S&P 500 just misses record high

By CNN Business

Updated 2138 GMT (0538 HKT) August 12, 2020
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4:03 p.m. ET, August 12, 2020

S&P 500 misses record high by an inch

From CNN Business' Anneken Tappe

It happened again. For the second day in a row, the S&P 500 fell just short of a fresh all-time closing high. The index closed up 1.4%. Yet it was some 5 points below the February record of 3,385.15 it needed to beat.

And so the "record watch" continues.

Stocks were in the green all day, rebounding from the prior day’s losses.

The Dow finished up 1.1%, or 290 points, and the Nasdaq Composite closed 2.1% higher.

3:20 p.m. ET, August 12, 2020

If the market closed now, the S&P 500 would be at an all-time high

From CNN Business' Anneken Tappe

The S&P 500 has hit the magic number of 3,385.15, meaning that if the market closed right now, the index would have set a new record high -- its first since the pandemic hit the United States.

But we still have about 45 minutes left in the trading day. As of now, the S&P is up 1.6%.

If the index does manage to finish at an all-time high, it would make the 2020 bear market the shortest in history at only 1.1 months, according to S&P Dow Jones Indices' Howard Silverblatt.

It would also mean that it took Wall Street less than five months to go from nadir to new record.

1:26 p.m. ET, August 12, 2020

There's plenty uncertainty ahead, strategist says

From CNN Business' Anneken Tappe

The Covid-19 pandemic threw a wrench into America's stock market, but indexes are recovering. Indeed, the S&P 500 is nearing a new all-time high and the Nasdaq Composite hit a record on last Thursday.

"There is a lot of liquidity in the economy and that has really helped the market deal with this," said David Kelly, chief global strategist at JPMorgan Asset Management.

That doesn't mean that there are no clouds on the horizon. Eventually, taxes and interest rates will have to be increased to pay for the pandemic's economic costs, Kelly told Alison Kosik on the CNN Business' digital live show Markets Now.

One of the mandates of the Federal Reserve, which sets interest rate policy, is to safeguard inflation. In a normal recession, inflation would be falling. But as this morning's inflation report showed, prices are already bouncing back after falling for only three months.

The uncertainty doesn't end there. This is an election year.

Former Vice President and Democratic candidate Joe Biden's VP pick -- Kamala Harris -- provides some assurance that the party's ticket is centrist and moderate, Kelly said, which "probably means less radical policy change."

"If we have a Democratic win, you probably see some progress in reducing the deficit," which would be helpful, he added. At the same time, taxes might rise, as could interest rates.

Under a re-election of President Donald Trump, there might be more uncertainty with regards to America's fiscal health, Kelly said.

1:22 p.m. ET, August 12, 2020

Warby Parker is in no rush to IPO, co-CEO says

From CNN Business' Anneken Tappe

Plenty of companies might be thinking about going public. Affordable glasses company Warby Parker is not one of them.

"We have a strong balance, and see no need for raising capital right now, Warby Parker co-CEO Neil Blumenthal told Alison Kosik on the CNN Business' digital live show Markets Now.

"We've been able to do so in the private market," he added. "Do we think we’re going to go public? Yes. Do we have immediate plans? No."

Upon Kosik pressing him on a timeline for a potential IPO, Blumenthal admitted that a year or two from now is the most likely scenario.

At the moment, the company has a strong balance sheet, as well as access to private funding markets, Blumenthal said.

Meanwhile, the pandemic has changed how Warby Parker is making its money.

"Our e-commerce business has gone gangbusters," Blumenthal said, and sales of both prescription glasses and sunglasses are doing well.

The company's virtual try-on feature, which works via an app, "is being used exponentially more than [it was in] pre-Covid," Blumenthal said.

1:00 p.m. ET, August 12, 2020

The IPO market is alive and well

From CNN Business' Anneken Tappe

The IPO market is alive and well, in spite of the pandemic, and a there's a trendy way to take companies public: SPACs.

"We know of the $56 billion in capital that have been raised in the IPO market, more than 40% have been special purpose acquisition vehicles," said Kathleen Smith, principal at the Renaissance Capital IPO ETF (IPO).

But even though SPACs are currently all the rage, they don't provide the best returns for all investors, she said. They are attractive for hedge funds and are also a better route for companies that the market would struggle to value appropriately, Smith said. "Eventually investors may realize it may not be the most efficient way," she added, and a regular IPO may be the best way to go.

"The IPO market is doing quite well as well," Smith said, and 2020 could even surpass previous years in terms of activity and volume of IPOs.

11:39 a.m. ET, August 12, 2020

Another 1.1 million jobless claims are expected tomorrow

From CNN Business' Anneken Tappe

It's Wednesday, and you know what that means: Tomorrow morning, the Department of Labor will release its weekly report on jobless claims.

Another 1.1 million Americans are expected to have filed for first-time unemployment benefits last week, according to economists surveyed by Refinitiv. That would be slightly (66,000 to be exact) fewer than in the week before.

Continued jobless claims, which count people who have filed for unemployment benefits for a at least two weeks in a row, are expected at just below 16 million. That would be 200,000 claims down from the prior week.

Economists think it's encouraging that claims for unemployment are going down because it means people keep returning to work. That said, first-time jobless claims have now been above 1 million every week for 20 weeks, or 5 months, not counting the expectations for tomorrow's report.

11:08 a.m. ET, August 12, 2020

Boston Fed president warns the economy won't recover until coronavirus is controlled

From CNN Business' Anneken Tappe

America has started on the long and arduous path to recovery, but there are plenty of hurdles in its way until Covid-19 has been effectively contained or eradicated, said Eric Rosengren, president of the Federal Reserve Bank of Boston.

As long as the virus poses a threat, consumers will be more cautious. And that will keep them from engaging in the kind of economic activity (meaning spending) they engaged in before, he said.

The trajectory of the economic recovery will be determined more by the path of the virus than by the path of policy making -- although monetary and fiscal policy can mitigate, and have mitigated, some of the most significant adverse impacts,” Rosengren said in prepared remarks before the South Shore Chamber of Commerce.

The central banker also said he thinks the recovery is losing steam, saying that "the recent slowdown in economic activity…is likely to continue."

10:50 a.m. ET, August 12, 2020

The S&P 500 is less than 10 points away from its record

From CNN Business' Anneken Tappe

Stocks are in the green today, which means the S&P 500 could clinch its first closing record since February, before the Covid-19 pandemic took hold in the United States.

The magic closing number for the S&P 500 is 3,385.15. In mid-morning trade the index was up 1.3%, and less than 10 points away from that key level. But there's still a long way to go in Wednesday's session

A new all-time high would mean it took Wall Street less than five months to go from nadir to new record, and if that happens, it would make the 2020 bear market the shortest in history at only 1.1 months, according to S&P Dow Jones Indices' Howard Silverblatt.

9:34 a.m. ET, August 12, 2020

Stocks climb at the opening bell

From CNN Business' Anneken Tappe

Wall Street opened in the green on Wednesday, reversing yesterday's losses that put an end to a seven-day winning streak for the S&P 500 and the Dow.

Maybe it was altitude sickness, as the S&P was poised for a new all-time high yesterday, but momentum petered out in afternoon trading. Investors hopeful that the index can hit its first record since the pandemic hit, might stand a better chance today.

  • The Dow opened 0.9%, or 260 points, higher.
  • The S&P climbed 0.9%, putting it into a 20-point distance to its February record high.
  • The Nasdaq Composite also rose 0.9% at the opening bell.