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CNBC
5 days ago
- Business
- CNBC
Wall Street's ‘fear gauge' says there's nothing to fear
The Street might have gotten another all-clear signal to keep buying. The Cboe Volatility Index (VIX) , known to many as Wall Street's fear gauge, had its lowest close of the year on Wednesday, ending the day at 14.49. That was its lowest closing level since late December. The VIX measure is calculated through the pricing of S & P 500 options. When the VIX is elevated, it signals investors expect the broader market to see wilder swings over the next 30 days. When it declines, it usually points to smoother sailing ahead for the market — which often sets up stocks for a move higher. .VIX YTD bar VIX year to date What's driving this latest move lower in the VIX? Expectations of Federal Reserve rate cuts have a lot to do with it. The CME Group's FedWatch tool points to a 96.5% chance that the central bank will cut its overnight rate next month. Traders are also pricing in two more rate cuts after that. That's not only assuaged investor concerns, as reflected by the VIX; it's also reawakened "animal spirits" on the Street. Goldman Sachs this week advised clients to buy call options on stocks with high retail participation, some of which can be categorized as "meme stocks." The presence of these animal spirits was also shown in Paramount Skydance . The stock on Wednesday had its best day ever, soaring 37%. There was no obvious catalyst for the move, yet the movie studio and CBS television parent had its biggest volume day since March 2021, with some 133.7 million shares traded. PSKY 5D mountain PSKY 5-day chart To be sure, contrarians will argue this is the calm before the storm. Before this week, the VIX hadn't closed below 15 since Feb. 14. The S & P 500 then closed at 6,144 on Feb. 19, a record at the time. What ensued in the weeks ahead was a sell-off that nearly knocked the benchmark index into a bear market. Andrew Brenner of NatAlliance Securities also noted that commodity trading advisors, or CTAs, who bet on broad market trends, are "at the 94% Percentile of being long equities." "With everyone near all in, who is left to buy?
CNBC
01-08-2025
- Business
- CNBC
Kelly Evans: Everything looks different now
The jobs report this morning is worthy of a quick comment. It's one thing when you get a surprisingly weak number that breaks from a decent trend. We all know the month-to-month data can be volatile, noisy, subject to revisions, and so forth. It's quite another when you get a report that , which is exactly what just happened. The Labor Department this morning said the U.S. added just 73,000 jobs last month. Fine. Not great, but not a disaster at first glance. Then you read the details. June went from showing we added 147,000 just 14,000! Same for May: from 144,000 to just 19,000! Revisions of this size and duration are highly unusual ("If Trump wants to focus his anger somewhere...[try] the Labor Department," quipped Andrew Brenner of Natalliance). These readings are now barely above the flat-line. The three-month average for job growth is now a measly 35,000, as Peter Boockvar of One Point BFG points out--a huge deceleration from the pre-Liberation-Day trend. It's always noteworthy when the anecdotal reports start to diverge from the government data, and that has certainly been happening in recent months. From the poor job market for new grads, to the friends I know in private equity looking for jobs, to the cautious tone we heard throughout earnings season (aside from AI), it has seemed that the labor market is slowing. Now, the official data suddenly confirm that. It's a huge migraine for the Federal Reserve, which literally just 36 hours ago left rates unchanged, but probably would have cut if they knew this was happening (as the two dissenters wanted). This trend is much worse than the 82,000 three-month average last year that precipitated their half-point September rate cut. Adding to their migraine is the fact that we also got worse inflation news this week. The Fed's preferred gauge, "PCE," hit 2.6% last month, up from 2.2% in April. Core prices were even higher, up 2.8% year-on-year. With GDP growing just 1.25% in the first half of the year, as Boockvar notes, this is an economy that now looks much more "stagflationary" than it did a week ago--just as the president's new tariffs take effect. The only reason stocks aren't down more is (a), because rates are down and cuts now seem more