S&P 500 rises as traders try to shake off recession concerns ahead of March inflation report: Live updates

Los Angeles-based asset manager Capital Group filed for three new ETFs on Tuesday, including two funds focused on international stocks.

Capital Group entered the ETF space last year and found quick success. Its nine existing funds have about $8 billion under management combined.

All three of the new funds are actively managed.

“I think actively managed ETFs are going to continue to find a home in investor portfolios, particularly where investors in the past wanted an ETF but had to use an index-based product. Now they no longer have to make that choice,” said Scott Davis, director of ETFs at Capital Group.

Read more about the new funds on CNBC Pro.

— Jesse Pound

Despite signs of softening, the labor market is “still too tight,” strategists at BCA Research said.

“On the one hand, easing employment conditions reflect the impact of the Fed’s rate hikes, indicating that policy is restrictive,” they said. “Yet on the other hand the tight labor market implies that a recession is not imminent.”

“Despite the slowdown in the pace of nonfarm payroll employment, the March figure remains more than double the 100 thousand jobs per month that Fed Chair [Jerome] Powell cited in a November speech as the pace needed to accommodate population growth over time,” they added.

— Fred Imbert

Chicago Fed President Austan Goolsbee said Tuesday he’s keeping an eye on credit conditions ahead of the central bank’s May meeting.

“Foremost thing on my mind before our next meeting in May is trying to get a handle on this question about credit: is it actually credit tightening?” he said at the Economic Club of Chicago. Concerns over credit conditions heightened after the collapse of Silicon Valley Bank and Signature Bank.

— Fred Imbert

“We have to be driven by the data,” New York Fed President John Williams told Yahoo Finance on Tuesday. “I will say that one thing that we’re paying attention to is credit conditions but also do we really see signs of this underlying inflation coming down?”

Williams’ comments come a day ahead of the release of the latest U.S. inflation figures. Economists polled by Dow Jones expect a 6% year-over-year increase in the consumer price index. Currently, the Fed is expected to raise rates by 25 basis points next month.

— Fred Imbert

Tech heavyweights are dragging the broader market down on Monday. 

“SPX is barely clinging on to gains today despite ~80% of components in the green because mega cap Tech is not participating,” says a recent note from Susquehanna International Group. 

Technology was the only sector in the red in the S&P 500 during early afternoon trading.

Shares of Microsoft and Amazon were down more than 2%, while Apple and Google-parent Alphabet edged lower 0.2% and 0.5%, respectively. Nvidia, one of the market’s best-performing stocks so far this year, lost about 0.7%. The Technology Select Sector SPDR Fund dropped 0.6%.

The broader index would be up over 40 basis points instead of 10 basis points without Monday’s losses from these large-cap tech names, according to the firm. The S&P 500 was recently up 0.27%, putting it on pace for a third straight day of gains.

— Pia Singh

Charles Bobrinskoy, Vice Chairman of Ariel Investments, is bullish on cyclical stocks for the near term. 

“The market is not cheap, but cyclicals and consumer discretionary and certain financial industry stocks are very attractive,” Bobrinskoy said on “The Exchange.” “My prediction is, as we get on the other side of these recessionary fears, interest rates–long-term rates–will actually go up a bit, above 4% on the 10-year. And that will not be good for tech stocks.”

Cyclical names, such as oil and gas companies, are trading at values in a market that is pricing in for a recession, Bobrinskoy said. His top picks are Goldman Sachs, automotive supplier Borgwarner, flooring manufacturer Mohawk Industries and energy supplier Apache—which are all trading higher on Monday. Mohawk is leading the broader market on Monday, with its shares up 5.3% in afternoon trading.

“Those are names that are trading for less than 10 times earnings because people are worried about a recession, and if we don’t get one, they’re going to do very, very well,” Bobrinskoy said.

– Pia Singh

ETF firm Roundhill launched the hyper-concentrated BIG Tech ETF on Tuesday, as it continues to build out a lineup of sector funds that give investors exposure to only the biggest, most well-known stocks.

The fund has exposure to just five companies: Amazon, Meta Platforms, Microsoft, Apple and Google-parent Alphabet. The fund uses equities and swaps to gain this exposure.

The new fund has a ticker of BIGT and an expense ratio of 0.29%.

The Big Tech ETF comes on the heels of a concentrated large bank ETF that Roundhill launched last month. The firm has filed to launch similar funds focused on airlines and defense stocks.

