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January 9, 2025

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In Stocks

Inflation Sparks Stock Market Downturn: What This Means for Your Portfolio

4 Mins Read

What a difference a day makes! December ISM Services data suggests the service sector remains strong. The JOLTS report showed there were 8.09 million job openings in November — that’s well above the 7.7 million that was expected. US economic growth is strong, as is the labor market. Stocks sold off on the news and for the rest of the trading day. Tuesday’s economic data brought back thoughts of the possibility of the Fed dialing back on its rate cuts in 2025.

The Federal Open Market Committee (FOMC) releases its minutes on Wednesday at 2:00 PM. Investors will be listening for any hawkish signals from the Fed. Expect some market action on Wednesday afternoon. The stock market is closed on Thursday in honor of former President Jimmy Carter. On Friday, we have the December Non-Farm Payrolls, so don’t be surprised if volatility climbs higher this week.

The Return of the Inflation Narrative

While stocks sold off on inflation and labor concerns, the bond market saw a lot of excitement. Treasury yields rose on the news with the 10-year yields closing at 4.68%. It’s within spitting distance of its 52-week high of 4.737. If it gets there, things could get worse for stocks.

They were bad enough on Tuesday. All broader indexes closed lower with the Nasdaq Composite ($COMPQ) closing 1.89% lower. The daily chart of the Nasdaq (see below) doesn’t paint a pretty picture.

FIGURE 1. DAILY CHART OF NASDAQ COMPOSITE. The series of lower highs should be an alert that the index is pulling back.Chart source: StockCharts.com. For educational purposes.

The Nasdaq Composite is getting close to its 50-day simple moving average (SMA), and a break below it would be cause for concern. It would be even more concerning if the break coincides with a declining Nasdaq Advance-Decline Issues (lower panel).

The Nasdaq has crossed below its 50-day SMA in the past and recovered. The recoveries presented opportunities to accumulate long positions in Nasdaq stocks. A similar scenario could play out this time, but Mark Twain’s quote, “History doesn’t repeat itself, but it often rhymes” keeps popping up. What will the rhyme be this time?

Energy and Health Care

Overall, it was a pretty grim day for stocks. Nine of the 11 S&P sectors closed lower; Energy and Health Care were the only two that closed higher. However, the charts of the exchange-traded funds (ETFs) that represent these sectors — Energy Select Sector SPDR (XLE) and Health Care Select Sector SPDR (XLV) — don’t display a bullish trend. The Bullish Percent Index (BPI) for these sectors is below 50, with the S&P Healthcare Sector BPI being the more favorable of the two at 39.39 (see chart below).

FIGURE 2. ENERGY AND HEALTH CARE SECTORS. Even though Energy and Health Care were the best performing sectors on Tuesday, their charts aren’t exhibiting bullish characteristics.Chart source: StockChartsACP. For educational purposes.

The best-performing S&P 500 stock on Tuesday was Moderna, Inc. (MRNA) with an 11.65% rise. Moderna is developing a vaccine for bird flu, which helped propel the stock price. The Market Movers panel on Your Dashboard shows a handful of health care and energy stocks in the S&P 500, %Up category.

Even though the Energy or Health Care sector charts are far from bullish, it’s worth keeping an eye on them. If a bullish trend takes shape while other sectors, such as Technology and Consumer Discretionary, turn bearish, it may be worth allocating a portion of your portfolio to the bullish-performing sectors.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

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In World news

Body found in hunt for two British hikers missing in Italian Alps

2 Mins Read

Rescue crews found the body of a British hiker buried in the snow of the Italian Alps and were continuing to search for his friend, who had also been missing since January 1, Italy’s rescue services said Wednesday.

Italy’s Alpine rescue service said it only received an alert about the men on January 6, five days after the men set out in the Adamello range near Trento, after they failed to make a scheduled flight home and relatives contacted authorities.

After the first two days of searches were hampered by snowfall, fog and avalanche warnings, rescue crews managed to get a helicopter in the air Wednesday and ground crews reached the pair’s last recorded location.

Guided by the hikers’ phone recordings, crews found the men’s backpacks and equipment, as well as the body of one of the hikers buried in the snow, the rescuers said in a statement.

British media quoted relatives and partners of the two men, Aziz Ziriat, 36, and Sam Harris, 35, as saying they were experienced hikers who had planned a New Year’s Day excursion, hiking from mountain hut to mountain hut.

“It wasn’t surprising that they had no signal as they like going off the grid,” said a university friend of Ziriat, Joe Stone.

A helicopter attempted a flyover on Tuesday, but fog and poor visibility forced it to return before reaching the affected valley and the search was suspended, the rescue crews said.

Additionally, ground crews of the fire rescue service were unable to work due to high risks of avalanches.

The Adamello range straddles Italy’s Lombardy and Trentino-Alto Adige regions and includes the highest peak, Mt. Adamello, at 3,539 meters (11,611 feet.)

This post appeared first on cnn.com

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In Business

Panera Brands CEO steps down; CFO to fill in as interim chief

2 Mins Read

Panera Bread’s parent company announced Tuesday that CEO Jose Dueñas is stepping down, effective immediately.

The change in leadership is the latest challenge to the company’s plans to go public eventually, following several years of hurdles.

Panera Brands CFO Paul Carbone will step in as interim chief executive while the board searches for a permanent replacement to lead the company, which includes Panera Bread, Einstein Bros. and Caribou Coffee.

Dueñas plans to stick around through the end of March as a special advisor, the company said. He took over as CEO of Panera Brands in July 2023 after four years leading bagel chain Einstein Bros.

JAB Holding, the investment arm of the Reimann family, bought Panera Bread in 2017 for $7.5 billion, taking it private and then forming Panera Brands with some of its other acquisitions.

JAB has been trying to take Panera public again for years. In 2022, Panera scrapped a deal with Danny Meyer’s special purpose acquisition company, citing market conditions.

In the same 2023 announcement tapping Dueñas as its latest CEO, Panera said the leadership transition is to prepare for an eventual initial public offering. Months later, in December 2023, the company confidentially filed for an IPO.

It has yet to go public, following lawsuits tied to its heavily caffeinated Charged Lemonade, a rocky year for the restaurant industry and a sluggish market for IPOs in 2024.

This post appeared first on NBC NEWS

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