycle” ahead for iPhone upgrades with the release of iPhone 15 expected later this year.

Meta Platforms (NASDAQ:META), meanwhile, jumped 3% after the UK closed its probe into the social media giant’s sale of Giphy to Shuttershock.

Crypto Stocks Waver After SEC Throws Shade on Bitcoin ETF Optimism

Cryptocurrency-related stocks including Coinbase Global Inc (NASDAQ:COIN), Riot Platforms (NASDAQ:RIOT), and Marathon Digital Holdings Inc (NASDAQ:MARA) were mostly higher after moving off session lows even as the U.S. Security and Exchange Commission said the recent slew of bitcoin exchange-traded funds filings – that have triggered a rally in cryptos – were inadequate. Blackrock, Invesco and Fidelity are among the biggest names that have applied for a spot bitcoin ETF.

Nike Slips Up on Earnings Stage, But Wall Street Remains Bullish

Nike (NYSE:NKE) fell more than 2% after the sportswear giant reported its first earnings miss in more than three years as margins were hurt by higher costs and a stronger dollar.

Still some on Wall Street continued to back the stock and flagged Nike’s efforts to improve inventory as key takeaway.

“We believe the key take coming out of the print is the company’s much improved inventory position (total dollars flat YOY with units down double-digits across both footwear and apparel), which we think signals the start of promotional pressure relief across the athletic space,” Deutsche Bank said in a note.

(C) Reuters. U.S. President Joe Biden speaks about the U.S. Supreme Court’s decision to strike down race-conscious student admissions programs at Harvard University and the University of North Carolina, during brief remarks in the Roosevelt Room at the White House i

By Steve Holland and Jeff Mason

WASHINGTON (Reuters) -President Joe Biden on Friday announced new measures to provide student loan relief to Americans and condemned the U.S. Supreme Court for blocking a plan to cancel hundreds of billions of dollars in debt that was popular with his voters.

Thwarted by the conservative-leaning court, Biden told reporters that his administration would pursue student loan relief through a different avenue, the Higher Education Act. The Education Department launched a regulatory “rulemaking” process that is likely to take months.

In a 6-3 decision earlier on Friday, the Supreme Court blocked Biden’s plan to cancel $430 billion in student loan debt. The ruling, which was welcomed by Republicans, threatened to dismantle part of the Democratic president’s policy agenda.

Biden said his administration would pursue a different way to achieve his goal.

“Today’s decision has closed one path. Now we’re going to start another,” Biden told reporters. “I believe the court’s decision to strike down my student debt relief program was a mistake, was wrong. I’m not going to stop fighting to deliver borrowers what they need, particularly those at the bottom end of the economic scale.”

As part of the overall plan, the Education Department finalized a program to reduce payments that borrowers with undergraduate loans have to pay monthly to 5% of discretionary income rather than 10%, which the administration said would help them save $1,000 a year.

Loan forgiveness would be offered to borrowers with balances of $12,000 or less after 10 years of payments rather than 20 years – a benefit aimed at helping community college graduates.

Progressive voters, who are part of the coalition that helped elect Biden in 2020, long have put pressure on the White House to address student loan debt; the court’s decision intensified calls for further action.

“The President has more tools to cancel student debt – and he must use them,” Democratic Senator Elizabeth Warren, a leading progressive voice, said on Twitter after the Supreme Court’s decision and before Biden spoke.

Progressive House Democrat Alexandria Ocasio-Cortez urged Biden to use authorities under the Higher Education Act to continue loan forgiveness before payments resume after a pause. “We still have the power to cancel and must use it, or we’re looking at an economic crisis for millions of people,” she said on Twitter.

About 53% of Americans supported Biden’s original student loan forgiveness program, while 81% of Democrats did so, a Reuters/Ipsos poll showed this year.

Democrats want voters to see Biden fighting for student debt relief ahead of his re-election bid in 2024, hoping conservative rulings from the court on debt relief and affirmative action or race-conscious college admission considerations would galvanize them in the same way the court’s ruling to strike down abortion rights did in 2022.

The White House made clear it would be putting blame on Republicans for stymieing student-loan relief efforts. Biden blasted Republican elected officials for supporting billions of dollars in pandemic-related loans to businesses that were eventually forgiven but not supporting student debt relief.

Education Secretary Miguel Cardona, in a briefing with reporters, listed a handful of Republican lawmakers, whom he named, who collectively had had millions of dollars in pandemic-related loans forgiven.

