[Marchnad yr UD]S&P 500 rebounds, scrutinizing corporate earnings – dollar 130 yen low – Bloomberg

In the US stock market on the 24th, the S&P 500 stock index fell for the first time in three business days. Amid heightened fears of a recession, the move has scrutinized a series of financial results for clues about the outlook for US companies.

The Dow Jones Industrial Average, a measure of economic activity, fell. The earnings of the railway company Union Pacific have been disappointing. 3M, a manufacturer of daily goods and industrial goods, showed the full yearEarnings forecasts were below analyst expectations. The company also announced plans to cut jobs. Meanwhile, homebuilder DR Horton posted better-than-expected earnings.

In after-hours trading after the close of regular trading, the exchange-traded fund (ETF) “Invesco QQQ Trust Series 1” (QQQ) linked to the Nasdaq 100 index rose. Microsoft reported earnings after the close, beating expectations’ r market for adjusted earnings per share. Meanwhile, Texas Instruments (TI) saw its revenue fall for the first time since 2020.

An index of business activity in the United States posted a seventh straight month of contraction in January, although it rose from the previous month. The index indicating input prices turned up, suggesting that inflationary pressures are extending.

US Corporate Activity Declines for 7th Consecutive Month, Suggesting Long-S&P Inflation (1)

“You have to ask if the stock has been pushed to a level that is not supported by the information coming soon,” said Kenny Polcari, senior market strategist at Slatestone Wealth.

Jeremy Grantham, co-founder of Grantham Mayo van Otterloo (GMO), said that the bubble in the US stock market is far from over, and that investors have been buoyed by a strong start to the year. Warning not to with overdoing it.

“The scale of the problem is bigger than usual, probably the biggest I’ve ever experienced,” he said.

S&P 500 down 17% this year, bubble not over yet: Grantham

US Treasures

US Treasuries rose, focusing on long-term bonds. The Composite Purchasing Managers’ Index (PMI), which measures US business activity, exceeded market expectations, and there was a moment when it fell.

Wall Street is widely expected to raise interest rates by 0.25 percentage points at each of the next two Federal Open Market Committee (FOMC) meetings, with a gap of seven weeks between them. Uncertainty about the outlook is increasing.

“Given the gap between the February and March meetings, the FOMC has a better understanding of the US economy when it meets late in the March quarter,” said Ian Lyngen, head of US rates strategy at Capital Markets BMO. ” stated in the report on the 23rd. “Information received between the two meetings will not be sufficient to prevent a rate rise of 0.25 percentage points in March, but it could rule out a rate rise in May.”

foreign exchange

The dollar fell in the foreign exchange market. The dollar fluctuated up and down during the day following the PMI index which measures US corporate activity in January and a series of US corporate earnings results, and was mainly driven by movements in yields US Treasury.

The Yen appreciated against the dollar to a low of 130 yen against a backdrop of falling US Treasury yields. At one point, the yen traded as low as 131.12.

raw

Crude oil futures fell. West Texas Intermediate (WTI) futures on the New York Mercantile Exchange (NYMEX) rose to their biggest drop since early January.

The disappointing results of several US companies appear to have hurt the near-term outlook of energy traders.

3M today announced that its fourth quarter 2022 adjusted earnings per share and adjusted operating profit fell short of analyst expectations. The forecast for adjusted earnings for the full year 2023 also fell short of market expectations.

3M to cut 2,500 jobs; full year 2023 profit forecast below market expectations

Ed Moya, senior market analyst at Oanda, said these results dampened economic optimism in the short term, with oil prices “erasing some of the recent gains.”

Market participants will continue to monitor company earnings releases for clues about the economic outlook. Moya said the earnings of oil giants such as Chevron and ExxonMobil and international companies such as Tesla will be the focus as they look to see where Chinese demand will go.

March WTI crude futures fell $1.49, or 1.8%, to close at $80.13 a barrel. The London ICE North Sea Brent March contract closed at $86.13, down $2.06, or 2.3%.

Money

The New York gold futures market continues to rise. Traders turned to economic data to gauge the trajectory of US interest rate hikes.

S&P Global January CompositePreliminary PMI readings showed declining activity for the seventh consecutive month.

This week, the focus will be on a range of indicators, including the US Personal Consumption Expenditure (PCE) price index, which the Federal Reserve uses to measure inflation.

Gold futures for April delivery on the New York Mercantile Exchange (COMEX) closed at $1,952.20 an ounce, up $6.80, or 0.4%.