Stocks inched slightly upward Friday, with the Nasdaq shaking off an Apple-fueled (AAPL) slide, after officials hinted the Federal Reserve could hold off from hiking interest rates at its meeting in September.
The S&P 500 (^GSPC) added about 0.1%, while the Dow Jones Industrial Average (^DJI) was up 0.2%. The Nasdaq Composite (^IXIC) put on around 0.1% as Apple's shares recovered from a two-day slump that dragged down tech stocks.
All three of the indexes ended the week with losses, however.
Investors on Friday weighed comments by several Fed policymakers that appeared to signal they could hold off from further rate hikes this year. That optimism was bolstered by Federal Reserve Bank of New York President John Williams saying on Thursday that US monetary policy is “in a good place,” though he did stress officials would be guided by economic data.
Inflation data is key to the Fed's decision on whether to keep rates higher for longer, and concerns are growing about rising energy prices and their potential to keep price pressures hot. The start of a strike at Chevron's natural gas plants in Australia — which provide over 5% of global LNG supply — was seen as driving a jump in European gas futures (NG=F) on Friday. That follows a recent run-up in oil prices (CL=F) that also spread worries.
Reports of Chinese curbs on the use of the iPhone by government officials and inside state companies sent Apple shares tumbling this week, wiping almost $200 billion off the stock's market value. The slide sent jitters through markets, hitting the iPhone maker's Asia suppliers in particular. Apple stock ended up around 0.4% on Friday but lost around 6% for the week.
But with Apple just days away from launching its next iPhone model, some analysts have soured on the stock — meaning its plunge may not be over yet. At the same time, Samsung is positioning its new Galaxy foldable smartphones as key contenders to take market share from the iPhone.
Wall Street ended a shortened week with all three major indexes posting slight gains at the closing bell on Friday. But the modest wins were not enough to recover from a tough week of losses. Uncertainty over the future of the Fed’s interest rate policy still weighs heavily on investors.
The S&P 500 (^GSPC) edged higher by about 0.1%, while the Dow Jones Industrial Average (^DJI) increased 0.2%, or 77 points. The tech-heavy Nasdaq Composite (^IXIC) increased by about 0.1%. Friday was the only winning day for the S&P and the Nasdaq, ending a losing streak for both indexes.
Analysts at Bank of America are growing less concerned about the challenges posed by student loan repayments, which are set to restart next month. A spike in deposits at the Department of Education in August suggests that borrowers are paying down their principal, now that the period of forbearance has ended, the analysts said.
“In our view, the premature spike in repayments in August suggests that borrowers were largely prepared for the resumption in repayments and have probably made the required adjustments to spending. This is in line with our expectations and is good news because it means that there is less downside risk to spending going forward.”
But the analysts did caution that those proactive borrowers are likely those who are in the best financial situation. How the repayments will impact less prepared borrowers remains to be seen.
So far more than 4 million student loan borrowers have enrolled in the new income-driven repayment plan that the Biden administration touts as “the most affordable ever.”
The iPhone maker’s stock has shed more than 5% in the last few days, registering its biggest back-to-back slide in 10 months. The losses add up to about a $200 billion slice in market capitalization, after Chinese officials reportedly asked government employees to stop using the company’s signature smartphones at work.
But even as China represents about one-fifth of Apple’s revenue, Morgan Stanley analyst Erik Woodring wrote Friday that the alarming headlines were overblown and that “the stock move is overdone.”
Santosh Rao, the Head of Research at Manhattan Venture Partners, echoed those sentiments, telling Yahoo Finance Live that even if the government ban is enforced, the number of devices that would be banned is only a tiny sliver of Apple’s footprint. But he did say the move signals an escalation of tensions between China and other countries, as Beijing attempts to warn other nations against restricting tech exports and placing limits on Chinese technology. “Materialy, in terms of dollars and sense I don’t see any impact near term,” he said. “Down the road, ok, let’s see when that happens.”
The alarming slowdown in China that has sent waves of anxiety through US markets is not just a cyclical downswing, but reflects broader shifts in worsening demographics and the dire consequences of a deflating housing bubble.
That’s the argument from Apollo Global Management’s chief economist Torsten Slok, whose worrisome outlook amplifies a wave of recent news headlines and analysis that forecast an end to China’s 40-year boom once regarded as an “economic miracle.”
An array of economic data bolsters Slock’s argument. While housing makes up roughly one-quarter of the country’s GDP, the real estate market is cooling across 70 major cities. Youth unemployment is high and rising, with roughly 1-in-5 workers aged 16 to 24 out of a job. And while in 2000 there were 10 workers for every retiree, today there are only 5, according to the analysis.
The nation’s shifting demographic are weighing on China’s economic prospects. After spiking in the mid-1990’s, population growth in urban areas has slowed, with a pronounced drop in the covid-era, heading toward zero. Another red flag for the economy: the share of the population that is above working age, at 60 years and older, will approach 50% in the next decade.
