5 things to know before the stock market opens on Tuesday, June 14

Here are the most important news, trends and analysis investors need to start their trading day:

1. Wall Street rallies after S&P 500 officially closes in bear market

Traders on the NYSE, June 13, 2022.

Source: NYSE

US stock futures bounces after Tuesday’s lower inflation report and what could be a Federal Reserve interest rate hike on Wednesday. The S&P 500 in Monday officially closed in bear market territory, defined as a decline of 20% or more from the previous high, in January. The broad market index also hit a new low for the year.

  • Monday’s sharp sell-off saw the S&P 500 lose 3.9% and Nasdaq – has been in a bear market since March – down 4.7%. The Dow down 876 points, or 2.8%. The 30-stock average continues to fall into a correction, down 17% from a record high in January. A correction is defined as a decline of 10% or more from the previous high. All three stock benchmarks have fallen for four straight sessions.

2. 10-year Treasury yields retreat to 2011 highs after inflation data cools

The 10-year Treasury yield on Tuesday was against a 2011 high, trading about 3.3%after the government’s producer price index in May rose 10.8% year-on-year, a slightly smaller increase than expected. PPI is the other side of the inflation currency at the wholesale level, after the consumer price index was hotter than expected last week. The PPI remains near its yearly historic high of 11.5% gain in March.

3. Fed will start two-day meeting and market now expects 0.75% rate hike

US Federal Reserve Chairman Jerome Powell discusses rate hikes during a press conference in Washington, DC, on May 4, 2022.

Xinhua News Agency / Getty

The market expects The Fed will raise interest rates by 0.75% at the end of its two-day June policy meeting on Wednesday. Only the magnitude of the rate hike matters, as Fed Chairman Jerome Powell has repeatedly said that a 0.5% increase in June and July is appropriate.

  • After the Fed’s May meeting, which saw interest rates rise by 0.5%, Powell took 0.75% off the table.
  • But a lot has changed since then with a stock market sell-off and a rise in bond yields, and another recession signaling 2-year yields and an inverse of 10-year yields.
  • Markets fear the Fed will have to curb the economy much harder to combat inflation and that it could lead to a recession.

4. Coinbase lays off 18% of full-time jobs; bitcoin plunges again

Coinbase reported a 27% drop in revenue in the first quarter due to a drop in usage of the platform.

Chesnot | beautiful pictures

Cryptocurrency Exchange Coinbase will cut full-time jobs by 18 percent, according to an email sent to a third employee. CEO Brian Armstrong pointed to a possible recession, the need to manage costs and “too fast” growth in a bull market. Shares of Coinbase fell 7% in the money markets after closing down 11.4% on Monday. In the wake of Tuesday’s money market slump, stocks are down 79% against bitcoin so far, and the entire crypto market has sold off in 2022.

  • Bitcoin briefly fell below $21,000 overnight in Asia before recovering slightly again. Crypto Assets has been forged Monday as interest grows about C-lending platform and crypto exchange Binance briefly halted withdrawals. Bitcoin, trading around $22,000 early Tuesday, is down about 68% from its all-time in November.

5. Oracle surges as database software giant beats earnings, revenue

A sign hangs in front of Oracle headquarters on June 13, 2022 in Redwood Shores, California.

Justin Sullivan | beautiful pictures

Oracle Shares rose 11% in money markets on Tuesday morning after the database software company released fiscal fourth-quarter earnings and revenue. exceed estimate. Revenue rose 5% to $11.84 billion from a year earlier, fueled by growth in the company’s cloud infrastructure business, which competes with Amazon Web Services and Microsoft Azure.

  • Oracle CEO Safra Catz said in a statement, “We believe this spike in revenue growth shows that our infrastructure business has now entered a period of super growth. speed.” Oracle’s earnings review is especially important as investors focus on companies that can generate profits and cash during a downturn. Before the after-hours gain, Oracle stock was down 27% for the year.

– by CNBC Sarah Min, Samantha Subin, Fred Imbert, Jeff Cox, Abigail Ng, Kate Rooney and Ari Levy contributed to this report.

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