Category: Trading news

US stocks jump as markets brace for May jobs report and debt ceiling bill nears finish line

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  • US stocks rose Thursday as markets await important labor data and eye debt ceiling progress.
  • The Labor Department will release the May employment report on Friday morning.
  • It’s one of the last big pieces of economic data before the Fed’s June 13-14 policy meeting.

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US stocks rose on Thursday as the debit limit deal advanced in Congress while investors look ahead to key labor data.

Bipartisan legislation was passed in the House late Wednesday and is now moving to the Senate, easing worries of a destabilizing US default.

Meanwhile, the Labor Department will release the May payroll report on Friday, one of the last major pieces of data before the Federal Reserve’s next policy meeting on June 13-14.

On Thursday, St. Louis Fed President James Bullard said in a blog post that current interest rates are likely not sufficient to bring down US inflation.

That hawkish remark came after Philadelphia Fed President Patrick Harker said on Wednesday that he feels inclined to “skip” another rate hike.

Here’s where US indexes stood at the 4:00 p.m. ET close on Thursday:

Elsewhere, bitcoin finished May with its first monthly loss of 2023 as traders navigate a murky macro environment.

“When there is fear sentiment in the market, investors tend to flock to safer assets, such as gold and government bonds,” Brigham Santos, COO of blockchain financial services provider Lama, told Insider. “This can lead to a sell-off in riskier assets, including bitcoin. In addition, central bank tightening can also lead to a decline in bitcoin prices.”

He added: “This could work as a domino effect by generating higher interest rates, which can make it harder to borrow money to invest back [into] bitcoin.”

Here’s what else is going on:

In commodities, bonds, and crypto:

Source: https://markets.businessinsider.com/news/stocks/stock-market-news-today-may-jobs-report-debt-ceiling-bill-2023-6?op=1

The housing market faces a ‘chicken and egg’ problem that could mean home prices start to fall

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  • The US housing market faces a chicken and egg problem, according to Realtor.com.
  • High mortgage rates are deterring buyers, and sellers who don’t want to swap out low rates they locked in previously.
  • New home listings dropped 22.7% in May as many sellers and buyers stay put, but home prices could start falling.

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Realtor.com pointed out the “chicken and egg” problem plaguing the housing market right now: High mortgage rates are keeping both home buyers and sellers sidelined, with the former hesitant to spend and the latter unwilling to part ways from the lower rates they locked in on current homes.

This means that even those buyers who are willing to pay high rates are struggling to find homes for sale. In May, there were 22.7% fewer new homes listed than last year.

“Many sellers report being concerned about finding another home, which may cause some of them to put plans to list on pause,” Realtor.com chief economist Danielle Hale said. “But this reduces the total number of options for buyers in the market.”

To be sure, while there are fewer new home sellers entering the market, total listings of both new and old homes remain 23.4% higher compared to last May. But those homes are staying on the market for a median time of 43 days, about two weeks longer than a year ago.

Still, in Hale’s view, it’s possible that home prices will climb in June, as they tend to do this time of the year, before falling.

Last June, median US home prices reached a record high of $449,000. That seems like a less likely mark for this month, however, as annual price growth has eased.

“Based on current trends, it’s possible that [home prices] won’t hit the previous year’s peak for the first time in our data,” said Sabrina Speianu, economic data manager at Realtor.com.

Again, this comes back to still-high mortgage rates. If they remain hovering in the 6% or 7% range, home prices may eventually have to fall down to compensate. Buyers have been getting slammed by the current combination of high rates, high prices, and low inventory.

This pattern is already showing up in the market, as the share of listings with price reductions climbed from 10.2% last May to 12.7% this year.

“Sellers appear to be aiming for a relatively high starting point in the market this year and are willing to negotiate if needed,” said Hale.

Meanwhile, the housing market has become increasingly localized, with price movements varying by large margins depending on location. Price growth in Miami, for example, has seen a 10.9% jump, while San Francisco has seen a 10.1% decline. That disparity between the two cities is near a 30-year high.

Source: https://markets.businessinsider.com/news/stocks/housing-markets-real-estate-realtor-prices-value-mortgage-rates-fed-2023-6?op=1

Stock market today: Asian shares mostly rise after House approves debt ceiling deal

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TOKYO — Asian benchmarks were mostly higher Thursday after the United States House of Representatives approved a debt ceiling and budget cuts package, avoiding a default crisis.

But the enthusiasm was muted by worries about the Chinese economy after disappointing recent data on a recovery in the world’s second largest economy, and a key driver of regional growth.

“Following recent disappointing economic data from China, the real economy levered stocks are likely to underperform. If economic data from China continues to miss expectations, more participants could start to forecast a lower China GDP for the quarters ahead,” Anderson Alves at ActivTrades said.

Japan’s benchmark Nikkei 225 rose 0.8% to finish at 31,148.01. Australia’s S&P/ASX 200 gained 0.3% to 7,110.80. South Korea’s Kospi quickly lost early gains to dip 0.3% to 2,570.80. Hong Kong’s Hang Seng added nearly 0.1% to 18,251.83, while the Shanghai Composite slipped less than 0.1% to 3,202.44.

If the debt deal also passes in the Senate, government checks will continue to go out and it would prevent financial upheaval at home and abroad ahead of the Monday deadline when the Treasury said the U.S. would run out of money to pay its debts.

Wall Street slipped as stocks slumped worldwide Wednesday on worries about the strength of the global economy and inflation.

The S&P 500 fell 25.69, or 0.6%, to 4,179.83. The Dow Jones Industrial Average dropped 134.51, or 0.4%, to 32,908.27, and the Nasdaq composite lost 82.14, or 0.6%, to 12,935.29.

