Tech leads market bounce as Powell soothes rate-cut nerves

Tech stocks led the markets higher on Thursday as investors hunting for interest-rate clues shifted focus to the coming US jobs report.

The Dow Jones Industrial Average (^DJI) rose roughly 0.4%, coming off three losing days in a row for the blue-chip index. The S&P 500 (^GSPC) put on 0.7%, while contracts on the tech-heavy Nasdaq Composite (^IXIC) popped about 0.8%, with both gauges building on slight closing gains.

The market is shaking off stocks’ rough start to the second quarter after Chair Jerome Powell soothed concerns the Federal Reserve would lose its nerve for making rate cuts.

Recent signs of acceleration in the economy raised the odds of further rate hikes — a so-called “no landing.” By sticking to the same tune — that the Fed will cut rates this year, but will choose its moment given inflation’s bumpy path downward — Powell appears to have put the debate to rest for now.

Focus is now shifting to the March jobs report, due out Friday morning, a key economic input for the Fed’s data-dependent policy decision-making. By and large, experts don’t expect to see any sign of cracks in the strong US labor market story. Department of Labor data released on Thursday showed initial jobless claims rose by 9,000 to 221,000 last week, their highest level since January.

On the corporate front, Levi Strauss (LEVI) shares jumped 18% after the jeans maker boosted its full-year earnings forecasts. Meanwhile, BlackBerry’s (BB) US-listed stock popped as the Canadian company’s cybersecurity unit helped deliver a surprise quarterly profit.

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  • Meta hits new high, helps lead Nasdaq higher

    Meta (META) shares gained more than 2% to hit a new high of $523.85 during Thursday’s session.

    The stock is up 47% year-to-date as the second best performer out of the ‘Magnificent 7’, behind Nvidia (NVDA).

    Shares of the social media giant were helping lift the Nasdaq Composite (^IXIC) on Thursday, the biggest gainer out of the major averages.

     

  • Tech stocks lead markets higher

    Stocks opened higher on Thursday with tech stocks leading the gains after a rough start to the second quarter.

    The Dow Jones Industrial Average (^DJI) rose about 0.7%, coming off three losing days in a row for the blue-chip index.

    The S&P 500 (^GSPC) gained 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) popped about 0.9%, after both gauges made slight gains in the previous session.

    The S&P 500 Technology Sector ETF (XLK) gained roughly 1% at the open. Equities related to Real Estate (XRE) and Consumer Discretionary (XLY) also rose.

    On Wednesday Fed Chair Jerome Powell said central bank officials expect to lower interest rates at “some point” this year.

  • Citi making some good points on General Motors

    One of the most under-the-radar stock moves of 2024 has been General Motors (GM).

    Shares are up 25% year to date, out-performing Ford’s (F) 12% advance and the 9% gain for the S&P 500. The move, in this writer’s humble view, has been fueled by better execution at GM around the EV transition and a new desire to return cash to shareholders.

    Wall Street may be finally getting into gear on the stock after years of disbelief.

    “With Q1 wrapping up, it’s become clearer that GM is likely to post another resilient quarter. While industry headwinds and execution risks persist, the now five plus year running pushback that GM’s latest strong quarter/year will be its last is increasingly looking stale,” said Citi analyst Itay Michaeli in a client note this morning.

    Michaeli adds the “comeback” for GM is well underway, and sees the stock as one of his top picks.

    I came away impressed after spending the day touring an EV facility in Detroit with GM chair and CEO Mary Barra (video below).

    The company is working on a lot of hard stuff that takes precision execution to profitably pull off. Considering that organized chaos, it’s a positive that GM is still a nicely profitable automaker and is out there buying back stock with its excess cash.

    It may be time to get GM’s stock out of the single-digit PE multiple range it has been stuck in for eons.

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