A man wearing face mask walks past a bank electronic board showing the Hong Kong share index at Hong Kong Stock Exchange Tuesday, April 28, 2020. Asian shares are mixed Tuesday as governments inch toward letting businesses reopen and central banks step in to provide cash to economies. (AP Photo/Vincent Yu)
By Stan Choe
Stocks are pumping higher in early trading on Wall Street Tuesday, and the S&P 500 is cruising toward its first three-day winning streak in a month.
European stocks were also strong, as markets turned higher following a mixed Asian performance. The price of U.S. oil remained wild, though, and it swung through more extremes as storage tanks come closer to hitting their limits.
With massive aid in place for the economy from central banks and governments, stocks have been building higher in recent weeks on anticipation that stay-at-home orders will gradually lift. U.S. states and nations around the world are going at their own speeds, but the removal of restrictions would allow businesses to get back into some type of gear, even if it’s only first, after the global economy essentially slammed shut.
The S&P 500 was up 0.8%, as of 10:05 a.m. Eastern time. The Dow Jones Industrial Average gained 213 points, or 0.9%, to 24,347, and the Nasdaq was up 0.3.%
Companies that would benefit most from people being able to leave their houses again were among the market’s leaders. Harley-Davidson jumped 16% after laying out plans to slash costs and preserve cash, including a cut of its dividend and a halt to its stock buyback program. Kohl’s rose 12%, and Kimco Realty, which owns shopping centers, added 8.8%
Sectors of the stock market that are most closely tied to the strength of the economy were also leaders. Financial stocks rose 3% for the biggest gain among the 11 sectors that make up the S&P 500. Industrial stocks were close behind with a gain of 2.7%, and raw-material producers were up 2.1%.
Still, signs of caution are prevalent throughout the market. Merck reported a jump in revenue and profit for the first quarter, but the drugmaker also cut its financial forecast for the full year. It said prescription drug sales will likely fall because the pandemic is keeping many patients with chronic conditions away from their doctors. It’s also looking for sales of veterinary medicines to dip. Its shares fell 4.2%.
Treasury yields, which had sent warning signals about the disastrous economic effects of the pandemic long before the stock market did, were down slightly.
The yield on the 10-year Treasury dipped to 0.63% from 0.65% late Monday. Yields tend to fall when investors are downgrading expectations for the economy and inflation.
Inflation recently has gotten weighed down by a plunge in oil prices. With airplanes, autos, and factories around the world idled, demand has collapsed for energy, and producers have not cut back quickly enough. All the extra oil has flowed into storage tanks, which are close to hitting their limits. A barrel of U.S. oil for delivery in June was up 2% to $13.06, but it had dropped as low as $10.07 earlier in the morning.
Brent crude, the international standard, was up 1.3% at $23.37 per barrel.
In Europe, France’s CAC 40 gained 1.6% while Germany’s DAX rose 1.8%7. Britain’s FTSE 100 gained 2.1.
Japan’s benchmark Nikkei 225 edged 0.1% lower. A day before, it surged after Japan’s central bank lifted its ceiling on purchases of government bonds and other assets that it uses to pump more cash into the economy.
“Basically, the monetary spigots are wide open,” said Robert Carnell, regional head of research, Asia Pacific, at ING.
South Korea’s Kospi gained 0.6%, and Hong Kong’s Hang Seng rose 1.2%.
The U.S. Federal Reserve is holding its own monetary policy meeting Tuesday and Wednesday, though it is not expected to add to the huge amounts of stimulus it has already deployed.
The European Central Bank will hold its own meeting Thursday, and is likewise expected to mainly fill in details of its stimulus programs, or possibly tweak them.
Worries persist about new surges of coronavirus cases in places like China and South Korea, where they had declined as a result of social distancing, testing, and arduous efforts by medical workers.
A slew of corporate earnings announcements is lined up for this week.
