Equity trading is mixed, Nasdaq breaks new record

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Stocks traded sideways on Wednesday to hold close to all-time highs as investors braced for a key Federal Reserve event later this week.

The S&P 500 gained ground. The index set intraday and closing records on Tuesday as investors piled up in stocks in the energy and consumer discretionary sectors that had fallen behind over the past month. The Nasdaq hit a new intraday high.

Stocks rose amid optimism about continued strength in corporate earnings and economic activity, although growth rates on both fronts appear poised to slow after a first wave of reopening. Retailer Best Buy (BBY) released second quarter results that beat consensus estimates earlier this week, and the company also upped its sales guidance for the full year, reaffirming that the increase consumer spending on electronics continued in the second half of the year. . Later Wednesday, companies such as Salesforce (CRM) and Ulta (ULTA) are set to release their results.

More movement on legislation that would increase government spending on physical and human infrastructure has added to investor sentiment. late Tuesday, House of Representatives voted to move forward with $ 3.5 trillion budget plan, laying the groundwork for a major economic program that would address issues such as healthcare, childcare and climate change. As part of the legislative action, the House also held a final vote on the $ 1.2 trillion infrastructure bill passed in the Senate earlier this month.

This week’s trading also saw a resurgence of “memes stocks,” or stocks that were popularized on social media platforms, including Reddit. Shares of GameStop (GME) extended the advances of the pre-market session after gaining 28% on Tuesday for their best day since March. AMC Entertainment (AMC) and BlackBerry (BB) also advanced.

US stocks are also hovering near all-time highs ahead of the Federal Reserve’s Jackson Hole Virtual Symposium, which begins Thursday. After the minutes of last week’s July Federal Open Market Committee meeting turned out to be more belligerent than many market participants expected, more clues on the way forward for monetary policy remains a focal point. Namely, traders are looking to see if central bank officials are signaling when they will announce and implement the reduction in their crisis asset purchase program.

“What the market really wants to hear is… that the Fed is prepared to adapt if in fact the Delta variant has a negative impact on the economy going forward,” Kristina Hooper, chief market strategist global Invesco, told Yahoo Finance. “And so that will be the key message – this willingness to be flexible with what happens to the US economy, that it is not full speed ahead to adhere to a taper schedule.”

Other strategists have also suggested that a “wait and see” approach from the Fed would be the most welcome outcome for equity investors.

“While we saw the progress in the labor market that I think the Fed wanted to see… obviously we are experiencing this temporary setback in terms of growth momentum,” Aneta Markowska, chief financial economist at Jefferies, told Yahoo Finance. “It is difficult for the Fed to signal anything and commit to a reduction schedule at this point, but I think it needs to recognize that we have made further progress on these targets.”

10:02 am ET: What to expect from Jackson Hole: TD Securities

Market participants are eagerly awaiting remarks from Federal Reserve officials in Jackson Hole, which should offer more insight into how central bankers view the way forward for monetary policy.

The Fed will need to thread the needle between acknowledging the lingering risks from the virus while also nodding to the progress still underway in the economic recovery, according to many strategists.

“I think the market is currently grappling with the upside of the Delta variant, it’s the economic outlook and the magnitude of the risks and are the risks all on the downside, or are there risks to rising inflation, “TD Chief Securities Officer Priya Misra Yahoo Finance Live told Yahoo on Wednesday.

