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      Stocks Drop as Jobs Report Shakes Market

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      Stocks skidded on Friday, capping off a turbulent week for Wall Street, as investors were jolted by data showing that hiring slowed and unemployment rose in July.The spiking uncertainty about the economic outlook, and the question of whether the Federal Reserve has been too slow to raise interest rates, was evident across financial markets.The S&P 500 fell 2.4 percent within the hour after the jobs report was released, while the tech-heavy Nasdaq dropped 3 percent. Yields on government bonds, which are sensitive to expectations for the economy, dropped sharply, and oil prices were lower too.The U.S. economy added 114,000 jobs on a seasonally adjusted basis, much fewer than economists had expected and a significant drop from the average of 215,000 jobs added over the previous 12 months. The unemployment rate rose to 4.3 percent, the highest level since October 2021.“That all-important macro data we have been hammering for months is finally starting to turn in an ominous direction,” said Alex McGrath, chief investment officer at NorthEnd Private Wealth.Markets are now predicting a half a percent cut in interest rates at the Fed’s next meeting in September, up from the quarter-point cut investors had been anticipating as of Thursday, according to CME FedWatch. The two-year Treasury yield, which is also reflective of short-term interest rate expectations, fell 20 basis points, to 3.96 percent.This week had already been a rocky one for Wall Street. The Federal Reserve’s indication on Wednesday that it was moving closer to cutting interest rates in September prompted an accelerated market rally, and the S&P 500 rose 2 percent on comments by Jerome H. Powell, the Fed chair.But the market sold off on Thursday, with the S&P 500 falling 1.4 percent, led lower by a drop in chip stocks and economic data suggesting the economy is cooling. The 10-year U.S. Treasury yield — which underpins many other borrowing costs — also dropped below 4 percent on Thursday.All this comes as investors started reconsidering their appetite for big technology stocks last month and bought up shares of smaller companies, which are particularly sensitive to borrowing costs and stand to benefit from interest rate cuts. Also driving this shift is a rethink among investors about the potential for artificial intelligence to continue to drive gains at big companies like Microsoft, Nvidia and Alphabet, after shares of those businesses surged in the past year. More

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      Why You Should Be Taking a Hard Look at Your Investments Right Now

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      After big gains in stocks and mediocre returns for bonds, investors are taking on undue risk if they don’t rebalance their holdings, our columnist says.All eyes were on the Federal Reserve this past week, or so several market analysts solemnly said. This was true even though the Fed essentially did nothing in its latest meeting but hold interest rates high to fight inflation, just as it has done for many months.To be fair, there was a little news: The Fed did appear to affirm the likelihood of rate cuts starting in September, and that’s important. But so are the big performance shifts in the market, away from highflying tech stocks like Nvidia and toward a broad range of less-heralded, smaller-company stocks. In fact, there’s a great deal to think about once you start focusing on the behavior of the markets and the health of the economy in an election year.But what is perhaps the most important issue for investors rarely gets attention.In a word, it is rebalancing.I’m not talking about a yoga pose, but rather about another discipline entirely: the need to periodically tweak your portfolio to make sure you’re maintaining an appropriate mix of stocks and bonds, also known as asset allocation. If you haven’t considered this for a while — and if nobody has been doing it for you — it’s important to pay attention now because without rebalancing, there’s a good chance you are taking on risks that you may not want to bear.The rise in the stock market over the last couple of years, and the mediocre performance of bonds, has twisted many investment plans and left portfolios seriously out of whack. I found, for example, that if you had 60 percent of your investments in a diversified U.S. stock index fund and 40 percent in a broad investment-grade bond fund five years ago, almost 75 percent of your investments would now be in stock. That could make you more vulnerable than you realize the next time the stock market has a big fall.Asset AllocationThe Securities and Exchange Commission defines asset allocation as “dividing an investment portfolio among different asset categories, such as stocks, bonds and cash.” It’s an important subject, but it’s not as straightforward as that description seems.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      China Unexpectedly Cuts Interest Rate as World Markets Sag

