Stock market today: Stocks limp out of the starting gate
Monday kicked off another week of action on Wall Street with a quiet trading day that saw the major indices give up just some of last week’s meteoric gains.
For the third time this year, the S&P 500 ended the week higher [greater than] 6%,” says Michael Reinking, senior market strategist at the New York Stock Exchange. time later.”
The most notable group movement of the day came from the energy sector (+2.9%). Shares of which Marathon oil (MRO, +4.9%) and Valero Energy (VLO, +8.0%) soared amid a 1.8% jump in U.S. crude oil futures to $109.57.
Somewhere else, Robinhood Markets (HOOD) shares were temporarily halted and ended 14.0% higher following a Bloomberg report saying crypto exchange FTX was exploring ways to acquire the company. However, late in the trading day, FTX founder and CEO Samuel Bankman-Fried told CNBC “there are no active M&A conversations with Robinhood.”
The Nasdaq Compound the worst of the major indexes, and even then it was down just 0.8% to 11,520. S&P500 slipped 0.3% to 3,900, and the Dow Jones Industrial Average was down 0.2% at 31,438. Regardless, the experts pointed to some positive signs on the inflation front that could mean better things for stocks further down the road.
Peter Essele, head of portfolio management for Commonwealth Financial Network, noted durable goods orders rose 0.7% in May – the strongest such reading since January.
“Of particular note are the increases in manufacturers’ inventories and shipments, which continue to outpace new orders year-over-year,” he said. “Recent measures signal an easing of supply constraints across various channels of goods. If current trends continue, inflation is likely to moderate in the coming months, providing relief to consumers and establishing good outlook for stocks in the second half of the year.”
Meanwhile, Jay Hatfield, CEO of Infrastructure Capital Management, pointed to the continued shrinking of the Federal Reserve’s balance sheet.
“We estimate that the Fed is more than halfway through its quantitative tightening program,” he said. “We expect the quantitative tightening already executed will lead to lower inflation in the fall. Most commodity prices are down more than 20% from the highs and these declines should start to unfold [consumer price index] figures will be released in August.”
Other news on the stock market today:
- Small cap Russell 2000 bucked the trend, ending up 0.3% at 1,771.
- U.S. Crude Futures rose 1.8% to end at $109.57 a barrel.
- Gold Futures Contracts edged up 0.3% to settle at $1,824.80 an ounce.
- Bitcoin slipped 1.8% to $20,856.59. (Bitcoin trades 24 hours a day; prices shown here are as of 4 p.m.)
- Coinbase global (COIN) plunged 10.8% after Goldman Sachs Equity Research analyst Will Nance downgraded the sell crypto exchange from neutral and cut its price target to $45 instead. $70 – a nearly 20% discount from today’s close at $55.96. “We believe that current levels of crypto assets and trading volumes imply further deterioration in COIN’s revenue base, which we see falling by approximately 61% year-over-year in 2022 and d ‘about 73% in the second half of the year,’ Nance said. The analyst also believes further job cuts are needed to stem a “cash burn as retail activity dries up”, even after COIN’s recent announcement that it would cut its workforce by about 18%.
- Etsy (ETSY) fell 3.6% after Needham analyst Anna Andreeva downgraded the online market to Neutral from Buy. While the analyst says she still believes Etsy is “unique with great opportunity to increase frequency for buyers and sellers” over the long term, “the discretionary nature of the ETSY model [is] increasingly at risk” in the short term.
Dividends defend investors
Very few sectors of the market are in favor of investors this year, but dividend-paying stocks have been a much-needed bright spot.
Our Kiplinger Dividend 15, for example, has posted positive returns over the past 12 months as the S&P 500 sits in red ink – you can thank a well above average income stream that helps offset a period lower price Return.
Investors in the Dow’s highest-paying dividend-paying stocks also enjoyed relative respite. From our Dan Burrows:
“A capitalization-weighted index of the five highest-rated Dow dividend stocks with a yield of at least 2% as of February 14 [when we compiled our original list] generated a total return of 11% in 2022. In comparison, the total return of the S&P 500 since the beginning of the year is -17.5%.”
As we approach the second half of 2022, we take a renewed look at the Dow – and again look for the highest-rated, dividend-paying components of the industrial average. Although the list has changed somewhat since the start of the year, the five stocks appear to contain the tools investors will need to outperform through the end of 2022.