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Home / Business / Dow 250 points at noon, Nasdaq under pressure as investors extend rotation in cyclical reserves

Dow 250 points at noon, Nasdaq under pressure as investors extend rotation in cyclical reserves

Stock market standards were mostly higher on Monday as investors monitored signs that a long-awaited Wall Street rotation in more growth-sensitive cyclical stocks could be produced, at the expense of their growing counterparts. up.

Investors also focused on signing President Donald Trump’s executive orders over the weekend, which aim to extend some elements of coronavirus relief. The measures face potential legal hurdles and questions about their effectiveness, however, while continued US-China tensions could also rise for the market, analysts said.

What are the main standards they make?

Dow Jones industrial average DJIA,
+ 0.98%
traded 253 points, or 0.9%, up to 27,687. S&P 500 SPX,
+ 0.16%
breaks water around 3,360 after trading about 1% away from the Feb. 19 closing record of 3,386.15. Composition Nasdaq COMP,
91 points, or 0.8%, were drawn at 10,920.

Shares posted gains last week, with the Dow advancing 3.8% to 27,433.48, and the S&P 500 posting a weekly increase of 2.5% to 3,351.28, the Nasdaq gaining 2.5% to finish at 11,010.98. The Nasdaq landed lower on Friday after hitting a series of closing records that pushed it over 11,000 points. The Dow closed 7.2% below its record high set on February 12th.

read: The stock bulletin, which called the market rally in March, now says the S&P 500 overvalued from 5% to 10%

Are you running the market at all?

Monday’s trading showed signs of a shift away from high-growth stocks in the tech sector toward more economically sensitive cyclical companies, a trend that has been rising since late last week.

“As COVID-19 summer illumination diminishes, investors are more likely to see economic recovery as real. This could mean that the recent move towards cyclical reserves is real and sustained for the first time since the onset of the pandemic.” said James Meyer, chief investment officer at Tower Bridge Advisors.

Still, investors say it is unclear how far any special rallies can take place in cyclical enterprises, with the coronavirus still a barrier weighing on the US economic recovery and the feasibility of new fiscal stimulus measures announced by the Trump administration in question.

Read: A ‘sharper cyclical rally’ could be on the cards, says this analyst

After the White House and Democratic lawmakers failed last week to reach an agreement on a new round of coronavirus aid, Trump on Saturday signed executive orders aimed at banning payroll tax collection, providing rental assistance, helping with student loan payments and extend a portion of the additional unemployment benefits that ended at the end of last month. The measures are almost certain to face legal challenges and logistical obstacles.

Specifically, an order authorizes states to pay $ 400 a week in additional unemployment benefits, with 75% of funding coming from the federal government, versus $ 600 in additional benefits that expired at the end of July, which were credited to it. helping borrowers and lenders, so far, avoid a wave of consumer standards.

View:States would be hit for billions under Trump’s unemployed benefit plan

“Obviously this is less stimulating than was previously available, which was probably not already enough to stop the economy from slowing down – despite the good employment news in the US on Thursday and Friday – and it starts in “It’s mathematically better than nothing,” said Michael Every, global strategist at Rabobank, in a note.

Meanwhile, U.S.-China tensions intensified, with Beijing on Monday announcing unspecified sanctions against 11 U.S. politicians and heads of organizations promoting democratic causes, including additional measures targeting Senators Marco Rubio and Ted Cruz, who were already subject to a ban. Travel.

Also, Chinese fighter jets spent some time in the Taiwan Strait midfield on Monday, news reports said, after U.S. Secretary of Health and Human Services Alex Azar visited the island. Azar would be the highest-ranking U.S. official to visit Taiwan in nearly four decades.

Earnings season also falls further this week. As of Friday, companies representing 89% of the S&P 500 market cap had reported second-quarter results, according to Jonathan Golub, US chief equity strategist at Credit Suisse Securities. Overall, 81% of companies that reported beat down projections.

Earnings Earnings:Hot rookies and not-so-hot pot companies jump on the slow profit train this week

Earnings exceeded estimates by 23.2% in total, with 81% of companies reported beating their low-forecast forecasts during the pandemic. Golub also noted that while second-quarter earnings per share exceeded forecasts by over 23%, 3Q consensus estimates rose by only 3%, and fourth-quarter estimates remained unchanged.

In economic data, the number of job vacancies in the US rose 518,000 to 5.8 million, climbing for the second month in a row. But the number of jobs available was about 7 million before the pandemic.

Which companies are in focus?
  • Shares of social media platform Twitter Inc.
    + 2.12%
    won 1.9% after the Wall Street Journal reported it had held preliminary talks on a possible combination with TikTok, the video-sharing app that the Trump administration has declared a national security threat because of its Chinese ownership. Microsoft Corp.
    however, it is still seen as key in any deal with TikTok after weeks of talks between it and Beijing-based TikTok owner ByteDance Ltd, the report said.

  • Shares of Berkshire Hathaway Inc.
    + 0.52%
    + 0.48%
    rose 0.5% after billionaire investor Warren Buffett-led conglomerate on Saturday reported a 87% increase in second-quarter profit thanks to the growth value of its investment portfolio, although it also received an estimate of about $ 10 billion in value of its aircraft parts manufacturing business.

  • Marriott International Inc
    + 3.53%
    shares rose 4.1% despite the hotel operator reporting a larger-than-expected loss for the second quarter and revenue falling below Wall Street estimates.

  • Shares of Cruises Royal Caribbean Ltd
    + 10.00%
    climbed to 11% on Monday even after the cruise operator announced a larger-than-expected loss in the second quarter. But revenue fell less than expected after cruising was suspended due to the pandemic.

  • Eastman Kodak Co KODK,
    Shares of
    fell to about 26% after reports that the U.S. International Development Finance Corporation was holding its planned $ 765 million loan hostage after the deal came under regulatory scrutiny.

How are other markets being traded?

Production of 10-year Treasury note TMUBMUSD10Y,
rose 1.4 basis points to 0.574%. Bond mites move in reverse order of yields.

The green return increased by 0.1%, with the ICE US Dollar Index DXY,
+ 0.12%,
a money meter against a half-dozen currency, at 93.52 early Monday.

In Europe, the Stoxx Europe 600 SXXP index,
+ 0.30%
ended 0.3% higher after advancing 2% last week, and the FTSE 100 UKX,
+ 0.75%
also added 0.3%, after its weekly advance of 2.3%.

In Asia, China CS3 300 index 000300,
+ 0.36%
ended the trade with 0.4%, while Hang Seng Hong Kong HSI Index,
closed 0.6% lower.

US Standard Oil Market CL.1,
+ 2.11%
traded 91 cents higher, or 2.2%, at about $ 42.13 a barrel on the New York Mercantile Exchange. The future of gold for December GCZ20,
+ 0.57%
added $ 11.80, or 0.6%, to trade at $ 2,039.60 an ounce.

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