“People are waiting, kind of with bated breath, to say, ‘Oh, my goodness, what’s the message he’s going to give,’” she said. Powell is expected to speak Wednesday afternoon in Washington, DC, at the Brookings Institute Hutchins Center on Fiscal and Monetary Policy about the outlook for the economy and changing labor market. She predicted Powell will likely “agree” with the market that the terminal rate will be around 5% or tat at least higher than it September. She also said Powell will likely agree that a 50-basis point hike at the next meeting would be appropriate. But she said Powell and investors will not totally align and that he will likely push back on expectations that interest rates will start getting cut down in October 2023. “I think he’s really going to push back and say, ‘Look, the labor market is strong. Demand is still decently strong. You know, let’s see what the GDP numbers are this week,’” she said. “Obviously, that can change if we have a deep recession next year, but we’re not expecting that,” she said, noting that a shallow recession is more widely expected. “And I think Powell is going to stay higher for longer.” —Alex Harring
All 11 S&P 500 sectors trade down
All of the S&P 500’s 11 sectors traded down late in the trading day Monday. The worst performer was real estate, which had dropped 2.8%. Although still in the red, consumer staples performed the best, posting a loss of 0.4%. —Alex Harring
Goldman says the bottom is not in yet
Investors should continue to position themselves defensively going into 2023 with further headwinds from rising real yields likely and lingering growth uncertainty, according to a team of strategists at Goldman Sachs. Goldman’s strategists said conditions for an equity bottom have not yet been reached. The Wall Street firm set its year-end 2023 target at 4,000 on the S&P 500, just below its Friday’s close of 4,026.12. “We are looking for lower valuations, a trough in negative growth momentum and a peak in interest rates before a new bull market starts,” Goldman said. “We expect markets to transition to a ‘Hope’ phase at some point in 2023 but from a lower level.” — Yun Li
Dow breaks 500 points down as selloff continues
The Dow’s downward descent continued in the final hour of trading as it moved more than 500 points down. The 30-stock index lost around 526 points, or 1.5%. Both the Nasdaq Composite and S&P 500 have shed 1.6%. —Alex Harring
Signature Bank loses 11% following BlockFi bankruptcy filing
Shares of crypto friendly bank Silvergate slid 11.5% on Monday after BlockFi formally filed for Chapter 11 bankruptcy as part of the continued fallout of FTX. Silvergate was BlockFi’s banking partner. Silvergate, along with Signature Bank in New York, have maintained an open stance towards crypto companies, serving them when many traditional banks have steered clear of such risky business. Signature’s shares fell 4% Monday. — Tanaya Machel
Indexes remain negative entering final trading hour
The three indexes remained trading down as investors entered the final hour of trading. The Dow was down 1.4%. Meanwhile, the S&P 500 and Nasdaq Composite both lost 1.5%. —Alex Harring
Momentum points to further downside for bitcoin, says BTIG’s Krinsky
Bitcoin has been hovering at the $16,000 level since the sudden demise of FTX at the beginning of this month. While the price has held up relatively well given the shock and widespread impact of the FTX collapse, it may not be finished falling, according to BTIG’s Jonathan Krinsky. Bitcoin “has now spent about two weeks in a large trading range between $15,500 and $17,000,” he said in a note Monday. “Momentum still looks to be favoring a downside resolution, and [a] third or fourth test of $16,000 is much less likely to hold than the first two, in our view.” — Tanaya Machel
DraftKings’ shares slump on JPMorgan downgrade
DraftKings’ stock shed 5% after JPMorgan downgraded shares of the sports betting company to underweight from neutral. “For DKNG, we see a longer runway and more risk to achieving OSB profitability than peers; with the stock’s bounce since earnings, we see 20% downside to our unchanged year-end 2023 price target,” wrote analyst Joseph Greff.
Oil comes off lows
Oil turned positive on Monday, with West Texas Intermediate crude rising $1.14, or 1.5%, to $77.42 per barrel. Earlier in the day, it hit a low of $73.60, which is the cheapest price since the year began. Brent crude, meanwhile, regained some of its earlier losses, down 7 cents, or 0.1%, to $83.56. It traded as low as $80.61 per barrel on Monday, its lowest level since Jan. 10.
