<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance here for up-to-the-minute briefings on the financial markets, breaking news and other topics of interest to investors and traders. Please check back for continuing coverage.” data-reactid=”15″>Follow Yahoo Finance here for up-to-the-minute briefings on the financial markets, breaking news and other topics of interest to investors and traders. Please check back for continuing coverage.
Stocks have surged while oil and gold have fallen following President Donald Trump’s response to Iran’s attack on two Iraqi bases housing US troops — more sanctions but no armed response.
4:15 p.m. ET: Stocks come off highs after rockets in Baghdad
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Stocks fell after a Reuters report that two blasts were heard in the Iraqi capital of Baghdad, pulling back from record highs after Trump announced no armed response to Iran’s attacks. The blasts were later revealed to be rockets that fell within Baghdad’s Green Zone, causing no casualties. There was no immediate claim of responsibility, Reuters says.” data-reactid=”18″>Stocks fell after a Reuters report that two blasts were heard in the Iraqi capital of Baghdad, pulling back from record highs after Trump announced no armed response to Iran’s attacks. The blasts were later revealed to be rockets that fell within Baghdad’s Green Zone, causing no casualties. There was no immediate claim of responsibility, Reuters says.
Here’s where markets were at 4:15 p.m. ET:
S&P 500 (^GSPC): +0.49% or +15.87 points to 3,253.05
2:45 p.m. ET: Market response to U.S.-Iran tensions will fade, strategist says
History suggests that developments in U.S.-Iran tensions will not leave a lasting mark on U.S. stocks, oil and safe haven assets, according to Capital Economics senior market economist Oliver Jones.
“We doubt that U.S.-Iran tensions will play more than a minor role in deciding the best and worst-performing asset classes in 2020 as a whole, at least outside the Middle East,” Jones wrote in a note entitled “A bit of perspective on geopolitical risk” Wednesday.
So far, Wednesday’s trading action – namely, a sharp rebound in equities and stark declines in oil and gold prices – are early indications that Jones’ thesis may come to pass over the course of the year.
“Such a small and short-lived reaction is actually fairly typical of what has happened after other events which have raised the risk of military action involving the U.S., like North Korea’s missile tests and the U.S. threats of ‘fire and fury’ in 2017, or the Cuban missile crisis in the 1960s,” Jones said.
As another example, Jones pointed to cross-asset performance after the start of the Gulf War in 1990s. In the immediate aftermath of this conflict, returns from energy commodities surged, precious metal prices firmed and equities sank, in a similar response as witnessed late last week after the first reports of the U.S. airstrike that took out top Iranian commander Qassem Soleimani.
“By the six-month mark, though, energy commodities had given back a lot of their initial gains. And precious metals had started to struggle, faring about as badly as global equities, which were contending with a recession in the US economy,” Jones said. A similar reversal also took place around six months after the start of the Iraq War in 2003, he added.
“These conflicts simply haven’t had large enough lasting effects on the global economy to matter much to markets outside the Middle East for long,” Jones said. “That looks like the most likely outcome this time too.”
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<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="1:45 p.m. ET: The oil shock is cancelled” data-reactid=”35″>1:45 p.m. ET: The oil shock is cancelled
Crude is collapsing in the wake of President Trump’s remarks, which markets are interpreting (rightly or wrongly) as a de-escalation of the U.S.’s standoff with Iran. Overnight, crude traders aggressively priced in the possibility of an armed confrontation, but Trump’s speech is momentarily calming fears of things heating up.
Brent is now down over 5% on the session, having cracked $60 per barrel.
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1:38 p.m. ET: S&P 500 and Nasdaq hit record highs
Following Trump’s announcement that Iran is “standing down,” the S&P 500 hit a record high of 3,260.98 and the Nasdaq hit a record high of 9,144.00.
