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Stocks were little changed to close out the trading session on Monday after logging their best week this year, as hopes continued to prevail that the Federal Reserve is ready to call an end to tightening.
The tech-heavy Nasdaq Composite (^IXIC) ticked up by 0.3%, continuing a notable stretch of gains, while the benchmark S&P 500 (^GSPC) gained about 0.2%. The Dow Jones Industrial Average (^DJI) increased by 0.1% or roughly 35 points.
The yield on the 10-year Treasury note (^TNX) ticked up about 10 basis points to trade near 4.66%.
The major US stock indexes soared on Friday after US jobs growth slowed more than expected and wage inflation cooled, cementing optimism for an end to Fed interest rate increases that persisted into the new week.
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
Investors will be listening out for confirmation when several Fed officials step up to speak this week, including two appearances by Chair Jerome Powell. Regional Fed Presidents John Williams and Raphael Bostic are among those on the docket.
Some on Wall Street have cautioned that the optimism could be overdone and to brace for volatility in stocks. Morgan Stanley strategist Mike Wilson warned last week’s stock comeback “looks more like a bear market rally rather than the start of a sustained upswing.”
Meanwhile, the market still has a stream of quarterly earnings ahead, while the calendar is quiet on the economic front. Disney’s (DIS) results due Wednesday are the highlight.
In commodities, oil prices jumped after top exporters Saudi Arabia and Russia confirmed last weekend that they will continue with their voluntary additional production cuts. West Texas Intermediate crude futures (CL=F), the US benchmark, rose more than 1% to just under $82 a barrel, while global benchmark Brent crude futures (BZ=F) put on a little less than 1% to trade under $86 a barrel.
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Stocks finish up slightly after huge week of gains
Stocks recovered from a brief period in the red and finished the day slightly above the flatline after posting significant gains last week.
The tech-heavy Nasdaq Composite (^IXIC) led the session, closing 0.3% higher. The benchmark S&P 500 (^GSPC) gained about 0.2%, while the Dow Jones Industrial Average (^DJI) increased by 0.1% or roughly 35 points.
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Google faces off against Epic in antitrust trial
A trial to settle the private anti-competitive claims of “Fortnite” creator Epic Games kicks off in a California federal court Monday, placing Google in antitrust battles on both sides of the US, reports Yahoo Finance’s Alexis Keenan.
The Epic lawsuit accuses Google of abusing its power in the mobile App Store market, and will be decided by a 10-person jury.
The new trial follows nearly two months of legal arguments in a Washington, D.C., courtroom, where Google is facing off against the Justice Department and a group of US states. They have accused the tech giant of unfairly gaining and holding on to market dominance in the online search market. As part of that legal conflict, which began Sept. 12, Google’s CEO Sundar Pichai testified in addition to executives from Google search market rivals Microsoft and DuckDuckGo. A judge will rule in the case.
Pichai is also expected to testify in the Epic trial. The dispute between Google and Epic began in August 2020, when “Fortnite,” Epic’s wildly popular game with about 350 million registered players at the time, was booted from Google’s Play Store and Apple’s (AAPL) App Store. The game maker circumvented the app stores by giving its players a way to make direct, in-game purchases at a 20% discount.
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Stocks trending in afternoon trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in afternoon trading on Monday:
Bumble: (BMBL): The online dating app sank more than 4% Monday after the company announced its founder Whitney Wolfe Herd will be stepping down as CEO, with Slack CEO Lidiane Jones taking her place. Bumble is scheduled to report earnings on Tuesday.
Eli Lilly (LLY): Shares of the pharmaceutical company continued to climb Monday afternoon following robust earnings that beat estimates on both the top and bottom lines. The company highlighted the strong performance of Mounjaro, a medication for type 2 diabetes, whose revenue grew to just over $1.4 billion globally for the quarter.
Dish (DISH): The stock saw its worst decline in 23 years as shares dropped more than 30% on disappointing earnings. The company posted a surprise third quarter loss as revenue sank 10% year over year to $3.7 billion. Dish CEO Erik Carlson also said he would step down.
Berkshire Hathaway (BRK-A, BRK-B): Shares of Warren Buffett’s Berkshire Hathaway ticked lower on Monday, down about 2%, after the conglomerate reported its first quarterly loss in a year. Still, operating earnings jumped by 40% while the firm’s cash reserves reached a record $157.2 billion.
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Yellen will meet with China’s vice premier to push economic diplomacy
Later this week, the Biden administration will advance efforts to deescalate tensions with China over economic and national security issues. Treasury Secretary Janet Yellen will meet with China’s Vice Premier He Lifeng, the top economic official in China, during a two-day bilateral summit in San Francisco, the department announced on Monday.
The meeting comes as the White House attempts to stabilize the relationship between the world’s two largest economies.
In a major address ahead of the meeting last week, Yellen attempted to reassure Asian countries that Biden’s approach to China wouldn’t force Beijing’s neighbors to take sides in a global standoff. She explicitly rejected the notion of fully separating the economies. “We have no interest in such a divided world and its disastrous effects,” she said. “And given the extent of economic linkages within the Indo-Pacific region and the complexity of global supply chains, it’s also simply not practical.”
Yellen’s huddle will take place just before the US hosts a week of gatherings of leaders and senior ministers from nearly two dozen Pacific Rim economies at the Asia Pacific Economic Cooperation forum. There, President Joe Biden and Chinese President Xi Jinping are also expected to meet.