“Jackson Hole is not a Fed meeting – this is where they talk about longer term framework issues,” she added. “And I think it’s [Fed Chair Jerome Powell’s] possibility of linking the revision of the framework, the flexible targeting of average inflation [FAIT] framework they launched last year, until release. To talk about how they can go down by the end of the year, they can hike long after that … and it’s all done in accordance with the DONE principle. Now that they’re scared of inflation, just trying to put the exit in the context of the DONE approach with the risks that abound, I think that’s what we’ll be watching. ”

9:30 a.m. ET: Stocks open slightly higher

Here’s where the markets were trading on Wednesday morning:

  • S&P 500 (^ GSPC): +4.65 (+ 0.1%) to 4,490.89

  • Dow (^ DJI): + 2.98 (+ 0.01%) to 35,369.24

  • Nasdaq (^ IXIC): +13.50 (+ 0.09%) to 15,028.79

  • Raw (CL = F): + $ 0.21 (+ 0.31%) to $ 67.75 per barrel

  • Gold (CG = F):-$ 11.40 (-0.63%) to $ 1,797.10 per ounce

  • 10-year cash flow (^ TNX): +0.7 bps for a yield of 1.297%

9:06 a.m. ET: Durable goods orders fell less than expected in July

Orders for US manufactured goods held up better than economists expected in July, pointing to sustained growth in the goods-producing sector.

Durable goods orders fell 0.1% in July, according to the Commerce Department preliminary monthly report. This follows an increase of 0.8% in June.

A drop in new orders for transportation equipment pushed the overall index down. Excluding transport, durable goods orders rose 0.7%, faster than the expected 0.5% increase.

Orders for non-defense capital goods, excluding aircraft, remained stable over the month after rising 1.0% in June. This metric serves as a closely watched metric of companies’ investment plans. Shipments of these orders, which are taken into account in GDP, however, increased by 1.0%, better than expected.

7:27 a.m. ET: Mortgage applications rebounded last week as rates fell

Mortgage applications rose last week to recover from a decline in the previous period, data from the Mortgage Bankers Association (MBA) showed on Wednesday.

Overall, claims rose 1.6% in the week ended August 20, following a 3.9% drop in the previous week. Home purchases led the gains, rising 3% week-over-week on a seasonally adjusted basis to the highest level since early July. Nonetheless, purchases were 16% lower than the same week last year, on an unadjusted basis. Refinances increased 1% from last week and 3% from last year.

“T-bill yields fell last week, as investors continue to anxiously watch whether rising COVID-19 cases in several states begin to dampen economic activity. Mortgage rates fell slightly as a result, with the 30-year fixed rate falling for the first time in three weeks, ”said Joel Kan, associate vice president of economic and industrial forecasting at MBA, in a press release. increase in refinancing requests, with government loan requests jumping 10% to the highest level since May 2021. ”

7:20 a.m. ET Wednesday: Stock futures drift sideways past Jackson Hole

Here’s where the markets were trading on Wednesday morning:

  • S&P 500 Futures Contracts (ES = F): +0.75 point (+ 0.02%) to 4,483.25

  • Dow Futures (YM = F): +14.00 points (+ 0.04%) to 35,328.00

  • Nasdaq Futures (NQ = F): -2.0 points (-0.01%) to 15,353.50

  • Raw (CL = F): + $ 0.20 (+ 0.3%) to $ 67.74 per barrel

  • Gold (CG = F):-$ 14.00 (-0.77%) to $ 1,794.50 per ounce

  • 10-year cash flow (^ TNX): +1.9 bps for a yield of 1.309%

6:07 p.m. ET Tuesday: Stock futures hover near record highs

Here’s where the markets were trading Tuesday night:

  • S&P 500 Futures Contracts (ES = F): +1.25 point (+ 0.03%) to 4,483.75

  • Dow Futures (YM = F): +16.00 points (+ 0.05%) to 35,330.00

  • Nasdaq Futures (NQ = F): +4.5 points (+ 0.03%) to 15,360.00

NEW YORK, NY - AOT 16: The Wall St. and Broad St. signs are seen by the New York Stock Exchange (NYSE) building in the financial district of New York City, United States on August 16, 2021. ( Photo by Tayfun Coskun / Anadolu Agency via Getty Images)

NEW YORK, NY – AOT 16: The Wall St. and Broad St. signs are seen by the New York Stock Exchange (NYSE) building in the financial district of New York City, United States on August 16, 2021. ( Photo by Tayfun Coskun / Anadolu Agency via Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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