— Jesse Pound

Warren Buffett revealed in an interview with Nikkei that his decision to dump a significant portion of Taiwan Semiconductor recently stemmed partially from geopolitical tensions.

The “Oracle of Omaha” sold 86% of his stake in the chipmaker in the fourth quarter. He had just bought the stock in the third quarter and made it Berkshire’s 10th biggest holding.

Buffett said geopolitical tensions were “a consideration” in the divestment, the paper said. He called the Taiwanese chip company a well-managed one but said Berkshire had better places to deploy its capital.

— Yun Li

Consumers are pulling back sharply on goods spending in what could be a troubling signal for the U.S. economy, according to Barclays.

For the first time since 2021, aggregate spending growth on a year-on-year basis in the Barclays U.S. credit card spending database fell below zero, analyst Renate Marold wrote to clients in a Tuesday note. It’s been on the decline since the start of this year.

The biggest contraction in credit card spending comes from goods spending. While consumers across all income levels are lowering their spending, the sharpest pullback comes from higher income shoppers.

“[Goods] spending by high-end consumers is falling fastest, with current goods spending nearly 10% below last year’s level,” Marold wrote. “This may suggest that the higher-income consumers are feeling the pinch in their wallets from inflation and are in the position where reduced discretionary spending on goods is possible.”

What’s more, the decrease is not due to a smaller set of credit card users as the data had been corrected for any changes, read the note.

“Instead, it could be a more ominous sign for the US economy,” Marold wrote.

— Sarah Min

Investors should proceed with caution when getting into the market this week, according to BTIG’s Jonathan Krinsky.

“While today’s volumes are likely to remain light ahead of heavy data and EPS the rest of the week, we continue to see very poor risk/reward broadly here,” the chief market technician wrote in a note to clients Tuesday. “Daily stochastics for SPX are as overbought as they have been in the last year.”

He noted that both Thursday and Monday marked some of the lightest volume days of 2023. Both started out with weak breadth and saw the SPDR S&P 500 ETF Trust trading 20% below average.

The SPDR S&P Regional Banking ETF’s inability to rally, could be another sign of a possible leg lower ahead, Krinsky said. He noted that the KRE hasn’t been able to test its 20-day moving average since breaking below it to the downside in February.

“There is the possibility we get a short-term ‘buy the news’ relief rally as their EPS comes in, but when something gets extremely oversold and can’t bounce, there’s usually another leg lower on the horizon,” he wrote.

— Samantha Subin

Shares of New York Community Bancorp. rose about 2% on Tuesday after Jefferies upgraded the stock to buy from hold.

NYCB, through its Flagstar arm, purchased billions in assets and deposits from the failed Signature Bank last month, and its shares have rallied since then.

However, Jefferies analyst Casey Haire wrote that the bank is still undervalued and that the deal improved NYCB’s balance sheet. In fact, the move brings NYCB’s loan-to-deposit ratio below 100% for the first time in over 20 years, according to Jefferies.

— Jesse Pound

The iShares MSCI Brazil ETF is up more than 4% during Tuesday trading in its best day since October 3, 2022.

Department store company Lojas Renner was up more than 9%. Personal care cosmetics group Natura & Co Holding SA rose 5%.

— Sarah Min, Gina Francolla

The major averages were little changed, with the S&P 500 and Dow advanced slightly, while the Nasdaq pulled back marginally.

— Fred Imbert

The International Monetary Fund on Tuesday released its weakest global growth expectations for the medium term in more than 30 years.

The D.C.-based institution said that five years from now, global growth is expected to be around 3% — the lowest medium-term forecast in an IMF World Economic Outlook since 1990.

“The world economy is not currently expected to return over the medium term to the rates of growth that prevailed before the pandemic,” the Fund said in its latest World Economic Outlook.

— Silvia Amaro

WW International, the parent WeightWatchers, saw its shares skyrocket 25% in premarket trading Tuesday. Goldman Sachs upgraded the stock to buy from neutral as it’s bullish on the diet company’s new foray into obesity medications. The firm also raised its 12-month price target to $13, more than tripling from Monday’s close of $4.12.

WW acquired Sequence, a telehealth platform that provides its subscribers with access to GLP-1 medications such as Wegovy and Ozempic.

“We believe a catalyst for a turnaround has emerged with its new obesity drug on-ramp solution,” Goldman said. “With this new service offering we expect a cohort of consumers to turn to it for help navigating what is poised to be an increasingly complex field of pharmaceutical solutions.”