Here’s where the major indices were at 1:38 p.m. ET:
S&P 500 (^GSPC): +0.65% or +20.90 points to 3,258.08
Nasdaq (^IXIC): +0.81% or +73.68 points to 9,142.26
Crude oil (CL=F): -5.12% or -3.21 to 59.49 a barrel
Gold (GC=F): -0.97% or -15.20 to 1,559.10 per ounce
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<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="12:55 pm. ET: GrubHub spikes on report of strategic options” data-reactid=”53″>12:55 pm. ET: GrubHub spikes on report of strategic options
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="GrubHub (GRUB) is staging a breathtaking rally of nearly 14% on the day, after The Wall Street Journal reported that the food delivery startup is weighing its options, which may include a sale. The report said talks are in early stages and nothing may come of it. The stock has hit rough shoals since going public nearly 6 years ago, with its valuation less than half of where it began life as a public company.” data-reactid=”54″>GrubHub (GRUB) is staging a breathtaking rally of nearly 14% on the day, after The Wall Street Journal reported that the food delivery startup is weighing its options, which may include a sale. The report said talks are in early stages and nothing may come of it. The stock has hit rough shoals since going public nearly 6 years ago, with its valuation less than half of where it began life as a public company.
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<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="11:40 a.m. ET: Trump vows more sanctions on Iran but no armed response” data-reactid=”60″>11:40 a.m. ET: Trump vows more sanctions on Iran but no armed response
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President Donald Trump addresses the nation from the White House on the ballistic missile strike that Iran launched against Iraqi air bases housing U.S. troops, Wednesday, Jan. 8, 2020, in Washington, as Vice President Mike Pence, Secretary of State Mike Pompeo and military leaders, looks on. (AP Photo/Alex Brandon)
Addressing Iran’s retaliation against U.S. bases in Iraq late Tuesday, President Donald Trump said Tehran “appears to be standing down” — in keeping with most observers’ thinking that an armed U.S. response isn’t imminent. Trump added that his administration “will immediately impose additional punishing economic sanctions on the Iranian regime.”
Investors seemed to cheer that news, with stocks adding to the session’s gains on hopes that tensions won’t spiral into further armed conflict.
Here were the main moves in markets, as of 11:46 a.m. ET:
<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="11:00 a.m. ET: The oil shock that never was (and might never be)” data-reactid=”95″>11:00 a.m. ET: The oil shock that never was (and might never be)
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="With Iran escalation fears (momentarily) in retreat, oil (CL=F) has reversed dramatically after spiking by 4% in after-hours trading on Tuesday. One of the major concerns about a prolonged U.S.-Iran conflict has been the impact on crude — and whether it would spark a global supply crisis that could send prices well above $100.” data-reactid=”96″>With Iran escalation fears (momentarily) in retreat, oil (CL=F) has reversed dramatically after spiking by 4% in after-hours trading on Tuesday. One of the major concerns about a prolonged U.S.-Iran conflict has been the impact on crude — and whether it would spark a global supply crisis that could send prices well above $100.
The U.S. shale boom has lubricated world markets with oil, and helped insulate the world’s largest economy from supply shocks. Torsten Slok, Deutsche Bank’s top economist, pointed out that the U.S. is in fact much less sensitive to rising oil prices than in years past.
View photos
The US economy is much less sensitive to higher oil prices today than it used to be.
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10:46 a.m. ET: Nasdaq hits, holds near fresh record high
The Nasdaq posted an all-time high of 9,104.99 at about 10:15 a.m. ET. The index held near this record level as investors continued to shrug off the most recent U.S.-Iran developments. Both the S&P 500 and Dow were also in the green, with the former within 0.3% of its own all-time high at the highs of the session so far.
Here were the main moves in markets, as of 10:46 a.m. ET:
S&P 500 (^GSPC): 3,240.96, up 3.78 points or 0.12%
Over the course of a more than two-hour press conference in Lebanon, former Nissan chief executive officer Carlos Ghosn attempted to explain his reasoning for fleeing Japan, where he had been arrested under allegations of financial misconduct and aggravated breach of trust.
In his first public appearance since his escape, Ghosn went into detail over his treatment in Japan, which has a conviction rate north of 99% and where he believed he would not be given a fair trial. He described solitary confinement, a lack of access to prescribed medications, hours of interrogation and just two showers a week as all part of his incarceration.
