As bond yields increased and investors processed an inflation report that revealed headline inflation has stayed steady although several areas the Federal Reserve tracks have continued cooling, stocks ended Thursday’s trading session down, snapping a four-day winning streak.
S&P 500 (\GSPC) declined 0.6%, and the Dow Jones Industrial Average (\DJI) fell around 0.5%, or 170 points. Additionally down 0.6% was the tech-heavy Nasdaq Composite (^IXIC).
The Consumer Price Index (CPI) report released on Thursday revealed that while prices increased somewhat faster than forecast by economists, headline inflation remained stable in September. September’s 3.7% annual increase in consumer prices was consistent with August’s increase. Monthly increases in consumer prices totaled 0.4%.
The 30-year Treasury (\TYX) and 10-year Treasury (~TNX) both had higher yields on Thursday. The yield on the 30-year Treasury increased to above 4.85% following many days of reductions.
The third quarter earnings season was also in the spotlight. As a result of increased fuel prices, Delta (DAL) lowered its profit projection, sending its stock down more than 2%. Some of the biggest banks in the country will be the next to report on earnings; JPMorgan (JPM), Citi (C), Wells Fargo (WFC), and BlackRock (BLK) are all scheduled to release their results on Friday.
Oil prices in the commodities market remained stable, despite the unstable state of the market due to Israel’s troop build-up for the anticipated ground invasion of Gaza. While Brent crude futures (BZ=F) increased little to trade above $86 a barrel, crude oil futures (CL=F) remained unchanged at $83.50 a barrel.
Bond yields increased on Thursday as stocks dropped following the latest inflation report that indicated stickiness.
While the S&P 500 (\GSPC) and the Nasdaq Composite (^IXIC) declined more than 0.6%, the Dow Jones Industrial Average (^DJI) dipped by roughly 0.5%.
Following the completion of a bond auction at 1 p.m., the 30-year Treasury yield (^TXY) saw its largest intraday movement in three weeks. On Thursday, the yield increased to 4.87%. Also rising to 4.71%, the 10-year Treasury yield (^TNX) saw its biggest increase in three weeks.
August and September saw a noticeable change in the markets following a summer of strong economic statistics and a stock market surge.
According to a Wells Fargo indicator, this was one of the most pronounced changes in market mood in recent memory.
In August, the Animal Spirits Index (ASI) was 0.69; in September, it was 0.1. Since March 2020, that represented the biggest one-month decline.
The yield curve—the difference between the yields on the 10-year and three-month Treasury bonds—the VIX Index, the Economic Policy Uncertainty Index, the S&P 500 Index, and the Conference Board’s Consumer Confidence Index make up the index. Increases in the Economic Policy Uncertainty Index and the VIX, which are regarded as fear gauges,
Overall, the index’s dramatic shift illustrates how swiftly market sentiment changed during the previous month as rising yields and the Fed’s stance favouring longer interest rates put pressure on stocks.
The economics team at Wells Fargo stated in a report on Thursday that “some cracks in the economy are beginning to appear, and the downtick in September’s ASI seems to reflect that.” “As real disposable income growth has stagnated and interest rates continue to climb, people are facing greater stress even as core inflationary pressures continue to diminish. We anticipate that real GDP growth will be negative in 2019 and a little increase in the unemployment rate as rising real interest rates put pressure on the economy.”
prior to its wider release on Friday and Thursday, when it opens in more theatres for early access screenings.
The live music experience is unlike anything exhibitors have ever seen, and it arrives at a crucial moment for theatre chains. Some have referred to it as the fall box office event of the year.
“Demand for large-scale blockbuster films has been observed, but not to this extent,” Richard Gelfond, CEO of IMAX (IMAX), stated on Thursday on Yahoo Finance Live. “I don’t think there’s ever been a concert film like this ever before.”
At least 625 IMAX screens, including 377 domestic screens, will screen the movie for the first time in 45 different markets worldwide. Additionally, it will be shown in every US AMC (AMC) and Cinemark (CNK) theatre.
“Will we ever see it again?” is the query. Gelfond asked a query. “In my opinion, Taylor is a unique talent and a real unicorn. There was a lot of publicity for this show. There was pent-up demand because so many people were unable to view it. In terms of the frenzy surrounding a concert film, it’s unquestionably a turning point in the history of film.”
Due to numerous delays in the release plan brought on by the nearly five-month-long writers’ strike, the movie’s premiere coincides with a crucial period for theatres. Most notably, the “Dune” sequel from Warner Bros. (WBD) was originally slated for November 2023, but it was postponed until March 2024.