likely, and (b), the AI trade remains solid, as we saw with Meta and Microsoft's results this week. The 10-year Treasury yield, a benchmark for mortgage rates, is down to 4.25%, versus 4.5% a couple of weeks ago, which is keeping housing stocks in the green today. The cherry on top of this sour data cocktail is the ISM manufacturing report that just hit the wires. Their index fell to 48, a sign the sector is further contracting, from 49.5 the prior month. That pushed the Dow from a drop of about 500 points to more than 700 as of this writing. For now, the data are lining up to confirm a "tariff shock" has impacted the economy. It's not to the point of being recessionary, per se, but the fact that we're even talking about that again tells you how much things have just changed. Until next time! Kelly Twitter: @KellyCNBC Instagram: @realkellyevans
Yahoo
26-06-2025
- Business
- Yahoo
US Treasuries Poised for Third Week of Gains on Rate-Cut Bets
(Bloomberg) — US Treasuries were headed for a third week of advances, rallying on Thursday after economic data releases reinforced bets that the Federal Reserve will cut interest rates at least twice this year. US Renters Face Storm of Rising Costs Philadelphia Transit System Votes to Cut Service by 45%, Hike Fares Mapping the Architectural History of New York's Chinatown Squeezed by Crowds, the Roads of Central Park Are Being Reimagined US State Budget Wounds Intensify From Trump, DOGE Policy Shifts The move pushed down yields across maturities, with most tenors falling to the lowest level in more than a month. A Bloomberg Treasuries index has returned about 0.6% for the week. 'We're going to continue to rock and roll for a few reasons, in terms of lower yields,' said Andrew Brenner, head of international fixed income at NatAlliance Securities. 'There's a real fear out there that the unemployment number a week from today is going to be a lot weaker. We'll have month-end on Monday which could see some reallocation from equities to bonds.' Traders are turning their attention to the jobs report as it will provide a key data point ahead of the Fed's meeting later in the month. They are already fully pricing in two cuts by year-end, starting in September, and wagers on a third quarter-point reduction could gain momentum if the number is weak. On Thursday, the growth rate for personal spending during the first quarter — part of a revision to US first-quarter gross domestic product — was unexpectedly revised to 0.5% from 1.2%. Other economic data points — including fewer-than-expected initial jobless claims — showed unexpected strength. Short-dated bonds — which are more tied to the outlook for Fed policy — gained the most following the release, with two-year yields dipping seven basis points to 3.71% by the end of the session. The widely watched spread between the five- and 30-year points increased to more than 101 basis points for the first time since 2021 and a $44 billion auction of seven-year notes was well received. A steepening yield curve is generally associated with expectations for Fed rate cuts. Some bonds were already gaining before the economic data releases following a report in the Wall Street Journal suggesting President Donald Trump is considering naming a successor to Fed chief Jerome Powell as soon as September or October. 'Today's data showed further weakness,' said Tracy Chen, a portfolio manager at Brandywine Global Investment Management. In addition, the potential early announcement of the next Fed Chair 'and perceived less Fed independence will likely contribute further to the steepener move.' Investors and analysts reckon Powell's replacement will grant the president's demands that the Fed cut interest rates right away causing traders to price in faster and deeper cuts beginning around mid-2026, when Powell's term ends. Fed Governors Christopher Waller and Michelle Bowman in the past week have signaled they'd be open to lowering rates as soon as the next meeting. 'Waller and Bowman pushing for early rate cuts has helped the front end to rally, with the curve steepening in the process,' said Mark Dowding, chief investment officer of the BlueBay Fixed Income unit at RBC Global Asset Management. 