Wall Street has been able to hold up pretty well recently, largely because of gains for a handful of tech companies and others getting swept up in the buzz around artificial intelligence. The S&P 500 managed to close out May with a modest gain.

Wall Street stocks pared their losses in the afternoon after a Federal Reserve official hinted the central bank may hold rates steady at its next meeting in two weeks.

Worries have been rising about an economic slowdown under the weight of much higher interest rates. The Federal Reserve has raised rates at a furious pace since early 2022 in hopes of getting inflation under control. But high rates work by hurting the economy and hitting prices for investments.

“We see this as a race for weakness between inflation and economic activity,” said Tony Roth, chief investment officer at Wilmington Trust.

Either inflation needs to break lower to return to the Fed’s target, which would allow it to go easier on interest rates, or the economy will fall into recession. Roth said both the economy and inflation have remained strong for longer than he expected: “It’s a very slow race to the bottom.”

In the bond market, the yield on the 10-year Treasury fell to 3.62% from 3.70% late Tuesday. It helps set rates for mortgages and other important loans that influence the housing and other markets.

The two-year yield, which moves more on expectations for Fed action, fell to 4.39% from 4.46%.

In energy trading, benchmark U.S. crude rose 43 cents to $68.52 a barrel. Brent crude, the international standard, fell 88 cents to $72.66 a barrel.

In currency trading, the U.S. dollar edged up to 139.67 Japanese yen from 139.29 yen. The euro fell to $1.0683 from $1.0692.

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AP Business Writer Stan Choe contributed from New York.

___

Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

Source: https://abcnews.go.com/US/wireStory/stock-market-today-asian-shares-rise-after-house-99750079

US stocks slide as traders wait for lawmakers to vote on debt ceiling deal

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  • Stocks slid on Wednesday ahead of a House vote to resolve the debt-ceiling crisis.
  • The price of credit default swaps linked to US debt show investors think a default is possible, though unlikely.
  • All three major indexes ended the day in the red, with the Dow sliding more than 100 points.

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US stocks slid on Wednesday as investors waited for lawmakers to vote on a potential resolution to the debt-ceiling crisis. All three major indexes ended the day in the red, with the Dow Jones Industrial Average sliding over 100 points.

The deal, negotiated by President Joe Biden and House Speaker Kevin McCarthy over the weekend, passed the House Rules Committee with a 7-6 vote on Tuesday night, with a full House vote scheduled for Wednesday evening.

Markets have lowered their expectations of a US debt default, though the price of credit default swaps tied to US debt still show that investors think a default is possible. The one-year implied probability of a default fell to 1.3% on Tuesday at the market close, down from a peak of 4.3% on May 11, per MSCI research.

Here’s where US indexes stood at the 4:00 p.m. ET close on Wednesday:

Investors were also discouraged by slowing factory activity in China, as well as unexpectedly strong preliminary jobs data in the US. Job openings rose above 10.1 million, surpassing economists’ predictions of 9.4 million openings.

Meanwhile, Fed Governor Philip Jefferson suggested more interest rate hikes could be in order, adding in a press conference on Wednesday that a potential pause in rates would not mean interest rates had yet peaked.

Philadelphia Fed President Patrick Harker said he believed the central bank should “skip, not pause” rates at its next policy meeting, contingent on the official May jobs report and inflation data.

Here’s what else is going on:

In commodities, bonds, and crypto:

US stocks slid on Wednesday as investors waited for lawmakers to vote on a potential resolution to the debt-ceiling crisis. All three major indexes ended the day in the red, with the Dow Jones Industrial Average sliding over 100 points.

Source: https://markets.businessinsider.com/news/stocks/stock-market-news-today-debt-ceiling-deal-vote-biden-mccarthy-2023-5?op=1

Stock Market Today: Dow Slides Nearly 200 Points As Traders Await Debt-Ceiling Vote

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Major stock indexes fell as weak economic data out of China pressured global markets and U.S. job opening numbers showed a still-hot labor market.

May data showed a contraction in Chinese factory activity and slowing services activity, further dampening hopes for a rapid rebound in the world’s second-largest economy after the end of coronavirus restrictions.

Indexes dropped deeper into the red after Labor Department data showed that U.S. job openings climbed in April and layoffs fell, adding to concerns about further interest-rate hikes from the Fed.

Meanwhile, investors are waiting to see if the U.S. debt-ceiling agreement can be implemented by the June 5 deadline. The deal passed its first legislative hurdle Tuesday, with a House vote expected today.

As of around midday:

U.S. stocks were down, though off daily lows. The Dow industrials were off about 150 points.

Treasury yields slid. The yield on the benchmark 10-year Treasury fell for a second day to 3.639%, from 3.697% late Tuesday.

Nvidia retreated. The chip maker’s shares slid more than 3.5% following a three-day run that saw its market cap cross $1 trillion.

Advance Auto Parts plunged. The auto parts provider was the worst performer in the S&P 500, with shares dropping about 35% after it reported a steep drop in profit. Intel was the index’s best performer, rising 6.4% after the company said it’s on track to hit the upper end of a quarterly revenue forecast.

Overseas stock markets fell. The Stoxx Europe 600 lost 1.1%. China’s Shanghai Composite Index fell 0.4% to one of its lowest closing levels since January; U.S.-listed Chinese stocks also fell.

Oil extended its decline. Brent futures fell to around $73 a barrel. China is the world’s largest crude importer. Traders worry that tensions between Russia and Saudi Arabia could stop members of the OPEC cartel from agreeing to deepen their output cuts.

