4:20pm: Target announcement drags on retail stocks
The Dow closed Tuesday up 264 points, 0.8%, at 33,180, the Nasdaq improved 114 points, 0.9%, to 12,175 and the S&P 500 added 39 points, 1%, to 4,161.
Stocks improved over the course of the day even after the retail sector was wounded by an announcement from Target that the retailer was taking steps to cut down on excess inventory. Target shares ended the day 2.3% lower at $155.98.
12.05pm: Wall Street shakes off early losses
After dipping into the red at the open, US stocks had recouped their losses by noon.
At midday, all three major indexes were steady with the Dow at 32,902 points, the S&P 500 at 4,122 points, and the Nasdaq at 12,075 points.
IG chief market analyst Chris Beauchamp said what had threatened to turn into a nasty afternoon for risk assets seemed to have been headed off for now by a wave of buying.
“Target’s warning about rising inventories and the hit to margins seemed to be the spark markets had been looking for to drive a fresh big move lower, but it looks like this bear market rally isn’t rolling over just yet,” Beauchamp said.
“Insider buying in tech stocks continues at a heavy pace, and this seems to have provided some comfort to the broader market.”
He noted that it was interesting that equities had weathered the RBA’s increased pace of interest rate hikes.
“But with the ECB and US CPI still to come this week the big issues are set to make a return,” he said.
11am: Proactive North America headlines:
Todos reports that Long COVID case study subject with erectile dysfunction credits supplement Tollovid with easing his symptoms
Globex Mining Enterprises says drilling at its Joutel Eagle property in Quebec has confirmed the location of a historical gold mineralization system
Fireweed Zinc to acquire world-class tungsten project in northern Canada
Ready Set Gold plans resource update on its Northshore project in Ontario; says it has made “significant progress” in defining a path forward
VR Resources completes third drill program at Hecla-Kilmer project in northern Ontario
SPYR (OTCQB:SPYR) says GeoTraq's Tracker Module (GT-TM100) is FCC approved and ready for market
O3 Mining makes strong progress on the pre-feasibility study for its Marban Engineering project in in Quebec
Western Magnesium takes aim at China's magnesium production share with 'cutting edge' pilot plant technology
Klondike Gold says aiming to deliver first inferred mineral resource on the Klondike District gold project in Yukon in 2022
Trust Stamp (NASDAQ:IDAI, EURONEXT:AIID) says accepting sign-ups for secure account credential and cryptographic key storage solution, MetaPresence Vault
Gevo signs 5-year agreement to supply Japan Airlines with 5.3 million gallons of sustainable aviation fuel (SAF) per year
Great Atlantic Resources starts 2022 prospecting and rock geochemical sampling program at Golden Promise gold property
American Resources completes first phase of commissioning its rare earth and battery materials facility in Indiana
New Pacific Metals (TSX:NUAG, NYSE:NEWP) starts drilling at wholly-owned satellite Jisas prospect
South Star Battery Metals partners with Graphex Technologies (OTCQX:GRFXY, HKG:6128) to develop a manufacturing and processing facility for battery anode material
Zinc8 Energy Solutions (CSE:ZAIR) appoints business development professional Storm Boswick to board of directors
Tribe Property Technologies announces partnership with Wyse Meter Solutions for smart energy solutions
NioCorp Developments promotes Jim Sims to newly created position of chief communications officer
Nevada Copper set to reduce costs at its mine; announces US$20M of additional funding from largest shareholder
Bloom Health Partners says to launch non-brokered private placement offering of units at $0.20 each for gross proceeds of up to $2M
Bhang partners with cannabis marketing agency Petalfast to expand California presence
Skye Bioscience enters research agreements with University of Eastern Piedmont and Spanish Research Council
Versus Systems inks partnership deal with experiential and digital marketing agency, Innovative Group
Metal Energy starts 10,000-metre drill program on its Manibridge high-grade nickel project
CULT Food Science invests in media production company and investment platform, Vevolution
Soma Gold says it set a new monthly record for ounces produced and sold during May
Cloud DX (TSX-V:CDX, OTCQB:CDXFF) intends to complete non-brokered private placement of secured convertible debentures for aggregate gross proceeds of up to $1.75M
AMPD Ventures signs deal with Variational AI to double its machine learning capacity at DC1
9.35am: Wall Street volatility continues
US stocks opened lower on Tuesday showing yesterday’s gains to be short-lived as inflationary pressures continue to weigh on the minds of investors.
