US stocks closed a volatile session in mixed territory on Tuesday as traders digested retail earnings and economic data.
Both Home Depot and Walmart reported earnings that beat expectations, with Target and Lowe’s scheduled to report on Wednesday.
But economic data sent mixed signals. U.S. housing starts in July fell from the previous month, below consensus expectations. Meanwhile, industrial production rose and the New York Fed’s manufacturing gauge softened.
Here’s where the US indices were as the market closed at 4pm on Tuesday:
According to Fitch, the odds of a severe housing downturn have increased and house prices could fall by as much as 15% in this scenario. But the ratings agency said a moderate decline remains the most likely outcome.
According to Goldman Sachs, industrial and consumer stocks in the S&P 500 will take the biggest hit from higher labor costs. A further acceleration in U.S. wage growth would pressure the sector and reduce industrials’ earnings per share by 1.4%, analysts said.
For the next stage of the equity recovery, Jefferies recommends investors look for cyclical and small-cap stocks. The Russell 2000 index of small-cap stocks is up 22% since mid-June, and the firm expects the rally to continue.
Meanwhile, Saudi Arabia has been piling up large-cap US stocks such as Alphabet, Microsoft and Amazon amid a $7.5 billion spending spree from oil profits. The kingdom’s sovereign wealth fund also bought shares in financial names such as JPMorgan and BlackRock.
Abroad, Germany postponed the shutdown of its three remaining nuclear power plants amid a worsening European energy crisis. The plants had been scheduled to close on December 31, but natural gas supply cuts from Russia have opened the door to an extension.
At the same time, Germany signed an agreement with natural gas suppliers to keep LNG terminals supplied during the winter. The new deal will provide some relief ahead of further potential supply disruptions.
And in the digital asset space, the amount stolen in crypto thefts is up 60%, according to Chainalysis. The company estimates that hackers spent $1.9 billion between January and July this year.
Oil fell, with West Texas Intermediate falling 3.44% to $86.33 a barrel. Brent crude, the international benchmark, fell 3.25% to $92.01 a barrel. Positive signals about nuclear talks with Iran raised the prospect of a supply influx.
Gold was down 0.37% at $1,791.50 an ounce. The 10-year yield rose 2.4 basis points to 2.815%.
Bitcoin fell 0.63% to $23,893.01.
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