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Tag: financial markets

S&P 500 Hits Record Close As Omicron Fears Subside​​

By Lewis Krauskopf, Medha Singh and Bansari Mayur Kamdar

(Reuters) - Wall Street's main indexes posted solid gains for a third straight session on Thursday, with the S&P 500 marking a record-high close, as encouraging developments gave investors more ease about the economic impact of the Omicron coronavirus variant.

Stocks ended the holiday-shortened week on a positive note, lifting sentiment heading into Christmas. Gains were broad among S&P 500 sectors, led by consumer discretionary and industrials, which both rose about 1.2 percent.

Vaccine makers AstraZeneca Plc and Novavax Inc said their shots protected against Omicron as UK data suggested it may cause proportionally fewer hospital cases than the Delta variant, though public health experts warned the battle against COVID-19 was far from over.

The arrival of Omicron has helped ratchet up market volatility for much of the last month of 2021, which has been a strong year for equities.

“There was a lot of negative sentiment coming into the final part of the year, and investors have likely continued to see pretty strong economic growth and pretty positive developments as it relates to healthcare innovation around COVID and that is putting in a bit of a bid into equities and causing investors to look to allocate capital as they close out the year,” said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management.

The Dow Jones Industrial Average rose 196.67 points, or 0.55 percent, to 35,950.56, the S&P 500 gained 29.23 points, or 0.62 percent, to 4,725.79 and the Nasdaq Composite added 131.48 points, or 0.85 percent, to 15,653.37.

Defensive sectors, which have mostly outperformed in December, generally lagged on Thursday. The real estate sector fell 0.4 percent.

The S&P 500 has gained for three days, after falling in the three prior sessions.

“People are seeing the strength on Tuesday and Wednesday and all of a sudden everybody is more optimistic again,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.

For the week, the S&P 500 rose 2.3 percent, the Dow gained about 1.7 percent and the Nasdaq climbed 3.2 percent.

Trading volumes were expected to be thinner than usual ahead of the Christmas and New Year holidays. The stock market will be closed on Friday in observance of the Christmas holiday.

In another medical development against the pandemic, the United States authorized Merck & Co's antiviral pill for COVID-19 for certain high-risk adult patients, a day after giving a broader go-ahead to a similar but more effective treatment from Pfizer Inc. Merck shares fell 0.6%, while Pfizer dropped 1.4 percent.

The number of Americans filing new claims for unemployment benefits held below pre-pandemic levels last week as the labor market tightens, while consumer spending increased solidly, putting the economy on track for a strong finish to 2021.

Tesla Inc shares rose 5.8 percent, gaining sharply for a second day after chief executive Elon Musk said on Wednesday he was "almost done" with his stock sales after selling over $15 billion worth since early November.

The S&P 500 is up about 26% so far this year. Still, the environment for equities could be changing heading into next year as the Federal Reserve is expected to begin raising interest rates in 2022.

Advancing issues outnumbered declining ones on the NYSE by a 2.40-to-1 ratio; on Nasdaq, a 2.22-to-1 ratio favored advancers.

The S&P 500 posted 35 new 52-week highs and no new lows; the Nasdaq Composite recorded 62 new highs and 80 new lows.

About 8 billion shares changed hands in U.S. exchanges, compared with the 11.8 billion daily average over the last 20 sessions.

(Reporting by Lewis Krauskopf in New York, Medha Singh and Bansari Mayur Kamdar in Bengaluru; Editing by Uttaresh.V and Matthew Lewis)


Trump Said Market Would Tank If Biden Won — But It’s Soaring

Throughout the campaign, Donald Trump claimed multiple times that if former Vice President Joe Biden were elected to the presidency, the stock market would crash and Americans' retirement funds would be wiped out.

But on Monday — the first day the stock market was open since Biden was declared the winner — the Dow Jones surged by nearly 1,400 points, setting a new record after AstraZeneca announced the success of its new coronavirus vaccine.

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If Trump Loses, He May Try To Punish America

Reprinted with permission from Independent Media Institute

What could happen to America if Trump were to further, severely crash the U.S. economy the day after Joe Biden is announced as the winner of the 2020 presidential race?

As Trump tweeted on June 15, 2019, "if anyone but me takes over… there will be a Market Crash the likes of which has not been seen before!"

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5 Reasons Your Nest Egg Could Be At Risk In 2016

By Roger Wohlner, GOBankingRates.com (TNS)

Investing for retirement, or any other objective, always carries risk. There are potential risks specific to 2016 that retirement investors should be aware as the new year approaches. There are also potential risks in any year that you should watch out for, said to Mike Piper, personal finance author and founder of the Oblivious Investor blog.

Having a significant amount of your portfolio invested your employer’s stock can be a big risk. “While familiarity with the company may make it feel safe, it’s anything but,” Piper said. “Having both your job and your portfolio exposed to the same set of risks creates a very dangerous situation.”

Also, if your portfolio contains actively managed mutual funds (like non-index funds), make sure you have a solid understanding of how the fund managers are investing. “During every market downturn, there are a handful of actively managed funds that ‘blow up’ in a spectacular manner — declining much more than investors anticipated, because the investors didn’t have a good understanding of the degree and types of risks the fund managers were taking,” Piper said.

