Traders work on the floor of the New York Stock Exchange (NYSE) on June 27, 2022 in New York City.
Spencer Platt | beautiful pictures
This report is from CNBC Daily Open today, our new international market newsletter. The CNBC Daily Open keeps investors up to date with everything they need to know, wherever they are. Like what you see? You can register This.
US stocks’ January rally has stalled as Treasury yields extend the possibility of an inversion. Recent data cannot paint a consistent picture of the economy.
What you need to know today
- US stocks closed lower on Thursday, give up a midday rally. Nasdaq saw the biggest drop in the major indexes, down 1.02%. Asia-Pacific shares mostly off on friday. The Shanghai Composite fell 0.46%, although China’s consumer prices rose less than estimated in January.
- Speaking of activists, Dan Loeb’s hedge fund, Third Point is the latest activist investor to hold a stake in Salesforce, CNBC confirmed. It joins ValueAct Capital, Elliott Management and Starboard Value. Salesforce has been hit recently by slowing revenue growth and criticism that it overpays for goals like Slack.
Key point
The January rally appears to be waning as investors handle the uncanny state of the US economy.
Weekly jobless claims in the US hit 196,000 for the week ending Feb. 4. Despite an increase of 13,000 from the previous week, it’s still one of the lowest numbers in history. However, the number was more than what analysts expected and contrasted with January’s employment data, which reported a record low unemployment rate.
Despite the strong labor market, the Treasury yield curve remains inverted — meaning the yield on the 2-year Treasury note is higher than the yield on the 10-year Treasury note. On Thursday, the reversal extended. That often indicates investors are worried about market conditions in the near term, and it sometimes signals a recession.
Those economic signals, combined with the Federal Reserve’s continued hawkish tone, seemed to give investors pause. On Thursday, US stocks continued their two-day losing streak. The Dow Jones Industrial Average lost 0.73% and the S&P 500 lost 0.9%. The tech-heavy Nasdaq Composite, weighed down by a 4% slide in Alphabet’s parent company Google and a 3% drop in Meta, fell 1.02%.
Until economic data paints a more coherent picture of the US economy, it is likely that the market will remain volatile.
Ordered This to get this report delivered directly to your inbox each morning before the market opens.
