Stock market today: Stocks edge higher as new quarter kicks off
07/01/2024 23:29
Political turmoil in France gripped investors weighing whether stocks can build on their stellar first-half performance.
US stocks edged higher on Monday to start the quarter as investors began counting down to the July 4 break and the key US jobs report.
The Dow Jones Industrial Average (^DJI) rose slightly while the S&P 500 (^GSPC) gained 0.2%. The tech-filled Nasdaq Composite (^IXIC) climbed back into positive territory to rise 0.6% by 12 p.m. ET.
Nvidia (NVDA) shares erased earlier losses, temporarily easing worries the chip heavyweight could be trading in treacherous waters.
Stocks are having a bumpy ride to kick off a trading week cut short by the Independence Day holiday. Investors are debating whether the second half will bring a pullback or a broadening in the record-breaking tech-driven rally that lifted the benchmark S&P 500 to a near-15% gain this year so far.
Coming into focus is the June jobs report due Friday, watched for signs of cooling in the labor market that could help make a case for interest-rate cuts. Encouraging signs that inflation is slowing toward the Federal Reserve's target, plus emerging cracks in the economy, have spurred hopes for a policy pivot.
US manufacturing activity data released on Monday showed the Institute for Supply Management's manufacturing PMI fell further into contraction territory in June, hitting a four-month low.
In the meantime, the prospect of political gridlock in France is gripping investors after the first round of voting in national elections. A rebound in French stocks (^FCHI) lost steam after jumping amid relief that Marine Le Pen's far-right party won by a smaller margin than exit polls indicated.
US political risks also started to emerge amid questions about whether President Joe Biden will step down as a candidate after a poor debate showing.
On the corporate front, Boeing (BA) said it has agreed to buy back supplier Spirit Aerosystems (SPR) in a $4.7 billion all-stock deal that will see a carve-up of its former subsidiary. US prosecutors are said to be seeking a guilty plea from the planemaker in a deal to settle criminal charges after two fatal 737 MAX crashes. Boeing stock tipped higher, while Spirit Aero shares rose about 4%.
Meta (META) shares inched lower in the face of the EU's filing of antitrust charges against the Facebook owner over its "pay or consent" model for avoiding or accepting digital ads.
Live8 updates
BlackRock’s Fink: Buying Preqin unlocks ‘democratization of all alternatives’
Yahoo Finance's David Hollerith reports:
BlackRock (BLK) CEO Larry Fink made it clear Monday that his firm’s acquisition of London data provider Preqin is part of a much larger vision he has to make private markets a lot more investable.
"We anticipate indexes and data will be important to future drivers of the democratization of all alternatives," Fink said on a Monday morning conference call. "And this acquisition is the unlock."
BlackRock and other asset management firms are making an aggressive expansion into private markets as the financial world pushes deeper into alternative assets that aren’t publicly traded.
These assets include everything from private equity and credit to real estate, infrastructure projects and even ownership of music rights.
Read more here.
Tesla pops 6% ahead of deliveries print, stock up nearly 50% since April
Tesla's (TSLA) upward trend continued Monday as shares gained another 6% ahead of the electric vehicle giant's latest quarter delivery numbers due out on Tuesday.
Analysts expect the manufacturer's deliveries to drop 5.4% to 441,019 vehicles, according to Bloomberg data.
Tesla shares have steadily climbed in recent months. The stock is up nearly 50% since it touched a 52-week low of $138.80 on April 22.
And the top voter concern is....
Morgan Stanley is out with a new survey, clearly showing that inflation remains the top concern amongst voters.
Rising prices remains a top worry with consumers. (Morgan Stanley) Manufacturing activity hits a four-month low
The rebound in US manufacturing activity seen in early 2024 is proving to be a head fake.
The Institute for Supply Management's manufacturing PMI indicated the sector fell further into contraction territory in June, hitting a four-month low.
The ISM's manufacturing PMI registered a reading of 48.5 in June, down from May's reading of 48.7 and below the 49.1 economists expected, according to Bloomberg data. A print below 50 reflects a shrinking in activity.
The consistent declines over the past several months come after activity in the manufacturing sector hit a 22-month high in April, per the ISM's report.
“U.S. manufacturing activity continued in contraction at the close of the second quarter. Demand was weak again, output declined, and inputs stayed accommodative," Timothy Fiore, chair of the Institute for Supply Management Manufacturing Business Survey Committee, said in a release.
Fiore added: "Demand remains subdued, as companies demonstrate an unwillingness to invest in capital and inventory due to current monetary policy and other conditions."
Chewy stock surges after 'Roaring Kitty' discloses 6.6% stake
Chewy (CHWY) stock soared more than 20% in pre-market trading on Monday before paring gains after an SEC filing revealed popular investor Keith Gill has a 6.6% stake in the company.
Shares were up more 6% in early trading on Monday.
The July 1 filing showed Gill, a popular meme stock trader who goes by the online name "Roaring Kitty," owned 9.1 million shares of Chewy on June 24.
Notably, that means Gill owned the shares before a post on X from Roaring Kitty sent Chewy shares soaring as much as 30% on June 27. The account posted a cryptic photo of a dog at 1 p.m. ET, sending the stock surging before it eventually lost gains and closed below the flat line.
Why Gill is interested in Chewy is largely unknown. Gill talked glowingly about current GameStop CEO Ryan Cohen, who is also the founder of Chewy, during a live stream on June 7 but hasn't made direct comments about the petcare provider. Notably, Cohen is no longer on the executive board at Chewy.
Gill's filing also provided little clues. Outside, of listing how many shares Gill owns, the 13-G filing provided one other detail. Gill included a box that asks to check the appropriate box for whether or not the filer is, or is not, a cat.
Gill checked the box labeled "I am not cat."
Stocks tick higher to kick off second half of 2024
Stocks opened higher on Monday to kick off the third quarter of the year as investors await a key jobs monthly jobs report on Friday.
The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) both nudged up roughly 0.3%. The tech-heavy Nasdaq Composite (^IXIC) also opened slightly higher.
This will be a shortened holiday week as the markets close early on Wednesday in observance of the Fourth of July on Thursday. However the June jobs report is due on Friday prior to the market open. A cooling labor market would make the chance of a Federal Reserve rate cut this fall more likely.
The weekend after the Biden/Trump debate
The weekend was full of public support by prominent Democrats for President Biden after his brutal debate performance.
The WSJ is reporting the Biden family urged him to continue moving forward during a weekend gathering at Camp David. Meantime, a CBS poll taken after the debate found that only 27% voters think Biden has the cognitive health to serve as President – down from 35%. Indeed those numbers made the rounds on TV over the weekend.
In the end, no signs the market will have to endure a surprise (this would still be a surprise, I think) announcement of Biden dropping out of the race in the near-term.
"All in all, the events following the debate have gone as well as Team Biden could’ve hoped for. We think it’s more likely that they press ahead than that they throw in the towel. However, they – and many other stakeholders in this process – are still waiting for some of the most critical information: a better sense of what the voters think this all means and what the race looks like going forward," said EvercoreISI strategist Sarah Bianchi in a note this morning.
For more on this topic, check out Yahoo Finance anchor Seana Smith's latest column here.
Optimism on corporate earnings continues
Investors are certainly feeling upbeat about the outlook for corporate profits.
The top 10 companies in the S&P 500 (^GSPC) make up 35% of the market cap, but only 23% of earnings, points out Apollo chief economist Torsten Slok in the below chart. The divergence has never been bigger.
Note: Apollo is the parent company of Yahoo Finance.
Too much optimism priced into stocks? (Apollo)