Republicans argued that Biden’s initial student-loan relief plan was unconstitutional and unfair.

“Biden’s student loan bailout unfairly punished Americans who already paid off their loans, saved for college, or made a different career choice,” Republican National Committee (RNC) Chairwoman Ronna McDaniel said in a statement. “Americans saw right through this desperate vote grab, and we are thankful that the Supreme Court did as well.”

(C) Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 29, 2023. REUTERS/Brendan McDermid

By Sin?ad Carew, Sruthi Shankar and Johann M Cherian

(Reuters) – Wall Street’s three major indexes advanced solidly on Friday, with the tech-heavy Nasdaq boasting its biggest first-half gain in 40 years as inflation showed signs of cooling while Apple closed with a $3 trillion market valuation for the first time.

Apple Inc (NASDAQ:AAPL) breached the $3 trillion mark for the first time since January 2022, adding 2.3% to close at $193.97 after hitting a record of $194.48. It was lifted by growing appetites for growth stocks generally as well as bets the iPhone maker will succeed in new markets.

Investors perked up for the last day of the second quarter on signs of cooling U.S. inflation from measures that are closely watched by the Federal Reserve.

A Commerce Department report showed the Personal Consumption Expenditures (PCE) index advanced 3.8% versus April’s 4.3%. Excluding volatile food and energy, the core PCE index gained 0.3%, down from 0.4% in the previous month.

The data fueled hopes the Fed could be near the end of its rate-hiking cycle. It helped that Treasury yields fell in response to cooling inflation, said Burns McKinney, portfolio manager at NFJ Investment Group in Dallas, Texas.

“Everything is going up because you’re seeing the economy cooling but not that much. The Fed might have a better-than-we-thought shot of threading the needle and cooling inflation without killing the economy in the process,” said McKinney.

The money manager said he still does not think the Fed can dampen inflation without causing a recession, but “the chances are going up.”

The Dow Jones Industrial Average rose 285.18 points, or 0.84%, to 34,407.6, the S&P 500 gained 53.94 points, or 1.23%, to 4,450.38 and the Nasdaq Composite added 196.59 points, or 1.45%, to 13,787.92.

The Nasdaq registered its strongest first-half performance in 40 years with a more than 31% gain. The Nasdaq 100 index of top technology stocks boasted its biggest first half gain on record, adding around 39%.

The S&P 500’s growth index rose 1.4% on Friday. The biggest boosts to the S&P 500 behind Apple were other investor favorites such as Microsoft (NASDAQ:MSFT), Nvidia (NASDAQ:NVDA), Amazon (NASDAQ:AMZN) and Meta Platforms. These added between 1.6% and 3.6%, extending blistering rallies fueled by strong earnings and a buzz around artificial intelligence.

All the S&P 500’s 11 major industry sectors advanced, with technology leading the charge, up 1.8%. Real Estate was the weakest, up 0.5%.

For the week, the S&P 500 added 2.35% while the Nasdaq added 2.20% and the Dow climbed 2.02%. For the quarter, the S&P 500 added 8.3% while the Nasdaq climbed 12.8% and the Dow rose 3.4%.

Small cap stocks were also attracting attention with the Russell 2000 index closing up 0.4% in its fifth straight day of gains, its longest winning streak since the five sessions ending March 3.

Still, traders were pricing in an 84.3% chance that the Fed will hike rates by 25 basis points to 5.25%-5.50% range in its July meeting, according to CMEGroup’s Fedwatch tool, down slightly from the 89.3% on Thursday.

Hawkish remarks from Fed Chair Jerome Powell and strong economic data earlier this week boosted bets the Fed would keep hiking rates, but stock markets took comfort in signs of strength in the U.S. economy as inflation cooled.

The CBOE Market Volatility Index, Wall Street’s fear gauge, closed up 0.05 points at 13.59 after earlier slipping to a one-week low at 12.96 points.

Among single stocks, Nike Inc (NYSE:NKE) fell 2.6% after it forecast first-quarter revenue below Wall Street expectations.

Carnival (NYSE:CCL) Corp shares jumped 9.7% after Jefferies upgraded the cruise operator’s stock to “buy” from “hold”.

On U.S. exchanges 10.36 billion shares changed hands compared with the 11.29 billion moving average for the last 20 sessions.