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Economic Times
10 hours ago
- Business
- Economic Times
Wall Street Week Ahead-Investors eye US jobs data as stocks hit record highs
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Investors who have been captivated by recent geopolitical events are poised to shift their attention in the coming week to key economic data and policy developments to see if the torrid rally in U.S. stocks extends benchmark S&P 500 and Nasdaq Composite both tallied record highs on Friday for the first time in months, helped by optimism about interest-rate cuts and trade deals . Easing tensions in the Middle East also paved the way for the latest bump higher in stocks, as a conflict between Israel and Iran appeared to calm after missile strikes between the two nations had set the world on will shift to Washington in the coming week. President Donald Trump wants his fellow Republicans to pass a sweeping tax-cut and spending bill by July also get a crucial view into the U.S. economy with the monthly employment report due on Thursday. U.S. stock markets are closed on Friday, July 4, for the U.S. Independence Day U.S. economic surprise index has been weakening, indicating that data has been missing Wall Street expectations, said Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments."After some softer May data, the June data is really going to be under a microscope," Miskin said. "If the data deteriorates more, it may get the market's attention."U.S. employment is expected to have climbed by 110,000 jobs in June, according to a Reuters poll -- a slowdown from May's 139,000 on Thursday showed the number of Americans filing new applications for jobless benefits fell in the prior week, but the unemployment rate could rise in June as more laid-off people struggle to find work."The labor market right now is front and center over the next few weeks," said Brent Schutte, chief investment officer at Northwestern Mutual Wealth data could factor into expectations for when the Federal Reserve will next cut interest rates, with investors also watching to see if inflation is calming enough to allow for lower Chair Jerome Powell has been wary that higher tariffs could begin raising inflation, a view he told the U.S. Congress this week. Some Fed officials have talked about a stronger case for cuts. Trading of fed funds futures in the past week indicated ramped-up bets for more easing this level of tariffs could come into sharper view with a July 9 deadline for higher levies on a broad set of countries. U.S. Treasury Secretary Scott Bessent on Friday said trade deals with other countries could be done by the Sept. 1 Labor Day holiday, citing 18 main U.S. trading have rebounded sharply since plunging in April following Trump's "Liberation Day" tariff announcement, as the president pulled back on some of the most severe tariffs. This eased fears about a recession, but markets could remain sensitive to trade also will focus on the U.S. fiscal bill in Congress for indication of the extent of stimulus in the legislation and how much it could widen federal a roller-coaster first half nearly complete, the S&P 500 is up about 5% so far in 2025. Over the past 15 years, July has been a strong month for stocks, with the S&P 500 increasing 2.9% in July on average, Wedbush analysts noted in a report this U.S. corporate earnings season kicks off in the coming weeks, with concerns over how much tariffs may be biting into company profits or affecting consumer spending. S&P 500 earnings are expected to have climbed 5.9% in the second quarter from a year earlier, according to LSEG IBES data."We've been in a geopolitically focused market over the past several weeks," said Josh Jamner, senior investment strategy analyst at ClearBridge Investments. "I think the dawn of earnings season ... will refocus the market back towards fundamentals."
Time of India
10 hours ago
- Business
- Time of India
Wall Street Week Ahead-Investors eye US jobs data as stocks hit record highs
Investors who have been captivated by recent geopolitical events are poised to shift their attention in the coming week to key economic data and policy developments to see if the torrid rally in U.S. stocks extends higher. The benchmark S&P 500 and Nasdaq Composite both tallied record highs on Friday for the first time in months, helped by optimism about interest-rate cuts and trade deals . Easing tensions in the Middle East also paved the way for the latest bump higher in stocks, as a conflict between Israel and Iran appeared to calm after missile strikes between the two nations had set the world on edge. Focus will shift to Washington in the coming week. President Donald Trump wants his fellow Republicans to pass a sweeping tax-cut and spending bill by July 4. Investors also get a crucial view into the U.S. economy with the monthly employment report due on Thursday. U.S. stock markets are closed on Friday, July 4, for the U.S. Independence Day holiday. Citigroup's U.S. economic surprise index has been weakening, indicating that data has been missing Wall Street expectations, said Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments. Live Events "After some softer May data, the June data is really going to be under a microscope," Miskin said. "If the data deteriorates more, it may get the market's attention." U.S. employment is expected to have climbed by 110,000 jobs in June, according to a Reuters poll -- a slowdown from May's 139,000 increase. Data on Thursday showed the number of Americans filing new applications for jobless benefits fell in the prior week, but the unemployment rate could rise in June as more laid-off people struggle to find work. "The labor market right now is front and center over the next few weeks," said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management. Employment data could factor into expectations for when the Federal Reserve will next cut interest rates, with investors also watching to see if inflation is calming enough to allow for lower rates. Fed Chair Jerome Powell has been wary that higher tariffs could begin raising inflation, a view he told the U.S. Congress this week. Some Fed officials have talked