Wall Street steady, Bitcoin rebounds, ASX set for flat start
Stan Choe
The US stock market remains relatively stable as both bond yields and Bitcoin stabilize.
The S&P 500 rose 0.2 percent, its first loss in six days. The Dow Jones rose 116 points (0.2 percent), while the Nasdaq composite increased 0.3 percent.
The Australian share market is poised for a flat start, with futures pointing to a 1 point loss at the open. The ASX gained 0.2 per cent on Tuesday.
MongoDB led the market, rising 23.2 percent after the database company posted stronger results than analysts expected in the latest quarter. United Natural Foods also climbed, rising 9.2 percent, after reporting stronger-than-expected profit.
They helped offset a 5.4 percent decline for Signet Jewelers, which gave a revenue forecast that fell short of analysts’ expectations during the holiday shopping season. The jeweler said it expects a “restrained consumer environment.”
Another potential warning about the power of U.S. consumers came from the chief financial officer of Procter & Gamble, the giant behind Tide detergent, Ivory soap and Oral-B toothbrushes. Andre Schulten said the situation for U.S. consumers is “fluid” at the moment, but still within the company’s expectations. Procter & Gamble fell 2.9 percent.
The U.S. economy is holding up overall, but that masks sharp divisions beneath the surface. Low-income households are still struggling with inflation that is much higher than anyone would want. Wealthier households, meanwhile, are benefiting from the stock market being within 1 percent of its all-time high set in late October.
In the bond market, Treasury yields were calming after the previous day’s rise. The 10-year yield remained at 4.09 percent late Monday, while the two-year yield fell to 3.51 percent from 3.54 percent.
Higher yields can cause prices to fall for all types of investments, and those seen as the most expensive may take the biggest hit.
Bitcoin, which fell below $85,000 on Monday as bond yields rose around the world, rose above $90,000. This helped shares of many crypto-related companies recover after sharp declines on Monday.
The strategy rose 4.9 percent, more than making up for Monday’s loss. Coinbase Global gained 3.2 percent and Robinhood Markets rose 2.1 percent, recouping most of the previous day’s declines.
Monday’s rise in yields came after the Bank of Japan hinted it might raise interest rates soon. But hopes remain high that the Fed will cut its key interest rate at its meeting in Washington next week.
However, it is unclear what will happen next for the Fed. The Fed has already cut its overnight interest rate twice this year in hopes of supporting a slowing job market. But low rates could push inflation higher, and inflation has remained stubbornly above the Fed’s 2 percent target.
Making things even more complicated is the earlier U.S. government shutdown, which delayed reports on the job market and other areas of the economy.
Investment giant Vanguard said its data showed the US labor market “remains stable but still soft compared to last year.”
Overall hiring numbers are trending slower month over month. But fewer workers are pursuing new job opportunities as immigration declines and retirements rise, according to Adam Schickling, senior U.S. economist at Vanguard. This means hiring doesn’t need to be as strong as it has been in the past to keep the unemployment rate steady.
In foreign stock markets, indices moved moderately in most of Europe and Asia.
South Korea’s Kospi was an outlier, making one of the world’s biggest moves, rising 1.9 percent. Technology stocks led the way, including a 2.6 percent gain for Samsung Electronics and a 3.7 percent gain for chip company SK Hynix.
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The Market Summary newsletter is a summary of the day’s transactions. Let’s each take ittoday afternoon.