'Trump's move to announce a Fed Chair early can increase political pressure on the Fed to cut rates and this is also a factor leading to a steeper curve.' Wagers on lower interest rates weighed on the dollar, which weakened against all of its Group-of-10 peers. The Bloomberg's Dollar Spot Index slumped 0.5% to the lowest level in more than three years. Michael Pfister, an FX analyst at Commerzbank AG, says the euro could climb to $1.18 in the coming days if policymakers continue to price in earlier rate cuts. Potential contenders to succeed Powell include former Fed Governor Kevin Warsh, current Fed Governor Christopher Waller, National Economic Council Director Kevin Hassett, former World Bank President David Malpass and US Treasury Secretary Scott Bessent, Bloomberg News has previously reported. Last week, US rates traders amassed a record futures bet that whomever Trump appoints will lead the central bank to cut interest rates almost immediately. In a Bloomberg Television interview, BlackRock Inc. portfolio manager Russell Brownback said the market would push back if the Fed's independence began to come into question. 'The markets would protest any kind of degradation of that independence very quickly,' he said. 'I believe in the sanctity of the institution.' —With assistance from Anya Andrianova, Alice Atkins, Ruth Carson and Ye Xie. How to Steal a House Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push America's Top Consumer-Sentiment Economist Is Worried Apple Test-Drives Big-Screen Movie Strategy With F1 Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags ©2025 Bloomberg L.P. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Globe and Mail
30-04-2025
- Business
- Globe and Mail
S&P Futures Tick Lower With U.S. GDP and PCE Inflation Data in Focus, Microsoft and Meta Earnings on Tap
June S&P 500 E-Mini futures (ESM25) are trending down -0.11% this morning as investors cautiously await a barrage of U.S. economic data, including the Fed's favorite inflation gauge and the first estimate of first-quarter GDP, as well as earnings reports from 'Magnificent Seven' companies Microsoft and Meta. In yesterday's trading session, Wall Street's three main equity benchmarks closed higher. SBA Communications (SBAC) climbed over +6% and was the top percentage gainer on the S&P 500 after raising its full-year revenue guidance. Also, Honeywell International (HON) advanced more than +5% and was the top percentage gainer on the Dow after the industrial conglomerate reported stronger-than-expected Q1 results and raised the lower end of its full-year adjusted EPS guidance. In addition, Cadence Design Systems (CDNS) rose over +5% and was the top percentage gainer on the Nasdaq 100 after the company lifted its full-year guidance. On the bearish side, NXP Semiconductors N.V. (NXPI) slumped more than -6% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the semiconductor firm announced a new chief executive officer and warned it was navigating 'a very uncertain environment' due to tariffs. A Labor Department report released on Tuesday showed that the U.S. JOLTs job openings fell to a 6-month low of 7.192M in March, weaker than expectations of 7.490M. Also, the U.S. Conference Board's consumer confidence index fell to a nearly 5-year low of 86.0 in April, weaker than expectations of 87.7. In addition, the U.S. February S&P/CS HPI Composite - 20 n.s.a. eased to +4.5% y/y from +4.7% y/y in January, weaker than expectations of +4.6% y/y. 'Many are still calling for a recession and even lower equity levels, but we think the 'Trump put' is real for equities while the 'Fed put' is real for the economy. And while tops and bottoms are hard to recognize as they are happening, we think the worst is behind us,' said Andrew Brenner at NatAlliance Securities. U.S. rate futures have priced in a 92.3% probability of no rate change and a 7.7% chance of a 25 basis point rate cut at May's monetary policy meeting. Meanwhile, U.S. President Donald Trump on Tuesday signed two executive orders intended to ease the impact of his auto tariffs, while his Commerce Secretary Howard Lutnick told CNBC that the U.S. had reached its first trade deal with an undisclosed country. First-quarter corporate earnings season rolls on, with investors looking forward to fresh reports from major companies today, including Microsoft (MSFT), Meta Platforms (META), Qualcomm (QCOM), Caterpillar (CAT), and KLA Corp. (KLAC). