S&P 500 Down Slightly As Traders Evaluate Ongoing Debt Ceiling Negotiations: Live Updates

There’s a difference between what markets look like on the surface and “the mayhem” below, according to Strategas.

The S&P 500 is trading near year-to-date highs, but only about half of its components — 49% — are trading above their 200-day moving averages, according to a note Monday. Meanwhile, only 65% ​​of Nasdaq 100 voters are above the 200-day moving average, while only 30% of Russell 2000 voters do the same.

“We’d be more willing to overlook this after a few weeks, or even a few months, off the market bottom — but the S&P has been bottoming out for over 7 months now — by that point, participation should be meaningfully broader,” Chris From the company Verone Books.

– Sarah Maine

The major averages rose in early trading. The Dow Jones rose nearly 20 points. The S&P 500 and Nasdaq advanced 0.1% each.

– Fred Imbert

The dollar set a record high against the Turkish lira today, Monday, reaching 19.6853.

Meanwhile, the iShares Turkey ETF (TUR) was down nearly 6% in pre-market trading. If this performance continues in the session, it will be the fund’s worst day since it lost 6.1% on Feb. 7.

The moves come on the heels of news that the country will hold an unprecedented run-off election for its president on May 28. A run-off is required because no candidate received 50% of the vote in Sunday’s election.

The dollar index, which tracks the greenback against a basket of other currencies, fell 0.2% to 102.49.

Alex Haring and Gina Francola

For investors nervous about the ongoing debt ceiling negotiations, there is “good news” — deal talks appear to be building in Washington, according to Oppenheimer Asset Management.

“The good news from our point of view is that amid growing concerns among market participants, efforts to resolve the situation around raising the debt ceiling seem to have intensified over the past few days,” said John Stoltzfus, the firm’s chief investment analyst. In a note on Monday.

Instead, the strategist said, investors appear to be “eyeing the potential benefits that are likely to come from the Fed’s current actions to bring about what we view as the end of the ‘free money’ period.” The ‘next new normal’ could mean a backdrop as momentum takes a ‘back seat’ to the fundamentals.

– Sarah Maine

Manufacturing activity collapsed in the New York area in May, with new orders and shipments falling while prices rose, according to the Federal Reserve.

The Empire State Manufacturing Survey fell 43 points from April to a reading of -31.8, below the Dow Jones estimate of -5. The index represents the level of companies reporting expansion versus contraction.

New orders fell by 53 points, while shipments fell by more than 40 points. Prices paid rose while prices were little changed and the employment index rose, although still in negative territory at -3.3.

– Jeff Cox

Here are some of the names that have made the biggest moves in pre-market trading:

• Magellan Midstream Partners, Onok — Shares in Magellan Midstream Partners jumped 15.5% after the announcement that pipeline operator Oneok is acquiring the company for about $18.8 billion. Oneok shares fell 5.5%.
• H&R Block, Intuit — Tax preparers are down 9.4% and 4.7%, respectively, following a Wall Street Journal report on the potential for a government-run online tax filing program. The IRS publication is expected this week, the newspaper said. The agency was looking at this as part of the inflation control act.
• SoFi Technologies — The stock fell nearly 7% after it was downgraded to underperform from neutral by Wedbush. The company said that SoFi fee income may reach a tipping point and may need to raise capital this year to support growth.

To see more names move in the market, read the full story here.

– Michelle Fox

Atlanta Federal Reserve President Rafael Bostick on Tuesday cast doubt on the prospect of lower interest rates this year, even if a recession hits.

“Inflation is not going to come down very quickly,” the central bank official told CNBC’s Steve Leizman during an interview on “Squawk Box. And in that regard, then, cutting interest rates doesn’t really fit into that scenario.”

“So I think the markets have been very optimistic about how easily inflation will respond to our policy,” he added. “Honestly, I hope I’m wrong and they’re right, because that would mean the economy is in equilibrium sooner rather than later. But it’s not my base case at all.”

If anything, Bostick said his bias would be to hike interest rates this year if inflation doesn’t fall as quickly as the Fed wants.

– Jeff Cox

Shares of Shake Shack jumped nearly 4% in pre-market trading Monday after The Wall Street Journal reported that activist investor Engaged Capital plans a proxy battle for three board seats at the company. Engaged Capital acquired a 6.6% stake including swaps.

The stock has rebounded 57% this year, but still trades for about half of its all-time high in early 2021.

– Yun Lee

Baird has upgraded its Albemarle lithium product to outperform. The company also raised its price target to $288 from $222, which means a gain of 47% from Friday’s close.

“ALB is down approximately 41% from its highs less than a year ago, and we believe that clarity on the impact of pricing, guidance resets, and ALB’s vertically integrated system positions it as a near- and long-term leader,” analyst Ben Calo wrote in a note Monday.

He noted that lithium prices have fallen more than 40% since the beginning of the year. However, Baird believes there is a significant imbalance in lithium supply and demand levels, particularly with the increased stockpiling of lithium-ion stationary batteries for electric vehicles.

CNBC Pro subscribers can read more about its upgrade here.

Treasury Secretary Janet Yellen said over the weekend that negotiations were making progress on a debt ceiling agreement.

“I’m optimistic. I think the negotiations are very active. I’m told they’ve reached some areas of agreement,” Yellen said in an interview with The Wall Street Journal on Saturday from Japan during a meeting of G7 finance ministers. .

President Joe Biden and House Speaker Kevin McCarthy are expected to meet early this week, CNBC reported. The Treasury said that the United States may not be able to meet its financial obligations as early as June 1.

– John Milloy

Raymond James analyst Patrick O’Shaughnessy upgraded Charles Schwab to outperform the market, and his price target for the stock means upside near 30%.

“Concerns about the stability of the banking system did not dampen Schwab’s ability to attract new accounts and assets. In fact, net new accounts grew at an annual rate of 4.3% in Q1 2013 while underlying net new assets grew at an average rate of 7.5%,” O’Shaughnessy said.

Schwab shares rose more than 2% in Primarkt.

European markets opened mixed on Monday as investors in the region focused on the outcome of the Turkish presidential elections.

The pan-European Stoxx 600 Index rose 0.3% near the market open, with most sectors posting marginal gains. Banking and the travel and entertainment sectors rose 0.7%, while oil and gas shares fell 0.7%.

Washington can’t agree on anything, but the consensus everywhere is that “date X,” when the Treasury Department can’t pay the government’s bills unless the debt ceiling is raised, won’t arrive before June 1st — and probably not until weeks later. .

Good news for markets next week: no default, no credit agency downgrade, and no end of the world. Only more talks between the White House and congressional staff, leading to another meeting between President Joe Biden and congressional leaders before Biden leaves next Wednesday for the G7 summit in Tokyo.

The bad news is that complacency is imminent in the stock market, as evidenced by the CBOE Market Volatility Index (VIX) trading below 18 on Friday, having fallen nearly 22% in 2023.

CNBC Pro subscribers can read the full story here.

– Scott Schneiber

Investors are awaiting May data for the Empire State Index, which will show how New York state manufacturers feel about the economy.

Economists polled by Dow Jones expect a reading of 1.0, which would be down from the 10.8 level in previous data.

The data is set to be released on the Monday before the opening.

– Sarah Maine