Dow Jumps 400 Points As Recession Certainty Grows Murkier – Forbes

Major stock indexes gained Monday as the market looks to build on a surprisingly strong week, though several notable companies, including Tesla and several New York-listed Chinese firms mounted large losses.
Stocks are set for another day of gains.
The Dow Jones Industrial Average rose 1.3%, or 420 points, looking to build off its 4.9% gain last week, its best weekly performance in four months, while the S&P 500 gained 1.2% and the tech-heavy Nasdaq rose 0.9%.
The gain is largely due to increasing expectations that the Federal Reserve will eventually back off of its aggressive interest rate increase plans as data begins to show some cooling of inflation and Fed officials begin to express hesitation what rate hikes may mean for the health of the economy generally, with Morgan Stanley analysts noting in a Monday note to clients “falling inflation expectations can lead to lower rates and higher stock prices.”
Monday was far from a good day for all stocks, as driving Nasdaq’s stagnation was Tesla, which fell 1.5% to $211.25, briefly hovering at its 12-month low below $200 in morning trading, after it decreased prices of some of its vehicles in China, while shares of Facebook parent Meta dropped as much as 4% before mounting a furious comeback to a 0.2% daily gain after Bank of America downgraded its rating for the company, expressing skepticism in Meta’s metaverse and Instagram Reel investments.
The market also reacted strongly to major political news abroad, as several New York-listed Chinese firms mounted big losses after Chinese President Xi Jinping secured a third term in power, with Alibaba shares crashing 12.6% to $63.10.
The bond market, which dropped to its lowest levels in decades over the last six weeks, had a confounding reaction to Rishi Sunak being made U.K. Prime Minister Monday: Yields of 10-year British gilts fell 10 basis points to 3.72%, nearly 90 basis points lower than its 4.6% peak earlier this month, while yields for 10-year U.S. Treasury notes rose as much as eight basis points to 4.28% before settling to 4.25%.
All three major U.S. indexes are on pace for their worst year since 2008, with the Dow, S&P and Nasdaq down 14%, 21% and 31%, respectively. The highest inflation levels in four decades spurred the Fed to raise the federal funds rate, largely contributing to the dismal market performance as higher borrowing costs cut into corporate profits. A survey of business economists released Monday revealed about two-thirds of experts believe the U.S. is already in a recession or will enter one over the next 12 months, echoing recent warnings from the heads of most major banks.
Goldman Sachs economists said Sunday there’s just a 35% chance the U.S. economy will enter a recession over the next year. That’s nearly half of the economist consensus for recession odds, with Goldman noting the success thus far in slowing gross domestic product growth and labor demand.
Does The Fed Want You To Lose Your Job? It’s Complicated. (Forbes)
Early Earnings Reports Worry Investors Already Battered by Stock Selloff (Wall Street Journal)

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