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.
Next-gen social sports platform Break the Love recently raised $2.5 million in seed funding. Break the Love's platform and iOS app allows users to discover and book group-based tennis activities, to either learn, train, or compete. The new company has already gotten support from a few big names in the world of tennis, including the coach of Naomi Osaka, as well as the United States Tennis Association and the brand Wilson. Break the Love founder and CEO Trisha Goyal joins Cheddar News' Closing Bell to discuss.
The world of NFTs and cannabis are colliding as luxury cannabis company Peakz gears up to launch a digital dispensary in the metaverse. CEO Jessie Grundy and Tiffany McBride, managing director of social equity ventures at The Parent Company, an investor in Peakz, joined Cheddar to break down exactly how a digital dispensary would work. Grundy also talked about offering low-cost NFT courses in an effort to help Oakland, California, residents not miss out on new investing opportunities, and McBride discussed why the tech-forward vision of Grundy was worth investing in for The Parent Company. "He comes with really fresh ideas that he's vetted, that he's experienced in, and I really believe the thinking along Jessie's lines is the future of cannabis," she said. "He's more than just flower and a story. He comes with concepts that are new that are innovative, and that is easy for us to get behind."
Daniel O'Brien, president and global head of enterprise at HTC America, joined Cheddar's "Closing Bell" to discuss new products and services the virtual reality brand showed off at CES 2022, including a wrist tracker — in lieu of controllers — for more accurate interactions connected to its all-in-one headset, the VIVE Focus 3. O'Brien also described a cloud-based, 5G content delivery system. "We partnered up with Lumen Technologies and from six miles away we delivered high bandwidth VR to a headset directly in the Wynn Hotel during CES," he said. "And people were able to walk around in their virtual experience through a wireless signal."
Samsung unveiled a slew of new electronics and upgraded designs at CES 2022. With a heavy focus on gaming and the future of work, the company showed off its all new Odyssey Ark, which boasts a massive 55 in. curved display designed to give users a more immersive and captivating experience. Sang Kim, SVP, Samsung Electronics joined Cheddar's Michelle Castillo to discuss the company's biggest launches as well as major trends to watch in 2022.
Tesla's Austin, Texas-based gigafactory could be days away from opening its doors and beginning production. Dan Ives, managing director of equity research at WedBush Securities, joined Cheddar to talk about his estimate that the EV company will be running its factory within a week and noted that Tesla has been in a good position despite ongoing semiconductor shortages. "They're really almost Teflon-like relative to other automakers," he said, calling its production delays "containable." Amid another shortage — labor —, he said he thinks Tesla positioned itself well for access to talent months ago with expanded hiring amid the move to Texas from California.
The UK's Information Commissioner's office is scrutinizing Facebook's parent company Meta over child safety practices linked to the Oculus headset, according to a report. The agency is looking to question the tech giant about how it's protecting children from harmful experiences in virtual reality.
Hall of Fame quarterback Troy Aikman joined Cheddar's "Between Bells" to talk about his own brand of organic light beer called Eight (his jersey number with the Dallas Cowboys) and explained that he's had an interest in the industry since his days working for a distributor during college. "These brands that are on the market have been there for a long time and [I] felt that it was time for something fresh, something new, and I thought that we could do it in a way that was a better-for-you beer' and that's what we've done," he said. Aikman also provided some insight into the upcoming NFL playoffs and noted that he doesn't see a clear frontrunner for this year's Vince Lombardi trophy.
Disney has secured a patent for a digital world simulator for headset-free augmented reality expected to be accessible in parks by tracking smartphones and projecting personalized 3D displays, an indication that the entertainment giant is gearing up for its entry into the metaverse.
It has been a record year for luxury automaker Rolls-Royce despite the industry struggling to meet demand overall due to the ongoing semiconductor chip shortage. CEO Torsten Müller-Ötvös joined Cheddar to discuss the driving factors behind the company's 2021 success. He said after the pandemic forced the closure of factories in 2020 and people stopped making large purchases, they were open to spending more in 2021. "The entire luxury sector was fueled by there's money available, and people are prepared to spend money," he said.
