Good morning. In today's newsletter: What bitcoin and Apple tell us about the market mood. Plus, Tesla shares leap on stock split plans, and why Alan Greenspan tracks sales of men's underwear. US stock futures are up after the S&P 500 rose 0.7% on Monday. Markets in Europe gained sharply in early trading, while stocks in Asia were mixed. ▸ Forwarded this newsletter? Want global markets news and analysis from CNN Business reporters every morning? You can sign up here. |
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Fear is vanishing from riskier corners of the market |
One month ago, when Russia's war in Ukraine erupted, fearful investors yanked their money out of riskier bets and sought safer places to park their cash. Now, in the final days of a turbulent quarter, there are signs that confidence is returning. What's happening: Bitcoin has erased its losses for the year, while shares of Apple — a bellwether for the tech industry — have climbed over the past 10 trading sessions. European stocks, which faced extreme selling as the region scrambled to secure energy supplies, are up 11% from their lows. "We've seen a lot of investors [move] past the initial panic now," Walid Koudmani, chief market analyst at the brokerage XTB, told me. While sentiment could still change, Wall Street is seeing "a lot more certainty" on the effects of the war and how policymakers will respond, he added. |
Federal Reserve officials are making clear that they intend to be as aggressive as needed to rein in the highest inflation in four decades. And investors are relieved that Russia and Ukraine are talking, even though it's difficult to predict how negotiations will play out. The CNN Business Fear & Greed Index, which tracks the market mood, is now in "neutral" territory. It was producing a "fear" reading one month ago. The price of bitcoin has rallied in recent weeks, rebounding almost 27% since the invasion of Ukraine in late February. The cryptocurrency is now up more than 3% year-to-date, a major reversal of fortune. "Market sentiment has turned very bullish over the past week," Marcus Sotiriou, an analyst at digital asset broker GlobalBlock, told clients on Tuesday. Then there's stocks. Investors turned on Big Tech companies — which skyrocketed during the pandemic recovery — as they geared up for the Federal Reserve to start withdrawing unprecedented support for the economy. The shock of the war in Ukraine only made matters worse. The tech-heavy Nasdaq Composite entered a bear market earlier this month when it dropped more than 20% from its November peak. But it's rebounded over the past two weeks. The index finished Monday up roughly 14% from its recent low. Apple, America's biggest public company, has seen shares climb about 16% from their March low. They're now down just 1% so far this year. Even European stocks, which got battered due to the region's reliance on energy from Russia, are staging a comeback — though Koudmani cautioned that they probably remain the most vulnerable. Big picture: The enthusiasm is still shaky. And the market for US government bonds remains turbulent, with chatter growing that unusual price moves could signal an imminent recession (more on that tomorrow). But ahead of the second quarter, there are indications that the dark mood is lifting, at least for now. |
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China's Huawei is still under enormous pressure |
"We managed to survive 2021. [But] our fight to survive is not over yet."
ROTATING CHAIRMAN GUO PING Read more from CNN Business. |
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Tesla's stock jumps on stock split plans |
Tesla's stock leaped on Monday after the electric carmaker said it would ask shareholders for permission to split its stock for the second time in two years. The latest: Shares of Tesla finished 8% higher at almost $1,092 apiece. They're up another 2% in premarket trading on Tuesday. The company did not give details on how many shares investors would receive if it gets the green light. Tesla's previous split in August 2020 gave shareholders five shares for each stock they owned. Step back: Some of the biggest US companies have gotten a lift after announcing recent stock splits, since the move makes their shares more affordable to everyday investors, boosting demand. Amazon and Google owner Alphabet have both said they will split their stocks this year. Tesla's journey: You'd be forgiven for having a bit of deja vu. But Tesla has had a big two years. "Given how well the stock has done since the last split, this wasn't a surprise," said Dan Ives, a tech analyst with Wedbush Securities. Shares have more than doubled since then. In December 2020, the company joined the benchmark S&P 500 index, encouraging more investor buy-in. And last quarter, it posted record earnings. On the radar: Tesla wants to grow deliveries by 50% this year despite supply chain difficulties. It will be bolstered by strong demand for electric vehicles, as well as the build-out of new factories in Berlin and Austin, Texas. |
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McCormick reports earnings before US markets open. Lululemon, Micron and Chewy follow after the close.
Also today: US consumer confidence data for March arrives at 10 a.m. ET. Coming tomorrow: Data on private sector hiring in the United States will be parsed ahead of the government's official jobs report on Friday. |
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| | WHAT WE'RE READING AND WATCHING |
▸ New supply chain risk: 22,000 dockworkers could strike (NYT)
▸ Bankers and traders in Shanghai are sleeping at work (Reuters)
▸ Walmart will stop selling cigarettes in some stores (CNN Business)
▸ Barclays to take huge hit on 'bizarre' bond blunder (Bloomberg)
▸ Companies push to help Ukrainian refugees get jobs (CNN Business)
▸ CNN+ is here: Details on the new streaming service (CNN Business) |
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Can underwear reveal the health of the economy? |
Investors are keeping an eye on the bond market for signs of an imminent recession, but it's not the only metric worth monitoring. From sales of underwear to cosmetics, quirkier datasets could also provide clues about where the economy is heading, my CNN Business colleague Nicole Goodkind reports. Alan Greenspan, former head of the Federal Reserve, is said to watch demand for men's underpants. It's usually stable, so when it dips, it's a sign consumers are really cutting back. Lipstick sales, on the other hand, are believed to jump during hard times, as shoppers replace big buys with small pick-me-ups. (Estee Lauder CEO Fabrizio Freda says tracking skin care sales may be more accurate these days, though the concept holds.) Dating sites also are known to get a boost when the economy is in the dumps, since they present a relatively inexpensive way to get an endorphin rush. Nicole points out that Bumble's recent earnings beat Wall Street's expectations. The big question: Is that a bad omen, or just a sign that its business model is working? |
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