Here are some of the stocks leading Yahoo Finance’s trending tickers page in afternoon trading on Friday:
Block: (SQ): Shares of the payment processing company fell more than 5% Friday afternoon following widespread outages Thursday and Friday that left businesses unable to process credit-card payments or access their accounts. Square said early Friday that “services are steadily regaining their functionality.”
SnowFlake (SNOW): The cloud-based data storage and analytics service rose by more than 3% after DA Davidson initiated coverage with a Buy rating and a $200 price target, suggesting the stock could rise another 20% from its current level.
Docusign (DOCU): Docusign (DOCU): The company lost more than 2% Friday afternoon after popping initially when it reported better-than-expected quarterly results on Thursday after the bell. The company also raised its full-year revenue outlook, while also expanding its buyback program by $300 million.
Coinbase (COIN): The crypto exchange advanced by 0.5% after announcing a new phase of its international expansion, with a focus on acquiring licenses and registering and establishing operations in markets that the company sees as providing clarity on rules of the road. Those markets include Europe, Canada, Brazil and Australia.
Wall Street clung to modest gains during the afternoon session as investors continue to digest the latest comments from Fed policymakers hinting at keeping interest rates unchanged in an effort to bring inflation back to its 2% target.
The S&P 500 (^GSPC) edged higher by about 0.3%, while the Dow Jones Industrial Average (^DJI) gained 0.2%. The tech-heavy Nasdaq Composite (^IXIC) increased 0.3%.
Facing higher interest rates and a funding environment that’s dried up in the wake of the pandemic, American venture capitalists and private equity funds are looking elsewhere for money: the energy-rich monarchies of the Middle East.
The appeal of overseas funding comes as investor appetite in the US has dwindled. Investors put $33 billion toward US-based venture capital funds in the first half of this year, according to PitchBook. That’s less than half the $74 billion in the same period in 2021, during the heady days of the pandemic when interest rates were far lower.
Flush with cash from an energy boom, the Middle East’s sovereign-wealth funds are drawing new partnerships, the Wall Street Journal reports, as traditional sources of funding including pension plans and college endowments are in retreat as higher interest rates drove losses in their portfolios.
The new financial relationships clash with an earlier period when American finance executives pulled back from relations with Saudi Arabia after the murder of journalist Jamal Khashoggi. Some executives continue to regard the kingdom as a toxic place to do business and as human-rights groups say its treatment of government dissidents remains a serious problem
The troubled crypto industry received a shot of optimism as Coinbase unveiled plans for expansion abroad. Chief executive Brian Armstrong told Yahoo Finance Live in an interview on Thursday that the crypto exchange has no plans of leaving the US, but that the American company will advance its “multinational reach.”
For years crypto companies have operated in a legal gray area in the US. More recently that ambiguity has crystallized into a crackdown by regulatory watchdogs in lawsuits, investigations and heightened enforcement actions. Armstrong said the company is looking to expand into markets where clear rules are already taking hold, which would relieve some of the pressure that Coinbase faces on its home turf. Some priority markets include Europe, Canada, Brazil and Australia.
Armstrong highlighted the tension between industry players and US regulators by saying that it “would certainly help” if Gary Gensler, the head of the SEC, were no longer in charge. But he added that he expects the uncertainty in the US to find resolution eventually, either through the courts or new laws written by Congress.
Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday.
DocuSign (DOCU): The electronic signature company shed some of its gains from earlier in the week after reporting better-than-expected quarterly results. The company also raised its full-year revenue outlook, while also expanding its buyback program by $300 million.
Coinbase (COIN): The crypto exchange rose 0.09% after announcing a new phase of its international expansion, with a focus on acquiring licenses and registering and establishing operations in markets that the company sees as providing clarity on rules of the road. Those markets include Europe, Canada, Brazil and Australia.
Kroger (KR): The stock rose more than 4% morning trading even as it missed same-store sales estimates and posted a net loss in the quarter related to a nationwide opioid settlement. Kroger is also planning to merge with rival Albertsons Companies (ACI).
Qualcomm (QCOM): Shares in the world’s biggest supplier of smartphone chips ended a painful slide after the company suffered its worst stock decline in a month as developments in China are threatening the company’s sales.
Wall Street rang in the day just above the flat line as investors parsed the latest comments from Fed policymakers hinting at keeping interest rates unchanged in an effort to bring inflation back to its 2% target.
The S&P 500 (^GSPC) edged higher by 0.02%, while the Dow Jones Industrial Average (^DJI) increased 0.02%, or 7 points. The tech-heavy Nasdaq Composite (^IXIC) advanced 0.2%, setting the major averages up for a modest win to wrap the week.
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