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Treasury Yields Take a Dip as Stocks Rocket: Inflation Expectations Under the Microscope

In the latest chapter of the financial saga, the CPI report for October triggered a delightful rollercoaster ride. Two-year Treasuries decided to take a leisurely dip, basking in the news of slower-than-expected inflation. Meanwhile, stock futures put on their rocket boosters and soared to new heights.

According to the report, this sluggish inflation pace sparked whispers about a potential decline in interest rates, even hinting at a Federal Reserve tap-dance around mid-2024. JPMorgan Asset Management’s sharp minds view this cooling inflation as the economy’s waltz towards the Federal Reserve’s coveted 2% target.

In their Bloomberg TV tête-à-tête, these analysts confidently nodded in agreement with the report, waving away concerns about sticky price situations. “Looks like the US economy is on a disinflation road trip, heading straight back to that sweet 2% spot,” they cheerfully chirped.

Despite a few sections of the stock market puffing up like an overinflated balloon animal, the prospect of low inflation might just cozy up to those long-term interest rates, usually the backstage VIPs of stock prices.

The analysts didn’t stop there. They spilled the beans on the lack of a dramatic “price wage spiral,” with little evidence of corporations or workers playing tug-of-war with the price tags.

And guess what? Yesterday, the analyst’s pals at JPMorgan played fortune teller, advising investors to bid adieu to bonds and stocks and take a stroll down the commodities aisle instead. Talk about stirring up the investment pot!

U.S. stocks higher at close of trade; Dow Jones Industrial Average up 1.43%

U.S. stocks were higher after the close on Tuesday, as gains in the Utilities, Basic Materials and Financials sectors led shares higher.

At the close in NYSE, the Dow Jones Industrial Average added 1.43% to hit a new 1-month high, while the S&P 500 index gained 1.91%, and the NASDAQ Composite index added 2.37%.

The best performers of the session on the Dow Jones Industrial Average were Home Depot Inc (NYSE:HD), which rose 5.40% or 15.56 points to trade at 303.63 at the close. Meanwhile, Walgreens Boots Alliance Inc (NASDAQ:WBA) added 4.56% or 0.92 points to end at 21.09 and Dow Inc (NYSE:DOW) was up 3.68% or 1.81 points to 51.05 in late trade.

The worst performers of the session were The Travelers Companies Inc (NYSE:TRV), which fell 1.35% or 2.30 points to trade at 168.70 at the close. UnitedHealth Group Incorporated (NYSE:UNH) declined 0.39% or 2.11 points to end at 540.46 and Merck & Company Inc (NYSE:MRK) was down 0.29% or 0.30 points to 102.17.

The top performers on the S&P 500 were Enphase Energy Inc (NASDAQ:ENPH) which rose 16.35% to 91.39, Alexandria Real Estate Equities Inc (NYSE:ARE) which was up 11.67% to settle at 105.32 and First Solar Inc (NASDAQ:FSLR) which gained 11.43% to close at 149.14.

The worst performers were McKesson Corporation (NYSE:MCK) which was down 3.57% to 453.82 in late trade, CME Group Inc (NASDAQ:CME) which lost 2.45% to settle at 211.76 and Vertex Pharmaceuticals Inc (NASDAQ:VRTX) which was down 2.37% to 369.95 at the close.

The top performers on the NASDAQ Composite were Biocardia Inc (NASDAQ:BCDA) which rose 168.17% to 1.07, reAlpha Tech Corp (NASDAQ:AIRE) which was up 103.74% to settle at 12.00 and Turnstone Biologics Corp (NASDAQ:TSBX) which gained 66.11% to close at 2.99.

The worst performers were Beauty Health Co (NASDAQ:SKIN) which was down 64.36% to 1.39 in late trade, Applied UV Inc (NASDAQ:AUVI) which lost 40.76% to settle at 0.16 and Gamida Cell Ltd (NASDAQ:GMDA) which was down 37.67% to 0.37 at the close.

Rising stocks outnumbered declining ones on the New York Stock Exchange by 2655 to 282 and 38 ended unchanged; on the Nasdaq Stock Exchange, 2672 rose and 834 declined, while 84 ended unchanged.

Shares in Beauty Health Co (NASDAQ:SKIN) fell to all time lows; losing 64.36% or 2.51 to 1.39. Shares in Applied UV Inc (NASDAQ:AUVI) fell to all time lows; losing 40.76% or 0.11 to 0.16. Shares in Gamida Cell Ltd (NASDAQ:GMDA) fell to all time lows; down 37.67% or 0.22 to 0.37.

The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 4.07% to 14.16 a new 1-month low.

Gold Futures for December delivery was up 0.85% or 16.55 to $1,966.75 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in December fell 0.08% or 0.06 to hit $78.20 a barrel, while the January Brent oil contract fell 0.10% or 0.08 to trade at $82.44 a barrel.

EUR/USD was up 1.68% to 1.09, while USD/JPY fell 0.88% to 150.38.

The US Dollar Index Futures was down 1.48% at 103.94.


Pharma Phoenix: Mallinckrodt Rises, Shearing $1.9B Debt in Bankruptcy Escape

Mallinckrodt, the pharmaceutical powerhouse (OTC: MNKKQ), has emerged triumphantly from the tangled web of bankruptcy proceedings, shedding a whopping $1.9 billion in debt. With the court’s nod to their bankruptcy plan last month, Mallinckrodt now stands on firmer financial ground to chase after its strategic ambitions.

In this reshuffling, the company’s reins have passed on to its lenders, wiping the slate clean for existing equity shares.

Back in 2020, seeking shelter from the storm of mounting debt, legal tussles over generic opioid marketing, and pricing disputes, Mallinckrodt struck a settlement that initially sliced off $1.5 billion from its debt. But the rocky road persisted, fueled by dwindling sales of its prized meds, notably Acthar Gel.

Investing smartly is like adding a pinch of patience, a dash of research, and a sprinkle of diversification to your financial recipe. It’s not just about picking the ripest fruit in the market; it’s about nurturing those seeds of opportunity and watching them grow into a fruitful orchard. So, grab your financial spatula, flip through those investment options, and cook up a portfolio that’ll leave your financial taste buds tingling with success.