Adjusting your long-term asset allocation based upon potential market risks in 2016, or any other year, is generally a poor idea, Piper said. However, it’s also a good idea to be aware of trends and what they can mean for your money. Here are five reasons why your nest egg could be at risk in 2016:

—The bull market might end. The current bull market began on March 9, 2009, according to the S&P 500-stock index. Although there have been a few hiccups in 2015, and at a few other points during this run, this market is six years in. It’s the third-longest bull market in U.S. history, according to a report by Bespoke Investment Management.

The S&P 500-stock gained 1,329 points through the last week of November, since the lows of March 2009 — a bit over three times the average gain during a bull market. There’s no rule that bull markets must end at a particular point, but they don’t go on forever. Furthermore, stock market risk is always heightened as a bull market progresses.

—China’s economy affects ours. This summer, the stock market experienced steep losses and a high degree of volatility. A good deal of this was due to China’s economic troubles. In this interconnected world, what happens in the second-biggest economy has an impact on the U.S. economy and financial markets.

A slowdown in China’s consumer economy, and a devaluation in its currency, hit a number of large U.S. companies that do business in China. Among the major companies that felt the impact were Apple, Yum Brands, Caterpillar, Boeing and General Motors.

—International markets are uncertain. Beyond China, other international markets also have an impact on the U.S. Because a well-diversified portfolio includes international exposure, both in developed and emerging markets, changes in those markets would be reflected in those portfolios.

“The outlook for international markets — Europe, Asia, Latin America and emerging markets — continues to be unclear,” said financial adviser Cathy Curtis. “As most diversified portfolios have a percentage allocated to stocks in these regions, they could continue to be a drag on portfolios. However, to not hold an allocation to international and emerging stocks could hurt a portfolio when these economies do improve.”

It’s this uncertainty that is a big risk to U.S. stocks in the coming year, said to Russ Koesterich, global investment strategist for money manager BlackRock. “Emerging markets account for a growing percentage of global growth, and the recent slowdown in the emerging world isn’t limited to China, as data from Bloomberg demonstrate,” he wrote in a recent economic outlook. “Economies in Brazil and Russia are contracting, and most large emerging markets, with the possible exception of India, are slowing, according to the data.”

—Tragic events have an impact. The impact of terrorist attacks on our portfolios is secondary to the human toll. However, some sort of major attack would affect our financial markets and your retirement nest egg, at least in the short term.

“The Paris attacks emphasize how vulnerable the world is to terror,” Curtis said. “Markets don’t like uncertainty, and investors could decide to put their money in safer havens — cash or short-term bonds, gold. Diversified portfolios would be vulnerable to this shift.”

—Interest rates might increase. When the Federal Reserve didn’t raise interest rates at its last meeting, experts began speculating on whether it would do so by the end of the year. An interest-rate increase will affect holders of fixed-income mutual funds, exchange-traded funds and individual bonds. The price of a bond moves inversely with interest rates.

A statistic called duration, which Morningstar and other sources provide for fixed-income mutual funds, can illustrate this. The largest bond mutual fund with Vanguard Total Bond Market Index Investor Shares currently has a duration of 5.72 years, according to Morningstar. What this means is that a 1 percent increase in interest rates would result in a 5.72 percent decrease in the value of the underlying bonds held by the fund. If you hold a longer-duration bond fund, the impact will be greater.

Bond duration is an imperfect indicator, but it can give investors a good idea of the impact on the value of their bond fund if interest rates rise. The interest rate earned from the bonds in the fund will partially offset the impact of rising rates. Investors should keep the impact of their fund’s duration in mind and might consider shortening up on the length of their bond holdings.

There are risks to your retirement nest egg in 2016. However, one of the biggest risks is overthinking what can go wrong. That doesn’t mean you should ignore what’s going on in the financial markets and the economy, but trying to time the markets based upon these or any other risk factors is not the best strategy. Retirement investors should consider investing with an asset allocation based on when they need the money, risk tolerance and their investment goals.

GOBankingRates.com is a leading portal for personal finance news and features, offering visitors the latest information on everything from interest rates to strategies on saving money, managing a budget and getting out of debt.

© 2015 GOBankingRates.com, a ConsumerTrack web property. Distributed by Tribune Content Agency, LLC.

Photo: Pictures of Money via Flickr

Poll: Americans Concerned About Economy, Don’t Really Care About Deficit

A new New York Times poll shows that voters’ top concerns have shifted over the last two months.

For one thing, voters are much less concerned about the federal deficit. Only 7% of respondents in June thought the budget deficit was the most important problem facing the country, while in April, that number was 15%.

Instead, voters appear more concerned about jobs and the state of the economy. A full 27% of people listed the economy as the number one problem facing the country in the latest survey, compared to only 18% in April. And 26% are now most concerned about jobs, a slight increase from the 21% who felt that way in April.

When asked to specifically exclude unemployment, a plurality (36%) of respondents declared that the budget deficit was the national economic issue that concerned them most. A close second, though, was rising prices (33%), followed by financial markets (14%) and the housing market (13%). [New York Times Poll]