LIVE MARKETS On the road to Apple’s $ 3 trillion market cap: many buyouts

  • S&P 500 drops, Nasdaq slips around 1.7%, DJI up
  • Energy leads the winners in the S&P sector; weakest technological group
  • Banks explode, FANG, tokens fall
  • Dollar ~ flat; bitcoin, gold, raw
  • The 10-year US Treasury yield is ~ 1.68%

January 4 – Welcome home for real-time market coverage presented by Reuters reporters. You can share your thoughts with us at market.research@thomsonreuters.com

ON THE TRACK OF APPLE 3 TRLN MARKETING CAPITALIZATION: LOTS OF BUYBACKS (1300 EST / 1800 GMT)

Perhaps one of the factors that pushed Apple (AAPL.O) to reach $ 3 trillion in market capitalization is its very high level of share buybacks over the years.

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“Buybacks are definitely one of the parts. You know there will be buying there even if others don’t like it,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

“They are making buyouts at record levels,” he said. “From an investor perspective, this is very important.

Apple on Monday became the first company to cross the market capitalization mark, but its market value was just below that level on Tuesday afternoon.

Silverblatt said Apple repurchased $ 348.3 billion in the five years leading up to the third quarter of 2021, reducing its stock count by 22.9% during that period.

Historically, the company represents 14 of the 15 largest quarterly buyouts of S&P 500 companies, according to data from Silverblatt.

Investors and others “assume they’re going to continue like this, and that’s a very good assumption,” Silverblatt said.

(Caroline Valetkevitch)

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NEW YEAR STARTS WITH A BANG (1140 EST / 1640 GMT)

With London shutting down for a public holiday on Monday, today was the first trading day for the FTSE and blue chips (.FTSE) started the year off on a high, jumping 1.6%, as Omicron’s fears subside.

The best performer, in terms of individual stocks, is the owner of British Airways IAG (ICAG.L), which had its best day since November, giving some support to the European Travel and Leisure Index (.SXTP ) – an indicator of fears around the pandemic – up 3.3% to reach its highest level in six weeks.

Tuesday’s milestones spread across Europe with the pan-European STOXX 600 index (.STOXX) hitting record highs, with the auto index (.SXAP) set for its best week in 11 months and banks (. SX7P) having their best day since October, up 3.2%.

sectors

(Joice Alves)

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PMI, JOLTS: IS THE ECONOMY CHANGING? (1125 EST / 1625 GMT)

“Scarcity of supplies and workers” was among the top-air songs of 2021, an earworm that fueled inflation concerns has helped remove the phrase “transient inflation” from the Fed’s vocabulary.

But two reports released on the matter on the second trading day of the new year suggest the economy may hum a more optimistic tune.

For starters, as U.S. factory activity has lost momentum in the final weeks of 2021, there are glimmers of hope buried beneath the title.

The Institute for Supply Management (ISM) Purchasing Managers Index (PMI) (USPMI = ECI) reached a reading of 58.7 in December, marking a deceleration of 2.4 points from November and being below the consensus figure of the same 60. read more

A PMI number greater than 50 means increased activity compared to the previous month.

As growth in new orders and inventory slowed, the good news is that the price paid component fell to its lowest level in more than a year, hinting that the constricted supply chain could slowly unclog.

And employment increased slightly, a positive sign for the sector, which has been hampered in recent months by a shortage of skilled workers.

“The US manufacturing sector remains in a demand-driven and supply chain environment, with indications of improvements in labor resources and supplier delivery performance,” writes Timothy Fiore, chairman of the committee. survey of ISM manufacturing companies.

Indeed, the report marks the 19th consecutive month in expansionary territory for the manufacturing sector, which is responsible for nearly 12% of US GDP.

Survey respondents sang once again in unison, with phrases like ‘keep tackling pressures from work, materials and transportation’ and ‘dealing with supply constraints on a daily basis’, scattered around in their comment.

Global financial reporting firm IHS Markit released its view of the December manufacturing PMI on Monday, posting a slightly less rosy impression of 57.7.

ISM PMI

Separately, there were 10.562 million job postings in November, an unexpected drop from the previous month’s all-time high of 11.091 million.

The Ministry of Labor’s Job Opportunities and Rotation Survey (JOLTS) (USJOLT = ECI), which measures labor market rotation, also showed an increase in hires and departures, while layoffs remained essentially stable.

Combined, these numbers bode well for a “full recovery” in the labor market, a goal the Federal Reserve repeated to nausea as a condition of tightening its lax monetary policy in the COVID era.

