Here are the most important news, trends and analyzes from which investors should start their trading day:
1. Futures are falling as the S&P 500 is ready to fall back into a bear market
Traders are working on the floor of the New York Stock Exchange (NYSE) on June 10, 2022 in New York.
Spencer Platt Getty Images
US stock futures sank on Monday after the worst week on Wall Street since January. Bond yields rose as investors prepared for the Federal Reserve to raise interest rates later this week after hotter-than-expected consumer inflation data on Friday. The Dow Jones Industrial Average is expected to open 500 points, or 1.7%, on Monday, sinking further into correction. The S&P 500 and Nasdaq look set to open at 2% and 2.7%, respectively, with previous tracking re-entering the bear market and testing this year’s low of 3,810.32 last month. The Nasdaq has been mired in a bear market since March.
2. Rising bonds lead to bad stocks such as fears of a growing recession
The yield on 2-year bonds on Monday reached its highest level since 2007, trading around 3.16%. At one point, the 2-year yield briefly turned and surpassed its 10-year counterpart for the first time since April. The so-called inversion of the yield curve is considered as an indicator of recession. The 10-year reference yield later jumped to 3.26%. The 5-year yield of about 3.4% was higher than the 10-year and 30-year yields of approximately 3.3%. Short-term yields have risen more over the past few days due to their higher sensitivity to rising Fed interest rates.
3. The Fed is expected to raise interest rates by 0.5% this week, but markets want more
The Fed is scheduled to hold its meeting in June on Tuesday and Wednesday, with an increase of 0.5% expected. Anything more than that would be a surprise, but it was believed in the markets that central bankers would have to become even more aggressive to curb inflation. The Fed is in a difficult situation, trying to cool things down with tighter monetary policy, while trying not to turn the economy into recession. Ahead of the Fed’s political decision, Wall Street will review Tuesday’s producer price index and retail sales data on Wednesday to put in context last week’s hottest report on consumer inflation.
4. Bitcoin falls below $ 24,000 as the entire crypto market sells out
Bitcoin fell 14 percent to below $ 24,000 on Monday, reaching its lowest level since December 2020 as investors dumped crypto into a wider sell-off of risky assets. He also raised concerns that a cryptocurrency company called Celsius had paused withdrawals for its customers. Over the weekend and Monday morning, the value of the entire cryptocurrency market fell below $ 1 trillion for the first time since February 2021, according to CoinMarketCap. The cryptocurrency market has also been on the brink since mid-May, when the so-called algorithmically stable terraUSD coin and its sister coin luna collapsed.
5. The first electric vehicle manufacturer after SPAC declares bankruptcy
Electric car startup Electric Last Mile Solutions said late Sunday that it plans to file for Chapter 7 bankruptcy protection less than a year after it became public by merging a special purpose vehicle. The public offering of ELMS at the end of June 2021 came amid a wave of deals with SPAC that made public electric car manufacturers. The company is the first electric vehicle maker since SPAC to declare bankruptcy. In February, chairman and founder Jason Luo and then-CEO Jim Taylor left after an internal investigation found the company’s previous financial statements unreliable.
– Register now for CNBC Investing Club to follow every movement of Jim Kramer’s shares. Follow broader marketing activities as a professional at CNBC Pro.
Add Comment