Wed, April 24, 2024 at 9:35 AM EDT
Business
Stock market news live updates: S&P 500, Nasdaq press on after biggest one-day surge since 2020
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U.S. stocks extended a dramatic ascent on Friday after deceleration in CPI inflation data ignited the most intense rally on Wall Street since early 2020.
The S&P 500 (^GSPC) rose 1%, while the technology-heavy Nasdaq Composite (^IXIC) gained 2%. The Dow Jones Industrial Average (^DJI) turned positive heading into the close after lagging behind the other indexes for much of the session. Treasury yields held steady following their steepest one-day decline Thursday in more than a decade.
A reversal in China’s Zero-COVID policy to reduce the amount of time in quarantine travelers to the country spend buoyed sentiment in early trading. Oil markets advanced as traders speculated the move may stoke a boost to commodity demand, with West Texas Intermediate (WTI) futures bouncing nearly 3% to above $88 per barrel.
Meanwhile on the economic data front, the University of Michigan’s preliminary reading on its consumer sentiment survey for Nov. fell to 54.7 from. 59.9 in October, the lowest since July.
All three major averages skyrocketed Thursday, each recording their largest one-day advances since a rebound from the throes of the COVID crash more than two years ago. Outsized moves were catalyzed by lighter October consumer price data that fueled bets the Federal Reserve may halt the tightening of financial conditions as soon as early next year. The S&P 500, Dow, and Nasdaq soared 5.5%, 3.7% — or 1,200 points — and 7.4%, respectively.
“Overall, the report suggests that peak inflation may finally be behind us, though inflation may remain elevated for a while,” BNY Mellon Investment Management Head of U.S. Macro Sonia Meskin said in a note Thursday.
She noted that the figure supports the smaller 0.50% rate increase for December telegraphed at this month’s FOMC meeting, which investors are pricing in.
“However, it is also important to not over-emphasize one report for inflation and policy trajectory,” she added.
The Consumer Price Index (CPI) in October rose at an annual 7.7% and increased 0.4% over the month. On a “core” basis, which strips out the volatile food and energy components of the report, prices rose at a clip of 6.3% year-over-year and 0.3% on a monthly basis.
Despite the moderation, many strategists assert that excitement is premature, with Federal Reserve officials still poised to tighten further after Chair Jerome Powell said last month that policymakers still have “some ways to go” on restoring price stability — a message that his central bank colleagues have since also echoed in a series of public speeches.
“The Fed’s extreme data dependence combined with the fact that economic data will only show the real-time labor market and inflation slowdown with a lag, increases the odds of an overtightening accident,” Gregory Daco, EY Parthenon chief economist, said in emailed comments.
Meanwhile, Nicholas Colas of DataTrek points out another reality: Although inflation trends lower once it peaks and starts to decline – as seen in 1970, 1974, 1980, 1990, 2001, and 2008 – that downshift typically comes with recessions, and there are no exceptions to the rule.
Turmoil persisted in cryptoworld as the FTX debacle unravels and the company announced Friday morning that it was filing for bankruptcy. Fallen crypto hero billionaire Sam Bankman-Fried has also stepped down as CEO and is reported to be under investigation by the U.S. Securities and Exchange Commission as his exchange seeks a cash bailout. Bitcoin traded around $16,500 Friday morning.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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Business
Oil Firms Doubtful Trans Mountain Pipeline Will Start Full Service by May 1st
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Oil companies planning to ship crude on the expanded Trans Mountain pipeline in Canada are concerned that the project may not begin full service on May 1 but they would be nevertheless obligated to pay tolls from that date.
In a letter to the Canada Energy Regulator (CER), Suncor Energy and other shippers including BP and Marathon Petroleum have expressed doubts that Trans Mountain will start full service on May 1, as previously communicated, Reuters reports.
Trans Mountain Corporation, the government-owned entity that completed the pipeline construction, told Reuters in an email that line fill on the expanded pipeline would be completed in early May.
After a series of delays, cost overruns, and legal challenges, the expanded Trans Mountain oil pipeline will open for business on May 1, the company said early this month.
“The Commencement Date for commercial operation of the expanded system will be May 1, 2024. Trans Mountain anticipates providing service for all contracted volumes in the month of May,” Trans Mountain Corporation said in early April.
The expanded pipeline will triple the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.
The Federal Government of Canada bought the Trans Mountain Pipeline Expansion (TMX) from Kinder Morgan back in 2018, together with related pipeline and terminal assets. That cost the federal government $3.3 billion (C$4.5 billion) at the time. Since then, the costs for the expansion of the pipeline have quadrupled to nearly $23 billion (C$30.9 billion).