The increase in the quit rate is often seen as a barometer of consumer expectations, as workers are less likely to leave a job in times of economic uncertainty. But the pandemic has added a question mark to that theory, as many Americans could be sidelined due to new restrictions as new variants emerge, and good old-fashioned fear.

But Elise Gould, senior economist at the Economics Policy Institute, chooses to emphasize the positive.

“Hires are up as quits continue to rise,” Gould tweets. “Workers seem confident that they will quit their jobs in search of better ones. “

“Let’s be clear: these trends predate Omicron’s rise,” Gould adds.

SHOCKS

Market players are now looking to Friday’s December jobs report, which analysts expect to show 400,000 more jobs and an unemployment rate down 0.1 percentage point to 4.1% .

Wall Street is a mixed bag in late-morning trading, with financials (.SPSY) and industrials (.SPLRCI) underlying the Dow (.DJI), but technology (.SPLRCT), and in particular FANG (.NYFANG) and chips (. SOX), dragging the S&P 500 (.SPX) and Nasdaq (.IXIC) into the red.

(Stephen Culp)

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2021 FORCE 2022 SWAGGER SIGNALS (1045 EST / 1545 GMT)

The stock market kicked off in 2022 with benchmarks hitting new all-time highs, and investors perhaps should have known this because of how stocks ended 2021.

The S&P 500 gained 4.4% in December, the 20th time the index has registered a gain of at least 4% in December since 1928, according to Frank Cappelleri, office strategist at Instinet.

For the previous 19 instances, the S&P 500 rose 16 times in January, or 84% of the time, Cappelleri said in a note, while January saw an overall increase of only 62% of the time. The average move over those 19 periods was a gain of 2.3% versus an overall average gain of 1.2% for January.

The S&P 500’s 10.6% rise in the fourth quarter is also auspicious. The index has now gained at least 10% in 24 quarters since 1980, according to Cappelleri. On past occasions, the index rose in the following quarter 20 out of 23 times, or 87%, with an average movement of 5.4%.

“Force has begotten force for quite some time, and while that can change at any time, we shouldn’t ignore studies like these – especially when they line up over different time periods,” Cappelleri said. in his note.

(Lewis Krauskopf)

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MIXED, BUT TILTING AMERICAN STOCKS IN FAVOR OF VALUE (1019 EST / 1519 GMT)

The Dow (.DJI) and S&P 500 (.SPX) hit record highs on Tuesday as concerns about the Omicron variant of the coronavirus subsided.

Meanwhile, the yield on the 10-year US Treasury continues to climb. It is now around 1.67%.

With this, the banks are outperforming again. The S&P 500 Banks Index (.SPXBK) rose more than 3% for a second consecutive day. His sliding two-day gain is on track to be the biggest since the start of 2021.

Chips (.SOX), FANG (.NYFANG) and tech (.SPLRCT) are on the losing side, dragging the Nasdaq (.IXIC) into the red.

Therefore, unsurprisingly, value (.IVX) clearly outperforms growth (.IGX) in early trade.

Here’s where the markets are at the start of trading:

earlytrade01042019

(Terence Gabriel)

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NASDAQ COMPOSITE: HEALTHIER GUT (0900 EST / 1400 GMT)

As earnings from Apple (AAPL.O) read more and Tesla (TSLA.O) read more grabbed the headlines on Monday, Nasdaq vital signs continue to improve:

IXICNHNL01042021

The Nasdaq New High / New Low Index (NH / NL), a measure built around new annual highs and lows, rose to 32.2% on Monday, its highest level since November 26. read more

It should be noted that the Nasdaq NH / NL index hit a low of 12.5% ​​on December 6. It then showed bullish convergence to the Nasdaq Composite (.IXIC) December 20 low, then established a higher low at 19.7% on December 22. It is now quickly approaching a hurdle in the form of its mid-October low of 33.6%.

If 33.6% are erased, the NH / NL index would certainly have a substantial room for improvement before approaching resistance lines intact from its 2021 peaks. Its November high was 75.7%. Read more

In this case, the IXIC could easily have enough underlying strength to propel it to new records.

Longer term, however, concerns remain as the composite is so close to its all-time highs, but this metric is massively below its early to mid-2021 levels.

However, a break in the NH / NL from its rising 10-day moving average, then from its late-December low, could potentially put the composite at risk for critical care.

(Terence Gabriel)

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Terence Gabriel is a market analyst at Reuters. The opinions expressed are his

Our Standards: Thomson Reuters Trust Principles.


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