Stock Market New: Rivian deliveries explode, Tesla rally, first $3T company

A trader stands outside the New York Stock Exchange, Friday, Sept. 23, 2022, in New York. AP Photo/Mary Altaffer

A widely watched section of the U.S. Treasury yield curve hit its deepest inversion on Monday since the high inflation era of Fed Chairman Paul Volcker, reflecting financial markets' concerns that an extended Federal Reserve rate hiking cycle will tip the United States into recession.

The closely-watched spread between the 2-year and 10-year U.S. Treasury note yields hit the widest since 1981 at -109.50 in early trade, a deeper inversion than in March during the U.S. regional banking crisis. The gap was last at -108.30 bp.

Traders on the floor of the NYSE. REUTERS

Stocks edged higher Monday as momentum slowed on Wall Street following a powerful rally to start the year.

The S&P 500 rose 0.1% and reached its highest level since April 2022. The Dow Jones Industrial Average gained 10 points, which is less than 0.1%. The Nasdaq composite added 0.2%.

Tesla helped push the market upward after it said the number of vehicles it delivered during the spring surged from a year earlier. Much of the rest of the market was quiet.

The U.S. stock market closed early on Monday and will remain shut on Tuesday in observance of Independence Day.

A worker at a US manufacturing sight. REUTERS

U.S. manufacturing slumped further in June, reaching levels last seen when the economy was reeling from the initial wave of the COVID-19 pandemic, according to a survey on Monday that also showed price pressures at the factory gate deflating.

Factories are resorting to laying off workers to manage headcounts, which ISM Manufacturing Business Survey Committee Chair Timothy Fiore said was "to a greater extent than in prior months," also noting that views about when "significant" growth would return were mixed.

At face value, the ISM survey is consistent with an economy that is in recession. But the so-called hard data, including nonfarm payrolls, first-time applications for unemployment benefits, consumer spending and housing starts, suggest the economy continues to grind along.

Risks of a downturn have, however, increased as businesses and consumers deal with the 500 basis points worth of interest rate increases from the Federal Reserve since March 2022, when the U.S. central bank embarked on its fastest monetary policy tightening campaign in more than 40 years.

A photographer takes pictures of the Khurais oil field during a tour for journalists, 150 km east-northeast of Riyadh, Saudi Arabia, on June 28, 2021. Saudi Arabia and Russia are extending cuts to the amount of oil they pump to the world to try to prop up prices, showing how two of the world's largest oil producers are scrambling to boost income from the fossil fuel even as demand has weakened with the economy. The move Monday, July 3, 2023, gave a slight boost to oil prices and comes after the Saudis announced a large cut in output for July at the latest meeting of the OPEC+ coalition of oil producers. AP Photo/Amr Nabil

Oil prices rose on Monday after top exporters Saudi Arabia and Russia announced supply cuts for August, prompting prices to bounce of early losses spurred by worries about a slowing global economy and possible U.S. interest-rate hikes.

Saudi Arabia on Monday said it would extend its voluntary cut of one million barrels per day (bpd) for another month to include August, the state news agency said.

Russia, seeking to tighten global crude supplies and boost prices in concert with Saudi Arabia, will reduce oil exports by 500,000 bpd in August, Deputy Prime Minister Alexander Novak said.

The cuts amount to 1.5% of global supply and bring the total pledged by OPEC+ oil producers to 5.16 million bpd.

A customer withdraws money at a Bank of America ATM. REUTERS

Bank of America Corp on Monday said it had begun a dialogue with the Federal Reserve to understand differing results of the central bank's stress test and the company's own under the Dodd-Frank Act.

The results of the Fed's latest annual stress test released last week showed lenders including Bank of America have enough capital to weather a severe economic slump, paving the way for them to issue share buybacks and dividends.

The bank said in a statement however that it wants to understand the differences in a category called "other comprehensive income" during a nine-quarter period measured in the tests.

Bank of America, the second-biggest U.S. bank, has not made any announcements about its dividend or share repurchase programs since the stress test results were published.

Tesla's North American Charging Standard on display. REUTERS.

Kentucky requires electric vehicle charging companies to include Tesla's plug if they want to be part of a state program to electrify highways using federal dollars, according to documents reviewed by Reuters.

"Each port must be equipped with an SAE CCS 1 connector. Each port shall also be capable of connecting to and charging vehicles equipped with charging ports compliant with the North American Charging Standard (NACS)," Kentucky Transportation Cabinet said in its documents.

Tesla shares jumped 6% on Monday after better-than-expected quarterly deliveries showed that Chief Executive Elon Musk's plan of boosting volumes through discounts was working.

The leading U.S. manufacturer of electric vehicles was set to increase its market capitalization by around $50 billion to $900 billion, based on early trading in its shares.

At $277, the stock has already more than doubled in value this year and risen far above price targets set by analysts, prompting caution from some brokerages that margins will suffer because of the aggressive discounting spree.

Apple products on display at an Apple store. REUTERS

Apple Inc became the first company in the world to reach a market value of $3 trillion, buoyed by hopes over its expansion in new markets coupled with expectations of a more moderate approach to interest rate hikes by the Federal Reserve.

The iPhone maker's advance was among the most eye catching in a month marked by investor interest in the potential of artificial intelligence, with share buyers also particularly favoring companies with strong balance sheets and cash flows.

Apple's most recent quarterly report in May showing its revenue and profits beat analysts' expectations, and its track record of stock buybacks, reinforced its reputation as a safe investment during global economic uncertainty.

Rivian logo is displayed underneath a tail light on a Rivian EV.

Rivian Automotive on Monday beat Wall Street expectations for quarterly deliveries on stable demand for its electric vehicles, sending its shares up nearly 9% in premarket trading.

The company, which has been struggling with supply chain hurdles, reiterated its annual production target of 50,000 units.

The Irvine, California-based startup, which makes R1T pickup trucks and R1S SUVs, has been developing its own drive unit to lower costs and reduce dependency on suppliers.

Rivian second-quarter vehicle deliveries jumped 59% to 12,640, compared with estimates of 11,000 vehicles, according to 15 analysts polled by Visible Alpha.