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      The central bank lowered a key rate in its latest effort to steady China’s economy, as Asian stock markets followed Wall Street down.China’s central bank on Thursday cut a key interest rate, in Beijing’s second move this week to try to offset a weakening economy and a housing market crisis.The unexpected action came as stock markets fell sharply across most of Asia in early trading, in an echo of Wall Street’s sharp drop the day before. Market indexes were down 1 to 3 percent in Australia, Japan, South Korea and Hong Kong.But share prices were down by less in Shanghai and Shenzhen. That could reflect a favorable response by investors to the central bank’s rate move, or a sign of intervention by the Chinese government, which plays an extensive role in the country’s stock markets.As markets opened in China on Thursday, the People’s Bank of China, the central bank, reduced its interest rate for one-year loans to commercial banks to 2.3 percent, from 2.5 percent. It was the biggest cut to that rate since a similar reduction in April 2020, when the Chinese economy was struggling because of a nearly national lockdown in the early days of the coronavirus pandemic.The one-year rate is important as a guide to commercial banks on the interest rates that they use for loans to corporate customers and also to the financing units of local governments. Beijing blocks local governments from borrowing directly from banks, but has allowed them to set up financial units that do so.Many of these financial units are now deep in debt, and the local governments that control them have been cutting the salaries of teachers and other civil servants to conserve cash.The reduction in the one-year interest rate followed moves by the central bank on Monday to lower other rates that it controls. The actions came after a conclave of the Communist Party’s leadership on economic policy last week that did not produce the broad course correction that many economists have recommended.The party reaffirmed its commitment to pursuing economic self-reliance through further investment in high-tech industries, instead of making a shift to greater consumer spending.Reducing rates now, instead of waiting for a possible cut by the U.S. Federal Reserve this autumn, runs the risk of prompting more Chinese companies and households to move money out of the country as they seek to earn more interest elsewhere. That could cause China’s currency, the renminbi, to weaken further against the dollar.Lower rates might also prompt a revival of speculative borrowing schemes that were a problem for Beijing several years ago.But Eswar Prasad, a Cornell University economist who specializes in China’s monetary policy, said that such concerns appeared to be secondary right now. “Supporting growth is taking precedence over other objectives, such as limiting financial risks or preventing currency depreciation,” he said. More

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      Banks Hit By Global Tech Outage, With Some Trading Delayed

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      Financial transactions around the world were affected by a tech outage on Friday, hampering operations as workers at several firms struggled to log into their corporate systems.Employees at companies including JPMorgan Chase and Instinet, a brokerage firm owned by the Japanese bank Nomura, have had trouble gaining access to their work stations, according to people with knowledge of the matter who spoke on condition of anonymity.That has led to delays in some trades, though the companies have been working on workarounds, the people said.The London Stock Exchange said that its RNS corporate news service was unable to publish, citing a “third-party global technical issue” that it was investigating. The exchange operator added that the matter was not affecting securities trading and other services.Norway’s central bank said that it had suffered disruptions when conducting a securities auction on Friday, with participants having been asked to submit bids by phone or email. It later said that the system was operating normally.Other central banks, including the Bank of England and the European Central Bank, said they were not experiencing any technical issues.A representative for Nasdaq said in a statement that the exchange operator’s European and American pre-market trading businesses were working, and that its U.S. market would open for business as normal.And a representative for the New York Stock Exchange said that its market was fully operational and expected to open normally.Eshe Nelson More

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      La izquierda gana a lo grande en México. Los inversores están preocupados

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      El peso tuvo su peor semana desde la pandemia. Los inversores temen que el gobierno apruebe “cambios radicales” a la Constitución, considerados como un desmantelamiento de los controles y equilibrios democráticos.[Estamos en WhatsApp. Empieza a seguirnos ahora]El conteo final de votos publicado el fin de semana sugiere que el partido político de izquierda que gobierna México y sus aliados obtendrían amplias mayorías en el Congreso, lo que podría permitir a la coalición aprobar cambios radicales en la Constitución.El conteo final de votos publicado el fin de semana sugiere que el partido político de izquierda que gobierna México y sus aliados obtendrían amplias mayorías en el Congreso, lo que podría permitir a la coalición aprobar cambios radicales en la Constitución.El recuento oficial de las elecciones de la semana pasada mostró que el partido, Morena, y sus socios parecían en camino de conseguir una mayoría de dos tercios en la Cámara baja del Congreso.En el Senado, parecía que la coalición no alcanzaría la supermayoría, pero por un pequeño número de escaños, según los analistas, lo que significa que probablemente solo necesitaría el apoyo de unos pocos legisladores de la oposición para modificar la Constitución. Construir esas alianzas “es relativamente fácil” de conseguir, dijo el presidente del partido, Mario Delgado, en una entrevista.“Somos ahora una fuerza dominante”, añadió Delgado, “por decisión de la gente”.La composición final de la legislatura aún no está clara porque una parte de los escaños del Congreso mexicano se designan mediante un sistema de representación proporcional en agosto. Las impugnaciones legales también podrían afectar al reparto de escaños.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      GameStop Stock Surges Again on Social Media Buzz