about a stronger case for cuts. Trading of fed funds futures in the past week indicated ramped-up bets for more easing this year. The level of tariffs could come into sharper view with a July 9 deadline for higher levies on a broad set of countries. U.S. Treasury Secretary Scott Bessent on Friday said trade deals with other countries could be done by the Sept. 1 Labor Day holiday, citing 18 main U.S. trading partners. Stocks have rebounded sharply since plunging in April following Trump's "Liberation Day" tariff announcement, as the president pulled back on some of the most severe tariffs. This eased fears about a recession, but markets could remain sensitive to trade developments. Investors also will focus on the U.S. fiscal bill in Congress for indication of the extent of stimulus in the legislation and how much it could widen federal deficits. With a roller-coaster first half nearly complete, the S&P 500 is up about 5% so far in 2025. Over the past 15 years, July has been a strong month for stocks, with the S&P 500 increasing 2.9% in July on average, Wedbush analysts noted in a report this week. Second-quarter U.S. corporate earnings season kicks off in the coming weeks, with concerns over how much tariffs may be biting into company profits or affecting consumer spending. S&P 500 earnings are expected to have climbed 5.9% in the second quarter from a year earlier, according to LSEG IBES data. "We've been in a geopolitically focused market over the past several weeks," said Josh Jamner, senior investment strategy analyst at ClearBridge Investments. "I think the dawn of earnings season ... will refocus the market back towards fundamentals."
Yomiuri Shimbun
21-05-2025
- Business
- Yomiuri Shimbun
Moody's Downgrade Ripples through Bond Market, Causes Worries for Stocks
Reuters file photo Signage is seen outside the Moody's Corporation headquarters in Manhattan, New York, U.S., November 12, 2021. NEW YORK, May 20 (Reuters) – Moody's U.S. debt downgrade is raising concerns that investors could reevaluate their appetite for U.S. government bonds, with the potential for rising yields to put pressure on stocks that are trading at elevated valuations. Moody's decision to downgrade the U.S. debt rating by a notch late last week due to mounting government debt and rising interest expenses has rekindled fears of a broader investor reappraisal of U.S. sovereign debt, which could drive up borrowing costs across the economy. 'Every time something like this happens, investors just think maybe they should shift a little more out of the U.S.,' said Campe Goodman, fixed-income portfolio manager at Wellington Management Company. Benchmark 10-year yields, which influence mortgage rates as well as borrowing costs for companies and consumers, rose to over 4.5% early on Monday but the selloff then moderated. Yields move inversely to prices. On Tuesday, the bond market selloff continued, with the 10-year yield last seen at 4.48%, slightly above where it closed on Monday. Longer-dated 30-year yields rose more sharply, hitting a high of over 5% on Monday, the highest since November 2023, and flirting with that level again on Tuesday. Higher yields have repercussions for stocks, analysts and investors say, as they represent higher borrowing costs for companies as well as greater investment competition from fixed income. Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments, said a rise in 10-year yields beyond 4.5% could be a headwind for stocks. 'I think what markets are grappling with, is if the 30-year is breaking out, does that mean the rest of the curve is next?' Miskin said. Over the past few years, stocks have come under pressure during some instances when Treasury yields moved above 4.5%, with sharply rising yields often negatively correlated with stock performance. One prominent example is late 2023 when the S&P 500 slid sharply as the 10-year yield ascended to 5%. In a note on Monday, Morgan Stanley equity strategist Michael Wilson said 4.5% on the 10-year yield has been 'an important level' for equity market valuation over the past two years, with stocks tending to face valuation pressure when 10-year yields breach that threshold. The price-to-earnings ratio for the S&P 500, based on earnings estimates for the next 12 months, was at 21.7 as of Monday, well above its long-term average of 15.8, according to LSEG Datastream. Wilson, however, said while a break above 4.5% in the 10-year yield 'can lead to modest valuation compression … we would be buyers of such a dip,' he said in the note, citing the recent U.S.-China trade truce as positive for equity markets. The downgrade has come as Republicans in Congress seek to approve a sweeping package of tax cuts aimed at boosting economic growth that at the same time could add trillions to the $36 trillion U.S. public debt pile, exacerbating concerns highlighted by Moody's over the U.S. fiscal trajectory. It also follows a detente in the trade war sparked by President Donald Trump's imposition of tariffs on U.S. trade partners. While tariffs are largely seen as being a drag for the economy, a recent trade breakthrough with China had sparked market optimism that their impact would be more muted than feared. 'You move from fears of stagflation, which was low growth and tariff-led inflation, to a better growth backdrop but probably not a better inflation or fiscal backdrop, as you still have this big tax bill getting pushed through,' said Ross Mayfield, investment strategist at Baird. Federal Reserve officials on Monday said the Moody's downgrade could have repercussions for the U.S. economy by raising the cost of capital. The ratings cut was unlikely to trigger forced selling of Treasuries, as major fixed-income indices only require securities to maintain an investment-grade rating or have no specific sovereign rating guidelines, analysts at BofA Securities said in a note on Monday. Still, it could cause the yield curve to steepen, they said, with long-dated yields rising due to worsening investor sentiment around the long-term prospects of U.S. debt. 'There could be a time when the bond market gets quite worried that we're continuing to stimulate an economy that's not weak,' Goodman said.
