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  • Writer's pictureThe San Juan Daily Star

US stocks gain at top of data-heavy week amid suspected yen intervention

Wall Street’s main indexes opened higher on Monday as Tesla and Apple led gains in megacap companies, while investors exercised caution ahead of the Federal Reserve’s interest rate decision later in the week.

The Dow Jones Industrial Average rose 42.5 points, or 0.11%, at the open to 38,282.16. The S&P 500 rose 14.2 points, or 0.28%, at the open to 5,114.13​, while the Nasdaq Composite rose 79.1 points, or 0.50%, to 16,006.998 at the opening bell.

U.S. stocks followed their European counterparts higher on Monday and the yen surged amid suspected intervention as investors embarked on what promises to be an action-packed week.

All three major U.S. stock indexes were modestly green at the top of a week filled with high profile earnings, crucial economic data and the U.S. Federal Reserve’s monetary policy meeting.

U.S. first-quarter estimated earnings growth is looking stronger at nearly the halfway mark of the reporting period, with corporate results giving a boost to stocks this week after recent weakness.

S&P 500 year-over-year earnings growth for the first quarter of 2024 is now seen at 5.6%, according to LSEG data on Friday. That is up from 4.3% the day before.

The latest estimate is based on results from 229 of the S&P 500 companies and forecasts for the rest, with about 78% of reports beating analysts’ earnings expectations.

Meanwhile, the yen jumped after touching 34-year low, with traders citing heavy yen-buying intervention by Japanese banks.

“The risk is that you have these asynchronous central bank moves where some are still seeing the shadow inflation on the cave wall and are afraid to start cutting rates, like the Fed,” said Brian Nick, senior investment strategist at Macro Institute in New York. “Then you have central banks that are effectively tightening policy through currency interventions or in the case of Bank of Japan, getting rid of some of their yield curve control.”

“That makes for a more volatile world versus the one where everybody is in sync and we know where we are in the cycle,” Nick said.

This week’s data releases include European inflation and U.S. labor market indicators, while the Fed is due to convene on Tuesday for its two-day meeting at which it is expected to keep its key interest rate unchanged, but strike a hawkish tone.

Nick said enough data was coming this week to allow to determine whether the economy was still running too hot because of the labor market. “We’ll have a much better picture of whether conversations about Fed rate hikes will creep back into the dialogue or whether everybody’s going to be able to calm down.”

Earnings season shifts into overdrive this week with high profile results expected from, Apple Inc and others.

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