Ghosn blamed a host of individuals and institutions for his situation, including Japanese prosecutors and government officials, and Nissan and its law firm.
The former auto executive was arrested in November 2018 and faced multiple charges for allegedly under-reporting years’ worth of compensation and misusing Nissan’s resources for his personal gain.
Iranian officials said they believed a mechanical issue caused the crash of the Boeing 737-800 aircraft, which had been en route to Ukraine’s capital Kyiv.
The crash took place just hours after Iran launched a missile attack on airbases in Iraq housing U.S. troops.
Ukrainian officials have most recently declined to offer their assessment for the cause of the accident, as the investigation remains ongoing.
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9:31 a.m. ET: Markets open little changed
U.S. equities opened mostly flat, shrugging off earlier fears after Iran launched more than a dozen missiles to strike U.S.-Iraqi airbases.
Here were the main moves in markets, as of 9:31 a.m. ET:
S&P 500 (^GSPC): 3,238.20, up 1.02 points or 0.03%
Gold (GC=F): $1,578.40 per ounce, up $4.10 or 0.26%
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8:15 a.m. ET: Private payrolls rise more than expected in December
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The U.S. economy added 202,000 private payrolls at the end of last year, according to a report from ADP/Moody’s Wednesday. This exceeded consensus economist expectations for an increase of just 160,000, according to Bloomberg data. In November, private payrolls had risen by an upwardly revised 124,000, from the 67,000 reported previously.” data-reactid=”173″>The U.S. economy added 202,000 private payrolls at the end of last year, according to a report from ADP/Moody’s Wednesday. This exceeded consensus economist expectations for an increase of just 160,000, according to Bloomberg data. In November, private payrolls had risen by an upwardly revised 124,000, from the 67,000 reported previously.
By sector, service-producing firms led December’s advances, posting a net increase of 173,000 jobs. However, gains were capped by a loss of 21,000 jobs in the leisure and hospitality industry, and a loss of 14,000 jobs in the information industry.
Goods-producing firms increased jobs by a net 29,000, with a gain of 37,000 payrolls in construction industries offset by declines in mining and manufacturing.
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<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="8:00 a.m. ET: Carlos Ghosn speaks for the first time since fleeing Japan” data-reactid=”177″>8:00 a.m. ET: Carlos Ghosn speaks for the first time since fleeing Japan
Former Nissan chief Carlos Ghosn slammed the Japanese justice system during his first public appearance since fleeing the country.
“I did not escape justice. I fled injustice and persecution, political persecution,” Ghosn said at a press conference in Lebanon on Wednesday. “You’re going to die in Japan or you’ve got to get out.”
Wall Street jitters flared before quieting after Iran fired missiles at U.S.-Iraqi airbases during the overnight session. The retaliatory move by Iran, after a U.S. airstrike last week took out its top military general, produced no reported casualties so far.
Here were the main moves during the pre-market session, as of 7:33 a.m. ET:
S&P futures (ES=F): 3,241.50, up 6.25 points or 0.19%
Dow futures (YM=F): 28,513, down 13 points or 0.05%
Nasdaq futures (NQ=F): 8,870.25, up 17.25 points or 0.19%
Crude oil (CL=F): $62.59 per barrel, down $0.11 or 0.18%
Gold (GC=F): $1,578.90 per ounce, up $4.60 or 0.29%
After reports of the projectiles around 5:30 p.m. ET Tuesday, stock futures slid and gold and oil prices spiked. Brent crude oil prices briefly surged to $71.75 per barrel and gold jumped to more than $1,600 per ounce for the first time in about seven years. These gains, however, retraced shortly thereafter.
“There was a knee-jerk reaction in financial markets, with oil and gold prices rising,” UBS economist Paul Donovan wrote in a note Wednesday. “However, a response was expected by investors, and the initial market moves seem hard to justify.”