Rearranging their separate programming, other studios have also kept Hollywood actors on picket lines.
Following news that Broadcom’s acquisition of VMware (VMW) was getting closer to approval in China, the company’s stock shot to the top of Yahoo Finance’s trending tickers page. The announcement caused shares to rise 3%.
The stock of Delta Airlines (DAL) fell by almost 3% on the release of its earnings. The airline reduced its profit forecast as a result of growing fuel costs, which prompted the negative price action.
Despite not meeting Wall Street’s expectations for its fiscal fourth quarter results, Walgreens Boots Alliance (WBA) saw a nearly 6% increase in value. The retail pharmacy company’s losses narrowed, demonstrating the success of its cost-cutting measures.
After falling more than 5%, Kraft Heinz (KHC) reached its lowest points in almost three years. The losses on Thursday continued a string of negative days as Wall Street experts voiced increasing anxiety …
Disney (DIS) increased streaming fees on Thursday as the business struggles with declining subscriber counts and direct-to-consumer profitability issues.
These price hikes, which are the company’s second of the year, affect the monthly cost of its ESPN+ membership, Hulu live TV bundles, and ad-free Disney+ and Hulu plans. The price increases were first disclosed by the corporation in August.
The cost of the Disney+ ad-free subscription increased from $10.99 to $13.99 per month in the US due to the changes. Disney originally charged $6.99 a month for the service, but that has already doubled to $24.
Freddie Mac reports that the average rate on a 30-year fixed mortgage increased this week from 7.49% to 7.57%. The rate has been above 7% for nine weeks running, and it is at its highest point since the first week of December 2000, when it averaged 7.65%.
The largest concern for purchasers who are priced out of the market or are unable to locate a property because no homeowner wants to sell is elevated rates. Given the growing likelihood that a high-rate environment is here to stay, their suffering is unlikely to get any better anytime soon.
“Mortgage rates increased for the fifth straight week as ongoing market and geopolitical uncertainty continues to increase,” a statement from Freddie Mac’s chief economist Sam Khater stated. “
The large Ford Truck Plant in Kentucky was the site of an unanticipated walkout by the UAW, which was greatly escalated because the plant produces Ford’s F-250 through F-550 super duty trucks, the Expedition SUV, and the Lincoln Navigator SUV. Although the best-selling F-150 was spared, Ford claims that the Kentucky Truck Plant generates $25 billion in revenue yearly.
Ford “refused to make further movement in bargaining,” according to a statement from the UAW, signalling the start of a new stage in the stand-up strikes. This led to the request for a strike at Kentucky Truck. “The 8,700 workers closing this incredibly profitable plant will help them understand it if they can’t grasp it after four weeks,” stated Fain.
Ford responded swiftly on Wednesday night, describing the UAW’s most recent action as “grossly irresponsible” but not shocking. The corporation went on to say that the Kentucky Truck strike “carries serious consequences for our workforce, suppliers, dealers, and commercial customers.”
At Kentucky Truck, 8,700 UAW members are employed. However, Ford executives stated that the Kentucky Truck incident will have a knock-on effect on numerous other Ford businesses and suppliers, collectively employing almost 100,000 people.
This decision has a significant financial impact and pain point.
Sam Fiorani, an auto industry analyst at AutoForecast Solutions (AFS), told Yahoo Finance that “targeting Ford’s Kentucky truck plant hits some of the most expensive products they make, including the SuperDuty, which sells for as much as a $100,000.”
The inflation data released on Thursday was little hotter than expected. However, experts predict a decreasing trajectory when volatile categories like food, energy, and shelter are taken out of the picture. This is encouraging for the Federal Reserve, which has been signalling in the days leading up to the inflation data that it will be biassed against raising interest rates in November.
In response to Thursday’s announcement, head US economist at Oxford Economics Michael Pearce commented, “The underlying trend in inflation is still down.” “This report will not change the message from Fed officials over recent days that they can afford to be patient.”
Crucially, the inflation report maintains the foundational argument for a Fed pause during the meeting in November.
Following two challenging weeks in which stocks were negatively impacted by increasing rates and the Fed’s “higher for longer” approach, last Friday’s jobs report signalled a significant change in investor sentiment. According to the research, wages are growing at their slowest rate in over two years, despite the labour market remaining tight and creating more jobs than anticipated.
Fed members made dovish remarks in response to the jobs report, as many are beginning to think that the central bank may be implementing monetary tightening on their behalf due to the recent increase in bond yields. The officials stated that this might prevent the Fed from hiking interest rates in November.
The markets are increasingly betting that there won’t be any more Fed raises in 2023 as a result of the speech and recent economic data coming together.