Wall Street remains afloat this Wednesday after several large companies released earnings reports that beat market expectations. Thus, the S&P 500 rose 0.3%, a day after breaking an eight-day winning streak, the longest of the year.
The Dow Jones Industrial Average rose 0.3%, while the Nasdaq Composite Treasury yields are also little changed as investors await the week’s main event on Friday. That day, Federal Reserve Chairman Jerome Powell is set to give a speech at an annual economic symposium. The hope is that he will offer clues about how deeply and how quickly the Fed will begin cutting interest rates next month, after having raised them to a two-decade high to combat inflation.
Meanwhile, more companies are joining a series of reports that appear to show the best earnings growth for S&P 500 companies since late 2021.
Target rose 13.4% after the retailer said an important underlying measure of sales strength for the spring came in at the high end of its expectations as traffic rose both in its stores and online. Its profit beat analysts’ estimates and it raised its full-year outlook.
TJX, the company behind TJ Maxx and Marshalls, rose 5.8% after it also reported a stronger-than-expected profit for the latest quarter. The retailer also raised its full-year profit forecast and said it saw an increase in customer transactions across all of its divisions.
The results helped offset a 13.5% drop at Macy’s. The company reported better-than-expected earnings, but its revenue missed forecasts. It also lowered its expected sales range for this year, in part due to “a more demanding consumer.” Concerns have grown over whether American shoppers will be able to maintain their spending and prevent the slowing economy from slipping into recession. Inflation is easing, but prices remain much higher than before the pandemic, and many American households have exhausted the savings they had accumulated during the lockdown period.
Some market concerns
Worries have been especially high for American households at the lower end of the income spectrum. High interest rates imposed by the Federal Reserve have made borrowing money more expensive, compounding the hardship.
The Fed is therefore widely expected to cut its main interest rate next month for the first time since the COVID crash in 2020. The only question is how much and how quickly it will do so.
Wall Street futures seesawed ahead of the release of a U.S. jobs report, which came about half an hour later than expected. The preliminary revision suggested the economy created 818,000 fewer jobs in the year through March than previously reported. It’s a big number, but smaller than some feared. “We have long warned that employment numbers are unreliable and subject to drastic revisions,” said Nancy Tengler, chief executive of Laffer Tengler Investments. “Investment decisions should not be made based on these numbers.”
Instead, he is focusing on the long term and said rising U.S. labor productivity is an encouraging sign for the economy.
On Wall Street, coal miners Arch Resources and Consol Energy rose after announcing they will combine in a “merger of equals” stock. Following the merger, they plan to operate under a new name, Core Natural Resources. Arch Resources rose 4.6%, and Consol Energy gained 6.8%.
Source: Ambito
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