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As of around midday:

Source: https://www.wsj.com/livecoverage/stock-market-today-dow-jones-05-31-2023

Dow finishes Tuesday lower as Wall Street weighs odds of debt ceiling deal clearing Congress: Live updates

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Dow finishes lower

The Dow finished Tuesday lower about 0.2%.

The S&P 500 finished little changed after flickering around the flatline for much of the session. The Nasdaq Composite ended 0.3% higher but was off the session high of nearly 1.4%.

— Alex Harring

Tesla is ‘set up well’ for share growth despite lingering demand constraints, Barclays says

Despite some near-term headwinds, Tesla looks “set up well” for share gains over the long run, according to Barclays.

“Simply, not only is Tesla set up to be the primary beneficiary of the global EV transition with a significant lead on cost, but it is also the leader in establishing the software-defined vehicle of the future,” wrote analyst Dan Levy in a Tuesday note to clients.

Even amid demand constraints and recent price cuts introduced by the company, Levy views the Model 1 and Cybertruck as “key steps forward” in Tesla’s share expansion opportunity. These models should offer Tesla access to the pickup market and lower price tiers, he wrote.

“Overall, we reaffirm our OW rating and Tesla, and see it as a long-term winner in the global EV race,” he said. “Yet we believe the question of model concentration must be addressed on its path of volume growth.”

— Samantha Subin

‘Up in the first half and down in the second half’ still reasonable for 2023, Trivariate Research says

Investors should still expect stocks to go “up in the first half and down in the second half” in 2023, according to Trivariate Research founder Adam Parker.

He said mega-cap technology stocks remain for risk management, not the “alpha group.” And he said investors who use an S&P 500 benchmark should own close to benchmark weight of Meta, Alphabet, Microsoft, Apple and Amazon, while being exposed to other sectors.

The S&P 500 has added 9.6% so far this year. Within the index, the communication services and information technology sectors have been the two best performers on the year, with each rallying more than 30% year to date.

— Alex Harring

BofA hikes Nvidia price target

Bank of America raised its price target on Nvidia to $500 per share from $450. The new target implies upside of 28.4% from Friday’s close.

“We reiterate Buy on top pick NVDA following CEO keynote at Computex (Annual computer expo) in Taiwan over the holiday weekend,” analyst Vivek Arya wrote. “Transforming into a data center powerhouse, NVDA highlighted how its full-stack platform has supported AI leadership, with company already partnered with >1,600 genAI startups (plus top hyperscalers). Indeed, AI upside is driving strong performance YTD (+180% vs. SOX +40%), but we believe we are only at the start of the story.

— Fred Imbert, Michael Bloom

Quanta shares rise more than 3% Tuesday

Bernstein wrote in a client note Tuesday morning on electric power infrastructure company Quanta Services “in a full embrace of the energy transition.” Quanta shares were up 3.3% Tuesday afternoon.

“PWR owns the picks and shovels that will be used to make the energy transition a reality,” analyst Chad Dillard wrote in a Monday note.

Dillard estimated transitioning the entire U.S. economy to electric power will require $2 trillion of power grid spending.

CNBC Pro subscribers can read more about the call here.

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Quanta Services stock

— Hakyung Kim

RBC raises year-end stock market forecast

RBC Capital lifted its year-end target for the S&P 500 to 4,250 from 4,100 as the tech-led market rally continued, seeing double-digit gains for 2023.

The new target is only about 1% higher than the S&P 500′s Friday close of 4,205.45 but it would represent a 10% gain for the year.

RBC’s new target stands above the average year-end forecast of 4,157 from Wall Street strategists, according to CNBC Pro’s market strategist survey, which rounds up the top 15 strategists’ predictions.

— Yun Li

Dow remains down heading into final hour

The Dow was the sole major index trading down as investors entered the final hour of the trading day.

The 30-stock average slid around 0.3%.

Meanwhile, the S&P 500 was little changed after flickering around the flatline for much of the session.

The Nasdaq Composite was solidly up with a 0.5% advance, helped by a nearly 3% rally in Nvidia. But the technology-heavy index was off its session high of nearly 1.4% up.

— Alex Harring

Atlantic Equities says Coinbase could provide notable returns to investors in the long-term

While crypto exchange Coinbase may seem volatile, the stock presents attractive returns for investors willing to wait out until the longer term, according to Atlantic Equities.

The firm upgraded Coinbase shares to overweight from neutral. Analyst Simon Clinch maintained his price target of $70, which implies shares rallying 23% from Friday’s close.

“The company is regaining custody asset share and is also leveraging its trust credentials to exercise pricing power – both important steps towards building resilience in the model,” Clinch said in a Tuesday note.

Read more about his upgrade here.

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Coinbase shares

— Hakyung Kim

Russell 1000 growth ETF notches high not seen in more than a yearStock Chart IconStock chart icon

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The IWF

— Alex Harring, Gina Francolla

Fed’s Barkin warns of stubborn inflation

Richmond Fed President Thomas Barkin warned that he thinks inflation will remain stubborn going forward, noting that he hasn’t “backed off” from his rate forecast — which he said is among the higher ones within the central bank.

— Fred Imbert

Energy stocks fall as oil declinesRoth bullish on Boston Beer this summer

Roth upgraded shares of alcoholic beverage maker Boston Beer to buy from neutral.

The bank was previously cautious on the beverage group’s shares — but it now says warmer weather and gross margin improvements make it optimistic.

“We believe Seltzer and Truly will benefit in the summer from Bud Light share losses (occasion overlap increases with warmer weather) and gross margin lift from production shift will be realized in 2Q (given inventory days timing),” the firm said in a Tuesday note.

