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We saw the three-day losing streak for the tech-heavy Nasdaq and the broader S&P 500 come to an end today, with the Nasdaq continuing its lead among major indices for the year, +127 points, +0.95%, and the S&P following, +0.37%. Last Thursday’s market peak has been fairly rapidly walked back, even with a three-day weekend in the way. The Dow narrowly missed closing in the green today, -0.01%, while the small-cap Russell 2000 fell off -0.80% for the session.
Fed Chair Jay Powell spent his second-straight day on Capitol Hill today, addressing the Senate Banking Committee and issuing some new(?) concerns for regional banks in the process. Powell said banks having a high concentration of real estate holdings — meaning smaller banks, not the Wall Street giants — have been identified, and are currently being monitored. This helped send the S&P Regional Bank ETF (KRE - Free Report) down -3% today, with M&T Bank (MTB - Free Report) swooning -3.7%.
It’s a day after Powell reiterated, to the House Financial Services Committee, that a quarter-point interest rate hike is still on the table for the next Fed meeting, which occurs July 25th and 26th. Openly keeping a +2% inflation target in place, Powell said that achieving this has still “a long way to go.” It’s now largely assumed that last week’s pause in rate hikes is no longer the end of the cycle, but rather a rest while economic data catches up to our present realities.
This data may be what keeps the Fed from acting on another rate hike, however. If we look at this morning’s weekly jobless claims data, we’re currently at the highest initial claims levels since October of 2021. Longer-term claims have not yet caught up, but this may be the tip of the iceberg for a labor force weakening, which economists have been predicting for months. Should we see more economic weakness begin to register in various reports over the next five weeks, the Fed may be of a different mind than they are today.
Tomorrow morning brings us Manufacturing and Services data from S&P PMI. Manufacturing, which had been holding its own after a weak start to the year (though off the more robust levels we were seeing a year ago), is expected to inch back up toward the 50 level -- above which indicates growth. Services have been fairly roaring ahead in recent months, and is expected to moderate slightly to a level still firmly above the 50 level.
Image: Bigstock
Nasdaq, S&P Break 3-Day Losing Streak
We saw the three-day losing streak for the tech-heavy Nasdaq and the broader S&P 500 come to an end today, with the Nasdaq continuing its lead among major indices for the year, +127 points, +0.95%, and the S&P following, +0.37%. Last Thursday’s market peak has been fairly rapidly walked back, even with a three-day weekend in the way. The Dow narrowly missed closing in the green today, -0.01%, while the small-cap Russell 2000 fell off -0.80% for the session.
Fed Chair Jay Powell spent his second-straight day on Capitol Hill today, addressing the Senate Banking Committee and issuing some new(?) concerns for regional banks in the process. Powell said banks having a high concentration of real estate holdings — meaning smaller banks, not the Wall Street giants — have been identified, and are currently being monitored. This helped send the S&P Regional Bank ETF (KRE - Free Report) down -3% today, with M&T Bank (MTB - Free Report) swooning -3.7%.
It’s a day after Powell reiterated, to the House Financial Services Committee, that a quarter-point interest rate hike is still on the table for the next Fed meeting, which occurs July 25th and 26th. Openly keeping a +2% inflation target in place, Powell said that achieving this has still “a long way to go.” It’s now largely assumed that last week’s pause in rate hikes is no longer the end of the cycle, but rather a rest while economic data catches up to our present realities.
This data may be what keeps the Fed from acting on another rate hike, however. If we look at this morning’s weekly jobless claims data, we’re currently at the highest initial claims levels since October of 2021. Longer-term claims have not yet caught up, but this may be the tip of the iceberg for a labor force weakening, which economists have been predicting for months. Should we see more economic weakness begin to register in various reports over the next five weeks, the Fed may be of a different mind than they are today.
Tomorrow morning brings us Manufacturing and Services data from S&P PMI. Manufacturing, which had been holding its own after a weak start to the year (though off the more robust levels we were seeing a year ago), is expected to inch back up toward the 50 level -- above which indicates growth. Services have been fairly roaring ahead in recent months, and is expected to moderate slightly to a level still firmly above the 50 level.
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