Economic Times
21-05-2025
- Business
- Economic Times
Moody's downgrade ripples through bond market, causes worries for stocks
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Moody's U.S. debt downgrade is raising concerns that investors could reevaluate their appetite for U.S. government bonds, with the potential for rising yields to put pressure on stocks that are trading at elevated decision to downgrade the U.S. debt rating by a notch late last week due to mounting government debt and rising interest expenses has rekindled fears of a broader investor reappraisal of U.S. sovereign debt, which could drive up borrowing costs across the economy."Every time something like this happens, investors just think maybe they should shift a little more out of the U.S.," said Campe Goodman, fixed-income portfolio manager at Wellington Management 10-year yields, which influence mortgage rates as well as borrowing costs for companies and consumers, rose to over 4.5% early on Monday but the selloff then moderated. Yields move inversely to prices. On Tuesday, the bond market selloff continued, with the 10-year yield last seen at 4.48%, slightly above where it closed on 30-year yields rose more sharply, hitting a high of over 5% on Monday, the highest since November 2023, and flirting with that level again on yields have repercussions for stocks, analysts and investors say, as they represent higher borrowing costs for companies as well as greater investment competition from fixed income Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments, said a rise in 10-year yields beyond 4.5% could be a headwind for stocks. "I think what markets are grappling with, is if the 30-year is breaking out, does that mean the rest of the curve is next?" Miskin the past few years, stocks have come under pressure during some instances when Treasury yields moved above 4.5%, with sharply rising yields often negatively correlated with stock performance. One prominent example is late 2023 when the S&P 500 slid sharply as the 10-year yield ascended to 5%.In a note on Monday, Morgan Stanley equity strategist Michael Wilson said 4.5% on the 10-year yield has been "an important level" for equity market valuation over the past two years, with stocks tending to face valuation pressure when 10-year yields breach that price-to-earnings ratio for the S&P 500, based on earnings estimates for the next 12 months, was at 21.7 as of Monday, well above its long-term average of 15.8, according to LSEG however, said while a break above 4.5% in the 10-year yield "can lead to modest valuation compression ... we would be buyers of such a dip," he said in the note, citing the recent U.S.-China trade truce as positive for equity downgrade has come as Republicans in Congress seek to approve a sweeping package of tax cuts aimed at boosting economic growth that at the same time could add trillions to the $36 trillion U.S. public debt pile, exacerbating concerns highlighted by Moody's over the U.S. fiscal trajectory It also follows a detente in the trade war sparked by President Donald Trump's imposition of tariffs on U.S. trade partners. While tariffs are largely seen as being a drag for the economy, a recent trade breakthrough with China had sparked market optimism that their impact would be more muted than feared."You move from fears of stagflation, which was low growth and tariff-led inflation, to a better growth backdrop but probably not a better inflation or fiscal backdrop, as you still have this big tax bill getting pushed through," said Ross Mayfield, investment strategist at Reserve officials on Monday said the Moody's downgrade could have repercussions for the U.S. economy by raising the cost of ratings cut was unlikely to trigger forced selling of Treasuries, as major fixed-income indices only require securities to maintain an investment-grade rating or have no specific sovereign rating guidelines, analysts at BofA Securities said in a note on it could cause the yield curve to steepen, they said, with long-dated yields rising due to worsening investor sentiment around the long-term prospects of U.S. debt."There could be a time when the bond market gets quite worried that we're continuing to stimulate an economy that's not weak," Goodman said.