CNBC Pro subscribers can read more about the upgrade here.

— Hakyung Kim

Nvidia, Tesla among Tuesday’s biggest movers

Here are some of the stocks moving the most during midday trading:

  • Nvidia — Shares of the chipmaker and AI beneficiary popped nearly 6%, building on its recent gains on the heels of a blowout quarter. The moves pushed Nvidia’s market value above $1 trillion.
  • Tesla — Shares gained 6% following a Reuters report that a private jet used by CEO Elon Musk arrived in China, his first visit in three years. Musk is expected to meet with senior Chinese officials and visit Tesla’s Shanghai plant, Reuters said.
  • Coinbase – Shares of the crypto services business rose more than 5% following an upgrade by Atlantic Equities, which called the company the “best expression of crypto.” The analyst kept his price target on the stock, still implying it could rally 23% from Friday’s close.

Read the full list of stocks moving here.

— Samantha Subin

Apple, Salesforce hit new 52-week highsCathie Wood’s Ark Invest misses out on Nvidia’s powerful rally

Ark Invest’s Cathie Wood, known for her investments in next-generation technologies, missed out on the jaw-dropping rally in Nvidia — the biggest winner in artificial intelligence this year.

Her flagship Ark Innovation ETF (ARKK) exited Nvidia entirely in early January, before the chipmaker went on to enjoy a powerful rally that propelled it to a $1 trillion market capitalization.

Wood revealed that her reason for dumping Nvidia was its high valuation.

“At 25x expected revenue for this year, however, $NVDA is priced ahead of the curve,” Wood said in a Twitter post on Monday.

— Yun Li

Oil slides more than 4%

Oil prices were down more than 4% on Tuesday as market observers weighed the likelihood of Congressional approval of the U.S. debt ceiling agreement and looked to the OPEC+ meeting slated for this weekend.

Brent crude dropped $3.28, or 4.3%, to $73.79 a barrel. U.S. West Texas Intermediate crude lost $3.06, or 4.2%, to $69.61.

Energy stocks were the worst performer in S&P 500, down around 1.5% in Tuesday’s session. With Wednesday marking the last trading session of the month, the sector is also set to see the worst performance in May with a 9.3% drop so far.

— Alex Harring

Dow lags in Tuesday’s session

The Dow underperformed in Tuesday trading, losing more than 100 points while the Nasdaq Composite and S&P 500 traded up.

Visa, Merck and Procter & Gamble all weighed on the 30-stock index, with losses of more than 1.6%.

But nine stocks were able to avoid the drawdown. Intel was the best performer of Dow stocks in the session, gaining 2.8%.

— Alex Harring

Ford shares rise more than 3% following Jefferies upgrade

Ford Motor could be in for big gains ahead, according to Jefferies. The firm said Ford’s recent investor event raised its confidence that the automaker has a solid plan and management that will help it close a gap with its rivals.

Jefferies upgraded the company’s shares to buy from hold. Shares were up 3% Tuesday.

“Ford has in recent months refined a strategy to leverage group strengths and fill the gap between the quality of its product franchises and returns that have lagged peers and lacked consistency,” analyst Philippe Houchois wrote in a Tuesday note.

CNBC Pro subscribers can read more about his upgrade here.

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Ford shares

— Hakyung Kim

Weak market breadth could portend a correction for stocks, chart analysts say

Wall Street’s chart analysts are warning that market breadth is alarmingly weak, with recent market gains powered largely by the AI boom lifting stocks like Nvidia and Alphabet.

CanaccordGenuity technical analyst Javed Mirza said in a note to clients on Monday that an “intermediate-term equity market correction looms” if market breadth does not improve.

Entering Tuesday, the Nasdaq-100 had gained more than 18% over the past three months, and the S&P 500 has advanced nearly 6%. Meanwhile, the Invesco S&P 500 Equal Weight ETF (RSP) has fallen more than 3%.

Read more about technical analysis on CNBC Pro.

— Jesse Pound

Consumer confidence tops expectations

The Conference Board’s consumer confidence index came in above expectations for May, with a reading of 102.3. Economists polled by Dow Jones expected a print of 99. To be sure, that’s still down from a revised April reading of 103.7.

“Consumer confidence declined in May as consumers’ view of current conditions became somewhat less upbeat while their expectations remained gloomy,” said Ataman Ozyildirim, senior director of economics at The Conference Board.

“Their assessment of current employment conditions saw the most significant deterioration,” Ozyildirim added. “Consumers also became more downbeat about future business conditions. … However, expectations for jobs and incomes over the next six months held relatively steady.”

— Fred Imbert

Broadcom soars as Nvidia lifts chipmakers, artificial intelligence stocks Stock Chart IconStock chart icon

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Broadcom stock.

The firm is also benefiting from a deal with tech giant Apple announced on May 23 to develop 5G components in the US.

— Brian Evans

Mountain Valley Pipeline operator surges

Shares of the Mountain Valley Pipeline operator Equitrans Midstream surged more than 40% at the opening bell Tuesday after the tentative debt ceiling deal included measures to accelerate the development of the controversial pipeline.

The natural gas pipeline, which spans more than 300 miles from West Virginia to Virginia, has been under litigation for years.

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Equitrans Midstream

— Pippa Stevens

Nvidia reaches $1 trillion market cap

Nvidia shares added to a recent string of gains on Tuesday to hit a $1 trillion market cap.

With Tuesday’s moves, Nvidia joins an elite club of companies with a $1 trillion market cap or more. That group includes Alphabet, Apple and Microsoft.

