The Tuesday Market Minute
- Nasdaq Hits Fresh Record High, Boeing pulls Dow lower as U.S. stocks face traditional September test.
- Global stocks ease from record highs amid COVID and Fed stimulus uncertainty, although China trade data provides sentiment boost.
- China’s August exports surge 25.6% to a record $294.3 billion, suggesting resilient global demand amid rising COVID infection rates.
- Soft August jobs report casts doubt on timing of Fed stimulus withdraw as Goldman Sachs trims GDP forecast.
- Oil prices slip as Saudi Aramco price cut offsets solid gains in China crude imports; U.S gas prices hold firm in the wake of Ida’s Gulf region damage.
Wall Street stocks traded mixed Tuesday as investors braced for what is typically the worst month of the year for stocks amid looming uncertainty over the pace of the global recovery and the path of the Federal Reserve’s stimulus withdraw.
Last week’s softer-than-expected employment report, which showed 235,000 new jobs were created last month, suggests a more muted pace of recovery over the final months of the year as the impact of government stimulus fades and Delta variant coronavirus infections continue to surge.
The modest gains, as well as forecasts of slower job gains the coming months as employers hold back investments amid COVID uncertainty, could delay the Fed’s plans to begin tapering the pace of its $120 billion in monthly bond purchases, a move that could also establish a new timeline for rate hikes that extends well into the middle of 2023.
Goldman Sachs, in fact, trimmed its 2021 GDP growth forecast by 30 basis points, to 5.7%, in the wake of both the August jobs report and a series of data releases that could suggest slower growth in the months ahead.
Global stocks got a modest boost from record China trade data, including a much stronger-than-expected 25.6% year-on-year increase in exports over the month of August and a $58.34 billion overall trade surplus, but the impact failed to keep European stocks in the green in the opening hours on trading.
On Wall Street, the Dow Jones Industrial Average fell 255 points at the start the trading day, while the broader S&P 500 was marked 18.8 points lower from Friday’s closing level of 4,535.43 points.
The Nasdaq Composite index, however, hit a fresh intra-day record high of 13,390.57 points before pulling back 12 points as benchmark 10-year note yields rose to 1.378%.
Match Group shares gained 6.5% to $158.00 each after the Tinder dating app operator was tabbed to join the S&P 500 benchmark later this month.
Procter & Gamble shares were also active, rising 0.1%, after analysts at Morgan Stanley picked the consumer brands group over Estee Lauder as its top bet in the household and personal care space.
Caesars Entertainment shares gained 1.15% after British gaming group 888 Holdings said Tuesday that its in advanced discussions to buy the group’s non-U.S. operations of bookmaker William Hill.
Boeing , meanwhile, fell 1.9% after European discount carrier Ryanair ended talks on the planned purchase of 10 737 MAX aircraft.
In other markets, bitcoin prices held firmly over the $50,000 mark Tuesday after El Salvador became the first country in the world to declare the cryptocurrency as legal tender.
El Salvador, a central American national that relies heavily on remittances from the United States to support its annual economic growth, purchased 400 bitcoin on Monday, taking prices to a multi-month high of $52,680 each on the Bitcoin exchange.
Oil prices slipped lower, however, after a weekend price cut on Asia deliveries by Saudi Aramco raised demand concerns that offset an 8% year-on-year gain in China crude imports imbedded in the country’s August trade data.
WTI contracts for October delivery were marked 42 cents lower at $68.51 per barrel while Brent contracts for November were seen 28 cents lower at $71.94 per barrel.
Overnight in Asia, Japan’s Nikkei 225 printed fresh three-decade high close of 29,291.14 points on extended bets that a new Prime Minister will usher in a new round of stimulus in the world’s third-largest economy, while the broader MSCI ex-Japan benchmark slipped 0.12% in muted regional trade.
This article was originally published by TheStreet.