Stocks Whipsaw On Recession Fears As Oil Slumps Below $100 Per Barrel

WTI crude oil tumbled despite supply outages in Libya and a Norwegian worker strike. The worker strike could reduce oil output in Norway by 8%, which equates to roughly 320,000 barrels per day. Investors are also looking ahead to the next round of corporate earnings for a clearer picture of inflation’s impact. Several big companies, including spice and seasonings maker McCormick, recently lvmh share price warned that their financial results are being squeezed by inflation. The Fed has been aggressive in its shift from historically low interest rates at the height of the pandemic to unusually big rate increases. But, that has raised concerns that the central bank could go too far in raising rates and hitting the brakes too hard on economic growth, which could bring on a recession.

We firmly believe that understanding the intrinsic value of a stock is very important, primarily for the long-term investor. Wealth Consulting Group CEO Jimmy Lee on market outlook, recession risk in the U.S. and the expected jobs report. The S&P 500 eked out a gain of 0.2% and the tech-heavy Nasdaq rose 1.7%. The Dow Jones Industrial Average remained in the red, losing 0.4%.

Financial Expert: The Fed Is Going To Continue To Raise Rates

The energy sector is the laggard so far, as it is down almost 4.9%. Conversely, the consumer discretionary sector is the session’s leader with a gain of 0.2%. In addition, WTI crude oil has fallen below $100 per barrel for the first time since May, representing a decline of roughly 10% from its previous close.

  • We firmly believe that understanding the intrinsic value of a stock is very important, primarily for the long-term investor.
  • Meanwhile, bond yields are lower as the U.S. 10-Year Treasury yield is now hovering around 2.816%.
  • Oil prices slumped, bringing the price of U.S. crude back below $100 a barrel for the first time since early May.
  • Wall Street has been closely watching the latest economic updates for more clues on how inflation is impacting the economy and whether that could shift the Fed’s position on rate hikes.
  • However, this figure is down substantially from the 3.58 million that were sold during June 2021, equating to a year-over-year decline of 24%.

And layoffs are beginning to mount in industries such as technology and real estate. Since the start of the year, the S&P 500 is down more than 20% and the Dow is down just more than 17%. These market declines come as current economic conditions are alluding to a recession. Major stock indexes shook off an early slump and ended with meager gains on Wall Street Tuesday as worries about the economy continue to weigh on markets. Following the two 75 bps hikes in June and July, Nomura expects the US Fed to hike rates by 25 bps at every meeting … The profusion of opinions on social media and financial blogs makes it impossible to distinguish between real growth potential and pure hype. The Dow, S&P 500, and Nasdaq 100 were up 1.05%, 1.06%, and 0.71%, respectively, at the end of regular trading hours on Friday, after witnessing the worst first half in decades on Thursday.

Sectoral Indices

Minutes of the latest policy meeting of the Federal Reserve are DotBig due out on Wednesday and could bring hints on future policy.

This represents a decline of 10.5 basis points from the previous close. Factory Orders, which measures the month-over-month change DotBig in new orders placed with manufacturers. For the month of May, new orders increased by 1.6%, much better than the expected 0.5%.

Oil Prices Decline

TipRanks is a comprehensive investing tool that allows private investors and day traders to see the measured performance of anyone who provides financial advice. Overall, macro challenges and concerns about an economic slowdown are expected to keep the U.S. as well global stock markets volatile in the days ahead.

Market Links

Brent crude, the international standard, fell $10.53 to $103.02 a barrel. Consumer sentiment is plunging as inflation remains well above the Federal Reserve’s 2% target level.

Conversely, the consumer staples sector is the session’s leader, with a decline of 1.1%. It’s worth noting that this indicator is based on data from May, making it a lagging indicator. Indeed, the Institute for Supply Management released its Manufacturing New Orders Index last week for June, which showed a decline. Department of Commerce and is composed of all passenger cars and light truck sales. Sales increased in June to 10.28 million compared to 10.04 million during the month prior. Quotes displayed in real-time or delayed by at least 15 minutes. Meanwhile, bond yields are lower as the U.S. 10-Year Treasury yield is now hovering around 2.816%.

Mutual Fund Links

Indeed, the spread between the 10-Year and Two-year U.S. Treasury yields had briefly inverted earlier on in the day. Nevertheless, recession fears appear to be at the forefront of investors’ minds. Currently, the price of oil is hovering around $103 per DotBig barrel, which is close to its previous month’s low of $101.56 per barrel. Energy companies performed especially poorly in line with a drop in oil prices. Tesla shares fell after the company reported its lowest quarterly sales numbers since last fall.

In addition, the Two-Year Treasury yield is at 2.831%, bringing the spread between them to only 0.2 basis points after briefly inverting earlier on in the day. A flat or inverted yield curve is unfavorable for banks as it tends to hurt net interest margins.

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