Dow breaks 400 points down
The Dow traded more than 400 points down as protests in China continued to weigh on markets. The 30-stock index has traded between 300 and 400 points in the red for much of the trading day. The S&P 500 and Nasdaq Composite were similarly trading down. —Alex Harring
Wynn Resorts, Anheuser-Busch InBev and Biogen among stocks moving midday
These are some of the stocks making the biggest moves midday.
Wynn Resorts, Melco Resorts — Shares of Wynn Resorts and Melco Resorts gained 4.62% and 9.71% respectively, after the Chinese government granted them provisional licenses to continue operating casinos in Macau. Anheuser-Busch InBev — The beer giant’s stock rose more than 3% after being twice upgraded from JPMorgan, which said Anheuser-Busch InBev will benefit from a resurgence in demand for domestic light beer and the decline in hard seltzer demand. Biogen — Biogen sank 3.47% after a Science.org report that a woman participating in an experimental Alzheimer’s treatment trial, sponsored by Biogen and a Japanese pharma company, recently died from a brain hemorrhage.
Read the full list of stocks making the biggest moves this afternoon here. —Michelle Fox
Fed should keep hiking into next year, Bullard says
James Bullard at Jackson Hole, Wyoming. David A. Grogan | CNBC St. Louis Fed President James Bullard said Monday that the Fed should continue to raise its benchmark interest rate in the coming months and that the market may be underestimating the chance that the Fed has to get more aggressive. “We’re going to have to continue pursuing our interest rate increases into 2023, and there’s some risk that we’ve had to go even higher than [5%],” Bullard said at a Barron’s Live webinar. Bullard made waves in financial markets earlier this month when he said the Fed’s hikes have had “only limited effects” on inflation so far and that the benchmark interest rate may need to rise to between 5% and 7%. Bullard, who is a voting member of the FOMC, said that the Fed will need to hold off any rate cuts next year even if the inflation picture starts to show consistent improvement. “I think we’ll probably have to stay there all through 2023 and into 2024, given the historical behavior of core PCE inflation or Dallas Fed trimmed mean inflation. They will come down, I think. That’s my baseline. But they probably won’ t come down quite as fast as markets would like and probably the Fed would like,” Bullard said. — Jesse Pound
Cryptocurrency prices drop but quickly recover after BlockFi declares bankruptcy
The price of bitcoin took a dip on Monday after BlockFi officially announced it has filed for Chapter 11 bankruptcy in the wake of FTX’s bankruptcy. Bitcoin briefly dropped to as low as about $16,000 but has rebounded already. It was last lower by just 1% to above $16,300, according to Coin Metrics. The action in the ether price showed a similar bounce. BlockFi has been in bad shape since the spring, following the blowup of the Terra project that led to the implosion of Three Arrows Capital. At that time, the company accepted a bailout from FTX that would help it stave off bankruptcy. Of course, FTX is now managing its own bankruptcy. — Tanaya Machel
Downward pressure remains as investors enter the second half of the trading day
The three major indexes continued trading down as the market entered the second half of the day. The Dow was down 1%, at times down more than 300 points. The S&P 500 also dropped 1%, while the Nasdaq Composite shed 0.9%. —Alex Harring
JPMorgan upgrades Anheuser-Busch InBev, says shares are cheap and should benefit from returning demand for light beer
Anheuser-Busch InBev shares gained more than 4% after JPMorgan double-upgraded the stock to overweight, saying the beer giant should benefit from a recovery in light beer sales. “After over a decade of minimal organic volume growth, ABI’s transition to a higher-quality top line growth story … is well underway,” wrote analyst Jared Dinges in his upgrade. CNBC Pro subscribers can read the full story here. — Samantha Subin
Dow briefly moves down 300 points
The Dow was down more than 300 points as the indexes continued to trade in the red. The drop came as St. Louis Fed President James Bullard said the central bank is likely to keep hiking interest rates into 2023 as there was “a ways to go to get restrictive.” Investors are watching for whether the Fed will continue its pattern of 75-basis point interest rate hikes in a bid to cool inflation as it can help them make predictions on how the market will perform going forward.
Equity markets and treasury yields tell ‘two very different stories,’ says Rockefeller Global’s Jimmy Chang
Equity markets and the Treasury yield curve are giving conflicting signals about the health of the economy, according to Jimmy Change, chief investment officer at Rockefeller Global Family Office. “These are two very different stories,” he said on CNBC’s “Squawk on the Street.” He said the equity markets are indicating that a pivot from the Fed on interest rates could indicate a soft landing, leading investors to believe “happy days are here…
