Monday May 23rd


Stock futures rise as Wall Street attempts to rebound after relentless sell-off

U.S. stock index futures rose Monday morning, as the market tried to recover some of the losses from a relentless sell-off that has gripped Wall Street. Futures on the Dow Industrial Average gained 265 points, or 0.8%. S&P 500 futures added 0.8%, and Nasdaq 100 futures rose 0.5%. Shares of VMWare jumped more than 20% after Bloomberg News and Reuters reported, citing sources, that chipmaker Broadcom is in talks to acquire the cloud services company. Broadcom shares fell 5%. Electronic Arts shares rose 3.6% in early trading following a report that the video game maker is actively seeking a sale or merger. Sentiment appeared to have gotten a boost after President Joe Biden said he was considering reducing tariffs on some products imported from China. “I am considering it,” Biden said. “We did not impose any of those tariffs. They were imposed by the last administration and they’re under consideration.” The moves came after the S&P 500 on Friday dipped into bear market territory on an intraday basis. While the benchmark was down 20% at one point, it did not close in a bear market after a late-day comeback. Investors have been looking for signs of a bottom as the market 2022 sell-off in stocks approaches its sixth month. Oppenheimer’s chief investment strategist, John Stoltzfus, notes that nasty sell-offs aren’t uncommon in times of Fed tightening, and that the market appears “way over sold” with big declines hitting even stocks with strong cash flow and profitability. “We remain positive on equities favoring cyclicals over defensives and profitable technology companies whose services and products are deeply embedded in the lives of both business and the consumer,” he said in a note Monday. “We look for the economy and the markets... to ‘work their way out of the woods’ from a period of high anxiety and crisis.” The S&P 500 currently sits 19% off its record high, while the Dow is down 15.4%. The Nasdaq is already deep in bear market territory, down 30% from its high. Last week marked the Dow’s first eight-week losing streak since 1923, while the S&P 500 capped a seven-week losing streak, its worst since 2001. The Nasdaq saw its seventh negative week in a row for the first time since March 2001. The tech-heavy index also saw its lowest intraday level since November 2020 on Friday. “Investors are trying to come to grips with what exactly is happening and always try to guess what the outcome is,” said Susan Schmidt of Aviva Investors. “Investors hate, and the markets hate uncertainty, and this is a period where they don’t have any clear indication on what’s going to happen with this push-pull between inflation and the economy.” Investors are looking ahead to a new batch of earnings this week, including an array of big retail names. Zoom Video is set to report results Monday followed by Costco, Nvidia, Dollar General, Nordstrom and Macy’s later in the week. Shares in the Asia-Pacific region were mixed on Monday as global concerns continued to plague investors. Hong Kong’s Hang Seng index pared some earlier losses but still fell 1.34% in afternoon trade, while the Hang Seng Tech index slid 2.65%. The Shanghai Composite recovered from earlier losses to close nearly flat at 3,146.86, while the Shenzhen Component declined 0.06% to 11,447.95. In Japan markets, the Nikkei 225 rose 0.98% to 27,001.52, while the Topix climbed 0.92% to 1,894.57. The Kospi in South Korea also fluctuated during the trading day but was up 0.31% at 2,647.38 at the close, while the Kosdaq advanced 0.42% to 883.59. Oil prices rose Monday with U.S. fuel demand, tight supply and a slightly weaker U.S. dollar supporting the market, as Shanghai prepares to reopen after a two-month lockdown fueled worries about a sharp slowdown in growth. Brent crude futures rose $1.52, or 1.4%, to $114.08 per barrel, while U.S. West Texas Intermediate (WTI) crude futures climbed $1.39, or 1.26%, to $111.67 a barrel, adding to last week’s small gains for both contracts. Gold prices jumped Monday as an easing dollar continued to support greenback-priced bullion, although higher U.S. Treasury yields capped gains. Spot gold rose 1% to $1,864.19 per ounce. U.S. gold futures gained 1.1% to $1,862.70.