U.S. MARKETS:
After moving sharply lower over the two previous sessions, the major U.S. stock indexes turned in a mixed performance during trading on Friday.
While the Dow and the S&P 500 extended the recent downward move, the tech-heavy Nasdaq managed to regain some ground.
The Nasdaq pulled back well off its best levels of the day but still closed up 47.41 points or 0.4 percent at 12,643.01, bouncing off its lowest closing level in five months.
Meanwhile, the Dow tumbled 366.71 points or 1.1 percent to 32,417.59 and the S&P 500 fell 19.86 points or 0.5 percent to 4,117.37.
The Dow slumped to its lowest closing level in seven months, while the S&P 500 slid to a new five-month closing low.
Despite the mixed performance on the day, the major averages all moved sharply lower for the week. The Dow tumbled by 2.1 percent, while the S&P 500 and the Nasdaq plunged by 2.5 percent and 2.6 percent, respectively.
The rebound by the Nasdaq partly reflected a positive reaction to earnings news from Amazon (AMZN), with the online retail giant spiking by 6.8 percent after reporting better than expected third quarter results.
Semiconductor giant Intel (INTC) also soared by 9.3 percent after reporting third quarter results that exceeded analyst estimates and providing upbeat guidance.
Meanwhile, a steep drop by shares of Chevron (CVX) weighed on the Dow, as the energy giant plunged by 6.7 percent after reporting third quarter earnings that missed analyst estimates.
Traders were also digesting a Commerce Department report showing its reading on consumer prices rose by 0.4 percent in September, matching the increase in August. Economists had expected prices to rise by 0.3 percent.
Excluding food and energy prices, core consumer prices increased by 0.3 percent in September after inching up by 0.1 percent in the previous month. The core price growth matched economist estimates.
The annual rate of consumer price growth was unchanged at 3.4 percent, while the annual rate of core consumer price growth slipped to 3.7 percent in September from 3.8 percent in August. Both year-over-year readings matched expectations.
“Despite the larger than expected monthly increase in core prices, the Fed is widely expected to keep the federal funds rate unchanged at the conclusion of their regularly scheduled meeting next Wednesday,” said Sam Millette, Senior Market Strategist for Commonwealth Financial Network.
Sector News
Pharmaceutical stocks showed a substantial move to the downside, dragging the NYSE Arca Pharmaceutical Index down by 3.2 percent to its lowest closing level in over three months.
U.S.-listed shares of Sanofi (SNY) plummeted after the French pharmaceutical company reported weaker than expected third quarter results and provided disappointing guidance.
Considerable weakness was also visible among biotechnology stocks, as reflected by the 2.6 percent slump by the NYSE Arca Biotechnology Index.
Banking stocks also came under pressure over the course of the session, with the KBW Bank Index tumbling by 2.3percent.
JPMorgan (JPM) helped to lead the sector lower after the financial giant revealed CEO Jamie Dimon and his family plan to sell 1 million shares of the company’s stock beginning next year.
Telecom, airline and utilities stocks also saw notable weakness, while retail stocks turned in a strong performance following the upbeat earnings news from Amazon.
Gold stocks also moved sharply higher amid an increase by the price of the precious metal.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index jumped by 1.3 percent, while Hong Kong’s Hang Seng Index surged by 2.1 percent.
Meanwhile, the major European markets moved to the downside on the day. While the French CAC 40 Index tumbled by 1.4 percent, the U.K.’s FTSE 100 Index slid by 0.9 percent and the German DAX Index fell by 0.3 percent.
In the bond market, treasuries turned in a lackluster performance before ending the roughly flat. The yield on the benchmark ten-year note, which moves opposite of its price, closed unchanged at 4.845 percent.
Looking Ahead
The Federal Reserve’s monetary policy decision is likely to be in the spotlight next week, although the monthly jobs report may also attract attention along with reports on manufacturing and service sector activity.
Traders are also likely to keep an eye on the latest earnings news, with a number of big-name companies due to report their quarterly results next week.
TRICK OR TREAT! THE FULL MOON ON THE 28TH AND WALL STREET MINI-PANICS MAY GO ALL TOGETHER. COVERED INDEX SHORT AND WATCHING.
SPX HIT LOWER BAND SUPPORT ON THURSDAY IN A MIDST OF PANIC, ESPECIALLY ON NASDAQ. THIS IS NOT A BULLISH CHART BUT PERHAPS WE GET A BOUNCE
https://www.howestreet.com/2023/10/will-the-plunge-protection-team-boost-stock-markets-mark-leibovit/
Mark Leibovit’s Market Forecast for the Major Markets
https://tinyurl.com/5acyxmup
Yellen Says Higher Yields Reflect Strength
EDITOR’S NOTE: While the great financial minds of the world – economists and billionaires alike – are sounding the alarm that our economy is in big trouble, Janet Yellen is painting a rosy picture of prosperity and strength. How does she say these things with a straight face? Anyone who lives in the real world, and has real expenses, sees the
writing on the wall. Yellen Says Higher Yields Reflect Strength of the Economy and IRA Success, Not the Deficit –
by Mike Shedlock
Janet Yellen brags about the Inflation Reduction Act (IRA) despite it being an abysmal failure at reducing inflation.
Yellen Comments
I don’t think this is connected to the deficit. This is a global phenomenon.
Largely, I think it’s a reflection of the resilience that people are seeing in the US economy.
We are not having a recession.
The economy is continuing to show continued robustness. That suggests interest rates will be higher for longer.
The short clip does not contain the Bloomberg subtitle “Enormous investments sparked by IRA, chips legislation.”
