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The Dow rises to start the week as investors await mid-elections and inflation report

The Dow rises to start the week as investors await mid-elections and inflation report
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Katz: Most of the stock market damage has been done

The Dow Jones Industrial Average rose Monday as a packed week began midterm elections of Congress and key inflation data on deck over the next few days.

The Dow traded 203 points, or 0.6%, higher, while the S&P 500 gained 0.1%. The Nasdaq Composite was little changed, trading between gains and losses.

Apple’s shares fell about 1%, according to the tech company iPhone production has been temporarily reduced due to Covid-19 restrictions in China. Palantir shares, meanwhile, fell more than 12% after the company released disappointing quarterly results. Carvana then plummeted 15% falling more than 20% earlier in the day.

facebook parents target gained about 5% after a The Wall Street Journal report that said The company could start layoffs as early as Wednesday.

Important elections and economic reports are coming up

Tuesday’s midterm elections will determine which party will control Congress and influence the direction of future spending. Democrats currently control the House of Representatives and have a majority in the Senate.

According to RBC’s Lori Calvasina in a note on Monday, investors could approve of a potential deadlock that could result from the midterm elections, as a Democratic president with a Republican or split Congress has historically meant above-average gains.

“The market is hoping that some sort of Republican clampdown in Congress will result in either some sort of stalemate in Washington, which they see as good, or at least no new spending, which would be good for interest rates and Treasury supplies,” Brad said Conger, Assistant CIO at Hirtle Callaghan & Co.

On the economic front, investors are expecting Thursday’s CPI report to provide further insight into how far the Federal Reserve will have to go to bring inflation down. A hot report could signal investors that a reversal from an extended period of higher interest rates may not be imminent.

“[In] For equity and bond markets to match the post-peak inflation trajectories shown in the table, inflation must continue to fall – and at a faster rate than we have seen so far. Until the Fed signals that pivot is near, things may remain challenging,” Baird’s Ross Mayfield wrote in a recent statement.

Elsewhere, several companies are expected to report Monday, including Activision Blizzard, lyft and Take Two Interactive. Corporate earnings season is drawing to a close and the majority of companies in the S&P 500 have reported their results.

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