Stock futures rose slightly after key averages worst day since June 2020

A 4% One-Day Drop Points to Historically Better Gains, Says Jeff Hirsch

According to Jeff Hirsch at the Stock Traders Almanac, a one-day drop of 4% or more can be brutal, but history shows it could point to better gains in the next session and in the longer term.

According to Hirsch’s Tuesday note, the chances of a Wednesday rally after the selloff of the previous session are around 66%.

“Since 1950, the S&P 500 has fallen 4% or more 53 times in the same day before today [Tuesday]Hirsch wrote in a Tuesday note. “In those past 53 events, the S&P 500 was 35 times higher on the next trading day and less than 18 with an average gain of 1.08% on all days. Probability of tomorrow based on historical performance [Wednesday] 66.04% are.”

History shows that stocks may not recover losses meaningfully in the short term after falling more than 4%, but they could rise in the double digits when investors look ahead, according to the note.

,[The] The line charts for the 30 trading days prior to the last 53 and the 60 trading days following the last 53 indicate no more than 4% decline, as the S&P 500 only managed a modest recovery, on average over the next 20-25 trading days. day (a typical month is typically 21 trading days),” Hirsch wrote. “But … the S&P 500 was up 82.7% in a year, with a daily decline of more than 4% to 25%. with higher average profit.

— Sarah Minnow

Stock futures rise again

Stock futures have gained some ground after initially showing a low response to the release of August PPI numbers.

Dow futures are now up about 71 points, while Nasdaq 100 futures are up 0.4%.

— Jesse Pound

Wholesale prices fall in August

The Producer Price Index for August showed that the wholesale price rise was less sharp than the pressures faced by consumers.

Headline PPI falls 0.1% month-on-month, matches expectations, Excluding food, energy and business services, PPI rose 0.2%. Economists polled by the Dow Jones expected the core PPI to climb 0.3%.

In July, the headline PPI fell 0.4% and the core PPI rose 0.1%.

Some investors and economists may take the low reading of the PPI as a sign that consumer inflation will also weaken in the coming months.

— Jesse Pound

SoftBank considering third Vision Fund, says report

Masayoshi Son and SoftBank are trying to see if a third time is an attraction for the Vision Fund.

wall street journal reported Wednesday that the Tokyo-based investment firm is considering launching another Vision fund, even though its two prior efforts have had disappointing returns and some high-profile losses.

The Journal reported that the third fund will use SoftBank’s own cash, and the company is also looking to add more money to its second Vision Fund.

— Jesse Pound

Wholesale price index expected to decline in August

When the Bureau of Labor Statistics releases producer price index data for August, the market will get another significant inflation reading at 8:30 a.m. ET.

Economists polled by the Dow Jones expect the PPI, which is a proxy for the wholesale prices that producers of goods and services receive, fell 0.1%. Excluding food, energy and business services, the index is expected to gain 0.3%.

The release comes a day after the Consumer Price Index unexpectedly rose 0.1% in August. Core CPI grew 0.6%, more than double the estimate. On a year-over-year basis, CPI grew 8.3% and 6.3%, respectively.

—Jeff Cox

futures leaves profit

Stock futures have lost their modest gains on Wednesday morning, with futures for the Dow, S&P 500 and Nasdaq 100 all hovering slightly above the flatline.

— Jesse Pound

Sharp recession could bring more selling for stocks and bonds, Goldman says

According to Goldman Sachs, the prospect of a Fed-induced recession means investors can’t be sure they’ve seen the worst sell-off for stocks and bonds.

Goldman’s Dominic Wilson and Vicki Chang wrote in a note to clients, “It is particularly difficult to rely on the degree to which low equity and credit prices or high bond yields will strengthen financial conditions, the complex between them.” Looking at the interaction.” on Tuesday evening.

“But the basic story is clear. If only a severe recession – and a swift Fed response to deliver it – will dampen inflation, it is likely that the downside will still remain for both equities and government bonds, even after the losses. Might be enough. We’ve already seen that.”

To be sure, Goldman’s chief economist Jan Hetzius said in the note that he still believes the Fed can bring inflation down without a sharp rise in unemployment.

— Jesse Pound

Elon Musk says the Fed should ‘fall 0.25%’

Kathy Wood’s call for impending deflation received more support Wednesday morning from Elon Musk, who has a contrarian view for the Federal Reserve.

Musk said on Twitter that the Fed should “drop 0.25%.” The central bank’s Federal Open Market Committee meets next week, and is widely expected to hike its benchmark interest rate by 0.75 percentage points.

Wood’s deflation call stemmed from a sharp drop in commodity prices in recent months. Musk responded to a tweet by Wood that listed the price drop “Absolutely, it’s neither subtle nor cryptic.”

— Jesse Pound

KeyBank says buy Walmart, Target

Walmart and Target received buy ratings from KeyBanc, which said both stocks could strengthen investor portfolios going forward.

