What's moving markets today: June 10, 2019
The market is closed for the day and investors are looking forward to what's next.
- Tesla (TSLA) is holding a shareholder meeting
- The E3 gaming conference kicks off in Los Angeles.
- UBER (UBER) CEO Dara Khosrowshahi is due to speak at the Economic Club of Washington.
- In economic data, the producer price index for May is due at 8:30 a.m. ET. It came in below expectations in the prior month.
- The UK releases its labor market report.
US stocks finished higher on Monday, the first day of trading after the United States and Mexico agreed to a deal to avoid tariffs on Mexican imports. The Dow logged the sixth day of gains in a row for the first time since May last year. The S&P 500 and the Nasdaq Composite climbed for the fifth consecutive session.
United Technologies (UTX) was the biggest loser in the Dow, dropping 3.1%. The company announced late yesterday it would merge with defense business Raytheon (RTN). President Donald Trump voiced his concern about what the merger would do to competition in the aerospace and defense sector in an interview with CNBC this morning. Raytheon shares ended the day 0.7% higher.
It's not just the stock market that's flying high. The Mexican peso is also rebounding as investors breathe a sigh of relief after the United States reached a deal with Mexico that averts tariffs.
The Mexican peso rallied more than 2% against the dollar today, leading it to its best level since late May.
The peso had fallen to its lowest level since December on May 31 after President Donald Trump threatened the tariffs, according to Refinitiv.
The recent stock rally is starting to make a difference.
The S&P 500 is just 2% off its closing record high of 2,945.83, which it reached on April 30, according to Refinitiv.
Stocks have been going strong since last week, when Federal Reserve Chairman Jerome Powell said the central bank would act "as appropriate" to ensure the economic expansion of the United States would be sustained. The market took this to mean that interest rate cuts will come sooner than expected. Today, the rally continued as investors grew optimistic on trade after threatened tariffs on Mexican imports were scrapped.
The S&P was up 0.6%, on track for its fifth straight day of gains.
Despite demands from President Donald Trump and whims of the market, some people think its premature for the Fed to lower rates.
- Consumer spending has held up relatively well.
- The stock market is not far from record highs.
- The unemployment rate is still at its lowest level in half a century.
With that in mind, it might behoove the Fed to remain patient instead of rushing to cut rates.
That's especially true since some point out that any recent weakness in the economy and stock market might have more to do with a somewhat manufactured crisis, namely the US trade tension with China.
Will the Fed follow through and give investors what they want? It's a little early to throw in the towel and expect them to ease," said Tony Bedikian, managing director and head of global markets for Citizens Bank.
"Barring major escalations in the trade dispute, the economy seems okay," he added.
At midday, stocks are squarely in the green as the market breathes a sigh of relief after the United States and Mexico reached a deal that avoids import tariffs on Mexican goods.
"The decision not to impose tariffs on Mexico also suggests to us a lower probability of tariffs on additional imports from China or on auto imports from the EU and Japan," wrote Goldman Sachs economist Alec Phillips.
But it's not all that peachy. M&A announcements from the weekend and this morning are weighing on some shares.
Raytheon is up 2.3%.
Hudson's Bay (HBAYF) stock soared 45% after its executive chairman and others revealed a plan to take the struggling retail giant private. The company owns Lord & Taylor, Saks Fifth Avenue, Saks Off 5th as well as namesake department stores.
The release said a group of shareholders, which owns 57% of Hudson's Bay, submitted a proposal to take it private at $9.45 per share in Canadian dollars. That's a 50% premium from Friday's close.
Last month, the company announced it was pursuing strategic options, including a merger or sale for Lord & Taylor.