The tech-heavy Nasdaq composite led gains among major indexes on Monday morning as investors reacted to Russia’s pullout from parts of Ukraine. Meanwhile, economists had expected inflation data to be released on Tuesday to show it is slowing. Apple (AAPL) gained more than 3%. Energy stocks led the sectors.
The Nasdaq composite traded 1% higher. The Dow Jones Industrial Average gained 0.6% while the S&P 500 rose 0.8%. The Dow and QQQ (QQQ), an ETF representing the Nasdaq’s top 100 stocks, are now above their 50-day lines, and the Nasdaq has a bit more space above its own 50-day line. days.
The Russell 2000 Small Cap Index rose 1.1%.
Volume fell slightly on the Nasdaq and rose on the NYSE from the same time on Friday.
Stock market on track for second week in a row
The Dow Jones closed last week up 2.7%, ending a three-week losing streak. Other major indices also performed similarly last week.
U.S. crude oil prices rose nearly 2% on Monday, trading at around $88.40 a barrel. The S&P Energy Select Sector ETF (XLE) gained 1.9% on Monday, leading all S&P sectors. All 11 sectors gained on Monday.
ETF Innovator IBD 50 (FFTY) gained 0.2%, driven by energy stocks Comstock Resources (CRK), Devon Energy (DVN) and Pioneer of natural resources (PXD). Raw material stocks steel dynamics (STLD) and CF Industries (CF) offset oil stocks as they both fell more than 3%.
U.S. consumer price inflation data, due Tuesday, dominates investors’ attention this week. CPI data is expected to show August was the second month of falling inflationary pressures after hitting a four-decade high in July. The Econoday consensus expects an annual rate of 8%, after 8.5% last month. The numbers will help Fed officials gauge how much further they need to raise interest rates.
Markets are already writing off a 75 basis point hike as a given for an inflation-fighting measure at next week’s Federal Reserve meeting. Investors now see an 88% chance of a 75 basis point hike versus a 12% chance of the Fed raising rates by 50 basis points, according to the CBOE’s Fed Watch tracking tool.
Separately, President Joe Biden’s approval rating has rebounded over the past month, helped by falling gas prices and a string of legislative victories, according to a new IBD/TIPP poll. Young Americans, in particular, rallied behind Biden after the approval of the climate-focused Cut Inflation Act and his decision to forgive up to $20,000 in college loans. Biden’s approval rating jumped 6.6 points to 49, the highest since April.
The yield on the 10-year US Treasury slipped one basis point to 3.28%.
European markets are growing strongly
European markets all rose strongly on Monday after Russia withdrew more forces from Ukraine’s Kharkiv region as Kyiv forces continued their push into Russian-occupied territory and the government pledged to resume all areas seized by Moscow.
London’s FTSE 100 gained 1.7%, Germany’s DAX 2.4% and France’s CAC 40 2%.
The price of Bitcoin rallied, surpassing $22,000 for the first time since August 19.
Apple wins and exceeds the 50-day moving average
Apple shares rose 3.3%, signaling a return above the 50-day moving average and a slight rise above the 200-day line. The stock is around 10% off a buy point at 176.25 on a mug with handle.
Microsoft (MSFT) gained 0.9% as it trailed gains in the technology sector.
Oracle (ORCL) gained 1.3% ahead of results to be released after the close of business today. FactSet analysts expect it to earn $1.07 per share on sales of $11.44 billion for the August quarter.
You’re here (TSLA) gained 1.2% and Amazon.co.uk (AMZN) rebounded 1.9%.
Follow Michael Molinski on Twitter @IMmolinski
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