Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 29, 2024.
The S&P 500 rose Monday and closed at a fresh record high as Wall Street looked toward several mega-cap tech earnings reports and the Federal Reserve's rate policy decision.
The benchmark index climbed 0.76% to 4,927.93, topping its highest ever close of 4,894.16, reached Jan. 25. The Dow Jones Industrial Average added 224.02 points, or 0.59% to close at 38,333.45, while the Nasdaq Composite gained 1.12% and settled at 15,628.04.
It was the sixth record close for the S&P 500 and the Dow.
This week marks the busiest slate of the earnings season, with 19% of the S&P 500 reporting earnings. Mega-cap tech names Microsoft, Apple, Meta, Amazon and Alphabet — part of the core group of big tech companies that have led this year's rally — will be posting their results. Investors will also keep an eye on several Dow components reporting their quarterly earnings, including Boeing and Merck.
Meanwhile, the Federal Open Market Committee will begin its two-day policy meeting on Tuesday. Investors are nearly certain the central bank will keep rates steady. Traders in the fed funds futures market assigned a roughly 97% probability the Fed will not cut rates at the upcoming meeting, according to the CME Group.
"This week could be key," said Chris Larkin, head of trading and investing at E-Trade. "If the market is going to sustain its latest breakout, it may need to avoid earnings disappointments from this week's Big Tech lineup, get encouraging news from the Fed on interest rates, and see jobs numbers that are solid, but not too hot."
Shares of iRobot tumbled nearly 9% following news that Amazon would no longer pursue a deal to acquire the company.
Money Report
Dow slated to underperform in January, hurt by Boeing
Sell-offs in Boeing and a handful of other stocks has restricted gains for the Dow this month.
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The blue-chip average is set to finish January's trading month, which concludes with Wednesday's closing bell, up about 1.7%. By comparison, the broad S&P 500 and technology-heavy Nasdaq Composite are on pace to advance 3.3% and 4.1%, respectively.
Part of those capped gains for the Dow are due to from Boeing, which has tumbled 21% this month. Shares have plummeted after a door plug on a 737 Max 9 aircraft blew out midflight.
Walgreens and Intel have also dragged on the 30-stock index, sliding roughly 13% each. A dozen Dow members are on pace to finish the month lower.
Those dives have somewhat mitigated gains seen elsewhere. Notably, IBM has led the index higher with a rally of more than 14%. Verizon and Merck were the next biggest gainers, advancing around 11% each.
— Alex Harring
Treasury Department reduces estimate for first-quarter borrowing
The U.S. Treasury Department expects to borrow $760 billion in the first quarter, according to a press release published Monday afternoon. That is below the previous estimate of $815 billion "largely due to projections of higher net fiscal flows and a higher beginning of quarter cash balance," the release said.
The reduced estimates appeared to spark a rally for bonds and stocks. The 10-year Treasury yield fell to its lowest level of the day at roughly 4.07%, while the S&P 500 is now up about 0.7%.
The Treasury will announce further details about its quarterly refunding plans on Wednesday.
— Jesse Pound
Stock valuations look stretched given inflationary risks, JPMorgan says
The market isn't properly pricing in the risks of stickier than expected inflation, according to JPMorgan.
Analyst Marko Kolanovic believes that the ongoing market rally could be knocked back if core inflation in the first half of 2024 proves firmer than investors have expected.
"A few bad inflation prints would likely upset both bond and equity markets, as risk markets could again start pricing a higher probability of 'hard landing,'" he wrote. "This outcome is very underpriced in large cap equities and credit, which price close to zero probability of recession, as the strong rally since the end of October has pushed both credit and equity markets into expensive valuation territory."
— Lisa Kailai Han
Beam Therapeutics surges more than 12% on JPMorgan upgrade
Shares of biotech company Beam Therapeutics jumped more than 12.5% on Monday after JPMorgan upgraded the stock, saying it stands to benefit from increased market share and a strong gene therapy pipeline. The firm thinks the stock could surge more than 60% over the next year.
"In our view, Beam's proprietary genetic base-editing platform provides either first or best-in-class potential across a diverse array of programs in heme and liver-mediated disease indications with advantages in editing efficiency, specificity, and editing in larger organ systems," analyst Eric Joseph wrote in a Monday note. Heme is a component of hemoglobin, a protein in red blood cells.
