August 8, 2022

Stocks fall as earnings season improves

Stocks fall as earnings season improves

US stocks fell sharply in the last hour of trading on Monday after the Apple news (AAPL) plans to slow hiring and rein in spending next year in preparation for a possible recession.

Bloomberg News Monday afternoon reported that the slowdown in recruitment The spending cuts will occur across certain departments and stem from a move toward “exercise caution during uncertain times,” according to people familiar with the matter who requested anonymity. Apple shares closed down 2.1%.

The S&P 500 and Nasdaq are down about 0.8%, while the Dow Jones Industrial Average is down more than 200 points, or 0.7%. Prior to the report, all three major indicators had reached session highs of at least 1%.

The Wall Street Journal mentioned Federal Reserve officials “indicated that they are likely to raise interest rates by 0.75 percentage points later this month.” Expectations To raise 100 basis points from the Federal Reserve at its next meeting on July 26 and 27, it rose last week after a Consumer Price Index (CPI) reading for June.

American Bank (buck) and a rounding of Goldman Sachs results ahead of Monday’s trading session. Goldman Sachs It posted a lower than expected drop of 48%. In second-quarter earnings, losses were partially offset by strength in the fixed-income trading business. Meanwhile, Bank of America Its earnings saw a 34% drop.due to lower investment banking revenues amid slowing deal-making activity.

Results come after The financial sector posted its best intraday gain since May on Fridaybacked by Citigroup’s win in the second quarter (c), a day after traders evaluated disappointing financial statements from JPMorgan (JPMand Morgan StanleyMs).

CEO of JPMorgan Jimmy Damon warned On Thursday’s post-earnings call, he said risks to the US economy appeared “closer than they have been before” and said the outlook would depend on “the effectiveness of quantitative tightening and flawed and volatile markets.”

Similar comments are expected from leaders across US companies this week such as More companies reveal how their business is affected During the last volatile quarter. Not only are the numbers expected to reflect more moderate earnings, but traders are also bracing for possible downside directional reviews as companies determine the impact of higher prices, quantitative tightening and the war in Ukraine on their business prospects.

“The most important indicator of the economy over the next few weeks will be earnings releases, companies say,” said Garji Choudhury, iShares’ Americas head of investment strategy at BlackRock, in a note.

NEW YORK, NY – July 12: A woman walks near the New York Stock Exchange, on July 12, 2022 in New York. Wall Street turned lower amid the recession, the S&P 500 closed 1.2% lower while technology stocks pushed the Nasdaq down 2.3%. (Photo by John Smith/VIEWpress)

“We will be watching to see if companies can still continue to pay higher prices to consumers, and which sectors are significantly downgrading their earnings outlook in the future,” Chaudhry added. “We will also be watching to see how much downside risk is observed in the earnings call feature.”

More than 70 companies are due to announce their results this week. Big tech profits are set to trickle in, starting with Netflix (NFLX(After the market closed on Tuesday, Tesla)TSLA(After the Wednesday bell, Twitter)TWTR) before the start of trading on Friday.

Monday’s moves in the markets come after Friday’s rally that saw stocks close sharply higher as Wall Street tried to pare losses from a turbulent week triggered by a surprising CPI reading in June. However, the S&P 500, Dow and Nasdaq all closed the week lower.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter Tweet embed

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