(Bloomberg) — Stocks rebounded after posting their worst week since March as earnings rolled in.
Treasuries fell as remarks from a Federal Reserve official signaled interest rates could remain higher for longer to tame inflation pressures.Most Read from BloombergMusk Says He May Need Surgery, Will Get MRI on Back and NeckEastern US Prepares for a ‘Potent’ Storm System: Weather WatchPayPal Launches a Stablecoin in Latest Crypto Payments PushHSBC Executive Slams ‘Weak’ UK for Backing US Against ChinaTexas Power Prices to Surge 800% on Sunday Amid Searing HeatThe S&P 500 halted a four-day drop while the Dow Jones Industrial Average saw its biggest advance in more than seven weeks.
Berkshire Hathaway Inc.
hit a record as its results beat estimates.
rose after a news report it will meet with the Federal Trade Commission to avoid an antitrust lawsuit.
slid as its chief financial officer stepped down in a surprise shakeup at Elon Musk’s company.
notched its longest losing streak this year.In late trading, Beyond Meat Inc.
fell as the plant-based burger company said it’s unlikely to hit its goal of becoming cash-flow positive in the second half of the year.
Palantir Technologies Inc.
climbed after raising its profit forecast and authorizing a $1 billion share buyback.
Lucid Group Inc.
gained after the maker of luxury electric sedans assured investors it’s on track to its achieve full-year production target.Ten-year US yields resumed an advance that drove them last week to the highest since November.
Bulging sales of Treasuries are about to deliver a major test of investor demand and determine whether a selloff has room to run as the market braces for the biggest round of refunding auctions since last year.
The bond market has to absorb a combined $103 billion of 3-, 10- and 30-year auctions before the week is out — up $7 billion from the May slate.Fed Governor Michelle Bowman said additional hikes “will likely be needed.” Meantime, Fed Bank of New York President John Williams cited the necessity to keep policy restrictive “for some time” — while noting rate cuts may be warranted next year if inflation slows.
Traders also awaited the consumer price index due later this week for clues on the policy outlook.Story continues“Most of the market sees the Federal Reserve holding the fed funds rate at its current level through the rest of this year,” said Anthony Saglimbene, chief market strategist at Ameriprise.
“Depending on how this week’s inflation reports come in, that forecast may see some changing odds, creating more stock volatility in the near term.”Morgan Stanley’s Michael Wilson said that Fitch Ratings’ downgrade of US government debt last week and the ensuing selloff in the bond market suggests that “investors should be ready for potential disappointment” on economic and earnings growth.A clear majority of investors expect a US recession before 2024 is out, leading them to view the current bull market in stocks as ephemeral and to favor long-term US Treasuries.
That’s the takeaway from the latest Markets Live Pulse survey, which showed that roughly two-thirds of the 410 respondents anticipate a downturn in the world’s biggest economy by the end of next year.Survey respondents appear to be looking past the economy’s current resilience and anticipating further damaging ripple effects from the Fed’s cumulative tightening.“It’s important for investors to remain vigilant and not become complacent as the market’s inflation and Federal Reserve fears remain intact,” said Ryan Belanger, founder and managing principal at Claro Advisors.
“Gasoline prices have been rising in recent weeks and Thursday’s CPI report may reflect that, which would boost the Fed’s arguments for remaining aggressive with policy.”More Corporate Highlights:Campbell Soup Co.
agreed to buy Sovos Brands Inc.
in a deal valued at $2.7 billion, expanding the soupmaker’s presence in frozen meals and giving it a foothold in the pasta sauce market.Tyson Foods Inc.
declined as it will shut down four additional chicken facilities after fiscal third-quarter sales trailed even the lowest of analyst estimates.Yellow Corp.
fell as it filed for bankruptcy and will remain shuttered after the trucking firm’s long-running financial woes were compounded by a dispute with its labor force.Sage Therapeutics Inc.
dropped after regulators granted approval to its fast-acting pill only for postpartum depression, denying the drug clearance for major depressive disorder.Elsewhere, wheat rose after Ukraine used sea drones to cripple a Russian naval vessel and an oil tanker over the weekend, posing a risk for a key export route for Russian commodities through the Black Sea.
West Texas Intermediate traded near $82 a barrel at the start of the week after rising more than 4% over the previous two sessions.Key events this week:Japan household spending, TuesdayUS wholesale inventories, trade, TuesdayPhiladelphia Fed President Patrick Harker speaks, TuesdayChina CPI, PPI, money supply, new yuan loans and aggregate financing, WednesdayIndia rate decision, ThursdayUS initial jobless claims, CPI, ThursdayAtlanta Fed President Raphael Bostic pre-recorded remarks for employment webinar, ThursdayUK industrial production, GDP, FridayUS University of Michigan consumer sentiment, PPI, FridaySome of the main moves in markets:StocksThe S&P 500 rose 0.9% as of 4 p.m.
New York timeThe Nasdaq 100 rose 0.9%The Dow Jones Industrial Average rose 1.2%The MSCI World index rose 0.5%CurrenciesThe Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.1004The British pound rose 0.3% to $1.2785The Japanese yen fell 0.5% to 142.46 per dollarCryptocurrenciesBitcoin rose 0.1% to $29,139.05Ether fell 0.3% to $1,824.51BondsThe yield on 10-year Treasuries advanced five basis points to 4.09%Germany’s 10-year yield advanced four basis points to 2.60%Britain’s 10-year yield advanced eight basis points to 4.46%CommoditiesWest Texas Intermediate crude fell 0.5% to $82.42 a barrelGold futures fell 0.2% to $1,971.60 an ounceThis story was produced with the assistance of Bloomberg Automation.–With assistance from Brett Miller, Tassia Sipahutar, Cecile Gutscher, Vildana Hajric and Isabelle Lee.Most Read from Bloomberg BusinessweekTeen Gamers Swiped $24 Million in Crypto, Then Turned on Each OtherA Digital Dollar Is for Banks and Governments, But Not YouHonoring the Enslaved Man Who Made Jack Daniel’s First WhiskeyPrivate Credit Funds Move From Mergers to Timeshares and Car LoansThe Health-Care Staffing Crisis Is Bad and Getting Worse©2023 Bloomberg L.P.