The expansion project has faced continuous delays over the years. In one of the latest roadblocks in December, the Canadian regulator denied a variance request from the project developer to move a small section of the pipeline due to challenging drilling conditions.
The company asked the regulator to reconsider its decision, and received on January 12 a conditional approval, avoiding what could have been another two-year delay to start-up.
Business
Tesla profits cut in half as demand falls
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Tesla profits slump by more than a half
Tesla has announced its profits fell sharply in the first three months of the year to $1.13bn (£910m), compared with $2.51bn in 2023.
It caps a difficult period for the electric vehicle (EV) maker, which – faced with falling sales – has announced thousands of job cuts.
Boss Elon Musk remains bullish about its prospects, telling investors the launch of new models would be brought forward.
Its share price has risen but analysts say it continues to face significant challenges, including from lower-cost rivals.
The company has suffered from falling demand and competition from cheaper Chinese imports which has led its stock price to collapse by 43% over 2024.
Figures for the first quarter of 2024 revealed revenues of $21.3bn, down on analysts’ predictions of just over $22bn.
But the decision by Tesla to bring forward the launch of new models from the second half of 2025 boosted its shares by nearly 12.5% in after-hours trading.
It did not reveal pricing details for the new vehicles.
However Mr Musk made clear he also grander ambitions, touting Tesla’s AI credentials and plans for self-driving vehicles – even going as far as to say considering it to be just a car company was the “wrong framework.”
“If somebody doesn’t believe Tesla is going to solve autonomy I think they should not be an investor,” he said.
Such sentiments have been questioned by analysts though, with Deutsche Bank saying driverless cars face “technological, regulatory and operational challenges.”
Some investors have called for the company to instead focus on releasing a lower price, mass-market EV.
However, Tesla has already been on a charm offensive, trying to win over new customers by dropping its prices in a series of markets in the face of falling sales.
It also said its situation was not unique.
“Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs,” it said.
Despite plans to bring forward new models originally planned for next year the firm is cutting its workforce.
Tesla said it would lose 3,332 jobs in California and 2,688 positions in Texas, starting mid-June.
The cuts in Texas represent 12% of Tesla’s total workforce of almost 23,000 in the area where its gigafactory and headquarters are located.
However, Mr Musk sought to downplay the move.
“Tesla has now created over 30,000 manufacturing jobs in California!” he said in a post on his social media platform X, formerly Twitter, on Tuesday.
Another 285 jobs will be lost in New York.
Tesla’s total workforce stood at more than 140,000 late last year, up from around 100,000 at the end of 2021, according to the company’s filings with US regulators.
Musk’s salary
The car firm is also facing other issues, with a struggle over Mr Musk’s compensation still raging on.
On Wednesday, Tesla asked shareholders to vote for a proposal to accept Mr Musk’s compensation package – once valued at $56bn – which had been rejected by a Delaware judge.
The judge found Tesla’s directors had breached their fiduciary duty to the firm by awarding Mr Musk the pay-out.
Due to the fall in Tesla’s stock value, the compensation package is now estimated to be around $10bn less – but still greater than the GDP of many countries.
In addition, Tesla wants its shareholders to agree to the firm being moved from Delaware to Texas – which Mr Musk called for after the judge rejected his payday.
Business
Stock market today: Nasdaq futures pop, Tesla surges after earnings with more heavyweights on deck
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Tech stocks rose on Wednesday, outstripping the broader market as investors welcomed Tesla’s (TSLA) cheaper car pledge and waited for the next rush of corporate earnings.
The Nasdaq Composite (^IXIC) rose roughly 0.6%, coming off a sharp closing gain. The S&P 500 (^GSPC) was up 0.2%, continuing a rebound from its longest losing streak of 2024, while the Dow Jones Industrial Average (^DJI) fell 0.1%.
Tesla shares jumped nearly 12% after the EV maker’s vow to speed up the launch of more affordable models eclipsed its quarterly earnings and revenue miss. That cheered up investors worried about growth amid a strategy shift to robotaxis and the planned cancellation of a cheaper model.
The results from the first “Magnificent Seven” to report have intensified the already high hopes for Big Tech earnings, that the megacaps can revive the rally in stocks they powered. The spotlight is now on Meta’s (META) report due after the market close, as the Facebook owner’s shares rose after the Senate voted for a potential ban on rival TikTok. Microsoft (MSFT) and Alphabet (GOOG) next up on Thursday.
Meanwhile, Boeing (BA) reported better than expected first quarter results before the opening bell with a loss per share of $1.13, narrower than the $1.72 estimated by Wall Street. Shares rose about 2% in morning trade.
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