Even though the company's shares have plunged over the past 12 months, Joseph thinks the company is at the frontier of a rising theme for investors this year: therapeutics.
Read more about JPMorgan's bullish thesis here.
— Pia Singh
Cathie Wood's flagship fund outperforms
In a rather sleepy day on Wall Street, Cathie Wood's Ark Innovation ETF (ARKK) is racing ahead.
Shares of Ark's flagship fund rose more than 3% on Monday, chipping away at its year-to-date losses.
The performance of ARKK was boosted by a gain of 3% for Tesla and 6% for Coinbase, two of the fund's biggest holdings.
— Jesse Pound
Markets could see volatility ahead of U.S. and global elections, says Mutual of America Capital Management
With several of the major global markets, including the U.S., facing elections this year, investor anxiety is likely to rise, according to Stephen J. Rich, Chairman & CEO of Mutual of America Capital Management.
"Financial markets may get choppier in the coming months, Rich said.
Some of the largest economies outside the U.S. that will be holding elections are India, the European Union member states, South Korea and the U.K.
With this in mind, he believes "it is crucial for investors to stick to a long-term financial plan that aligns with their risk tolerance and time horizon, maintain a diversified portfolio and avoid reacting to short-term market gyrations."
— Hakyung Kim
The Federal Reserve isn't yet ready to cuts rates despite encouraging inflation data, Oppenheimer's John Stoltzfus says
The Federal Reserve will likely wait until the second half of 2024 to cut benchmark interest rates, according to Oppenheimer chief investment strategist John Stoltzfus.
"We believe the Fed is getting close enough to its inflation target rate for investors who keep their expectations of rate cuts right sized to likely be pleasantly surprised later this year," Stoltzfus said. "Our expectations remain for the Fed to cut once or twice in the second half of this year."
Stoltzfus added that while the central bank remains steadfast in its goal of taming inflation back down to a 2% target, the Fed is also "remarkably sensitive as to the effects of its efforts on the economy while practicing its mandate in successfully curbing the pace of inflation."
-- Brian Evans
Microsoft, Meta Platforms and Uber among S&P 500 names hitting new all-time highs
22 S&P 500 stocks hit new 52-week highs during Monday's trading session.
Of these stocks, 15 names hit new all-time highs. These included mega-cap technology stocks Microsoft, Meta Platforms and Uber.
Here are a few other stocks that met this milestone on Monday:
— Lisa Kailai Han, Gina Francolla
Tesla bounces after posting worst week since October
Tesla climbed on Monday, regaining some ground after last week's post-earnings sell-off.
Shares of the electric vehicle maker added nearly 3% on Monday. That comes after the stock finished last week down more than 13%, its worst weekly performance since October.
Tesla reported weak auto revenue on Wednesday and warned of slowing growth in 2024. The stock has dropped more than 24% in the new year, relinquishing gains after more than doubling its share price in 2023.
— Alex Harring
Oil falls as China property crisis overshadows geopolitical risk
Oil prices tumbled on Monday as worries grow about the impact of China's property crisis on its economy.
The West Texas Intermediate contract for March fell $1.01, or 1.29%, to trade at $77 a barrel. The Brent contract for March dropped 94 cents, or 1.13%, to trade at $82.61.
Crude prices fell after a court in Hong Kong ordered the liquidation of Evergrande, which was once China's largest property developer. Traders are worried China's property crisis is weighing on its economy and the slowdown could soften demand for oil this year.
Oil rose more than 1% earlier in the session after three U.S. soldiers were killed in a drone strike on base in Jordan. The U.S. blamed Iran-allied militants for the attack.
"It's a critical inflection point for the Biden administration because we really have to see whether he will have a serious escalatory response to this attack," Helima Croft with RBC Capital Markets told CNBC's "Worldwide Exchange" on Monday.
— Spencer Kimball
Lucid stock soars in mystery move
Lucid's stock is soaring for reasons that are not clear.
The electric vehicle maker's shares were up nearly 17% on Monday morning without any public announcement or news to fully explain the move.
But a high amount of Lucid's outstanding shares, some 29%, have been sold short, according to FactSet. A high short interest can create volatile stock moves.