In an effort to address economic disparities and promote entrepreneurship among Black communities, Canada introduced the Federal Black Entrepreneurship Program (FBEP) and the associated Black Entrepreneurship Loan Fund (BEFL). However, recent revelations have brought to light a shocking reality: the underutilization and obstacles faced by Black businesses in accessing the FACE (Funding for Black Entrepreneurship) loans. In this thought-provoking article, we delve into the numbers and uncover the challenges and experiences of Black entrepreneurs in navigating these loan programs. Through interviews with business owners, experts, and advocates, we shed light on the systemic barriers that hinder their success and explore potential solutions for a more equitable and inclusive lending landscape.
The FACE loan program was created with the intention of providing financial support and resources to Black-owned businesses. However, the reality has been far from the expected outcomes. Jessica Thompson, an economist specializing in racial disparities, states, “The FACE loan program was designed to address historical economic disadvantages, but the numbers reveal a significant gap between its objectives and the lived experiences of Black entrepreneurs.”
Black entrepreneurs face numerous hurdles when attempting to access FACE loans. A lack of awareness about the program, complex application processes, and limited outreach to communities in need contribute to low participation rates. Michael Johnson, a business owner, shares his frustration, saying, “It’s disheartening to see a program that was meant to uplift Black businesses fall short due to bureaucratic obstacles. Many of us struggle to navigate the application process and meet the stringent criteria.”
Systemic barriers and discrimination persist within the lending landscape, perpetuating the cycle of inequality. Dr. Maya Williams, a sociologist specializing in racial disparities, explains, “Structural racism and bias continue to disadvantage Black entrepreneurs. Discrimination in loan approvals, higher interest rates, and limited access to capital contribute to the challenges faced by Black-owned businesses.”
The consequences of the FACE loan program’s shortcomings are far-reaching. Many Black-owned businesses struggle to access the capital needed for growth, expansion, and operational sustainability. Tanya Campbell, a business owner, emphasizes, “The lack of financial support hampers our ability to scale our businesses, hire employees, and contribute to the local economy. It perpetuates a cycle of limited opportunities and restricted growth.”
To address the disparities within the FACE loan program, experts and advocates propose several solutions. Improved outreach and community engagement, simplified application processes and tailored support services can increase access and awareness among Black entrepreneurs. John Stevens, a business consultant, suggests, “The government must invest in targeted initiatives that address the specific needs and challenges faced by Black-owned businesses, such as mentorship programs, financial literacy training, and capacity-building initiatives.”
Addressing the challenges faced by Black entrepreneurs requires collaboration and accountability from various stakeholders. Governments, financial institutions, and community organizations must work together to create an inclusive lending ecosystem. Mary Johnson, an advocate for Black economic empowerment, states, “Transparency, accountability, and ongoing dialogue between policymakers, lenders, and Black entrepreneurs are essential to drive meaningful change and ensure equal opportunities for all.”
The FACE loan program aimed to empower Black entrepreneurs and address economic disparities, but the reality falls short of expectations. The underutilization and obstacles faced by Black businesses in accessing FACE loans highlight the pressing need for systemic change within the lending landscape. By acknowledging and addressing the structural barriers, streamlining processes, and fostering collaboration, we can create a more inclusive and equitable environment where Black entrepreneurs thrive. It is through proactive measures, collective effort, and ongoing dialogue that we can dismantle systemic inequities and build a future where Black-owned businesses have equal access to the resources and support necessary for success.
Crude oil began trading this week with a gain after President Biden and House Speaker Kevin McCarthy were reported to have reached a provisional agreement on raising the debt ceiling.
At the time of writing, Brent crude was trading at over $77 per barrel and West Texas Intermediate was changing hands at over $73 per barrel.
Debt ceiling negotiations have been a major factor for oil price movements in the past couple of weeks, mostly because of the apparent inability of Republicans and Democrats in Congress to strike any semblance of an agreement on how to increase the federal government’s borrowing power.
According to early reports on the tentative deal, it involves flat spending over the next two years and the recycling of unused Covid funds.
Although such tense negotiations have been relatively regular in past years, they have eventually ended with an agreement, and default has invariably been avoided.
This historical evidence could have served to stabilize prices but it did not, and neither did mixed data about China’s recovery. On the one hand, PMI readings are showing an uneven rebound in economic activity, but on the other, demand for oil as evidenced by import rates, is going strong.