Nearly a third of the companies in the S&P 500 are scheduled to report their results for the first three months of 2020 and, more importantly, perhaps talk about how they see future conditions shaking out. That includes Amazon, Apple, Facebook, Microsoft, and Google’s parent, Alphabet, which together make up about a fifth of the index.
Miami wants to be the crypto capital of the world. Mayor Francis Suarez has gone all in on the blockchain, even accepting one of his first paychecks in Bitcoin, hosting one of the world's largest digital cryptocurrency conferences, and marketing Miami as a great place for tech experts to work. Maja Vujinovic, managing director of OGroupLLC, joined Cheddar's Fast Forward to discuss Miami's enthusiasm toward crypto, some of the potential risks that entails, and where the city might be heading when it comes to the crypto takeover.
Like so many other cities, Miami experienced a tourism boom over the summer after vaccines were distributed. But, the Omicron variant has thrown the travel industry for a loop. David Whitaker, president and CEO of the Greater Miami Convention and Visitors Bureau, joined Cheddar to discuss the city as a tourist destination, and how it has handled headwinds from the pandemic.
Miami's real estate market has boomed since early 2020, thanks to an overall strong housing market, remote work, and no income tax as incentives. The city is preparing to welcome even more residents as people relocate to warmer climates to work from home. Garrett Derderian, director of market intelligence at SERHANT, joined Cheddar to discuss the Magic City's red hot market.
Rockstar Energy, a subsidiary of Pepsico, unveiled its new beverage brand, Rockstar Unplugged, changing up the energy drink formula with hemp seed oil as an ingredient. PepsiCo Energy CMO Fabiola Torres joined Cheddar News to talk about how the product promotes “good vibes” and allows consumers to unwind and discuss partnering with "MTV Unplugged" for a concert series. "We couldn't find a better partnership that MTV," she said. "MTV Unplugged has been such an iconic proposition … and we believe that we're the right partners because the insight of our proposition for Rockstar Unplugged comes from music.
Eight months after the National Football League announced $1 million in research into cannabinoids, the NFL-NFLPA Joint Pain Management Committee has awarded the funding to two teams of medical researchers at the University of California San Diego and the University of Regina. The NFL says the studies will investigate the effects of cannabinoids on pain management and neuroprotection from concussion in elite football players, respectively. Cheddar correspondent Chloe Ailello spoke with Jeff Miller, the executive vice president of communications, public affairs, and policy for the NFL, about the studies, as well as the recent lawsuit filed against the NFL by former Miami Dolphins head coach Brian Flores. "Maybe we can learn things from other alternative pain approaches that are going to benefit our player population and then sports medicine as a whole," Miller said.
All Hands celebrates Black History Month by highlighting achievements in inclusivity and paying homage to those who have fought for equal rights. Rep. Maxine Waters (D-CA) joins Cheddar News to discuss voter suppression; Damali Peterman, CEO of Breakthrough ADR, elaborates on the biggest barriers for Black professionals; Andre Perry, senior fellow of Brookings Institution, dives into student loans and the racial wealth divide; and lastly, BET CEO Scott Mills discusses the company's initiatives for 2022.
Hinge users who have children can opt-in to a $100 stipend up to $25,000 for childcare. Logan Ury, the director of relationship science for the online dating platform, noted the issue as an obstacle for single parents who want to go out on dates. "We have heard that singles with children have a hard time going on dates for one of the reasons being that it's just hard to find childcare and it's hard to be able to afford it," she said. Ury also said that the hot topic among Hinge's users is mental health and the prioritizing of mental health.
According to the Federal Reserve, the investment gap between Black and white Americans has remained substantial, with only 34 percent of Black households joining in on the historic rise in the markets. Stacey Tisdale, the first Black woman to have reported from the NYSE and the CEO and president of Mind Money Media Inc., said that the data might not be as disheartening as it seems. "I think that number is very deceiving. That Federal Reserve study is actually from 2019, and it's very important that we all look beneath that number and look beneath the surface because there is nothing short of an investing revolution going on in the Black community," Tisdale said.