Time of India
21-05-2025
- Business
- Time of India
Moody's downgrade ripples through bond market, causes worries for stocks
Moody's U.S. debt downgrade is raising concerns that investors could reevaluate their appetite for U.S. government bonds, with the potential for rising yields to put pressure on stocks that are trading at elevated valuations. Moody's decision to downgrade the U.S. debt rating by a notch late last week due to mounting government debt and rising interest expenses has rekindled fears of a broader investor reappraisal of U.S. sovereign debt, which could drive up borrowing costs across the economy. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Moose Approaches Girl At Bus Stop In National Capital Region - Watch What Happens Happy in Shape Undo "Every time something like this happens, investors just think maybe they should shift a little more out of the U.S.," said Campe Goodman, fixed-income portfolio manager at Wellington Management Company. Bonds Corner Powered By Moody's downgrade ripples through bond market, causes worries for stocks Moody's downgrade of U.S. debt is fueling concerns about investor appetite for U.S. government bonds, potentially driving yields higher. Rising yields could pressure stocks with elevated valuations, as they represent increased borrowing costs and investment competition. While a trade truce offers some optimism, the downgrade and proposed tax cuts raise concerns about the U.S. fiscal trajectory. SBI to raise $3 billion through senior unsecured notes in FY26 How will higher anchor investor allocation impact lower rated bond market? RBI accepts lower bond purchase amount in first FY26 OMO auction Sebi simplifies operational process of cash flow disclosure in corp bond database Browse all Bonds News with Benchmark 10-year yields, which influence mortgage rates as well as borrowing costs for companies and consumers, rose to over 4.5% early on Monday but the selloff then moderated. Yields move inversely to prices. On Tuesday, the bond market selloff continued, with the 10-year yield last seen at 4.48%, slightly above where it closed on Monday. Longer-dated 30-year yields rose more sharply, hitting a high of over 5% on Monday, the highest since November 2023, and flirting with that level again on Tuesday. Live Events Higher yields have repercussions for stocks, analysts and investors say, as they represent higher borrowing costs for companies as well as greater investment competition from fixed income . Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments, said a rise in 10-year yields beyond 4.5% could be a headwind for stocks. "I think what markets are grappling with, is if the 30-year is breaking out, does that mean the rest of the curve is next?" Miskin said. Over the past few years, stocks have come under pressure during some instances when Treasury yields moved above 4.5%, with sharply rising yields often negatively correlated with stock performance. One prominent example is late 2023 when the S&P 500 slid sharply as the 10-year yield ascended to 5%. In a note on Monday, Morgan Stanley equity strategist Michael Wilson said 4.5% on the 10-year yield has been "an important level" for equity market valuation over the past two years, with stocks tending to face valuation pressure when 10-year yields breach that threshold. The price-to-earnings ratio for the S&P 500, based on earnings estimates for the next 12 months, was at 21.7 as of Monday, well above its long-term average of 15.8, according to LSEG Datastream. Wilson, however, said while a break above 4.5% in the 10-year yield "can lead to modest valuation compression ... we would be buyers of such a dip," he said in the note, citing the recent U.S.-China trade truce as positive for equity markets. The downgrade has come as Republicans in Congress seek to approve a sweeping package of tax cuts aimed at boosting economic growth that at the same time could add trillions to the $36 trillion U.S. public debt pile, exacerbating concerns highlighted by Moody's over the U.S. fiscal trajectory . It also follows a detente in the trade war sparked by President Donald Trump's imposition of tariffs on U.S. trade partners. While tariffs are largely seen as being a drag for the economy, a recent trade breakthrough with China had sparked market optimism that their impact would be more muted than feared. "You move from fears of stagflation, which was low growth and tariff-led inflation, to a better growth backdrop but probably not a better inflation or fiscal backdrop, as you still have this big tax bill getting pushed through," said Ross Mayfield, investment strategist at Baird. Federal Reserve officials on Monday said the Moody's downgrade could have repercussions for the U.S. economy by raising the cost of capital. The ratings cut was unlikely to trigger forced selling of Treasuries, as major fixed-income indices only require securities to maintain an investment-grade rating or have no specific sovereign rating guidelines, analysts at BofA Securities said in a note on Monday. Still, it could cause the yield curve to steepen, they said, with long-dated yields rising due to worsening investor sentiment around the long-term prospects of U.S. debt. "There could be a time when the bond market gets quite worried that we're continuing to stimulate an economy that's not weak," Goodman said.