Shares gained more than 4% in early morning trading to last trade at around $405.56. Shares need to hold above $404.86 to maintain that distinction during Tuesday’s trading.

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Nvidia shares pop again

— Samantha Subin

Nasdaq and S&P 500 open higher

The Nasdaq Composite and S&P 500 were trading higher shortly after the opening bell.

The Nasdaq added 1.1%, followed by the S&P 500 with a 0.5% advance. The Dow lagged, trading around its flatline.

— Alex Harring

Major indexes are on pace for mixed month with two trading sessions left

Wednesday’s session is the last of the May trading month. With just two trading days left, the indexes are on pace to post varied performances.

The technology-heavy Nasdaq Composite has been the relative star as of Friday’s close, rallying more than 6% so far this month. The S&P 500 is on pace for a relatively modest advance of 0.9% month to date.

But the Dow has lagged, shedding nearly 3% on the month. Drops larger than 10% in Nike, Walgreens and Disney have weighed on the 30-stock, blue-chip average in May.

— Alex Harring

Tesla shares rise following reports of Musk in China

Tesla shares rose more than 3% in premarket trading following reports of CEO Elon Musk’s trip to China.

Reuters reported Monday that a private jet used by Musk arrived in China. He’s expected to meet with senior Chinese officials and visit the electric vehicle maker’s Shanghai plant, according to Reuters.

The trip comes as Bank of America analyst Matty Zhao said Monday that China would likely be the world’s largest electric vehicle market by 2025, accounting for between 40% and 45%. That would mark a decrease as the country current made up about 60% of global market share in 2022, but Zhao said growth in the U.S and Europe would not be enough to make another country the biggest market in 2025.

— Alex Harring

See the stocks making the biggest moves before the bell

These are some of the stocks making notable premarket moves:

  • ChargePoint — Shares of the electric vehicle charging station company jumped 5% premarket after Bank of America upgraded the stock to buy.
  • Nvidia — Shares continued to near $1 trillion in market value, up 3.7% in premarket trading. The AI semiconductor company has been soaring since its blockbuster earnings report last Wednesday.

See the full list here.

— Alex Harring, Michelle Fox

Tue, May 30 20238:02 AM EDT

ChargePoint Holdings shares gain more than 5% during premarket trading

Shares of electric vehicle charging company ChargePoint rose 5.2% Tuesday before the bell following an upgrade to buy from Bank of America.

“The reason for our upgrade is simple – CHPT has proof of execution, line of sight to profitability and with its story largely unchanged since the PIPE offering, valuation is compelling against shares making all-time lows,” analyst Alex Vrabel wrote in a Tuesday note.

“CHPT [is] a best-in-class way to play [the] EV charging theme,” he added.

To read more about his upgrade, click here.

— Hakyung Kim

Tue, May 30 20237:39 AM EDT

Premarket Nvidia rally puts semiconductor maker on track to enter $1 trillion market cap club

A 3.8% premarket rally in Nvidia shares is putting the semiconductor maker on pace to join just a handful of stocks that have a market cap larger than $1 trillion.

A market capitalization is the combined total value of a company’s outstanding shares and can help investors understand a company’s relative size in the stock market. Apple and Microsoft are among stocks who have already passed the $1 trillion threshold.

Nvidia shares rallied on the back of its strong earnings report last week. Investors have been increasingly excited about the stock given its exposure to artificial intelligence trends.

— Alex Harring

Tue, May 30 20237:08 AM EDT

Debt ceiling not a ‘sustainable positive’ for the market, trader warns

Tom Essaye of The Sevens Report noted Tuesday that the market will need more than a debt ceiling deal to sustain a rally.

“From a market standpoint, the news may cause a temporary knee-jerk rally, but this will not be a sustainable positive and is not a reason to buy stocks by itself, as extending the debt ceiling merely removes a potential catastrophic negative and does not add anything new and positive into the macro set up,” Essaye wrote.

“Conversely, the deal will not be a material negative for growth, either, as it does not drastically reduce federal spending (i.e. putting more pressure on an already slowing economy),” he added.

— Fred Imbert

Tue, May 30 20234:29 AM EDT

Europe stocks choppy

European stocks were mixed in morning trade, with the Stoxx 600 index moving between narrow losses and gains.

Investors are watching key votes on the U.S. debt ceiling and more clues from central banks on the path of interest rates.

Germany’s DAX index was up 0.25% by mid-morning, though France’s CAC 40 and the U.K.’s FTSE 100 declined by 0.5% and 0.14%, respectively .

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Stoxx 600 index.

— Jenni Reid

Tue, May 30 20232:57 AM EDT

Everyone can be a programmer, says Nvidia CEO

Fresh off Nvidia‘s stellar earnings report and subsequent stock rally, its CEO Jensen Huang is predicting that the world is entering a “new computing era”.

Speaking at the Computex forum in Taiwan. He says anyone can be a programmer, just by speaking to the computer, and the desired functions will come forth.

No longer will programmers need to write lines of code, only for it to display the dreaded “fail to compile” because of a missing semicolon.

“This computer doesn’t care how you program it, it will try to understand what you mean, because it has this incredible large language model capability. And so the programming barrier is incredibly low,” Huang pointed out.

Nvidia says that generative AI is the “most important computing platform of our generation” as individuals and companies move to create new apps and leverage on generative AI in the process.

Read the full story here.

— Lim Hui Jie

Tue, May 30 20232:28 AM EDT

Toyota’s April sales increase as demand from Japan and China rises

Toyota’s global sales rose almost 5% year-on-year in April, with strong demand from home market Japan and China.