— Spencer Kimball
Stocks making the biggest moves midday: Dollar Tree, iRobot, Bloom Energy and more
Check out the companies making headlines in midday trading.
McGrath RentCorp — Shares jumped more than 9% after WillScot Mobile Mini, an equipment rental company, said it would buy McGrath RentCorp in a $3.8 billion cash-and-stock transaction.
Dollar Tree — Shares of the discount retail chain popped 1% following an upgrade to overweight from neutral at JPMorgan. As catalysts, the bank cited a larger total addressable market and higher profitability.
SoFi Technologies – Shares of the financial services provider surged 21% after the company reported its fourth-quarter financial results. SoFi posted earnings of 2 cents per share, beating Wall Street estimates by 2 cents, according to LSEG. It also reported $594.2 million in revenue, while analysts anticipated $571.8 million.
The full list can be found here.
— Hakyung Kim
Energy stocks drag on S&P 500
Energy names hurt the S&P 500 in Monday's session.
The broad index inched up about 0.1% in morning trading. But it was weighed on by a slide in energy stocks, with the sector down 0.7%.
Every stock in the energy sector traded lower in the session. APA was the biggest loser, sliding 1.7%,
On the other hand, consumer discretionary was the best performing sector with a 0.3% advance. Tesla led the sector higher with a gain of more than 2%, regaining some ground after sliding more than 13% last week on the back of earnings.
— Alex Harring
Goldman's Kostin says economic growth matter most to stocks
For equity investors who are worried about rising yields, Goldman Sachs' head of U.S. equity David Kostin said stocks tend to ignore the bond market.
"Growth, rather than changes in yields or the shape of the curve, is the most important driver for equity returns," Kostin said in a note to clients.
The S&P 500 hit an all time high last week, while the benchmark 10-year Treasury yield has been steadily climbing this year, up about 25 basis points. Kostin noted that these moves prompted questions from his clients about the interplay between interest rates and equities.
"Stocks have typically posted the greatest returns during periods of strong economic growth, regardless of whether the yield curve was steepening or flattening," he said. "Equity returns following yield curve normalization have also been positive provided the US economy avoided a recession."
— Yun Li
Stock open little changed
Stocks were little changed to start the week, with Wall Street readying for the forthcoming Federal Reserve policy meeting and a fresh batch corporate earnings.
The S&P 500 ticked down 0.02% while the Nasdaq Composite fell 0.03%. The Dow Jones Industrial Average added 5 points, or 0.02%.
— Brian Evans
Texas crude oil touches two-month high early Monday
Crude oil continued to rally on Monday with the U.S. benchmark at a two-month high and the international benchmark reaching its highest in almost three months.
March West Texas Intermediate futures contracts briefly touched a high of $79.29, the highest since Nov. 30, and are now about 8.5% higher on the month, the first gain in four months. In January, crude oil may post its strongest month since July, depending how this week shakes out.
March Brent contracts got as high as $84.80 on Monday, the highest since Nov. 7, and are ahead 7.9% in January.
In the Energy Select SPDR ETF (XLE), Marathon Petroleum, Valero, Phillips 66 and Halliburton are all ahead almost 4% or more month-to-date.
— Scott Schnipper, Gina Francolla
iRobot slumps 18% after terminating merger deal with Amazon
Shares of iRobot plummeted 18% before the bell after Amazon axed its deal to buy the Roomba maker following antitrust scrutiny.
"Amazon's proposed acquisition of iRobot has no path to regulatory approval in the European Union, preventing Amazon and iRobot from moving forward together—a loss for consumers, competition, and innovation," the companies said in a release.
iRobot also said it plans to cut about 350 employees, or 31% of its workforce as part of a restructuring plan.
Amazon shares were marginally higher.
— Samantha Subin
There's not 'any rush' for Fed to cut, Ed Yardeni says
Yardeni Research president Ed Yardeni said on "Squawk Box" that the Federal Reserve should hold interest rates steady for a little while longer.
"I don't think there's any rush for the Fed to ease right away here. They've got the risk of the Middle East creating a 1970s scenario due to energy shocks, and if they ease and become too dovish they'll get a 1990s scenario, which is irrational exuberance," Yardeni said.
The Fed's next policy decision is due out on Wednesday, with the following two decision days coming on March 20 and May 1.
