This week’s marquee market event, hardly needing an introduction, is the future of US interest rates – the dominant issue in the latest stock news.
It dominates all asset classes, from recent peaks in Treasury yields and the dollar to influences on record highs and subsequent declines of things such as the price of gold and bitcoin.
Latest stock news: Fed Reserve Meeting
As the Federal Reserve concludes its final session of a two-day meeting today, the latest stock news focuses on the news conference of Fed Chair Jerome ‘Jay’ Powell.
It’s especially noteworthy this time as there will be no latest economic projections from the board.
In the wake of Powell’s reduction in expectations for rapid inflation relief, a cautious, hawkish posture is in prospect.
Top stock trends: Tesla, Meta shares jump
To anticipate a bumpy economic ride is one thing, but to see markets transition from a hope for a soft landing to an extended holding pattern is quite another.
Markets had already anticipated up to five quarter-point rate cuts this year but now barely expect one by year-end, suggesting a profound shift in market expectations.
Latest stock news: Markets remain calm
The latest stock market news reports that markets have remained relatively calm ahead of the Fed meeting, despite a dramatic plunge Friday on Wall Street in reaction to the sharply stronger labour market data, and high-volume dollar moves – rumoured to reflect official intervention – with the yen: the dollar continues to trade higher; two-year Treasury yields are at near six-month highs.
In spite of European holiday closures, which tend to eliminate noise, things still seem to happen.
For example, ECB policymaker Pablo Hernandez de Cos will speak at the London School of Economics. According to the latest news on the stock market, the odds of a rate cut for the euro zone at its next meeting in June are now greater than 70%.
Latest stock news: Adidas wins, Tesla under fire!
The day brings home price data and manufacturing PMIs for June in London, with European earnings light, while the US session will feature Mastercard, Qualcomm and Pfizer among others, so it’s a big day for the latest stock news to move markets.
Latest stock news: US equity market drop
Meanwhile, U.S. equity markets plummeted as stock news today reports that the sell-off in the global equity markets also extended to the United States. Investors are watching a handful of indicators as the Federal Reserve’s two-day meeting is currently in session.
The stock news today also covers the fact that prices for gold fell through the morning session and afternoon trade while the U.S. dollar ticked up, following a report from the US Labor Department that showed that employment cost growth in the first quarter was higher than expected – generally seen as a reason for the Fed to continue its restrictive policy regime.
Latest stock news: Trading opportunity
Against this backdrop, all major US indexes posted their first monthly percentage losses since October amid stock news reports that market strategists are lowering their expectations ahead of what they expect to be a hawkish outcome at the Fed’s ongoing meeting.
Portfolio managers and investment strategists say markets could be due for a repricing after recent gains.
Meanwhile, the latest stock news mentions that the first-quarter earnings season is not over yet, highlighting that several crucial reports from big companies, such as Amazon and Apple, are still due to be published next week, possibly determine the further direction of the market.
Once the Fed meeting ends, the latest stock news will also concentrate on what news the central bank will issue: most likely an announcement to keep the Fed funds target rate unchanged and possibly reveal forward-looking hints from the Fed Chair Jerome Powell in his press conference about where interest rates might be going.
Latest stock news: Euro stocks retreat
Bottom line, latest stock news delivers right out of the chute, upfront if you will, that European stocks have retreated on downbeat earnings even as the data almost all are better, thus making more likely a second ECB rate cut in June.
Latest stock news also indicates a stronger dollar and better U.S. bond markets with rising Treasury yields. Much to ponder, friends — much to ponder, indeed.
The UK’s FTSE 100 gained 0.2% by 0721 GMT on Wednesday as investors await the Fed’s policy announcement for any hints about when interest rate cuts could start in the US. Meanwhile, investor apathy due to the closure of several European exchanges for Labour Day has left a quieter market environment.
The focus is on Fed Chair Jerome Powell’s comments later in the day as markets digest the latest inflation numbers in the US.
The comments are expected to provide more clarity on what impact the underwhelming US inflation print might have on interest rate path for this year.
Latest stock news: GSK rises
In other latest stock news, shares of GSK rose 0.4% after the British pharmaceutical giant improved its full-year profit forecast and said sales in the first half could be higher than previously expected.
Meanwhile, the UK’s midcap stocks were dragged down by a 7.6% plunge in Aston Martin shares after it reported a bigger than expected quarterly pretax loss.
The mid-cap FTSE 250 also dipped 0.2% and a further fall would mark the index’s second day of losses in a row. Here are some of the latest stock news driving the market movements.
Woolworths (WOW.AX) on Wednesday said it would sell a 5% stake in Australian retailer Endeavour Group (EDV.AX) worth A$468 million ($302.84 million), in a block trade that will almost complete the liquor store and pub operator’s spin-out from Australia’s biggest supermarket operator nearly three years ago.