But yes, we do have enormous investments in wasteful wind and solar projects. And we have EVs that few seem to want despite massive subsidies.
Quote of the Day
“Janet Yellen is a delusional national embarrassment.”
Indeed, and if you waste enough money the economy will “seem” to grow for a while. But there is always payback down the road.
U.S. consumer ‘walking towards a cliff’
EDITOR’S NOTE: According to Strategist Chris Watling, US consumers don’t realize what’s about to hit them. This has been brewing for some time now and it’s almost surprising we’ve made it this long. This is why it is now more important than ever for each of us to carefully plan for our financial future; too many pitfalls are waiting along the way
not to do so.
The U.S. consumer is ‘walking towards a cliff,’ strategist warns – CNBC
by Sam Meredith
Trouble is brewing for the U.S. consumer, according to one strategist, and a substantial labor market downturn could kick-start a recession.
“I think the U.S. consumer is walking towards a cliff, basically,” Chris Watling, chief executive of financial advisory firm Longview Economics, told CNBC’s “Squawk Box Europe” on Wednesday.
He said that a slew of recent economic indicators had showed consumers are quickly running out of excess cash, while household savings are coming under pressure.
“Of course, retail sales have been quite strong for the last few months and everyone gets quite excited about that, but, actually, if you look at what’s going on, the household savings ratio has been run down, and, in fact, real income growth has been negative for three months,” Watling said.
“So, it’s not quite all good news. I mean, quite the reverse, I think there are some real challenges coming for the U.S. consumer.”
His comments were made even as data suggests the U.S. economy may have turned in another stellar performance, heading into the final part of the year.
Gross domestic product posted a 4.9% annualized gain for the third quarter, according to a Commerce Department report Thursday.
Billionaire Paul Tudor Jones Says US in Weakest Financial Position Since World War II -Daily Hodl
Add Paul Tudor Jones to the list of billionaires sounding the alarm. We agree with Mr. Jones that the markets are no longer taking actual threats seriously. This lack of appropriate market response will end in disaster if we don’t start paying attention now.
by Henry Kanapi
Hedge fund billionaire Paul Tudor Jones is warning that the United States is at its most economically precarious point in over 70 years.
In a recent CNBC interview, the legendary investor says that tough times lie ahead for the United States as the country’s debt burden continues to soar with the world embroiled in geopolitical tensions.
“The United States is probably in its weakest fiscal position since certainly World War II with debt to GDP at 122%. So it’s a really tough time for the moral voice of the world, certainly been the leader since World War II. It’s a really difficult time.”
According to Jones, the markets are not accurately pricing in the risks involved with the eruption of war in the Middle East.
“I think we’ve become inured to headline risk. If you think about the markets’ reaction to what happened [with Israel and Hamas], it was a linear response. It was risk-off, but it wasn’t anything that possibly recognizes just how dangerous this could be. I think that’s because we’ve gotten exhausted with headline risk .
The yield on a 10-year Treasury reached 5% for the 1st time since 2007. Here’s why that matters
by Stan Choe
NEW YORK (AP) — The yield on the 10-year Treasury has reached 5% for the first time since 2007. That matters for everyone, not just Wall Street.
Treasury yields have been climbing rapidly, with the 10-year yield rallying from less than 3.50% during the spring and from just 0.50% early in the pandemic. Monday morning, the yield on the 10-year Treasury was at 4.96% after hitting 5.02% earlier. The jump means the U.S. government must pay more to borrow money from investors to cover its spending.
It also directly affects people around the world, because the 10-year Treasury yield is the centerpiece of the global financial system and helps set prices for all kinds of other loans and investments. Besides making it more expensive for U.S. homebuyers to buy a house with a mortgage, higher yields also put downward pressure on prices for everything from stocks to cryptocurrencies. Eventually, they could help cause companies to lay off more workers.
The war in Ukraine, along with the unprecedented attacks in Israel by Palestinian militant group Hamas last weekend, may have “far-reaching impacts on energy and food markets, global trade and geopolitical relationships,” Dimon said in a statement accompanying the bank’s third-quarter earnings release. “Thismay be the most dangerous time the world has seen in decades,” Jamie Dimon said. – Megan Henney, “JPMorgan CEO Jamie Dimon warns: ‘This May be the Most Dangerous Time the World has seen in Decades’: Sounds Alarm over Economic Outlook Amid Israel-Hamas War,” www.foxbusiness.com,
October 13, 2023.
Billionaire investor Ray Dalio said there’s a 50-50 chance a world war will break out in light of the Israel-Hamas conflict.
“In my opinion, this war has a high risk of leading to several other conflicts of different types in a number of places, and it is likely to have harmful effects that will extend beyond those in Israel and Gaza,” Dalio wrote in an essay titled “Another Step Toward International War,” which he posted Thursday on LinkedIn.
“Primarily for those reasons, it appears to me that the odds of transitioning from the contained conflicts to a more uncontained hot world war that includes the major powers have risen from 35% to about 50% over the last two years.”
https://tinyurl.com/3mfhf7zf
What about the January Barometer?
The January Barometer calls for a positive year-end outcome, but a lot can happen between now and then. Please check with previous editions discussing the calculation of the Barometer.
https://tinyurl.com/2rd9wv52
OPPORTUNITY TO ACCESS MARK LEIBOVIT’S PROPRIETARY VOLUME REVERSAL INDICATOR – THIS IS THE ONLY PLACE TO DO IT!
https://www.metastock.com/
COME ON, DAD. IT’S TIME TO EAT
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