— Yun Li

Check out the companies making headlines before the bell on Wednesday:

• CarMax — Shares of the vehicle retailer soared 6.3% on the back of better-than-expected quarterly earnings. CarMax earned 44 cents per share, beating a Refinitiv forecast of 24 cents per share.
• Moderna — The biotech giant slid 4.6% after the company said it’s delaying its flu vaccine due to a lack of enrolled cases in a late-stage trial. The news comes after a company spokesperson told CNBC on Monday that Moderna hopes to release a slew of new vaccines that target cancer, heart disease as well as other yet-to-be confirmed conditions by 2030.
• WW International — Shares popped more than 28% after Goldman Sachs said the weight loss company could triple in value. “WW’s subscriber base and earnings power has been shrinking, but we believe a catalyst for a turnaround has emerged with its new obesity drug on-ramp solution,” Goldman said.

Read here to see which other companies are making moves before the open.

— Pia Singh

Upstart, an artificial intelligence-powered loan platform, lost 2.7% in premarket trading after JPMorgan said the stock could struggle going forward.

Analyst Reginald Smith initiated coverage of the lending stock at underweight. His $11 price target implies the stock could tumble 36% over the next year from Monday’s close.

“We like the potential of UPST’s AI lending platform, but our long-term bullishness is offset by near-term headwinds including slowing originations, waning investor demand for sub-prime unsecured consumer credit, and elevated losses on held loans,” he said in a note to clients Tuesday.

He also said the stock’s year-to-date rally of nearly 30% is shocking. CNBC Pro subscribers can read the full story here.

Upstart

Shares of LendingClub popped 5% in premarket trading after JPMorgan said investors may have unfairly sold off.

Analyst Reginald Smith initiated the stock at overweight. He set a price target of $11, which implies the stock could surge 60.3% from Monday’s close.

“We like LendingClub’s marketplace-bank model, which combines the fee income of a marketplace with interest income of a bank, personal loan market opportunity, and competitive positioning,” he said in a note to clients Tuesday. “Investor concern has shifted from the credit quality of their loan portfolio to the availability of bank partner funding and the near-term earnings impact (and optics) of holding more loans on balance sheet. Our sense is these third-party funding concerns are transitory and LC’s marketplace model thrives in time.”

And, he said the stock “is a compelling way to express the view that the recession for which investors have been bracing for well over a year, will be milder than feared.”

Shares have fallen 22% so far this year, building on 2022′s 63.6% selloff. CNBC Pro subscribers can read more about the call here.

LendingClub

Berkshire Hathaway CEO Warren Buffett raised his stakes in five major Japanese trading houses, and said he plans on adding to his holdings.

Berkshire Hathaway raised its stakes in all five trading houses to 7.4%, according to CNBC’s Becky Quick. That’s up from positions of 6.6% in Mitsubishi Corp., 6.6% in Mitsui & Co., 6.2% in Itochu Corp., 6.8%  in Marubeni Corp. and 6.6% in Sumitomo Corp, according to November filings.

The news sent shares of Mitsubishi, Mitsui and Itochu up more than 2% each in Tokyo trading. Marubeni and Sumitomo climbed 4.6% and 3.2%, respectively.

Buffett told Nikkei said he plans on meeting with the companies later this week “to really just have a discussion around their businesses and emphasize our support.”

— Jihye Lee

Goldman Sachs upgraded Whirlpool shares to buy from neutral. The bank’s $160 price target implies the stock can rally 24% over the next 12 months.

“Although the near-term path is likely to remain choppy, we believe the current valuation provides an attractive entry point,” analyst Susan Maklari wrote.

CNBC Pros subscribers can read more here.

— Alex Harring

European stock markets opened higher Tuesday after the long Easter weekend.

The pan-European Stoxx 600 index was up 0.8% around market open, with most sectors and major bourses trading in the green.

Mining stocks made strong gains with a 3% uptick, followed by autos, which were up 1.3%. Food and beverages was the only sector trading in negative territory, with a 0.1% downturn.

— Hannah Ward-Glenton

European stock markets are expected to open higher across the board in a strong start to the trading week.

The U.K.’s FTSE 100 is set to be up 45.9 points to reach 7,795.2 and Germany’s DAX will increase 118 points to 15,718, according to IG data. France’s CAC index will be up 62.7 points to 7,381.8 and Italy’s MIB is set for a 205.5-point uptick to 26,894.6.