Just after the open, the Dow had shed 245 points at 32,671 points.
The S&P 500 dipped 39 points at 4,083 points and the tech-heavy Nasdaq had lost 172 points at 11,889 points.
Retail giant Target Corporation (NYSE:TGT) had dipped about 7% just after the open after the company said it was aiming to reduce its excess inventory by offering discounts, cancelling orders, and revaluating its expenses.
Fellow retailers Walmart Inc (NYSE:WMT) and Costco (NASDAQ:NA:COST) Wholesale Corporation were also down about 2% each, with The Home Depot Inc, Lowe's Companies Inc, and Best Buy Co Inc (NYSE:BBY) down about 3% each.
City Index and FOREX.com market analyst Fawad Razaqzada said choppy price action continued to dominate markets as investors weigh the impact of central bank policy tightening on inflation and economic growth.
“We are still in a bear market and with central banks ending quantitative easing (QE) and reducing their balance sheets, the good days of the stock markets may well be behind us,” he said.
OANDA senior market analyst Craig Erlam said the lack of momentum in equity markets and the economy was hardly surprising given the sheer uncertainty around inflation, interest rates, and the economy.
“Central banks are racing to catch up but that may come at a great cost,” Erlam said.
He noted that the RBA’s decision to hike interest rates by 50 basis points came as quite a shock to the markets, with 25 priced in ahead of the meeting.
“It was the biggest hike in more than two decades and another sign of policymakers belatedly recognizing the urgency of the inflation problem. And there's plenty more to come,” Erlam said.
6.30am: More falls, choppy trading seen
US markets were expected to open lower on Tuesday, further reversing yesterday’s short-lived gains and signalling that investors are wary amid elevated levels of inflation and rising interest rates.
A spike in oil benchmark oil prices, an unexpectedly large interest rate increase in Australia, and a rise in benchmark US bond yields all serve to underscore the prevailing mood of caution and suggest that trading will continue to be choppy.
Futures for the Dow Jones Industrial Average lost 0.4 % in pre-market trading, while those for the broader S&P 500 index shed 0.4%, and contracts for the Nasdaq-100 were also down 0.4%.
“Risk appetite wanes as the US 10-year yield stretches above the 3% psychological mark. The US stock indices failed to extend gains on Monday, as Friday’s strong jobs report ruled out the expectations that the Federal Reserve would slow tightening as a result of heavier pressure on the economy,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“Inflation is the only metric that matters for the Fed right now, and tension among investors will likely remain high before Friday’s CPI release in the US,” she noted.
On Friday, headline US inflation is expected to come in around the 8.3% level for May and there is still doubt whether price pressures have peaked. If inflation beats expectations, equities may be in another bout of selling.
US trade data for April is due out today at 8.30 am ET. In March, the trade deficit in the world’s biggest economy hit a record and a slight narrowing is expected in April. If the narrowing does not materialize, share prices could take a knock.
Ozkardeskaya noted some favorable developments on price pressures with signs of improvement in the global electronic chip shortage along with lower shipping and fertilizer prices.
“But energy prices aren’t easing. The barrel of US crude extended gains to $121.50 on Monday, and last week’s announcement that OPEC would pump more oil didn’t help improve the price pressure. A further rise in crude oil seems inevitable after the bears failed the OPEC test last week. On the topside, the next resistance stands at $130 per barrel,” she added.
In energy markets, WTI crude oil futures eased 0.3% to $118.19 a barrel and Brent crude futures shed 0.3% to $119.16.
Contact the author at jon.hopkins@proactiveinvestors.com