Traders Market Weekly: Bonds, Bank Earnings and CPI Ahead

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    Exxon (XOM 106.52, -2.47, -2.3%): close to deal to purchase Pioneer Natural Resources (PXD) for $60 bln, according to the WSJ


    Juniper Networks (JNPR 25.65, +0.09, +0.3%): discloses in SEC filing that it approved a restructuring plan, including headcount reduction of 440 employees; total estimated costs to be incurred by the plan are approximately $59 mln


    Levi Strauss (LEVI 13.098, -0.12, -0.9%): beats by $0.01, misses on revs; guides FY23 EPS to lower end of prior guidance; lowers FY23 revenue guidance; commences initiative to review operating model and cost structure


    Amazon (AMZN 126.27, +0.31, +0.3%): will offer free grocery delivery on orders above $100, according to Bloomberg

    • This reply was modified 4 months, 4 weeks ago by Truman.

    Disney (DIS 81.21, +0.40, +0.5%): Bernstein initiated coverage with an Outperform rating


    MGM Resorts (MGM 35.00, +0.21, +0.6%): provides update on recent cybersecurity issue


    HP Inc. (HPQ 26.08, -0.15, -0.6%): 10% owner Berkshire Hathaway (Warren Buffett) sold another 3,067,508 shares at $26.025 – $26.60 worth more than $80 mln (transaction date 10/3)


    Tesla (TSLA 256.29, -3.76, -1.5%): lowers prices on Model 3 and Y vehicles, according to Reuters


    Nonfarm payrolls rose a much stronger than expected 336,000 (consensus 158,000) and upward revision to July and August summed to an additional 119,000 jobs than previously thought. That was a shocker for the market given the soft ADP employment change reading seen earlier this week, but to be fair, maybe it should not have been a shocker given that initial jobless claims have been running at low levels consistent with a tight labor market.

    There was a bit of moderation in average hourly earnings growth to 4.2% year-over-year from 4.3% in August, but when that is balanced with the unchanged 3.8% unemployment rate, the dip in the U6 unemployment rate, and the clear and continued strength in hiring activity, this labor market is not going to be labeled a weak labor market.

    The key takeaway from the report is that it bodes well for the economy. That is good news, yet that good news is apt to translate in the market’s mind into a stubborn Fed standing on guard to possibly raise rates again but certainly not cut them anytime soon.

    Treasury yields surged higher in response.

    The 2-yr note yield is up seven basis points to 5.10%.
    The 10-yr note yield is up 14 basis points to 4.85%.
    The 30-yr bond yield is up 12 basis points to 5.00%.

    U.S. Labor Market Resilience as Hiring Surged in September, Pressuring Bonds Further


    Market Snapshot


    Dow 33449.85 +330.32 (1.00%)
    Nasdaq 13383.14 +163.31 (1.24%)
    SP 500 4302.23 +44.04 (1.03%)

    10-yr Note -28/32 4.787
    NYSE Adv 1809 Dec 987 Vol 298 mln
    Nasdaq Adv 2523 Dec 1604 Vol 2.4 bln

    Strong: Health Care, Information Technology, Communication Services, Industrials, Materials, Financials
    Weak: Consumer Staples

    Moving the Market
    — Digesting the September employment report, which reflected continues strength in the labor, and what it might mean for the Fed’s policy path
    — Treasury yields pulling back from their post-employment report highs
    — Relative strength in the mega cap space limiting downside moves for the major indices
    — Lingering sense that the market is due for a bounce

    Mega cap stocks are boosting index gains, but many other stocks are participating, which was not the case before when the stock market started to recover from its opening lows. The Vanguard Mega Cap Growth ETF (MGK) is up 1.2% and the market-cap weighted S&P 500 is up 0.9%. Meanwhile, the Invesco S&P 500 Equal Weight ETF (RSP) is up 0.7%.

    Ten of the 11 S&P 500 sectors trade up. The heavily-weighted information technology (+1.6%) and communication services (+1.2%) sectors lead the pack while the consumer staples sector (-1.2%) sits alone in the red.


    Dow 33,407.58 288.01 0.87%
    S&P 500 4,308.50 50.31 1.18%
    Nasdaq 13,431.34 211.51 1.60%
    VIX 17.45 -1.04 -5.62%
    Gold 1,847.00 15.20 0.83%
    Oil 82.81 0.50 0.61%


    Oct 8 – 14, 2023 FEAR NOT Brave Investors Where have we been and where are we going? Join our weekly market thread on Traders Community… Doing, OK? Th
    [See the full post at: Traders Market Weekly: Bonds, Bank Earnings and CPI Ahead]

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