4:14pm: S&P 500 hits 2022 low
An afternoon surge briefly pushed the Dow into positive territory, but the blue-chip index ended the session down 104 points, 0.3%, at 31,730. The Nasdaq added 7 points, less than 0.1%, to 11,371, while the S&P 500 shed 5 points to 3,930. It was the lowest close for the S&P 500 of 2022.
Despite the widespread selloff this week, the afternoon rally is a reason for some optimism, according to Keith Lerner of Truist.
“Even if you say we’re in a bear market, there’s rallies within bear markets that can be very sharp,” Lerner said, as reported by CNBC. “I think, at least short-term, and given how oversold we are and given that we’re starting to see people nibble at some of these areas that have been the most beaten up, I think that’s at least a silver lining in a sea of red and gloom over the last couple of days.”
One outperforming ara was meme stocks, as shares of GameStop Corp (NYSE:GME) gained more than 10% to $89.60, and AMC Entertainment Holdings (NYSE:AMC) gained 8% to $11.19.
12:05pm: US stocks back in the red at noon
US stock gains made in late morning were lost by noon amid renewed concerns the Fed may need to act more aggressively than expected to curb inflationary pressures.
At noon, the Dow had slipped 356 points to 31,478 points while the S&P 500 was down 41 points at 3,894 points.
The tech-laded Nasdaq, which had been leading gains earlier in the day, was down 82 points at 11,282 points.
IG chief market analyst Chris Beauchamp said investors would have been hoping for a bounce after a tough few days of trading.
“But given the damage done in recent weeks and the still-strong fears about a recession, it seems silly to expect things to return to the orderly gains that prevailed in 2021," Beauchamp said.
After multiple trading halts during Thursday morning, plant-based meat producer Beyond Meat Inc (NASDAQ:BYND) was up about 1% at noon following the company’s release of what CMC Markets UK chief market analyst Michael Hewson described as disappointing 1Q results.
Earlier in the day, the company’s stock price slipped below its IPO price of $25, a record low.
“When you consider the shares rose as high $239 post IPO this is a huge fall from grace, although not altogether surprising for a company that has annual revenue of less than $500 million at its last set of annual accounts,” Hewson said.
Electric vehicle maker Rivian Automotive Inc (NASDAQ:RIVN) had jumped about 17% following the release of its 1Q numbers which showed it built 2,553 vehicles and delivered 1,227 of them during the quarter.
“The company reaffirmed its 25,000 target of annual vehicle sales despite supply chain bottlenecks which are currently acting as a headwind,” Hewson noted.
The Walt Disney Company (NYSE:DIS)’s stock was down about 3% following the release of its 2Q results yesterday which reported revenue for the quarter of $19.25 billion, below analyst estimates of $20.1 billion.
“Disney’s 2Q results were a welcome surprise, bucking the trend seen by Netflix and other streaming providers, by growing their subscriber base to 137.7 million, above expectations, from 129.8 million, although both revenues and profits missed to the downside, due to higher spending costs on programming on Disney+ and Hulu,” Hewson said.
9:55am: Proactive news headlines
Walt Disney reports higher streaming services sign-ups unlike rival Netflix
Touchstone Exploration quarterly sales rise 28% boosted by oil and gas prices
Global Energy Metals CEO says shareholders expected to benefit greatly as electric revolution strengthens
New Age Metals (TSX-V:NAM, OTCQB:NMTLF) eyeing busy months ahead as it advances 'green' agenda with two divisions
CULT Food Science hails cellular agriculture as ‘viable solution’ to help combat global food insecurity
Manganese X Energy says positive PEA for its Battery Hill project includes an after-tax NPV 10% of $486M
Mandalay Resources reports strong Q1 results; EBITDA second highest in its history
CareRx Corporation (TSX:CRRX) says integration of new acquisitions and organic growth led to 108% jump in 1Q revenue
New Pacific Metals (TSX:NUAG, NYSE:NEWP) reports working capital of US$34.7 million at end of 3Q to advance Bolivia assets
Versus Systems enters strategic partnership with Red Moon Marketing
Jushi Holdings expands retail footprint in California with 32nd store opening
Hapbee Technologies reports 246% surge in subscriber numbers in Q1
Mindset Pharma progresses plans for clinical trials of its advanced pre-clinical psychedelic MSP-1014
Fobi AI (TSX-V:FOBI, OTCQB:FOBIF) signs LOI to acquire intellectual property and assets related to retail price comparison app and data intelligence platform Basket
Royal Fox Gold (TSX-V:FOXG) hits high-grade gold at its Philibert deposit in Quebec
ORAGIN Foods says subsidiary Future of Cheese's plant-based product line earns organic certification in US, Canada, EU
BioHarvest Sciences reveals unique composition profile of cannabis products suitable for medical and food and beverage applications
Electric Royalties closes previously announced marketed public offering for aggregate gross proceeds of $3,450,000
Thesis Gold plans expansive 50,000-metre drill program at Ranch
9:40am: US stocks start the day lower
US stocks have dipped into the red after the open as inflation concerns continue to hamper investor confidence.