Bradley Thomas, analyst at KeyBanc Capital Markets, wrote, “While investors can find better growth potential in smaller companies, we believe both Walmart and Target are in the best competitive position of the past decade, given the economic growth potential of both.” The catalyst for the -commerce epidemic has become very important.” ,

CNBC Pro customers can read more here,

— Carmen Reinicki

Traders are now split between a 75 basis point or a 100 basis point Fed hike

Some traders are now expecting a full point rate hike at the US Federal Reserve’s September meeting, According to CME Fedwatch Tracker Fed funds futures bets.

The 100-basis-point probability rose from 0% to 33%, and the three-quarter-point probability of growth fell from 91% a day earlier to 67%.

economist here Nomura still hopes To see the absolute percentage increase.

— Abigail of

UK inflation unexpectedly drops to 9.9% as fuel prices fall

ONS data shows real wages in the UK for the three months to May have fallen the biggest since records began in 2001.

Henry Nichols | Reuters

UK inflation slows in August Due to the fall in fuel prices, however, food prices continued to rise as the country continues to face a cost of living crisis.

According to estimates published on Wednesday by the Office for National Statistics, the consumer price index rose 9.9% annually, below a consensus forecast of 10.2% among economists polled by Reuters. This was also down from the July figure of 10.1%.

“The fall in the price of motor fuels made the largest contribution to the change in CPIH and CPI annual inflation rates between July and August 2022,” the ONS said in its report.

“Rising food prices contributed the largest, partially offset, upward movement to the rate change.”

Read more here.

– Elliot Smith

European stocks fell slightly as global markets reacted to the latest US inflation data

European markets were slightly lower on Wednesday as investors reacted to the latest US inflation data

The pan-European Stokes 600 was down 0.3% in early trade, with travel and leisure stocks losing 0.9%, while retail stocks extended the trend to add 1.9%.

Kevin O’Leary says volatility is back, but this opportunity could be

Billionaire investor Kevin O’Leary says there are opportunities in today’s volatile market.

“The best thing to do here – since you can’t guess at the bottom – The day is to take opportunities and buy stocks that you find attractive,” the president of O’Shares Investments told CNBC’s “Street Science Asia.”

He added that large parts of the economy are still strong, and the Fed will continue to raise rates until they see “some sort of slowdown”.

read the full story here,

— Lee Ying Shano

CNBC Pro: Morningstar says it’s one of the ‘best’ value-focused funds

Looking for opportunities after Tuesday’s heavy sell-off

Despite Tuesday’s broad selloff, the market has some opportunities for investors looking to play

Crossmark Global Investments Victoria Fernandez told CNBC’s “Closing Bell: Overtime” on Tuesday that investors want to focus on the health care and consumer staples, paying particular attention to quality balance sheets, earnings and management.

Oil prices have come down from their highs despite a huge rally at the start of the year. Investors should remain overweight on energy, given that many companies are returning capital to their shareholders and focusing on dividends, Joe Terranova of Vertus Investment Partners told “Closing Bell: Overtime.”

Many valuations at these levels are certainly attractive, but Quincy Crosby of LPL Financial says she is monitoring trading volumes for signs of market strength.

A sell-off at strong volumes could signal further fear in the market, while a rally at higher volumes could signal a healthy one, she explains.

“We haven’t seen [high volume] As the market rallies this week,” Crosby said. “The volume was not merely meant to reinforce the notion that the market base was strong.”

— Samantha Subin

Why Gundlach Says It’s Time to Buy Long-Term Treasuries

Jeffrey Gundlach, CEO of DoubleLine Capital, told CNBC’s Scott Wapner at the Future Proof Festival on Tuesday that now is a good time for investors to buy long-term Treasuries.

“Despite the fact that today’s story is quite the opposite, the risk of deflation is much greater today than it was in the past two years,” Gundlach said. Threat. “I’m not talking about next month. I’m talking sometime after next year, certainly 2023.”

CNBC Pro subscribers can read the full story and about Potential risks ahead of deflation here,

– Samantha Subin, Yun Liu

where the prime averages stand

This is where all the major averages stand after Tuesday’s sharp selloff.

Dow Jones Industrial Average:

  • down 14.4% this year
  • 15.8% down from its 52-week high

S&P 500:

  • down 17.4% from the beginning of the year
  • sits down 18.4% from its 52-week high

Nasdaq Overall:

  • down 25.6% this year
  • 28.2% down from its 52-week high

Tuesday’s market move put all 11 S&P 500 sectors with the exception of utilities up more than 10% from their 52-week highs. The area sits 2.7% off its highs, but is up 5.6% this year.

— Samantha Subin

Stock futures open slightly higher

Share futures opened slightly higher on Tuesday. Futures tied to the Dow Industrial Average rose 60 points, or 0.19%. The S&P 500 and Nasdaq 100 futures were up 0.16% and 0.12%, respectively.

— Samantha Subin

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