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      A post on a long-dormant Reddit account suggested the trader known as Roaring Kitty had amassed a large stake in the video game retailer.GameStop’s shares soared on Monday after the long-dormant Reddit account associated with Keith Gill, the trader known as Roaring Kitty who helped spur 2021’s meme-stock mania, appeared to show a big stake in the video game retailer.It was GameStop’s second major rally in as many months, seemingly prompted by social media buzz. The stock more than doubled at one point in premarket trading, before posting a gain of about 50 percent shortly after the open of regular trading, a move adding billions of dollars to the company’s market value.Monday’s surge was driven by a screenshot uploaded to Reddit on Sunday by the account associated with Mr. Gill, after more than three years of inactivity. The post showed a holding of five million shares in GameStop worth just under $116 million, nearly $30 million in cash and a large number of options that give the holder the right to buy more stock at $20 per share. The market data provider Unusual Whales posted that there had been a spike in trading for those options.Adding fuel to the rally was a post to the X account associated with Mr. Gill that featured an image of a reverse card from Uno, the card game. Followers largely interpreted the picture — in line with the cryptic memes that punctuated Mr. Gill’s social media posts in 2021 — as a rallying cry to bolster GameStop’s stock price, which had fallen after a Roaring Kitty-inspired spike last month.GameStop benefited from that rally by selling new shares, raising $933 million. The move “prudently” gives GameStop “a greater level of reserves while it struggles to refocus its business and reverse continuing operating losses,” according to a recent research note by analysts at Wedbush.The new posts continue a flurry of activity from Mr. Gill’s accounts, which had been quiet since 2021. The X account TheRoaringKitty resumed posting on May 13, with another cryptic meme largely interpreted as a pro-GameStop call, followed by dozens of rousing clips from television shows, movies and music videos.Online sleuths have been debating the revival of the accounts since last month, with some speculating that Mr. Gill had sold his X account to a conceptual artist with a history of trolling. While Mr. Gill’s X and Reddit accounts have shown signs of life, his YouTube channel — where he regularly posted videos of himself talking up his stock recommendations — remains inactive.Mr. Gill gained a cult following during the coronavirus pandemic with lively videos and posts arguing that GameStop was undervalued. In 2021, that stock and others, like AMC Entertainment, soared in value as armies of small investors piled in and cheered each other on with irreverent memes. The chaos inspired the 2023 film “Dumb Money.” More

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      Activist Ancora Wins Three Norfolk Southern Board Seats but Will Not Oust CEO

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      An activist investment firm failed to replace the railroad’s top executive and all its directors, but did win three seats on its board.Shareholders of Norfolk Southern, the beleaguered freight railroad, on Thursday voted down an attempt by an activist investment firm to remove the company’s chief executive and take control of its board.But the activist, Ancora, a Cleveland firm, managed to secure a foothold at the company, after shareholders voted to place three of its directors onto Norfolk Southern’s 13-member board. Ancora had hoped to take control of the company’s leadership with an aim to cut costs and increase Norfolk Southern’s profits and stock price.The result is a partial victory for Norfolk Southern’s executives, who had to defend themselves against criticisms of the company’s safety record and its lackluster financial performance. A company train carrying hazardous chemicals derailed last year in East Palestine, Ohio, forcing residents to evacuate.The results of the shareholder vote, which are preliminary, were announced Thursday morning at a virtual company annual meeting.During the meeting, Alan Shaw, Norfolk Southern’s chief executive, said he looked forward to working with the new directors.“Norfolk Southern persevered through several challenges over the last year,” he said, “We have met every challenge and never lost sight of where we are taking our powerful franchise.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Berkshire Reports Strong Earnings and Formidable Cash Stockpile

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      The company also disclosed in its first-quarter earnings that it had trimmed its stake in Apple, but Warren Buffett, its C.E.O., said he remained a fan of Apple.Berkshire Hathaway on Saturday reported strong operating earnings, which track the actual profit that its array of businesses produce, and a record pile of cash in the first quarter, underscoring the health of the conglomerate run by Warren E. Buffett.The results provided a positive backdrop for Berkshire’s annual shareholder meeting in downtown Omaha, the company’s hometown. It is the first such gathering for Mr. Buffett’s business empire since the death in November of Charles Munger, Mr. Buffett’s longtime business partner and alter ego, at age 99.Saturday’s results underscore Mr. Buffett’s repeated admonition that the best way to judge Berkshire — a collection of businesses that includes a major railroad, a substantial power-generation business, insurance, consumer brands including Fruit of the Loom and more — is on operating earnings, not net income.For the first three months of the year, Berkshire reported $12.7 billion in earnings attributable to its shareholders, down 64 percent from the same time a year ago. Driving the drop was a steep fall in the paper value of Berkshire’s vast investment portfolio though Mr. Buffett has long warned shareholders to ignore fluctuations in the company’s stock holdings.Berkshire also disclosed that it had trimmed its huge stake in Apple, which Mr. Buffett has called one of his company’s most important holdings, by about 13 percent in the quarter. The value of its stake is now about $135.4 billion, down from $174.3 billion at the end of 2023. (Apple’s chief executive, Tim Cook, is attending the annual meeting.)But Mr. Buffett said that he remains a big fan of Apple, suggesting that the stock sale was to take some profits off the table. “I would say that at the end of the year it would be extremely likely that Apple would be the largest common stock holding we have now,” he told shareholders on Saturday.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More