 | | |  Good morning. Markets continue to bet on a "soft landing" for the economy. Talk of a recession has dwindled as inflation has come down, but the labor market has remained strong. While economic growth has slowed, it hasn't gone negative. And as long as inflation continues to drop, investors seem content.
The latest sign of this soft landing playing out is with the Treasury yield curves. They're still inverted, indicating investors expect rates to move lower sooner rather than later. The Fed is near the end of its rate hike cycle, and it's possible there could be some small cuts next year. Typically, an inverted yield curve is a sign of trouble ahead. That trouble could still happen, but doesn't look as bad as it did at the start of the year.
Nevertheless, given the market's big run, traders should expect some more daily volatility and a slowdown in the overall market move over the summer. We may see some turbulence in the fall, but could set up for a final year-end run from here.
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| | |  | DOW 33,852.66 | -0.22% | | | | | S&P 4,376.86 | -0.04% | | |  | NASDAQ 13,591.75 | +0.27% | | | | | *As of market close | | | • | Stocks traded mixed on Wednesday, with a slight rally in tech stocks. | | | • | Oil rose 2.4 percent, closing at $69.29 per barrel. | | | • | Gold slid 0.3 percent, ending at $1,919 per ounce. | | | • | Cryptocurrencies generally declined, with bitcoin at $30,135 at the stock market close. | | | | | | | |
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| | Insider Activity Report: Southwest Gas Holdings (SWX) | | | | Carl Icahn, a major owner at Southwest Gas Holdings (SWX), recently added 9,652 shares. The buy came to a total price of $559,700, and increased his holdings by less than one percent.
Icahn has been increasing his position since March, buying over 3 million shares in total across a number of transactions. Company insiders were last sellers of shares in June 2022, when the share price was about 50 percent higher than where the stock trades today.
» FULL STORY | | | | |
| | Unusual Options Activity: Delta Air Lines (DAL) | | | | Airliner Delta Air Lines (DAL) is up over 40 percent in the past year, as flight demand has remained strong and energy prices have declined. One trader sees shares giving back some of those gains in the coming weeks.
That's based on the August $45 puts. With 50 days until expiration, 4,324 contracts traded compared to a prior open interest of 173, for a 25-fold rise in volume on the trade. The buyer of the puts paid $1.47 to make the bearish bet.
» FULL STORY | | | | |
| | • | Yield Curve Warns on Recession
The Treasury yield curve remains inverted, with shorter-term notes having a higher annualized yield than longer-dated bonds. Historically, yield curve inversions have presaged a recession. The current yield curve is still near its most inverted in history, but investors are largely ignoring the concern as economic data remains strong and inflation continues to decline. | | | | • | Powell Sees More Restrictive Monetary Policy Ahead
Federal Reserve Chairman Jerome Powell stated that he sees more "restriction" ahead for monetary policy. The strong labor market is the culprit, as high employment could keep pressure on consumer spending which in turn could keep inflation higher for longer. The Fed Chair has already hinted that there would be another two interest rate hikes this year, likely for a quarter point each. | | | | • | Corporate America Draws Down Cash
Companies have been drawing down their cash piles over the past year by about 12 percent on average. While the S&P 500 companies still have a relatively high amount of cash overall at $2 trillion, drawing down that cash leaves less on hand for an emergency or paying down debt. | | | | • | Companies Working on Next-Generation Air Conditioners
A number of companies, from large-cap players to startups, are working on creating better air conditioners. The technology is a major user of energy, and creating more efficient units could improve power grid needs, lower costs, and reduce the potential heating effects of using air conditioning units. | | | | • | PayPal Launching Tap-to-Pay Options on Android
Payment processing company PayPal (PYPL) is launching support for tap-to-pay on the Android operating system. The support will increase the value of PayPal's network, and allow merchants to use Venmo and Zettle in the U.S. as a means of payment. | | |
| | | | TOP | | | CCL | 8.999% | | | | NCLH | 7.683% | | | | WY | 3.879% | | | | NFLX | 3.602% | | | | GNRC | 3.578% | | | | BOTTOM | | | GIS | 5.309% | | | | ALB | 4.4% | | | | HSY | 3.961% | | | | SJM | 3.94% | | | | CAG | 3.841% | | | | |
| | |  | | All we've been hearing about this year is the pending recession, but the truth is the economy is on solid footing and the odds of a recession decrease with each piece of economic data. | | - Ryan Detrick, chief market strategist at the Carson Group, on why the market will likely trend higher, as economic data continues to show a slowdown, largely in inflation, but not to the point of a recession given the strength of the labor market and corporate earnings. | |
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