— Jesse Pound
Stocks making the biggest moves before the bell: Dollar Tree, American Airlines and more
These are the stocks moving the most in premarket trading:
- Dollar Tree — Shares of the discount retailer popped nearly 2% after JPMorgan upgraded them to overweight from neutral.
- American Airlines — The airline stock added 1.5% following an upgrade to buy from neutral at Citi.
- ZoomInfo Technologies — The software stock popped 5.5% after Bank of America analyst Koji Ikeda upgraded it to buy from neutral.
Read the full list of stocks moving here.
— Lisa Kailai Han
FanDuel parent-company Flutter will list on the NYSE Monday, rivals DraftKings for market share
FanDuel parent-company Flutter will make its debut on the New York Stock Exchange on Monday, as the company looks to further cement its standing in the U.S. market.
The company will also maintain its main listing on the London Stock Exchange and will continue to be included in the FTSE 100 index. FanDuel dominates the U.S. online sports betting landscape alongside DraftKings.
— Brian Evans
JPMorgan strategist is cautious on global earnings growth
Global corporate earnings growth could be under pressure this year as the world economy softens slightly, according to JPMorgan strategist Mislav Matejka.
"We are generally cautious on global earnings prospects given elevated margins and the risk of pricing and volume disappointments," Matejka wrote. "Consensus expectations of a re-acceleration in EPS momentum this and next year might end up too optimistic."
"Within this, relative regional earnings prospects matter for the relative regional performances. Most recently the US outperformance has been aided with better relative EPS momentum," Matejka added.
— Fred Imbert
Oil prices slightly higher after Iran-linked missiles kill U.S. troops
Oil prices advanced after missiles launched by Iran-backed militants killed U.S. troops in Jordan.
Global benchmark Brent traded 0.35% higher at $83.84 a barrel Monday, while the U.S. West Texas Intermediate futures rose 0.42% to $78.34 per barrel.
According to the White House, three U.S. service members were killed in an unmanned aerial drone attack on forces stationed in a northeast Jordan outpost near the Syria border on Sunday.
—Lee Ying Shan
Evergrande shares plunge 12% before trading halt as court orders liquidation
Hong Kong-listed shares of Evergrande plunged 12.2% in early trading before being halted on Monday as a Hong Kong court order the liquidation of the Chinese real estate developer.
Once one of the country's largest property developers, Evergrande has been enveloped in the Beijing's debt crisis in recent years.
The world's most indebted property developer defaulted in 2021 and announced an offshore debt restructuring program in March last year.
Before the ruling, the Wall Street Journal reported that Evergrande's overseas creditors failed to reach an 11th-hour deal this weekend to restructure, which could mean an imminent liquidation for the real estate
— Shreyashi Sanyal
Singapore central bank stands pat in first policy meeting of the year
Singapore's central bank left its monetary policy unchanged as expected on Monday in its first quarterly monetary policy decision of 2024.
The Monetary Authority of Singapore said it will maintain its exchange rate policy band known as the Singapore dollar nominal effective exchange rate or S$NEER.
"MAS will closely monitor global and domestic economic developments, and remain vigilant to risks to inflation and growth," the central bank said in a policy statement.
The central bank said it expects the country's gross domestic product to improve in 2024, estimating growth between 1% and 3%.
The MAS said core inflation is expected to rise in the current quarter "due in part to the one-off impact of the 1%-point hike in the GST from January this year." Singapore raised its goods and services tax by one percentage point on Jan. 1.
The benchmark Straits Times index edged 0.1% higher in early trading.
Read the full story here.
— Shreyashi Sanyal
Six Dow companies reporting earnings this week
Six of the 30-stock Dow Jones Industrial Average will be releasing their quarterly results this week.
Microsoft will be reporting its earnings on Tuesday after the bell. Boeing, which has been battered by issues with its 737 Max 9 planes, will be posting its quarterly earnings Wednesday morning.
On Thursday, Honeywell and Merck will be reporting, followed by Apple after the bell. Chevron will be announcing its results Friday morning.
— Hakyung Kim
Stock futures open lower
U.S. stock futures declined Sunday night.
Futures tied to the Dow Jones Industrial Average declined 86 points, or 0.2%. S&P 500 and Nasdaq 100 futures were down 0.2% and 0.3%, respectively.
— Hakyung Kim
