U.S. stocks rose on Monday, steadying after last week’s strong gains, as investors awaited minutes from the Federal Reserve’s latest policy meeting, as well as the central bank’s Jackson Hole symposium, for clues on future monetary policy.
By 09:35 ET (13:35 GMT), the index was up about 90 points, or 0.2%, trading up about 9 points, or 0.2%, and up about 8 points, or 0.1%.
Recession Chances Decline
Wall Street’s main indexes had their best week this year last week, as recent positive data eased concerns about a possible recession.
This rise comes after a turbulent start to the month following a disappointing reading in July.
However, the employment index rebounded in July, with the employment component entering expansion territory for the first time since November 2023, economists noted.
Moreover, retail sales in July exceeded expectations, indicating strong growth in real consumption, and have declined over the past two weeks.
Goldman Sachs has revised the probability of a U.S. recession within 12 months to 20% from 25%, citing recent economic data that shows no signs of slowing.
The increase was placed midway between the long-run average probability of a recession of 15% — based on a historical recession occurring every seven years — and the 35% estimate during the banking turmoil in early 2023.
Investors will be focused this week on the latest Federal Reserve meeting, which is scheduled for Wednesday, ahead of Fed Chairman Jerome Powell’s speech on Friday.
Earnings season will continue
Earnings season continues this week, with results due from cybersecurity company Palo Alto Networks (NASDAQ:) and retailer goal Shares of Nike Inc. (NYSE:) and home improvement chain Lowe’s (NYSE:) are expected to continue to rise during the week.
Advanced Micro Devices (NASDAQ:) shares fell 0.4% after the chipmaker said it plans to acquire server maker ZT Systems for $4.9 billion, expanding its portfolio of artificial intelligence chips and devices.
B. Riley Financial (NASDAQ:) stock fell more than 6% after falling more than 65% last week following its warning about the negative impact of its investment in Vitamin Shoppe owner Franchise Group (NASDAQ:)
The latest Bank of America survey of fund managers showed a decline in the percentage of investors who are overweight in stocks, falling to 31% from 51%.
The survey also highlighted that 40% of CIOs are calling on CEOs to improve their companies’ balance sheets. Despite the ongoing boom in AI, the desire to increase capital spending has fallen to 24%, the lowest level since November 2023.
Crude looks ahead to Gaza ceasefire talks
Crude oil prices steadied on Monday as traders digested the resumption of ceasefire talks in the Middle East.
By 09:35 ET, West Texas Intermediate (WTI) futures were up 0.1% at $75.61 a barrel, while contracts remained largely flat at $79.65 a barrel.
Both benchmarks fell about 2% late last week after data from China showed its economy lost momentum in July, with new home prices falling at the fastest pace in nine years, industrial production slowing and unemployment rising.
All eyes are now on Gaza ceasefire talks, which are set to continue this week in Cairo, after a two-day meeting in Doha last week.
US Secretary of State Antony Blinken said on Monday that Washington’s latest diplomatic efforts to reach a ceasefire agreement in Gaza are “perhaps the best and perhaps the last chance” and urged all parties to reach the agreement.
The urgency for a ceasefire agreement has grown amid fears of escalation across the region, which could affect supplies from the oil-rich region.
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