Stocks continued their hot streak Tuesday, extending gains for the seventh straight session as renewed confidence in the Federal Reserve ending its tightening campaign this year lifted investors.
The tech-heavy Nasdaq Composite (^IXIC) rose 0.9%, continuing its own win streak, while the benchmark S&P 500 (^GSPC) edged up by nearly 0.3%. The Dow Jones Industrial Average (^DJI) increased by nearly 0.2% or close to 60 points.
Recent signs of a weaker US economy signaled to the market that the Fed could ease up on its rate hikes. But central bankers have said that the door is still open to additional increases, even if officials decide to pause for a time.
And while the market’s momentum has swung to a more optimistic reading, investors have plenty of cautious voices to check their exuberance, including Minneapolis Fed President Neel Kashkari, who emphasized both Monday and Tuesday that the central bank likely has more work ahead of it to control inflation. Kashkari was one of several more hawkish members of the Fed to express caution on Tuesday. Meanwhile, Chair Jerome Powell is set to speak later in the week.
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
“There was quite a bit of euphoria at the end of last week on the belief that the Fed is done, the jobs market is slowing, that the US economy is going to experience a soft landing,” Michael Hewson, chief market analyst at CMC Markets UK, told Reuters. “People have started to become a bit more clear-eyed. There is the risk that the Fed could rise again.”
The fresh Fed doubts clouded the outlook for oil, helping push WTI crude prices below $80 a barrel for the first time in over two months despite the prospect of Saudi and Russian supply cuts. West Texas Intermediate crude futures (CL=F) and Brent crude futures (BZ=F) both sank 4%, to $77.48 and $81.76 a barrel, respectively.
Also dragging on oil was trade data showing China’s drop in exports unexpectedly accelerated in October, a sign of flagging overseas demand, while its imports rose. But there was a bright spot for the world’s second-biggest economy, as the IMF upgraded its GDP growth forecasts for the country this year and next.
In corporate news, WeWork (WE) on Monday filed for bankruptcy after the once most valuable US startup grappled with expensive leases. Its shares have fallen about 98% this year.
Meanwhile, earnings season continues with reports from Uber (UBER) and Rivian (RIVN) highlighting Tuesday’s docket, ahead of the closely watched Disney (DIS) results due Wednesday.
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Stocks post 7th straight win
The benchmark S&P 500 (^GSPC) increased for the seventh consecutive session, extending a win streak as investors banked on the Federal Reserve holding rates steady heading into the end of the year. The S&P rose by nearly 0.3%
The tech-heavy Nasdaq Composite (^IXIC) added 0.9%, notching its eighth straight day of gains, while the Dow Jones Industrial Average (^DJI) increased 0.17% or almost 60 points.
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A$30 for ESPN streaming service ‘entirely reasonable’: Fmr. Disney exec
Wall Street has been skeptical about how much Disney (DIS) can charge for a new ESPN streaming service it’s planning to launch. But the company’s former streaming chief says sports fans will be willing to pay — even if the price tag is higher than what most platforms currently cost.
“People have always paid a lot for sports,” Kevin Mayer, who now runs Blackstone-backed entertainment startup Candle Media, said at the Yahoo Finance Invest Conference on Tuesday. “They didn’t always know it because back in the day when 95% of this country had paid TV bundles, probably 40% to 50% of the cost of that bundle was sports programming. … [But] now they can do so explicitly.”
His comments come as Disney’s stock has hit multiyear lows and activist investor Nelson Peltz is pushing for multiple board seats at the company. The company’s parks business is slowing, its linear TV division is declining, and its streaming business is not yet profitable.
Mayer, who is currently serving as a strategic adviser to CEO Bob Iger, said his former boss is “definitely most focused on making sure that ESPN, a company that he really believes in strongly, is well positioned for the future.”
Disney hasn’t disclosed any details regarding pricing for the ESPN service, although analysts have estimated it would need to cost a minimum of around $30 a month in order to break even — let alone turn a profit.
Mayer, however, insisted that $30 a month is an “entirely reasonable price to get the full suite of sports that ESPN would offer.”
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Fed’s Goolsbee says a ‘golden path’ of a soft landing is still possible
A substantial drop in inflation that comes without triggering a recession is still a possibility, said Chicago Fed President Austan Goolsbee.
“Over the next couple of months, we might equal the fastest drop in inflation in the last century,” Goolsbee said Tuesday, during in an interview with CNBC. “So we’re making progress on the inflation rate.”
Goolsbee noted that in previous battles against inflation a recession usually followed when central bankers had to greatly reduce pricing pressures. But achieving a soft landing in this tightening cycle would achieve what has not previously been done, he said, because of the magnitude of the inflation drop that would be required.
He also noted that if the Fed continues to make progress on the inflation front, the debate will shift from whether to rise rates to how long to keep rates elevated.
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Credit card debt and missed payments surged, NY Fed study finds
Credit card balances rose by $48 billion in the third quarter to a record high of $1.08 trillion, according to data released Tuesday by the Federal Reserve Bank of New York. The $154 billion year-over-year gain in debt was the largest such increase since the beginning of the series in 1999. At the same time, the 90-day delinquency rate measure for credit cardholders increased to 5.78%, up from 3.69% a year earlier, Yahoo Finance’s Gabriella Cruz-Martinez reports.