Shortly after the markets opened, the Dow was down 195 points at 31,640 points.
The S&P 500 had shed 29 points at 3,906 points and the Nasdaq was down 95 points at 11,269 points.
The release of April’s producer price index (PPI) data on Thursday morning indicates that price growth has slowed slightly but that inflation remains at an unsustainably high level.
Pantheon Macroeconomics chief economist Ian Shepherdson said the PPI figures were better, but questioned if the drop in margins could be sustained.
"This matters because the huge expansion in margins since Covid struck has been a key part of the surge in consumer inflation. A sustained decline in margins would change the overall inflation picture, but a decline in one month is not definitive," Shepherdson said.
8:50am: Latest producer price index data indicates slight slowdown in growth
The producer price index (PPI) for final demand rose 0.5% in April, less than the 1.6% increase recorded in March and 1.1% in February, the US Bureau of Labor Statistics has reported today.
Year-on-year PPI increased 11% in April, a slight decrease from the 11.5% recorded in March.
According to Reuters, analysts had expected PPI to gain 0.5% for the month and 10.7% year-on-year.
The slowdown in growth of PPI has followed the same path as the consumer price index growth for the month of April, which recorded the smallest inflation growth rate in eight months.
Meanwhile, a separate economic report has revealed that unemployment benefit claims in the US increased by 1,000 to 203,000 for the week ending May 7.
This figure exceeded the analyst consensus of 195,000, however, the labor market remains tight and challenges around staff shortages are expected to continue.
6.30am: Wholesale inflation data due
US stocks were expected to retreat further on Thursday with worries about inflationary pressures continuing to undermine sentiment.
Consumer prices inflation data spooked markets on Wednesday, leading to widespread falls and putting the focus on factory gate price data due out today. A higher-than-expected number will likely add to share price woes.
Futures for the Dow Jones Industrial Average shed 0.5% in premarket trading, while those for the broader S&P 500 index lost 0.6% and contracts for the Nasdaq-100 fell 1.0%.
“US inflation data didn’t print a soft-enough figure to reverse the market sell-off,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, noting that core inflation, which excludes the most volatile food and energy prices, rose 0.6% in April from 0.3% in March.
Data out yesterday showed a headline CPI inflation figure of 8.3% in April, slightly higher than expected but lower than the 8.5% seen in March.
“There is still hope that the 8.5% print of March was a peak, but it looks like the overheating in consumer prices won’t be easy to cool down,” she said, adding that the producer price index (PPI) expectations are for a slowdown to 10.7% in April from 11.2% in March.
The producer price data is scheduled for 8.30am ET.
As prices show little sign of abating, the US Fed is expected to continue on a path of aggressive rate increases despite the possible threat to economic growth. Many now fear that the rate hikes may not work too well to staunch inflation.
Elsewhere, the US dollar’s gains are adding to fears over economic activity.
Oil prices too remain elevated signaling that commodity price pressures are going to be a mainstay. WTI crude futures were 1.4% down at $104.23 a barrel while Brent crude futures were 1.4% lower at $106.04 a barrel.
Over in China, fears of a slowdown were offset slightly amid news of falling COVID-19 cases in Shanghai, taking the edge off fears that supply chain constraints are looming.
“There is one good news on the wire, though: Covid cases in Shanghai halved this week, sparking hope that the lockdown measures could soon be over in China’s economic heart. Yet, zero Covid is hard to achieve, and the risk of a renewed lockdown is omnipresent, if the Chinese government doesn’t soften the rules, which they don’t seem to be willing to do,” noted Ozkardeskaya.
Contact the author at jon.hopkins@proactiveinvestors.com