— Hannah Ward-Glenton

Bitcoin climbed on Monday evening, topping the key psychological level of $30,000 as investors awaited key inflation data later in the week that could steer crypto prices.

The largest cryptocurrency by market cap rose 7% to $30,193.25 for the first time since June, according to Coin Metrics. The U.S. consumer price index and producer price index due Wednesday and Thursday, respectively – will be key in determining if or when the Fed will pause or put an end to its rate hiking campaign.

Meanwhile, ether has been climbing ahead of its planned “Shanghai” tech upgrade, which is expected to bring a wave of negative sell pressure on the market as previously locked funds on Ethereum are released over the next few weeks. It advanced more than 3.5% to $1,925.11 for the first time since August as investors ahead of the upgrade, scheduled for Wednesday.

For more details, check out our full story here.

— Tanaya Macheel

China’s inflation for March came in lower than expected at 0.7% against expectations of a 1% rise in its consumer price index compared to a year ago.

Producer price index also fell 2.5% year-on-year, in line with forecasts by Reuters and after seeing a decline of 1.4% in the previous month.

— Jihye Lee

Alibaba stock performance

Hong Kong-listed shares of Alibaba rose 3.12% in early Tuesday trading after the Chinese tech giant’s cloud computing subsidiary debuted its ChatGPT-style product Tongyi Qianwen.

Alibaba Cloud said in a statement that Tongyi Qianwen will be rolled out across all Alibaba products from e-commerce to search in the near future. Alibaba did not reveal a timeline.

“We are at a technological watershed moment driven by generative AI and cloud computing, and businesses across all sectors have started to embrace intelligence transformation to stay ahead of the game,” said Daniel Zhang, chairman and CEO of Alibaba Group and CEO of Alibaba Cloud Intelligence, in a statement.

Alibaba is the latest Chinese player to unveil a ChatGPT clone after Baidu’s Ernie Bot in March. Baidu continued to see losses of more than 4%.

— Sheila Chiang

Cryptocurrencies rose on Asia’s Tuesday morning, with Bitcoin gaining by more than 7% in the past 24 hours to $30,190 according to Coin Metrics.

Bitcoin maintained the highest levels it’s seen since June last year, when it last surpassed $30,000.

Ether also gained more than 3.78% to $1,923.59, hovering around below $2,000 level as well.

The Bank of Korea held its interest rates steady at 3.5%, in line with expectations.

The Korean won slightly strengthened immediately after the move to 1319.68 against the U.S. dollar.

South Korea joins the likes of Australia and India in pausing its tightening cycle amid a global inflationary environment as the U.S. Federal Reserve is seen to maintain its hawkish stance.

Semiconductor stocks are “vulnerable” to a downturn after rallying more than 30% in the first quarter, BTIG technical analyst Jonathan Krinsky wrote in a note to clients April 10.

Krinsky said that two weeks ago, in late March, he thought that “the clock was ticking for technology broadly, and that tech stocks would ultimately ‘catch-down’ to many other parts of the market, which would be a negative for the [S&P 500]. We think we are starting to see the negative divergences find their way into tech stocks, including semiconductors,” he wrote.

“In both absolute and relative terms, semis look vulnerable after a potential false breakout above resistance, [and] a potential uptrend break,” the BTIG report said.

Semiconductor ETF over past six months.

All of which bodes poorly for the Nasdaq Composite. In 2022, BTIG said the Nasdaq-100 Index dropped 2.5% or more on 29 occasions — which hasn’t happened once in 2023. “[D]ownside volatility for the Nasdaq is likely to reassert itself over the coming weeks,” Krinsky wrote.

— Scott Schnipper

U.S. natural gas futures rose 8.01% on Monday, recording its best day since March 3. Front-month gas futures settled at $2.172.

Gas stocks kicked off the week on a higher note. The First Trust Natural Gas ETF, led by Pioneer Natural Resources, Comstock, Matador and EQT, gained 1.9% during Monday’s trading session. Comstock gained 6.5% and Pioneer added 5.8%, while Matador and EQT each rose more than 3%. 

So far this year, however, natural gas is down 51.46%.

— Pia Singh, Gina Francolla

U.S. stock futures were little changed on Monday night.

Dow Jones Industrial Average futures rose by 20 points, or 0.06%. S&P 500 and Nasdaq 100 futures gained 0.06% and 0.04%, respectively. 

— Hakyung Kim