Woolworths, which will reduce its holding to about 4.1% of Endeavour, announced in February last year plans to float the other 85% of its former liquor unit.
In the wake of the announcement, news on the share market showed that the price of Woolworths fell by 0.4% in the latest trading, while Endeavour’s shares fell 5% in early trading.
Woolworths said it intends to use the proceeds to return capital to its shareholders, details of which will be covered at its full-year results announcement on 28 August.
Meanwhile, Woolies’ recent stock market disclosures include an announcement about buying back its 9.1% stake in Endeavour – a stake it bought ‘after a strategic review’ following Endeavour’s IPO in November.
‘We actually think that space does not warrant us having a material equity investment,’ the departing chief executive Brad Banducci told analysts. He didn’t say what ‘material equity investment’ means to Woolies, but noted that it ‘does not have any intention to sell down’ the remaining stake, although it ‘will continue to evaluate it’.
Phillip Kimber, a retail analyst at E&P Capital, says this will give Woolworths more than A$1.5 billion to return to shareholders, or more than A$1.25 per share.
The timing of the stake sale is also unusual as it comes just ahead of Endeavour’s third-quarter sales results.
The update to the stock bulletin also noted that investment and advisory group Jarden was handling the block deal but was unable to divulge the final buyers of all those shares. Endeavour confirmed that it will continue its agreement with Woolworths to supply its hotels and small-goods businesses until at least 2027.
Woolworths’ relationship with Endeavour has undergone a transformation from owner to partner after it sold down its A$636 million share in Endeavour in 2022.
The latest stock news from DJT.O This week, short-sellers of Trump Media and Technology Group are hurting badly, as a big rally in the stock price and soaring borrowing costs are pinching them, according to the analytics firm S3 Partners.
Shares of the company, which owns former president Donald Trump’s social media platform Truth Social, were up nearly 7% on Tuesday.
Since it started trading on 26 March, the stock has been rallying for five straight days, but is still down almost 30% from its initial $70.90 trading price.
This rally has had a big effect on short-sellers’ financial results, based on the stock news from Ihor Dusaniwsky, president of S3 Partners.
For April, short-sellers have had $91.1 million in market-to-market profits, a 50% gain, but they are still down 68% since the stock began trading in late March, having had $94.8 million in year-to-date mark-to-market losses.
With the cost of borrowing increasing, this encourages short-sellers to exit the short squeeze, raising the stock price even further by increasing the upward bid pressure.
While some owners of the short shares covered their short positions, Dusaniwsky observed in the latest short squeeze news coverage that lots of other position-takers are willing to shortsell the stock at these much higher levels.
Making matters more fraught, new short positions in Trump Media Technology Group incur borrowing fees of between 600% and 650%, and existing positions incur fees of 33%.
The floats of the company’s shares – that is, the number of shares that can be made available for borrowing – amount to less than 100,000.
So: fewer shares available, higher cost of borrowing, wider spreads, and heightened volatility.
The overwhelming hurdle for shorts is that the stock price must fall enough each day just to break even on the cost of stock borrow financing.
Trump Media and Technology Group contacted the CEO of Nasdaq, Adena Friedman, on 19 April over the matter of ‘potential market manipulation’ and the fact that ‘naked’ short-selling was likely the culprit.
‘Naked’ short-selling is usually illegal in the US and involves attempting to sell shares that have not been confirmed as borrowable; the seller might end up failing to ‘deliver’ the shares.
The stock trades are complicated and controversial once again.
Marijuana was upgraded to a Schedule II substance on Tuesday, making cannabis companies’ shares soar in stock on Wednesday 14.9% (US-listed shares of the Cronos Group), 23.4% (Tilray Brands, also known as TLRY.O), 46.8% (Canopy Growth) and 24.8% (the ETF AdvisorShares Pure US Cannabis, or MSOS.P).
Under the change, the plant was reclassified as a less dangerous substance.
The stocks of Green Thumb Industries (GTII.CD) and Trulieve Cannabis (TRUL.CD), both listed in Canada, rose 26.6% and 37.3%, respectively.
The market move was triggered directly by the DoJ’s notice of intent to transfer marijuana from Schedule I to Schedule III.
Such a reclassification would reduce the marginal tax imposed on these businesses because it would allow them to write off normal business expenses like rent, utilities, advertising, labour costs, etc, thereby increasing profitability.
What could that mean for an industry in urgent need of capital? Aaron Grey, an analyst at Alliance Global Partners, estimates it would put more than $150 million cash in industry pockets.
The stock news has been detailed as this proposal goes to the White House Office of Management and Budget for review, which could result in the most profound change to federal cannabis policy in 40 years.
This reclassification will not, however, make marijuana legal for recreational use, as the latest stock news has reported.
In the latest stock news, we’re reminded that US-listed marijuana stocks jumped in 2019 after Canada legalised recreational marijuana, but then crashed in 2020 as revenue failed to match the elevated prices of the initial companies’ valuations.
