An Hour Ago
European markets open modestly higher
European markets opened modestly higher Tuesday, seemingly brushing off concerns over oil price rises following a surprise production cut by the OPEC+ alliance.
The pan-European Stoxx 600 index was up 0.4% at the start of trade, with all major bourses and sectors trading in the green. Mining stocks led gains with a 1.2% uptick, followed by bank stocks, which were up 0.8%. Oil and gas stocks were up 0.4%.
— Hannah Ward-Glenton
3 Hours Ago
Australia’s central bank keeps rates unchanged at 3.6%
The Reserve Bank of Australia has held its its benchmark interest rate at 3.6%.
“The decision to hold interest rates steady this month provides the Board with more time to assess the state of the economy and the outlook, in an environment of considerable uncertainty,” the central bank said in its statement.
This marks the first halt in the RBA’s hiking cycle since it started raising rates in April 2022.
The Australian dollar weakened following the move to 0.6782 against the U.S. dollar.
– Lim Hui Jie
9 Hours Ago
A recession coming ahead as the full effects of rate hikes loom, says Evercore’s Julian Emanuel
Evercore expects an economic downturn this year as the effects of the Federal Reserve’s tightening monetary policy continue to ripple through the economy.
“If you think about it, [we’ve had] a year’s worth of tightening. … If you think about all that tightening to us, [right now] is likely only the beginning of the effects of the tightening, rather than the end of it,” Evercore ISI’s senior managing director Julian Emanuel said on CNBC’s “Fast Money.”
“We do think there’s probably more to come—and in that respect, we’re going to have a recession, even if it’s mild, as we expect. We think stocks will bear the brunt of it,” Emanuel continued.
Emanuel anticipates that companies will see their earnings soften in the second quarter of 2023, which could potentially call into question the Nasdaq’s strong year-to-date rally. The tech-heavy index has jumped 17.3% in 2023.
He mentioned that Evercore has added small-cap stocks to its portfolio today as a defensive play in the current market.
“Small caps actually have a larger-than-normal weighting towards the more defensive sectors, including healthcare and energy — which we think makes a lot of sense right here,” Emanuel said.
“Basically what it does is it gives you the put-option protection through high free cash flow. If the economy turns down as we expect —or importantly, if there’s a credit crunch —you’re protected with free cash flow, and then the call optionality part of it is in an environment where earnings estimates have been coming in across the broad spectrum of stocks. These stocks are still having upward revisions. That’s a good thing,” added Emanuel.
See Chart…
Nasdaq Composite
5 Hours Ago
JPMorgan says OPEC+ move to cut supply targets is ‘preemptive’
JPMorgan analysts said that the move by OPEC+ was a “preemptive” move and that it had expected similar measures to come earlier.
“We view the current reduction in supply as a preemptive measure, assuring that surpluses that started accumulating in the global oil market since mid-2022 don’t extend into the second half of 2023 as the global economy slows following almost 400 bps of cumulative hikes since 2022,” analysts including Natasha Kaneva wrote in a late Sunday note.
Contrary to Goldman Sachs that raised its forecast for Brent oil rising to $95 per barrel by December 2023, JPMorgan said their forecast remains unchanged at $89 in the second quarter of this year – rising to $94 by the fourth quarter of 2023 and ending the year at $96 per barrel.
– Jihye Lee
10 Hours Ago
Stock futures open flat
Stock futures were little changed to begin trading Monday evening.
Dow Jones Industrial Average futures inched down by 30 points or 0.09%. S&P 500 futures slipped by 0.08%, and Nasdaq 100 futures dipped by 0.14%.
In regular trading the Dow rose 327 points, or 0.98%, and the S&P 500 added 0.37%. The Nasdaq Composite slid 0.27%.
— Tanaya Macheel
