U.S. 10Y Yield tops 5% – Oct 20 Market Recap
Indices
- Dow 33,127, -543 or -1.61%.
- Nasdaq 12,983, -424 or -3.16%.
- MSCI EAFE 1960.40, -61.28 or -3.03%.
- S&P 4,224, -103 or -2.38%.
- USD10Y 4.924%, +29.5bp or +6.37%.
- WTI Crude $89.02 bbl, +$1.20 or +1.37%.
U.S. 10Y Yield tops 5%
The U.S. 10Y yield broke 5% for the first time since 2007 despite the improving inflation situation. This coming Friday will see the release of the Personal Consumption Expenditure, which may give the market a better sense of whether the 10Y yield can sustain these levels. Interestingly, the gap between the 2Y and 10Y has closed to 15 bp, the closest they have been since July of 2022, just days after the two inverted.
Next Week
Earnings continue with mega names Amazon, Alphabet, and Microsoft reporting next week. Industrial names Boeing, General Motors and Ford also report and Mastercard and Visa will provide some insight on the U.S. consumer. The biggest economic data piece will come on Friday with the release of September’s Personal Consumption Expenditure Index (CPE).
Economic Calendar
- Monday – N/A. Earnings: N/A.
- Tuesday – October U.S. S&P Flash Manufacturing and Services PMI. Earnings: Microsoft (MSFT), Alphabet (GOOG), Coca-Cola (KO), General Motors (GM), Visa (V).
- Wednesday – N/A. Earnings: Meta (META), Boeing (BA), International Business Machines (IBM).
- Thursday – Initial Jobless Claims, Q3 GDP, September Durable Goods, Earnings: Amazon (AMZN), Chipotle Mexican Grill (CMG), Ford Motor (F), Mastercard (MA), United Parcel Service (UPS).
- Friday – September Personal Consumption Expenditure, Personal Income, Personal Spending. Earnings: Exxon Mobile (XOM).
If you know of any friends or family members who could benefit from our services and these types of communiques during these unique times, we are accepting new clients and offer a complimentary one-hour review.
Oct 20 Daily Trading Recap…
Monday – Dow +314 to 33,984, Nasdaq +160 to 13,567, S&P +45 to 4,373, USD10Y +8.3bp to 4.712%.
- All eleven S&P sectors traded higher, led by Consumer Discretionary, Communication Services, and Utilities.
- October Empire State Manufacturing was slightly better than expected at -4.6 vs -6 but down from last month’s +1.9 print.
- Earnings: Charles Schwab (SCHW) missed their revenue estimates but beat earnings expectations; SCHW rose +4.7% in the regular session.
Tuesday – Dow +13 to 33,997, Nasdaq -34 to 13,533, S&P -1 to 4,373, USD10Y +13.5bp to 4.847%.
- Seven of eleven S&P sectors traded higher, led by Utilities, Consumer Discretionary, and Materials.
- September Retail Sales were much higher than expected at +0.7% vs +0.3% but down vs last month’s +0.8% print.
- Earnings: United Airlines (UAL) traded down -4.64% after stating that higher fuel costs and cancelled flights to Tel Aviv would impact current quarter results. JB Hunt (JBHT) fell -3.63% after missing their numbers. Johnson and Johnson (JNJ) beat their numbers but traded relatively flat during the regular session. Lockheed Martin (LMT) beat their numbers and traded flat. Goldman Sachs fell -1.6% on disappointing numbers. Bank of America beat their estimates and traded up +2.3%.
Wednesday – Dow -332 to 33,665, Nasdaq -219 to 13,314, S&P -58 to 4,314, USD10Y +5.7bp to 4.904%
- Nine of eleven S&P sectors traded down today, led lower by Materials, Industrials, and Consumer Discretionary.
- Earnings: Netflix (NFLX) added 8.8 million subscribers for the quarter, the most since they added 10 million early in the pandemic, beat earnings and reported in line revenues; NFLX traded up +12.94% post close. Tesla (TSLA) missed on earnings and revenues estimates and reported operating margins 10% lower than this quarter last year; TSLA traded down -4.78% in the regular session and down another -4.24% post close when CEO Musk announced that the much-awaited Cyber Truck would not be cash flow positive for 12-18 months. Lam Research (LRCX) beat their numbers but still traded down -4.30% post close. Proctor and Gamble (PG) beat their numbers and traded up +2.58% post close.
Thursday – Dow –250 to 33,414, Nasdaq –128 to 13,186, S&P -36 to 4,278, USD10Y +8.4bp to 4.988%.
- Ten of eleven S&P sectors traded down today, led lower by Real Estate, Consumer Discretionary, and Financials.
- Jobless claims dipped below 200,000 to 198,000 vs 212,000 forecast and last week’s slightly revised higher print of 211,000 (originally 209,000).
- Earnings: American Airlines (AAL) posted its first quarterly loss since Q1 of 2022. CSX (CSX) beat earnings but missed revenue expectations and traded down -4%. Union Pacific (UNP) beat earnings but missed revenue expectations; UNP traded down -2.77%.
Friday – Dow -286 to 33,127, Nasdaq -202 to 12,983, S&P -53 to 4,224, USD10Y -6.4bp to 4.924%.
- All eleven S&P sectors traded down, led lower by Energy, Technology, and Consumer Discretionary.
- Earnings: American Express (AXP) beat on earnings but missed on revenues and traded down 5.38% during the regular session.
If you know of any friends or family members who could benefit from our services and these types of communiques during these unique times, we are accepting new clients and offer a complimentary one-hour review.
Disclaimer: This is not a recommendation to buy or sell any of the securities listed above. I personally, or a family member whose account I control, have positions in the following securities/assets…Bitcoin, Cardano, Chainlink, Ethereum, ETHE, GBTC, and TSLA.