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As Wall Street’s momentum shifts, 74% of companies are beating last quarter’s earnings
Fresh off notching the best performing week of the year, Wall Street appears, at least monetarily, to be shaking off the pessimism that has gripped investors in recent months. While much of the shift in momentum stems from renewed hopes that the Federal Reserve is ready to call an end to tightening, corporate earnings continue to outperform last quarter, according to a new analysis by JPMorgan.
With almost 80% of S&P 500 companies already reporting, nearly three-quarters are beating Q3 earnings, that’s compared to an average of 68% over the last four quarters, the report said. And 58% of companies are beating revenue estimates. For companies that have posted earnings already, third quarter revenue growth has come in at 1.1% year over year, with net income growth at 2.6%
But the analysis that shows a largely robust picture coincides with other data on investor behavior that signals pessimism. At the end of last month, for instance, the equity strategy team at Bank of America Global published research showing that companies beating expectations weren’t seeing their stocks rewarded over the week following these reports. During this period of volatility companies that have revealed their latest results to investors were faring even worse.
This week, however, another 10% of S&P 500 companies representing 4% of market cap are scheduled to report, including Disney (DIS), Robinhood (HOOD), and eBay (EBAY). Market watchers will be keeping a close eye on whether boosted investor confidence will also reward the winners of the week.
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AStocks lose steam but still positive
Stocks lost some steam by mid-afternoon on Monday with all three major indexes paring gains.
The tech-heavy Nasdaq Composite (^IXIC) continued to lead the session, up about 1.5%, while the benchmark S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) each traded flat. The yield on the 10-year Treasury note (^TNX) ticked up about 9 basis points to trade near 4.65%.
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Li Auto, Nvidia, Ryanair: Stocks trending in afternoon trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in afternoon trading on Monday:
Li Auto (LI): Shares of the Chinese EV maker surged more than 8% on Monday following reports the Chinese government may introduce more fiscal stimulus. The company reported record October delivery figures last week, telling investors it delivered 40,422 vehicles, an increase of more than 302% year over year.
Dish (DISH): The stock saw its worst decline in 23 years as shares dropped more than 20% on disappointing earnings. The company posted a surprise third quarter loss as revenue sank 10% year over year to $3.7 billion. Dish CEO Erik Carlson also said he would step down.
Ryanair (RYAAY): Shares of the European budget airline rose about 5% after the company said it anticipates full-year earnings to reach a record high amid rising ticket prices. It also announced its first-ever dividend, saying it plans to pay out roughly $429 million in dividends next year.
Berkshire Hathaway (BRK-A, BRK-B): Shares of Warren Buffett’s Berkshire Hathaway ticked lower on Monday, down about 2%, after the conglomerate reported its first quarterly loss in a year. Still, operating earnings jumped by 40% while the firm’s cash reserves reached a record $157.2 billion.
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JIt might be time to ‘bargain hunt’ in small caps, strategist says
The Russell 2000 (^RUT) just had its best week in more than two years.
Beaten-down areas of the market caught bids as investors increasingly bet on the Federal Reserve being done with its interest rate hike cycle. And even after a more than 7.5% surge in the index, RBC capital markets head of US equity strategy Lori Calvasina still sees opportunity as several traditional tailwinds for small caps take hold.
“They tend to lag late in economic cycles and so there’s really a sense when times get dicey that’s when you want to go bargain hunting in the small cap space in particular,” Calvasina told Yahoo Finance Live on Monday.
This could be crucial in the current economic moment. The most recent jobs report released on Friday showed unemployment at its highest level in nearly two years. Data out last week showed the activity in the US services sector just hit a five-month low. And while the economy has overall remained resilient, if the cracks many are seeing at the surface proliferate into a period of slower economic growth, small caps “tend to price in economic problems ahead of time,” Calvasina wrote in a research note out Monday.
Beyond the economic picture, other factors point to solid position for small caps, per Calvasina. For starters, markets are increasingly confident the Fed may be done done hiking rates, a known headwind for small caps. This comes as valuations on the index are looking increasingly attractive.
The Russell 2000 hasn’t been this cheap compared to the S&P 500 since the tech bubble in the late 1990s into the early 2000s, per Calvasina.
“That’s causing some multi-asset investors to take notice,” she said.
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Disney reveals new CFO Hugh Johnston
Disney (DIS) finally has a new CFO.
The company announced Monday that longtime PepsiCo (PEP) executive Hugh Johnston will be the new senior executive vice president and chief financial officer of the media giant, effective Dec. 4.
Johnston has been at PepsiCo for 34 years where he held multiple leadership positions, including the CFO position, for more than a decade.
He was in that role when PepsiCo successfully fended off a campaign by activist investor Nelson Peltz to break up the company. Peltz is now pushing for multiple board seats at Disney, and the stock has hit record lows.
Disney shares traded flat following the announcement on Monday.
“Hugh’s well-earned reputation as one of the best CFOs in America and his wealth of leadership experience in both financial and operational roles overseeing a diverse portfolio of top global brands make him a perfect addition to Disney’s senior leadership team,” Iger said in a press release.
“His expertise will serve Disney and its shareholders well as we continue the transformative work we are doing to drive growth and value creation.”
Read more here.
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Stocks rise after logging best week this year
US stocks opened higher on Monday after logging their best week this year, buoyed by optimism that the Federal Reserve is done raising interest rates.
At the opening bell, the tech-heavy Nasdaq Composite (^IXIC) led the session, up 0.4%, while the benchmark S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) each climbed around 0.3%. The yield on the 10-year Treasury (^TNX) ticked up about 6 basis points to trade near 4.62%.
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