Rising delinquencies spanned incomes and regions, the data showed, but they were particularly acute among millennials and those with auto or student loans.
The fresh data comes as the three-year federal student loan payment pause ended in October and interest rates on credit cards have increased to 38-year highs. The combination has been a blow to some borrowers saddled with credit card debt.
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Stocks trending in afternoon trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in afternoon trading on Tuesday:
Intel (INTC): Shares of the multinational tech company rose 2% Tuesday afternoon following a report from the Wall Street Journal that revealed the company is in the running to potentially receive billions of dollars in government funding for secure facilities producing microchips for US military and intelligence applications.
ARM (ARM): Arm shares rose by more than 3% following reports that Nvidia (NVDA) and AMD (AMD) are both planning to launch Arm-based central processing units (CPUs) for Windows-based PCs.
Datadog (DDOG): Shares surged nearly 30% Tuesday afternoon after the security software company beat profit expectations and delivered a positive outlook as more customers transition to the cloud seeking more robust security solutions amid heightened cybersecurity threats.
Planet Fitness: (PLNT): Shares of the gym chain climbed more than 12% Tuesday after reporting a nearly 14% increase in total revenue from last year on growth in same-store sales and more than two dozen new clubs.
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Stocks rise in afternoon trading, on pace for 7-day win streak
The benchmark S&P 500 (^GSPC) is on track to notch its seventh consecutive day of wins, if it holds on to its gains through the closing bell. The index rose 0.2% in afternoon trading.
The tech-heavy Nasdaq Composite (^IXIC) ticked up by about 0.7%, on target to record its eighth straight day of gains, while the Dow Jones Industrial Average (^DJI) was just over the flatline.
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Hopes of an end to rate hikes allow corporate earnings to shine
Strong showings from corporate America are generally moving stocks upward again.
The 710 companies that reported quarterly results last week saw a 2.3% gain in the trading session following their release, according to Bespoke Investment Group. That’s one of the best readings in the last 20 years, Yahoo Finance’s Josh Schafer reports.
But it’s not the earnings themselves that have changed investor behavior, but rather the shifting narrative that has renewed hopes on Wall Street that the Fed is close to ending its rate hiking campaign.
As the current market consensus has shifted over the past several trading sessions, investors appear less worried about the headwinds that drove stocks lower in October. As of late-morning Tuesday, markets were pricing in a 90% chance the Fed holds interest rates steady in December, up significantly from the roughly 58% chance seen a month ago.
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Marriott CEO committed to Middle East market, bullish on China
Anthony Capuano, the chief executive of Marriott, said the hotel chain is dedicated to the Middle East market, even as the conflict in Israel and Gaza carries the potential for broader regional instability. “We’ve got a robust pipeline across the region,” Capuano said during a live interview at Yahoo Finance Invest, adding that keeping guests within the hotel ecosystem is a top priority. Marriott has more than two dozen hotels in Lebanon and Egypt.
Capuano also emphasized the company’s growth in China, its second-largest market. The operating environment there, he said, “is more than fully recovered to pre-pandemic levels.” Marriott recently opened its 500th hotel in China, he said, and has plans to open another 400 properties.
While the US and China are grappling with heightened economic and national security tensions, Capuano said his company has been able to stay above the geopolitical fray because Marriott is an asset-light business.
Of the 500 hotels in Marriott’s China portfolio and the hundreds more on the way, most of the properties are “almost entirely China-owned,” he said.
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Stocks trending in morning trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in morning trading on Tuesday:
Datadog (DDOG): Shares surged 24% Tuesday morning after the security software company beat profit expectations and delivered a positive outlook as more customers transition to the cloud seeking more robust security solutions amid heightened cybersecurity threats.
Planet Fitness: (PLNT): Shares of the gym chain climbed more than 15% Tuesday after reporting a nearly 14% increase in total revenue from last year on growth in same-store sales and more than two dozen new clubs.
WeWork (WORK): Trading on the co-working space provider remains halted as the former high-flying startup is expected to file for bankruptcy after its value plunged from $50 billion. The company warned investors in August that its financial troubles may force the company to shutter, punctuating what has been a disastrous run as a public company. It’s last price was below $1.
Peloton (PTON): The troubled connected fitness company edged up less than 1% Tuesday morning after investors sent the company down more than 5% in premarket trading. The rollercoaster moves came after Deutsche Bank downgraded Peloton to Hold from Buy as it sought clarity on its growth outlook.
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Stocks open mixed as momentum fades
Wall Street couldn’t keep up the surge that fueled last week’s rally, as pessimism over the potential for future rate hikes overtook hopes of an end to the Fed’s tightening campaign.
The tech-heavy Nasdaq Composite (^IXIC) ticked up by about 0.3%, continuing on a win-streak path, while the benchmark S&P 500 (^GSPC) edged down by 0.06%. The Dow Jones Industrial Average (^DJI) decreased by 0.1% or roughly 30 points.
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