Sales to Japan saw the largest gains, increasing 21.5% compared with April 2022 as parts shortages eased.

China sales saw a year-on-year jump of 46.3% to 162,554 units in April, rebounding from the impact of Covid-19 on the economy a year ago.

In contrast, sales to Europe slid 22.8% to 75,869 units. Toyota said despite solid demand, sales were lower due to operations being suspended, caused by the impact of shortages of semiconductors and other parts.

Shares of Toyota closed 0.6% higher on Tuesday.

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— Lim Hui Jie

Mon, May 29 202311:45 PM EDT

Australia’s building approvals fall to lowest in 11 years

Building approvals in Australia fell 8.1% month-on-month to 11,594 – marking its lowest level since April 2012 – when the number of total approved units stood at 10,860, government data showed.

Private sector houses fell 3.8% to 7,939 while private sector dwellings excluding houses fell 16.5% to 3,469.

Meanwhile, the value of total building rose by 4.7% – the value of new residential building fell 2.7%, while the value of non-residential building rose 13.5%.

– Jihye Lee

Mon, May 29 20239:38 PM EDT

Softbank shares slide almost 4%, leads losses on Topix

Shares of Softbank Group tumbled almost 4% on Tuesday, leading losses on the Japan’s Topix index.

This comes after Softbank owned chip designer Arm announced it rolled out new technology for mobile devices and Taiwan smartphone chip maker MediaTek Inc said it will be using it for its next-generation product.

Shares of Softbank surged 8.8% on Monday.

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— Lim Hui Jie

Mon, May 29 20236:50 PM EDT

Biden, Congressional leaders iron out debt ceiling agreement set for a vote this week

President Joe Biden and Congressional leaders reached an initial agreement on over the weekend to avoid a U.S. default, with the bill set for a vote as soon as this week.

House Majority Speaker Kevin McCarthy and Biden had been at odds for weeks over raising the debt ceiling, with the first inklings of real progress coming last week. Key provisions that necessitated compromise included keeping non-defense spending flat for the next two years as well as increasing work requirements of food stamp benefits.

Still, the bill will need both Republican and Democratic support to make it to President Biden’s desk before the so-called “X date” on June 5, which is the earliest time the Treasury Department has signaled the U.S. could default.

— Brian Evans

Mon, May 29 20236:25 PM EDT

S&P 500 and Nasdaq coming off weekly gains

Both the Nasdaq Composite and S&P 500 posted weekly gains of 2.5% and 0.3% on Friday, respectively, while the Dow Jones Industrial Average slipped 1%.

The tech-heavy Nasdaq heads into the new trading week looking to add to a stretch of five consecutive gains. Nvidia’s meteoric rise has added more hype to the investor optimism over artificial intelligence stocks.

— Brian Evans

Mon, May 29 20236:02 PM EDT

Stock futures open higher

Futures tied to the major averages opened higher on Monday night.

Dow futures were up about 70 points, or 0.2%. S&P 500 futures climbed 0.3%, while Nasdaq-100 futures popped 0.5%.

— Fred Imbert

“Simply, not only is Tesla set up to be the primary beneficiary of the global EV transition with a significant lead on cost, but it is also the leader in establishing the software-defined vehicle of the future,” wrote analyst Dan Levy in a Tuesday note to clients.

Source: https://www.cnbc.com/2023/05/29/stock-market-today-live-updates.html

How crypto is dealing with the debt ceiling turmoil

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A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.

New York CNN —

Cryptocurrencies are often characterized by their wild price swings and volatility, but stablecoins are digital currencies designed to do the opposite — to hold a steady value.

If you have a stablecoin that is supposed to be equal to $1, then you can theoretically trust that it will always be worth one dollar. It’s like having a digital version of a dollar bill. That makes it easier to use cryptocurrencies for everyday things like buying goods or services, and reduces the risks associated with regular cryptocurrencies, which can go up or down in value very quickly.

These coins have become a crucial part of the overall crypto system — they currently have a market value nearing $130 billion, up from about $11 billion in June 2020. A lot of money is on the line, and with just days left until the US reaches its so-called X date — when the Treasury says the government must raise the debt ceiling or risk defaulting on its obligations — stablecoin companies are worried.

Circle, a financial service company that issues one of the world’s largest stablecoins tied to the US dollar, known as a USDC, has been preparing for months.

Before the Bell sat down with Circle CEO Jeremy Allaire to discuss what the company has been doing, regulation of stablecoins, the regional banking crisis and more.

This interview has been edited for length and clarity.

Before the Bell: President Joe Biden and House Speaker Kevin McCarthy have come to a deal, but lawmakers still have to approve it before the government runs out of cash. How are you prepping for a potential government default?

Jeremy Allaire: At the highest level, USDC is designed to always be redeemed at $1. The way that the regulatory guidance around this is is set up, and our own self imposed approach to this, has been to hold the reserves in the the most safe, most liquid dollar assets in the world — so historically 80% of USDC reserves had been in short term US government Treasury bonds, so 90-day or less Treasury bonds. When people talk about the value of the dollar, that’s generally the anchor point, short duration Treasury bills.

Months ago, when this X date was established, we faced a situation where, in theory, if you’re holding Treasury bills that mature after May 31, and the government can’t pay them, and they’re not able to pay their debt, the dollar itself would de-peg because short term Treasury bonds are the reference point for cash and collateral in the broader financial system. So, we took measures to proactively ensure that we held no T-bills that matured beyond May 31.

There are a few bills to regulate stablecoins making their way through Congress. How do you see things progressing?

