Wall Street rises on its return to trading

The DOW JONES Ind Average rose 1.36% at the open to 30,296 points, while the S&P 500 scored 1.63% to 3,734 points. For its part, the NASDAQ 100 rose 1.72% to 10,984 points. Last week the main indices posted heavy losses, experiencing the worst week since early March 2020, in the face of the Fed’s biggest rate hike since 1994.

In the macroeconomic section, investors will learn new data on the real estate sector throughout the morning, with the publication of second-hand home sales for May. The Chicago Fed Activity Index for May has also come to light, standing at 0.01. Nevertheless, All eyes are on Federal Reserve Chairman Jerome Powell’s speeches before the Senate and Congresswhich will be held between tomorrow and Thursday.

Sentiment this week has been helped by comments from US President Joe Biden that a US recession is not “inevitable”, but the outlook remains bleak for investors weighing whether the market has bottomed. Many on Wall Street are skeptical, including strategists at Morgan Stanley and Goldman Sachs Group, who believe equities may need to fall further to fully assess the risk of an economic downturn.

“These are very vulnerable rebounds and the tension will return on Wednesday with Powell’s appearance in the Senate”, Bankinter analysts warn in a report. The Fed chairman “will have to maintain a tough tone on inflation as he tries to assuage doubts about economic growth. The ability to surprise positively is very low”.

The big concern of the market is that the Federal Reserve will overdo the brakes and end up damaging economic growth in its battle against inflation, which rose in May to a new maximum of four decades. A Bloomberg survey of economists forecasts a CPI of 6.5% for the fourth quarter and 3.5% for the middle of next year.

In debt markets, which are very sensitive to changes in monetary policy, bond yields rise slightly in anticipation of Powell. The ten-year US debt bond offers a yield of 3.269% in the early hours of the morning, a rise of 3 basis points. For its part, the return on the 30-year bond climbs to 3.339%.

With regard to raw materials, oil prices rise in the day on Tuesday. Black gold has been torn in recent weeks between concerns about a supply shortage due to sanctions on Russia and concerns that a global recession will affect demand, and today the former seem to win.

US West Texas rose 1.16% to $110.06 a barrel, while benchmark European Brent Oil Futures rose 1.13% to $115.53 a barrel.

Today the euro rises 0.6% against the dollar to place the exchange rate at 1.0573 dollars for each community currency, while the price of gold falls 0.2% to 1,835.78 dollars per ounce.

Kellogg will split into three companies

Among the big moves in the morning, Kellogg shares soar 8% at market open. The food giant has unveiled plans to split into three separate listed companies: one will comprise the international cereals and snacks business, another the US cereals business and the third will be a plant-based food producer.

Significant increases also for Spirit Airlines after JetBlue has improved its purchase offer for the company by $2, to $33.50 per share. Spirit is scheduled to decide by the end of the month whether to maintain its merger agreement with Frontier Group or accept JetBlue’s offer. Spirit shares soar 7.5%, while JetBlue Airways jumps 1.6%.

Among the protagonists of the session is also Tesla, with increases of more than 3%. The CEO of the company, Elon Musk has shed some light on the electric vehicle maker’s job cut plans.

At an event organized by Bloomberg on Tuesday, Musk said that Tesla will reduce its salaried workforce by 10% in the next three months, while at the same time increasing the number of hourly employees. The tycoon has explained that this will mean that the layoffs will affect around 3.5% of his total workforce. Salaried workers make up about two-thirds of Tesla employees.

“A year from now, I think our workforce will be higher both in salaried workers and, obviously, in hourly workers,” Musk defended.

At the same event, Musk noted that there are still some unresolved issues related to his deal to buy Twitter, including information about spam accounts and the completion of funding for the deal. In the meantime, A New Twitter Filing With The SEC Recommends Shareholders Vote In Favor Of Musk’s $54.20 Per Share Takeover Offer. Twitter rises 1.2% in the market.

Looking at analyst recommendations, Exxon Mobil shares rebounded 3.5% at the pre-open after experts at Credit Suisse upgraded their recommendation on the oil company to ‘overweight’. The Swiss bank believes that the value can still rise 45% after 35% has been recorded so far this year.