December 9, 2022

Stock markets rebound after a week of injury

Stock markets rebound after a week of injury

Stock markets rose on Monday, in their latest move in a series of big swings, after several major financial institutions reported profits that beat expectations and Britain’s new finance minister announced the reversal of Prime Minister Liz Truss’ tax plan.

Monday’s recovery marks another big move in the stock market, as daily large swings are becoming more and more common. The S&P 500 rose 2.6 percent by midday, reversing a drop of more than 2 percent on Friday, which itself came after a rise of more than 2 percent on Thursday. The benchmark index has posted five days of moves of more than 2 percent this month, with Monday on track to be sixth, versus just two days in September.

The S&P 500 has been down more than 22 percent since the start of the year.

The big shift in the markets came after Bank of America, The second largest bank in the countryQuarterly earnings exceeded expectations. The bank noted continued strength in consumer spending, echoing its earnings Other major banks At the end of last week. Bank of America shares were up 5.4 percent by midday. Charles Schwab and Bank of New York Mellon also reported better-than-expected earnings.

Investors are closely watching companies that reported earnings this quarter to gauge whether major companies are beginning to feel the effects of the economic downturn. This week, industry leaders such as American Airlines, Goldman Sachs and Procter & Gamble are set to open their books, providing updates and forecasts for investors worried about the course of the economy.

Last week, data showed that US inflation has not subsided as much as economists had expected, a sign that the Federal Reserve may announce another big rate hike at its next meeting in November, which could limit economic growth. This, along with a survey showing an increase in consumers’ expectations of future inflation, cast a shadow over the markets.

US government bond yields, a benchmark for borrowing costs, have fallen. The yield on the two-year bond fell to 4.4 percent after rising to its highest level since 2007 on Friday. The yield on 10-year notes fell to 3.9 percent. Yields inconsistent with prices.

Elsewhere, London’s FTSE 100 closed with a gain of 0.9 per cent, the British pound strengthened and UK government bond yields fell after Jeremy Hunt, newly installed On Monday, the Treasury Secretary announced further backsliding from Ms. Truss’ plan to Tax deductions financed by additional borrowing.

“At a time when markets are rightly calling for sustainable public fiscal commitments, it is not right to borrow to fund this tax cut,” said Mr. Hunt.