Stock Markets Bounce After a Week of Whiplash

Investors are keeping a close eye on companies reporting earnings this quarter to gauge whether big corporations are beginning to feel the effects of an economic downturn. This week, businesses including American Airlines, Goldman Sachs and Procter Gamble are set to open their books, providing updates and forecasts for investors anxious about the path of the economy.

The big gyrations in stocks lately haven’t always been about changes in fundamentals, like a strong earnings report, said Kristy Akullian, a senior iShares strategist at BlackRock. There’s a “technical element” too that’s driving the bigger-than-usual moves, she said.

“We’re actually seeing that whenever the market rallies a little bit, it tends to rally a lot.”

Yields on U.S. government bonds, a benchmark for borrowing costs, were largely unchanged. The yield on the two-year note inched lower, to 4.45 percent. The yield on the 10-year note was unchanged at 4.02 percent. Yields move inversely to prices.

In other markets, the price of West Texas Intermediate crude oil, the U.S. benchmark, fell 0.3 percent, to $85 a barrel. The price of Brent crude, the global benchmark, also fell 0.1 percent, to almost $92 a barrel.

London’s FTSE 100 closed with gains of 0.9 percent, the British pound strengthened and Britain’s government bond yields plunged after Jeremy Hunt, the newly installed chancellor of the Exchequer, announced on Monday more reversals of Ms. Truss’s plan for tax cuts funded by additional borrowing.

Article source: https://www.nytimes.com/2022/10/17/business/stock-markets.html