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +6.7% increase in quarterly earnings for Q1 compared to the previous year. On the economic data front, all eyes are on the Commerce Department's first estimate of gross domestic product, set to be released in a couple of hours. Economists, on average, forecast that U.S. GDP growth will stand at +0.2% q/q in the first quarter, compared to the fourth-quarter figure of +2.4% q/q. Investors will also focus on the U.S. core personal consumption expenditures price index, the Fed's preferred price gauge. Economists expect the core PCE price index to be +0.1% m/m and +2.6% y/y in March, compared to the previous figures of +0.4% m/m and +2.8% y/y. The U.S. ADP Nonfarm Employment Change data will be closely monitored today. Economists foresee the April figure coming in at 114K, compared to the March figure of 155K. U.S. Personal Spending and Personal Income data will be reported today. Economists anticipate March Personal Spending to be +0.6% m/m and Personal Income to be +0.4% m/m, compared to February's figures of +0.4% m/m and +0.8% m/m, respectively. The U.S. Employment Cost Index will be released today. Economists expect this figure to arrive at +0.9% q/q in the first quarter, matching the fourth quarter's figure. U.S. Pending Home Sales data will come in today. Economists forecast the March figure at +0.9% m/m, compared to the previous figure of +2.0% m/m. The U.S. Chicago PMI will be released today as well. Economists expect this figure to come in at 45.9 in April, compared to the previous value of 47.6. In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.161%, down -0.31%. The Euro Stoxx 50 Index is down -0.08% this morning as investors digest a wave of corporate earnings reports and key economic data from the region. Automobile stocks outperformed on Wednesday after U.S. President Donald Trump signed an executive order softening the impact of his auto tariffs. At the same time, mining stocks slumped, with Glencore Plc ( sliding over -4% after it reported a 30% drop in Q1 copper production. The benchmark index is on track for the second consecutive monthly drop. Eurostat data released on Wednesday showed that the Eurozone economy expanded at a quicker rate in the first quarter, supported by U.S. companies stockpiling imported goods ahead of anticipated tariff increases. Separately, preliminary data showed that France's annual inflation rate held steady in April, while Italy's annual inflation rate for April edged up slightly. Meanwhile, European Central Bank Governing Council member Gediminas Simkus said on Wednesday that he is a 'proponent of a 25-basis-points cut' at the central bank's next meeting in June. Investor focus is now on Germany's preliminary inflation data for April, due later in the session. In other corporate news, Societe Generale ( gained over +2% after reporting better-than-expected Q1 results. At the same time, Ssab Ab ( fell more than -4% after the Swedish steelmaker posted a 57% decline in Q1 operating profit. Germany's Retail Sales, Germany's Unemployment Change, Germany's Unemployment Rate, France's CPI (preliminary), Italy's CPI (preliminary), and Eurozone's GDP (preliminary) data were released today. The German March Retail Sales stood at -0.2% m/m, stronger than expectations of -0.4% m/m. The German April Unemployment Change arrived at 4K, stronger than expectations of 16K. The German April Unemployment Rate was 6.3%, in line with expectations. The French April CPI came in at +0.5% m/m and +0.8% y/y, compared to expectations of +0.4% m/m and +0.8% y/y. The Italian April CPI arrived at +0.2% m/m and +2.0% y/y, in line with expectations. Eurozone GDP has been reported at +0.4% q/q and +1.2% y/y in the first quarter, stronger than expectations of +0.2% q/q and +1.0% y/y. Asian stock markets today closed mixed. China's Shanghai Composite Index (SHCOMP) closed down -0.23%, and Japan's Nikkei 225 Stock Index (NIK) closed up +0.57%. China's Shanghai Composite Index closed lower today as investors digested weak PMI data from the country. Bank stocks led the declines on Wednesday. An official survey released on Wednesday showed that China's factory activity shrank at the fastest rate in 16 months in April, revealing initial harm to the world's second-largest economy from the trade war with the U.S. Also, a private measure of Chinese manufacturing activity showed a slowdown in April, though it remained in expansion territory for the seventh consecutive month. In addition, the non-manufacturing gauge showed that activity in construction and services expanded at a slower-than-expected pace. The readings heightened concerns over the wider economic impact of trade tensions and boosted expectations for stronger government stimulus. Earlier this week, the vice head of China's state planner promised the rollout of new policies over the second quarter. Meanwhile, Reuters reported on Wednesday that China has compiled a list of U.S.