Ed Yardeni, founder and chief investment strategist at Yardeni Research, shares his insight as to why the retail sales report was so strong and which sectors of the market are poised to do the best or the worst. It also looks at what could cause another crash in the stock market.
NEW YORK – Stocks are rising and falling on Wall Street early Monday, after last week’s decline with more tentative trading.
The S&P 500 rose 0.4% after reeling from profit to loss shortly after trading began, following mixed moves abroad. European stocks rose, while many Asian markets ended with losses. Treasury yields were stable.
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The Dow Jones Industrial Average rose 265 points, or 1.1%, to 25,281, at 10 am Eastern time, while the Nasdaq compound fell 0.3%.
They are the latest choppy moves for markets around the world, which have been rocking in recent weeks. A spike in new coronavirus infections, including in the southern and western United States, has abolished the optimism that previously screamed at the S&P 500 almost to the record it reached in February.
| Heart | Security | Latest | Change | Change% |
|---|---|---|---|---|
| Me: DJI | DOW JONES AVERAGES | 25373.15 | +357.60 | + 1.43% |
| SP500 | S&P 500 | 3,026.77 | +17.72 | + 0.59% |
| I: COMP | NASDAQ COMPOSITE INDEX | 9770.030591 | +12.81 | + 0.13% |
The concern is that worsening levels could drown the budding improvements the economy has recently shown as states and other governments decrease closing orders, even with the Federal Reserve and other central banks pumping unprecedented amounts of aid to the economy.
“Conflicting signals between the spread of COVID-19 and economic data continue to keep risk sentiment and consequently markets stagnant in late June,” said Jingyi Pan of IG.
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Florida and Texas place new restrictions on the bars to slow the spread of the virus, for example, which helped propel the S&P 500 to a 2.9% loss last week. Other governments around the world are also backing down in efforts to reopen their economies after widespread blockades that have brought the global economy into a sudden and severe recession.
Given all the uncertainty, many professional investors say the only sure thing for the markets is that the next moves are likely to be volatile. The second quarter of the year will close on Tuesday, and the S&P 500 is on track for a return of about 17%, including dividends, its best level since late 1998. Of course, that follows the loss of nearly 20 in the US stock market%, which was its worst since the end of the 2008 financial crisis.
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The stocks of several companies that would benefit the most from an economic reopening helped lead the way in early Wall Street. Boeing was up 6.2% after reports that test flights on its troubled 737 Max jet may start soon. Southwest Airlines rose 2%,
| Heart | Security | Latest | Change | Change% |
|---|---|---|---|---|
| licensed in letters | BOEING COMPANY | 184.64 | +14.63 | + 8.61% |
| LUV | SOUTHWEST AIRLINES CO. | 33.69 | +1.73 | + 5.41% |
| CCL | CORP. CARNIVAL | 15.38 | -0.40 | -2.53% |
| EXPE | GRUPO EXPEDIA, INC. | 77.55 | -0.04 | -0.05% |
| full board | FACEBOOK INC. | 214.07 | -2.01 | -0.93% |
But the gains were not uniform. Other travel companies whose fortunes are also terribly tied to the pandemic were smaller. Cruise ship operator Carnival lost 2.9% and Expedia Group fell 1.5%.
Facebook also had one of the worst losses in the S&P 500, 2.3% less, since it is a defection of tired advertisers of the racist and violent publications that spread through the social network. Starbucks became the latest major company to say on Sunday that it will stop its advertising on social media.
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In Asia, the Nikkei 225 in Tokyo lost 2.3%, while the Hang Seng in Hong Kong fell 1%. The Kospi in Seoul fell 1.9%.
In Europe, the German DAX obtained 0.1%, while the French CAC 40 was practically flat. The FTSE 100 in London added 0.4%.
The yield on the 10-year Treasury rose to 0.64% from 0.63% late on Friday. It tends to move with investor expectations for the economy and inflation.
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