There’s still important unfinished work on what we think of as the first phase of what we’re trying to do. We need a protocol for dollars on the internet to become enshrined in law as a $1 cash equivalent instrument that is acceptable to financial institutions, to households, to firms and the like. That’s what we’re talking about with the stablecoin bill. We’re talking about making this legally part of the global financial system.

We absolutely see movement. It’s very clear that both sides of the aisle would like to get something done and they’d like to come together to do that. There seems to be a consensus view that this is important and needs to get done.

Circle had $3.3 billion invested in Silicon Valley Bank before its failure. What are you doing to protect Circle from future banking problems?

We’ve always been concerned about exposure to the fractional reserve banking system [banks that are required to hold only a fraction of customer deposits as reserves, allowing them to lend out the majority] where cash is tied into longer duration lending. We don’t think that’s a good foundation for a digital dollar that runs on the internet.

We’d like some portion of the cash that sits behind USDC to be held with the Fed and Treasury bonds and the like, then you’d have something extraordinarily safe that everyone understood and could depend on. We were moving towards that prior to SVB’s collapse. But as part of our efforts to continue to do that, we’ve been bringing online larger and larger cash custodians [a financial institution that safeguards and manages cash and other financial assets on behalf of clients]. Bank of New York Mellon, which is one of the largest and safest cash custodians in the world, holds our cash reserves.

President Biden and Republican House Speaker McCarthy put their long weekend to good use, coming to an agreement to raise the debt ceiling in the hope of avoiding a self imposed default on US government debt.

Now comes the hard part. Lawmakers have to also approve the deal. If Congress doesn’t raise the debt ceiling by June 5, Treasury Secretary Janet Yellen warns the government will not have enough funds to pay all of the nation’s obligations in full and on time.

Here’s a breakdown by my colleague Tami Luhby of what the deal would do (you can also read the bill in full here):

> Address the debt ceiling: The agreement would suspend the nation’s $31.4 trillion debt limit through January 1, 2025. This removes it as a potential issue in the 2024 presidential election.

> Cap non-defense spending: Under the deal, non-defense spending would remain relatively flat in fiscal 2024 and increase by 1% in fiscal 2025, after certain adjustments to appropriations were made. After fiscal 2025, there would be no budget caps.

> Cut Internal Revenue Service funding: House Republicans have been determined to jettison money allotted to the IRS to fight fraud. The debt ceiling bill does that, rescinding $1.4 billion in IRS funding.

> Expand work requirements: The agreement calls for temporarily broadening of work requirements for certain adults receiving food stamps.

> Claw back some Covid-19 relief funds: The deal would rescind roughly $28 billion in uncommitted funds from the Covid-19 relief packages that Congress passed to respond to the pandemic.

> Restart student loan repayments: Under the deal, borrowers would have to begin paying back their student loans at the end of the summer, as the Biden administration has already announced. The pause has been in effect since the Covid-19 pandemic began.

> Expedite a pipeline in West Virginia: The agreement would also speed the creation of the Mountain Valley Pipeline, a natural gas pipeline in West Virginia.

It appears that US industry is pleased with the debt ceiling deal, and would like Congress to pass it quickly.

Leading business groups praised Biden and McCarthy for forging a bipartisan agreement over the weekend, reports my colleague Matt Egan.

“With the US at risk of defaulting in less than 10 days, there is no time to spare. We urge members of Congress to give the legislation their strong support,” Josh Bolten, the CEO of the Business Roundtable and former chief of staff to President George W. Bush, said in a statement on Sunday.

Bolten applauded the agreement for not only raising the debt ceiling through January 1, 2025, but for making a “down payment” on permitting reform and taking steps towards putting America on a “more sustainable fiscal trajectory.”

Suzanne Clark, president and CEO of the US Chamber of Commerce, said in a separate statement that by reaching a compromise, Biden and congressional leaders have “shown they can come together on a bipartisan basis and act in the best interests of our country.”

“Members of Congress must finish the job and send the bill to the President’s desk to be signed into law without delay. The gravity of this moment cannot be overstated,” said Clark, who added the Chamber will consider this a “key vote” for lawmakers.

The House vote is expected to take place Wednesday.

Source: https://edition.cnn.com/2023/05/30/investing/premarket-stocks-trading/index.html

Nvidia reaches $1 trillion market value, becoming first chip company to do so

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May 30, 2023 / 10:26 AM / CBS News

How Congress could regulate AI

How Congress could regulate AI 06:12

Nvidia, an artificial intelligence and chip company headquartered in California, hit a $1 trillion market value on Tuesday, making it the first chip company to do so, according to Reuters.

The company’s stock rose 4.4% on Tuesday morning and about 25% over the past week. The reason? The demand for AI. The company engineers “the most advanced chips, systems, and software” for AI. Shares are now worth around $408.

Nvidia is the leader in making AI chips, but some experts say that is overvalued, according to Forbes.

Last week, the company forecasted their second quarter revenue to be more than 50% above Wall Street estimates, leading analysts to increase their price targets, according to Reuters. The company said it is boosting production of the chips, which are used in products like ChatGPT, the AI bot that can complete tasks and answer questions with impressive accuracy.

In an interview with Reuters, Nvidia Chief Executive Officer Jensen Huang said the company began producing new AI chips in August and the increasing popularity of AI lead to a steep demand increase by January.

“We had to place additional orders, and we procured substantially more supply for the second half” of 2023, Huang said.

With a $1 trillion value, Nvidia joins the ranks of other tech companies like Google, Apple and Microsoft. In fact, it would be the sixth highest valued public company, according to Forbes.

Apple comes in at number one, worth an estimated $2.79 trillion. In 2022 it was the first company to reach a $3 trillion value, according to Forbes.