-made goods to be exempted from its 125% tariffs and is quietly informing companies about the policy, as Beijing looks to soften the impact of its trade war with Washington. U.S. President Donald Trump stated on Tuesday that he thought a trade deal with China was on the horizon. 'But it's going to be a fair deal,' he added. In corporate news, Industrial & Commercial Bank of China fell over -3% after the lender posted weak Q1 results. The Chinese April Manufacturing PMI stood at 49.0, weaker than expectations of 49.7. The Chinese April Caixin Manufacturing PMI came in at 50.4, stronger than expectations of 49.7. The Chinese April Non-Manufacturing PMI arrived at 50.4, weaker than expectations of 50.6. Japan's Nikkei 225 Stock Index closed higher today as trading resumed after a holiday. Sentiment was boosted by remarks from U.S. Treasury Secretary Scott Bessent, who said the administration held 'substantial talks' with Japan regarding a potential trade deal. Also, Japan's top trade negotiator, Ryosei Akazawa, stated that he aims to achieve steady progress in tariff talks with the U.S. He is set to travel to Washington later in the day to meet his counterparts for a second round of talks. Bank and electronics stocks led the gains on Wednesday. The benchmark index notched its first monthly gain since December. Meanwhile, data from the Ministry of Economy, Trade and Industry released on Wednesday showed that Japan's industrial production fell more than expected in March, signaling that manufacturers became cautious amid the U.S. tariff uncertainty. A separate government data release showed that retail sales growth in March came in below expectations. Investor focus now shifts to the Bank of Japan's monetary policy decision. The central bank is widely expected to keep its policy rate steady at 0.5% on Thursday, but it remains on a rate-hike path due to strong domestic fundamentals, according to Barclays economists. In corporate news, Sony Group climbed over +7% after Bloomberg reported that the group is considering spinning off its semiconductor unit. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -5.48% to 27.23. The Japanese March Industrial Production (preliminary) arrived at -1.1% m/m, weaker than expectations of -0.5% m/m. The Japanese March Retail Sales stood at +3.1% y/y, weaker than expectations of +3.6% y/y. The Japanese February Leading Index came in at 107.9, in line with expectations. Pre-Market U.S. Stock Movers Super Micro Computer (SMCI) tumbled over -14% in pre-market trading after the artificial intelligence server maker reported weaker-than-expected preliminary Q3 results. Snap (SNAP) plunged more than -13% in pre-market trading after the company declined to issue Q2 guidance due to economic uncertainty. Starbucks (SBUX) slid over -6% in pre-market trading after the coffee chain posted weaker-than-expected FQ2 results. You can see more pre-market stock movers here Today's U.S. Earnings Spotlight: Wednesday - April 30th Microsoft (MSFT), Meta Platforms (META), Qualcomm (QCOM), Caterpillar (CAT), ADP (ADP), KLA Corp. (KLAC), Equinix (EQIX), Trane Technologies (TT), Illinois Tool Works (ITW), Canadian Pacific Kansas City (CP), Aflac (AFL), Allstate (ALL), MetLife (MET), Public Storage (PSA), Crown Castle (CCI), Robinhood Markets (HOOD), Yum! Brands (YUM), Hess (HES), Public Service Enterprise (PEG), Garmin (GRMN), Prudential Financial (PRU), Cognizant (CTSH), Fannie Mae (FNMA), VICI Properties (VICI), Vulcan Materials (VMC), Tradeweb Markets (TW), Humana (HUM), eBay (EBAY), Martin Marietta Materials (MLM), Ventas (VTR), AvalonBay (AVB), American Water Works (AWK), ANSYS (ANSS), PPL (PPL), International Paper (IP), CGI Inc (GIB), Invitation Homes (INVH), Mid-America Apartment (MAA), EMCOR (EME), PTC (PTC), Gfl Environmental (GFL), Everest (EG), Sprouts Farmers (SFM), UDR (UDR), Western Digital (WDC), Lineage (LINE), Brookfield Infrastructure Partners (BIP), United Therapeutics (UTHR), Align (ALGN), Pilgrims Pride (PPC), Morningstar (MORN), Alamos Gold (AGI), Annaly Capital Management (NLY), Clean Harbors (CLH), XPO (XPO), SCI (SCI), Antero Resources Corp (AR), FTAI Aviation (FTAI), Penske Automotive (PAG), CH Robinson (CHRW), Lincoln Electrics (LECO), Globe Life (GL), DT Midstream (DTM), Host Hotels Resorts (HST), Stanley Black Decker (SWK), MGM (MGM), Evercore (EVR), Antero Midstream (AM), Confluent (CFLT), Norwegian Cruise Line (NCLH), Axis Capital (AXS), Parsons (PSN), Open Text (OTEX), National Fuel Gas (NFG), Albemarle (ALB), Generac (GNRC), Wyndham Hotels (WH), Wingstop Inc (WING), Waystar Holding (WAY), Guardant Health (GH), MGIC Investment (MTG), Clearway Energy (CWEN), The Hanover Insurance (THG), Credit Acceptance (CACC), Clearwater Analytics Holdings (CWAN), Oshkosh (OSK), Silgans (SLGN), Comstock Resources (CRK), Glaukos Corp (GKOS), Enact Holdings (ACT), Lancaster Colony (LANC), FMC (FMC), Siteone Landscape Supply (SITE), Reynolds (REYN), Etsy Inc (ETSY), Bausch + Lomb (BLCO), Ionis Pharma (IONS), Gates Industrial Corp (GTES), Timken (TKR), Independence Realty Trust Inc (IRT), Federal Signal (FSS), Cognex (CGNX), Spire (SR), Wex (WEX), Radian (RDN), Avnet (AVT), Bloom Energy (BE), Magnolia Oil (MGY), PureTech Health (PRTC).
Yahoo
21-03-2025
- Politics
- Yahoo
Ohio Senate Education Chair introduces bill that could close low-performing public schools
COLUMBUS, Ohio — JUNE 07: State Sen. Andrew Brenner, R-Delaware, speaks during the Ohio Senate session, June 7, 2023, at the Statehouse in Columbus, Ohio. (Photo by Graham Stokes for Ohio Capital Journal) A Republican bill that could automatically close low-performing Ohio public schools received no supporter testimony this week. Ohio Senate Bill 127 would revise Ohio's public school closure law and require a poor performing school to either close or take remedial action. Senate Education Committee Chair Andrew Brenner, R-Delaware, introduced the bill last month and no one submitted supporter testimony for the bill's second hearing this week. 'It is my hope that this bill will help to standardize the law surrounding school closures for public and community schools and help ensure that each student in Ohio receives the best education possible,' Brenner said to the Senate Education Committee earlier this month during his sponsor testimony. The bill defines a poor performing school as a school (district operated, community or STEM), serving grades four and older, that has performed in the bottom 5% among public schools based on its Performance Index Score for three consecutive years, and is in the bottom 10% based on its Value-Added Progress for three consecutive years. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX A poor-performing school would have the option to close at the end of the school year or replace its principal and a majority of licensed staff. Another option is the school could get the help of an Ohio Department of Education and Workforce management organization, charter management organization, education service center, or an Ohio public or private university with experience in school improvement. 'This bill leaves open many options, and so whatever option is probably in the best interest of the school district and those buildings and those students is what could be adopted,' Brenner said. The two Democrats on the Senate Education Committee — Sens. Catherine Ingram of Cincinnati and Kent Smith of Euclid — questioned Brenner about the bill. 'Do you have any idea how many schools this could potentially impact or how many districts this might impact?' Smith asked. Brenner didn't have an exact answer. He explained how 5% of the state's total school buildings would be about 180-185 schools. 'Have you run the numbers for academic performance, the performance index and the value added because it's got to be for three years?' Smith pressed. 'Do you have any idea is that number 185? Is it less?' Brenner said the actual number would likely be less than 185 since a school would have to be in both the bottom 5% among public schools based on their Performance Index Score for three consecutive years and in the bottom 10% based on its Value-Added Progress for three consecutive years to be considered poor-performing. 'You may have one year that they're better than that and outside of that zone,' Brenner said. 'So we don't have the exact numbers, but you do know what the maximum number potentially could be based on this, and this is based on the current situation in our schools.' Ohio charter schools are automatically closed if they have three straight years of poor performance. Brenner introduced a similar bill in the previous General Assembly, but it did not make it out of committee. Only one person testified in support of that bill with nearly 20 people speaking out against it. Follow Capital Journal Reporter Megan Henry on Bluesky. SUPPORT: YOU MAKE OUR WORK POSSIBLE