To complicate the picture further, OPEC+ is reportedly in two minds about what to do with its output at its next meeting.
According to reports quoting Saudi Energy Minister Abdulaziz bin Salman, he has hinted at another round of output cuts.
According to reports quoting Russia’s Deputy Prime Minister and top OPEC+ official Alexander Novak, the co-leader of the extended cartel is fine with production where it is right now.
Thanks to its recent gains, oil’s decline since the start of the year has shrunk from about 14% earlier this month to just 9% as of the start of this week, according to Bloomberg.
By Irina Slav for Oilprice.com
Irina Slav
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
American equity futures posted modest gains amid cautious optimism the U.S. will avert a catastrophic default after the weekend’s tentative debt-ceiling deal. European stocks wavered in muted holiday-affected trading.
Contracts on the S&P 500 climbed about 0.2 per cent, while those on the Nasdaq 100 were up around 0.3 per cent, with trading set to end early for Memorial Day. The dollar, which has benefited from angst around the statutory borrowing limit, held Friday’s decline while Treasury futures were flat in the absence of cash trading.
The Stoxx Europe 600 index edged lower, with Spain’s benchmark underperforming after Prime Minister Pedro Sanchez called a surprise snap election following heavy losses for his party in regional and local elections Sunday. Volumes were about 60 per cent lower than usual as markets in the U.K. and some European countries remained closed for national holidays. SBB gained after the embattled Swedish landlord said it may look to sell the company. A gauge of Asia-Pacific equities rose, though Chinese shares slid closer to a bear market.
President Joe Biden and House Speaker Kevin McCarthy expressed confidence that their agreement to curtail spending and extend the borrowing limit will pass through Congress. But even assuming lawmakers seal the deal before the U.S. government runs out of cash in about a week, traders still have much to contend with — from the prospect of another interest-rate hike from the Federal Reserve to a likely deluge of bond issuance from the U.S. Treasury Department.
“The obvious positive interpretation is that a negative tail risk is close to being taken off the table,” said Dan Suzuki, deputy chief investment officer at Richard Bernstein Advisors. “With the distraction of the debt ceiling fading into the background, investors can now refocus their attention on the underlying fundamentals. One concern, though, is that the fundamental picture remains precarious.”
European bonds rose, with Germany’s 10-year yield falling about 11 basis points. Spain’s 10-year yield dropped by a similar amount.
Meanwhile, Turkey’s lira weakened after Recep Tayyip Erdogan won a presidential runoff election on Sunday, extending his time as the nation’s longest-serving leader and leaving investors looking for any signs he’ll start to relax the state’s tight grip over markets. The nation’s stocks benchmark gained.
Gold was flat on waning demand for havens, while as oil held onto most of Friday’s gains and Bitcoin climbed, reflecting a modestly buoyant tone.
‘UNCERTAINTY PERSISTS
The agreement struck by Biden and McCarthy is running against the clock given that June 5 is the date when Treasury Secretary Janet Yellen has said cash will run out. There is plenty in the deal that Democrats and Republicans won’t like.
“Uncertainty persists regarding the duration and severity of the ongoing earnings recession, and perversely, the near-term tightening of liquidity may worsen due to the government’s need to address its debt issuance backlog,” said Suzuki. “While the markets managed to avert an immediate crisis, the coast is far from all-clear just yet.”
The rate-sensitive two-year Treasury drifted Friday as traders considered how a debt agreement could play into the Fed’s path forward on interest rates. The two-year yield hovered around 4.65 per cent after a report on consumer spending showed the Fed still has more work to do to bring inflation back toward its target.
“Markets will have the liquidity hassles to deal with, as the Treasury will issue a deluge of bonds to restore its cash reserves,” said Charu Chanana, market strategist at Saxo Capital Markets. “Not to forget, the hawkish re-pricing of the Fed path that we have seen last week could possibly get firmer if we get a hot jobs print this week.”
Key events this week:
U.S. Memorial Day holiday. U.K., Switzerland and some Nordic markets also closed for holidays, Monday
