4:04pm: Airline stocks manage to buck the late-day slide
The Dow closed Tuesday down 189 points, 0.6%, at 30,985, the Nasdaq Composite lost 108 points, 1%, to 11,265 and the S&P 500 dipped 35 points, 0.9%, to 3,819.
For the benchmarks, it was an up-and-down session that tailed off in the last hour of trading.
“There’s a lack of a catalyst, a lack of a leadership right now,” said Truist’s Keith Lerner, according to CNBC. “Growth is slowing and global central banks are still in tightening mode and I think that’s concerning the markets.”
Airline stocks soared, in a manner of speaking, after American Airlines Group (NASDAQ:AAL) announced that it expected second-quarter revenue to come in above 2019 levels. American shared jumped about 10%, while Delta Air Lines Inc, United Airlines Holdings and Southwest Airlines (NYSE:LUV) Co added more than 6%, 8% and 4%, respectively.
12.05pm: Parity party
US stocks remained mixed at noon with all eyes on the currency markets as the euro hit parity – a 1:1 ratio – with the US dollar on Tuesday morning for the first time in 20 years.
At midday, the Dow Jones Industrial Average had added 66 points at 31,240 points, while the S&P 500 was steady at 3,853 points and the Nasdaq Composite had dipped 8 points at 11,364 points.
Forex.com market analyst Fawad Razaqzada said, amid fears of a Russian gas shutdown, rising hawkish bets on the Fed and downbeat risk sentiment, the final nail in the euro’s coffin was news of a considerable deterioration in the German economic outlook.
“The fact that the EUR/USD has just broken parity after a slow grind lower, rather than a sudden move, means there’s consistent and continued selling of the euro and buying of the dollar, rather than some sort of market manipulation,” he said.
“Beyond the short-term movements, the direction of the EUR/USD will pretty much be driven by fundamental news. Unless something changes fundamentally, the bearish trend will remain intact even if we see some short-covering bounces here and there.”
10.30am: Proactive North America headlines:
Empower Clinics subsidiary Medisure launches latest version of its blood glucose monitor across Canada
Phunware's Smart Advocacy Solution to offer Twitter integrations for politicians and organizations looking to better reach audiences
Nextleaf Solutions announces the launch of its new Glacial Gold CBD 3:1 Vape expected to hit British Columbia this summer
Deepspatial secures purchase order for Geo-AI Platform with global frozen food conglomerate
Bridgeline Digital says PharmaDirect selects Celebros software to power its on-site search
Clean Seed Capital welcomes Indian ministerial delegation to its agricultural technology facilities in Saskatoon
Recruiter.com highlights continued job mobility, demand for IT professionals in June Recruiter Index
Empower Clinics subsidiary Medisure launches latest version of its blood glucose monitor across Canada
HighGold reports high-grade indicated gold equivalent of over 1 million ounces at Johnson Tract
Western Magnesium achieves 99.83% magnesium metal purity during pilot plant calibration run
Tartisan Nickel says a PEA of its Kenbridge Nickel Project makes 'solid base case' for moving toward feasibility and production
Fobi AI (TSX-V:FOBI, OTCQB:FOBIF) highlights success of its CheckPoint digital ticketing solution at the Oscars in new case study
Nextech AR Solutions becomes 3D model supplier for Prime eCommerce; signs new 3D deals
Victory Resources begins work on its Georgia Lake Lithium Project in Ontario
Perk Labs helps hospitality organizations looking for new ways to adopt technology in order to streamline costs
Planet 13 Holdings welcomes Nevada ruling to approve cannabis consumption lounges
Wishpond Technologies launches new website builder product
i-80 Gold hits 19.8 g/t gold over 33.2 metres from Ruby Hill drilling in Nevada
TraceSafe acquires carbon offset marketplace Offsety
Plurilock Security says Aurora Systems Consulting subsidiary receives US$2.5M in purchase orders in June 2022
Pure Gold Mining enhances credit facility and launches strategic review
9.35am: Earnings season kicks off
US stocks opened mixed on Tuesday as the prospect of a recession continued to weigh on investor sentiment ahead of key earnings and inflation data due this week.
At the open, the Dow Jones Industrial Average had dipped 47 points at 31,127 points, while the S&P 500 was steady at 3,858 points.
The tech-heavy Nasdaq Composite, which shed more than 2.2% yesterday, had added 62 points at 11,435 points.
Earnings season has kicked off with the release of PepsiCo (NASDAQ:PEP) Inc’s latest results where the company reported revenue and profit exceeding the consensus analyst expectations. The food and beverage business said it expects to grow its revenue by 10% this year as consumer demand for its brands – including Mountain Dew, Fritos, and Quaker Oats – remains strong amid high inflation.
Shares of Pepsi were steady following the release of its results at about $170.80.
Shares of electric vehicle maker Canoo Inc (NASDAQ:GOEV) had surged a whopping 107% at the open after the news that retail giant Walmart Inc (NYSE:WMT) plans to electrify its delivery fleet with Canoo EVs. Per the deal, Walmart will purchase 4,500 EVs, and has the option to purchase up to 10,000 units.
Twitter Inc (NYSE:TWTR) opened higher, up about 1% at $33 per share, after dropping 11.3% yesterday following the news that Tesla Inc (NASDAQ:TSLA) CEO Elon Musk was reneging on his $44 billion deal to purchase the social media company.
6:30am: Pessimism reigns
US stocks were expected to open lower on Tuesday as investors brace for the prospect of a recession in the world’s biggest economy.
Investors are also nervously eyeing the unfolding US earnings season and Wednesday’s US inflation data. These factors are expected to keep trading choppy.
Futures for the Dow Jones Industrial Average were trading 0.7% lower pre-market, while those for the broader S&P 500 index were down 0.8% and futures for the tech-laden Nasdaq-100 lost 0.6%.
“US markets had a negative session with the Nasdaq-100 seeing the heaviest declines, with the main focus on tomorrow’s US CPI numbers for June, as investors wrestle with the inflation versus the recession narrative,” said Michael Hewson, chief market analyst at CMC Markets UK.
“All the while the US dollar moved to its highest levels since late 2002, as traders used the greenback as a haven, pushing the euro ever closer to parity,” he noted.
Runaway inflation and a series of aggressive interest rate hikes by the Federal Open Market Committee are seen as twin threats to US economic growth. While recent data showed that the labor market remains strong, there are already indications that measures of consumer confidence are starting to falter.
“US bond yields fell back, reversing a lot of their Friday gains, with the US 10-year yield falling back below 3%, in a move that gives a fair indication of the skittish nature of current sentiment,” said Hewson.
Up ahead on Wednesday, US inflation data will be closely watched. The big question is whether inflation has peaked. Consensus expectations point to an 8.8% rise in June following an 8.6% increase in the previous month. If the headline figure comes in higher than predicted, investors are likely to take on bets that the US Fed will hike interest rates even more aggressively than previously expected.
As things stand, many predict that the Fed will raise rates by 75 basis points at its next rate-setting meeting but some fear that an even bigger increase may materialize as rate-setters fight to rein in inflation which is at a multi-decade high.
On the earnings front, Pepsi is due to announce its earnings today, Delta Air on Wednesday, and JP Morgan and Morgan Stanley (NYSE:MS) on Thursday, while Wells Fargo, Citigroup, and PNC Financial will report on Friday.
In energy markets, WTI crude oil futures were down 2.3% at $101.67 a barrel, while Brent crude futures were 2.1% lower at $104.85.
Contact the author at jon.hopkins@proactiveinvestors.com