On CBS News’ “Face the Nation” on Sunday, President and Vice Chair of Microsoft Brad Smith said he expects the U.S. government to regulate artificial intelligence in the year ahead.

Some tech executives, including Elon Musk, have urged for the regulation of AI, which is used in systems like Google’s Bard and even Roombas. During a hearing for the Senate Judiciary’s Subcommittee on Privacy, Technology and the Law, Sam Altman, the CEO of the company behind ChatGPT, said artificial intelligence could “go quite wrong.”

“If this technology goes wrong, it can go quite wrong,” he said. “We want to be vocal about that. We want to work with the government to prevent that happening. But we have to be clear-eyed about it.”

    Caitlin O’Kane

    caitlin-okane.jpg

    Caitlin O’Kane is a digital content producer covering trending stories for CBS News and its good news brand, The Uplift.

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    Source: https://www.cbsnews.com/news/nvidia-1-trillion-market-value-becoming-ai-first-chip-company-to-do-so/

    NVIDIA Hits All Time High: Alphabet, Amazon And Meta Don’t Get There

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    AI, NVIDIA, technology

    getty

    The soaring price action in NVIDIA DIA last week, based a good earnings report and on projections for the impact of artificial intelligence, is extraordinary. The stock climbed to a new all-time high as those money managers and retail investors who didn’t want to be left behind climbed on board.

    Is it now overvalued? NVIDIA is trading at a price-earnings ratio of 202 and at 43 times its book value. The price to sales ratio is 36 and price to free cash flow sits at 212. Those are not the type of metrics that Benjamin Graham would approve of but growth stock proponents who are piling in would disagree.

    The leading components of the NASDAQ NDAQ -100 participated in what seemed to amount to a buying panic for the closely followed tech and social media-heavy index. Amazon AMZN , Apple AAPL , Google GOOG , Meta, Microsoft MSFT and Tesla TSLA joined in the bullish fun but without making it all the way up to or past their all-time highs.

    The 7 stocks mentioned have gained by 44% since the beginning of the year while the other 493 stocks in the Standard & Poor’s 500 are up by just 1%. Things have become a bit lopsided thanks to AI-crazed investors unable to refrain from pressing the buy button over and over in that small, select group said to benefit.

    AI Stocks That Buyers Liked

    Here’s the monthly chart for NVIDIA:

    NVDIA monthly price chart, 5 28 23.

    stockcharts.com

    It’s uncommon to see bullish price candlesticks as big as the one for the month of May. The stock has clearly broken above the previous high of just above $340 during 2021. Another uncommon characteristic is how far it is now above the 50-month moving average (the blue line) and the 200-month moving average (the red line).

    Here’s the monthly chart for Amazon:

    Amazon monthly price chart, 5 28 23.

    stockcharts.com

    It’s a nice rally in May but this stock is far below its all-time high up near $190 in 2021. To be precise, it’s off that previous peak by 36%. Note that Amazon remains below its 50-month moving average, the ascent of which seems to be diminishing.

    The monthly chart for Alphabet looks like this:

    Alphabet monthly price chart, 5 28 23.

    stockcharts.com

    It’s another tech stock participating in the AI-driven upward blast for May, but unlike NVIDIA, the price remains well below that early 2022 all time high up there just above $150. Alphabet needs to rally by another 17% before reaching that old peak level.

    The monthly chart for Meta is here:

    Meta Platforms monthly price chart, 5 28 23.

    stockcharts.com

    The May climb upward continues the solid gains coming off of the October, 2022 low below $100. The stock is back above the 50-month moving average. Note how much further it must go to break above the all-time high of just above $380 in 2021.

    One more thing: according to BespokePremium.com, the tech sector is now more than 3 standard deviations above its 50-day moving average. The analytics firm says it hasn’t traded this far above it since 2004. It’s these types of metrics that make you wonder how much further this rally can run.

    Follow me on Twitter or LinkedIn.

    AMZN

    Source: https://www.forbes.com/sites/johnnavin/2023/05/28/nvidia-hits-all-time-high-alphabet-amazon-and-meta-dont-get-there/

    Stock Market Today: Dow Closes More Than 300 Points Up as Debt-Ceiling Deal in Focus

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    Stocks rallied to end the week as a potential debt-ceiling deal started to take shape, although nothing has been finalized.

    The Federal Reserve’s preferred inflation gauge, the core personal-consumption expenditures price index, rose 0.4% in April from March, while consumer spending climbed 0.8%.

    In today’s session:

    All three major indexes climbed. The Dow Jones Industrial Average posted a decline for the week. The Nasdaq Composite notched a fifth straight week of gains.

    Bond yields rose. The yield on 10-year notes settled Friday at 3.820%, from 3.814% late Thursday. The two-year yield, meanwhile, was at 4.587%, from 4.508%, a 12th straight daily increase.

    Nvidia shares rose more than 2% after yesterday’s enormous rally. Meanwhile, Marvell Technology’s stock was flying higher. The PHLX Semiconductor Index climbed about 10% for the week.

    All but three of the S&P 500’s 11 sectors rose on the day. Utilities, healthcare and energy sold off, while consumer discretionary stocks climbed more than 2%.

    Amazon.com, Tesla, and Micron Technology were among the S&P 500’s top performers, while Ulta Beauty’s stock was by far the biggest laggard. Ford’s stock rose on Tesla partnership news.

    —By Charley Grant and Joe Wallace

    Get smarter about markets with our free morning and evening newsletters, delivered every weekday.

    Source: https://www.wsj.com/livecoverage/stock-market-today-dow-jones-05-26-2023