Select Page

U.S. Stocks Drown as Treasury Yields Reach Sky-High Altitudes; Investors Hold Their Breath for Jobs Data Extravaganza

In the theatrical spectacle that is the stock market, the leading actors—Dow Jones, S&P 500, and NASDAQ Composite—stumbled onto the stage like they’d lost their cue cards. At 10:54 ET, it was a collective faceplant as the Dow dropped 391 points, the S&P 500 dipped 1.4%, and the NASDAQ Composite took a dramatic plunge of 1.6%. It was almost as if Wall Street had forgotten its lines and was anxiously awaiting a blockbuster plot twist, namely this week’s job data saga, starring the eagerly anticipated Friday jobs report for September.

But let’s not forget Monday’s dress rehearsal where the Dow, ever the method actor, shed 0.2%, while the tech-savvy Nasdaq boldly strutted its stuff with a 0.7% gain. The S&P, perhaps exhausted from carrying the weight of investor expectations, managed to inch higher but only marginally so. September and the third quarter both took their toll, leaving all three main indices lower than a cat trying to play limbo.

What’s driving this Wall Street soap opera, you ask? Well, it’s the mischievous 10-year U.S. Treasury yield, which decided to pull off its highest stunt since 2007. You see, when Treasury yields go up, stocks go down, and that’s precisely what happened. Yields climbed to 4.758%, leaving equities feeling a bit deflated. It’s almost as if they were saying, “Hey, Fed, we thought we were friends!”

The good news, though, is that these numbers suggest the U.S. economy is putting on a tough act, resisting any significant downturn. Some even think the Federal Reserve might decide to keep interest rates higher for a longer run. The Fed’s recent hawkish stance prompted investors to do some quick mental math, resulting in futures markets now betting that borrowing costs will stand at 4.7% by the end of next year. This implies fewer cuts than previously anticipated from the current range of 5.25% to 5.50%. Looks like the Fed is playing hard to get.

But wait, there’s more drama! JOLTS (Job Openings and Labor Turnover Survey) surprised everyone by flaunting a higher number than expected for August. Employers flaunted 9.61 million job openings, dancing past the predicted 8.8 million. It’s like the labor market decided to throw in a plot twist, hinting at a gradual slowdown. That twist might have played a role in the Fed’s decision to keep interest rates unchanged at its September meeting.

As the week unfolds, the labor market spectacle will continue with the ADP nonfarm employment report and the star-studded nonfarm payrolls. Will they steal the show or be mere supporting actors in this financial theater?

Meanwhile, spice connoisseur McCormick & Company Incorporated (NYSE:MKC) had a rather spicy performance, with shares tumbling 8.9% after reporting earnings that were on par with expectations but revenue slightly below. The company, however, remained optimistic about 2023 revenue, staying in tune with expectations.

And let’s not forget the egg-citing performance by Cal-Maine Foods Inc (NASDAQ:CALM), slated to report earnings after the closing bell. It’s a quiet week for corporate quarterly reports, but eggs might just scramble things up.

Lastly, oil prices took a slippery slide, touching a three-week low. Worries about sky-high interest rates impacting crude demand had traders on edge. As the U.S. dollar flexed its muscles, the cost of oil became a bit heavier for buyers with other currencies, potentially denting demand. To add a twist, Turkey’s energy minister announced the restart of a suspended Iraq pipeline operation, muddling the supply outlook even more.

As we watch this financial theater unfold, one thing’s for sure: Wall Street never fails to deliver the most captivating drama, with more plot twists than a Shakespearean tragedy.

Stock Market Today: Dow turns negative for 2023 as surging yields sink stocks

The Dow fell Tuesday, and turned negative for the year as data showing surprise strength in the labor market, stoked further concerns about higher Federal Reserve interest rates, pushing Treasury yields to multi-year highs.

The Dow Jones Industrial Average fell 1.3%, 430 points, Nasdaq fell 1.9%, and the S&P 500 fell 1.3%.

Demand for labor unexpectedly rose in August

The U.S. Labor Department’s latest Job Openings and Labor Turnover Survey (JOLTs) report, a measure of labor demand, showed job openings in August unexpectedly increased by about 9.6 million, confounding expectations for drop to 8.8M.

The signs of a still tight labor market added to fears that the Fed may need to hike again this year, pushing the 10-year Treasury yield and 30-year Treasury yields to their highest levels since 2007 in anticipation of a higher for longer rates. U.S. government bond prices, which trade inversely to yield, have also been pressured by a surge in the supply of Treasuries as the U.S. government stepped up the pace of borrowing amid growing deficit.

The fresh surge in the Treasury yields comes even as Atlantic Fed President Raphael Bostic said there wasn’t “urgency” for the Fed to raise rates again.

Technology rebound proves fleeting as selling resumes

Tech, which staged a rebound a day earlier, was led lower by Microsoft Corporation (NASDAQ:MSFT) and Meta Platforms Inc (NASDAQ:META), with the latter coming under added pressure after media reports that it is mulling whether to charge a $14 monthly fee to users who want to access an ad-free version of Facebook or Instragram.

The moves comes as a European court ruling in July — stating that under the EU’s data protection rules, Meta must seek user consent first before showing personalized ads – threatens the tech giant’s advertising revenue, a major source of revenue.

The broader malaise in tech, meanwhile, continued to be dominated by an ongoing rise in Treasury yields, which makes growth sectors of the market less attractive.

McCormic lifts guidance, but Q3 revenue falls short

McCormick & Company Incorporated (NYSE:MKC) fell more than 8% despite lifting its full-year earnings guidance, though the spice maker did report Q3 revenue that fell just short of analysts estimates.

The company said it expects special charges — relating to to organizational and streamlining actions — to reduce EPS by $0.16 in 2023. But excluding special charges, adjusted EPS was expected to be in the range of $2.62 to $2.67, up from prior to guidance of $2.60 to $2.65.

Energy stocks slip as oil prices rebound ahead of OPEC+ meeting

Energy stocks were less than 1% lower as a rise in oil prices following weakness a day earlier helped keep losses in check ahead of the meeting between Organization of the Petroleum Exporting Countries, or OPEC, and allies led by Russia, known as OPEC+, due Wednesday.

Valero Energy Corporation (NYSE:VLO), Phillips 66 (NYSE:PSX), and Marathon Petroleum Corp (NYSE:MPC) were among the biggest decliners.

“When OPEC’s JMMC meets this Wednesday, we do not anticipate any major shift in production policy despite a price increase of nearly 9% since the August monitoring meeting,” RBC said in a note.

Source: Investing.com

Insulet’s CFO Waves Goodbye: McMillan Joins 3M’s Healthcare Gala

In a plot twist worthy of a corporate soap opera, Wayde McMillan, the current Chief Financial Officer (CFO) of Insulet Corp, has announced his impending exit stage left, with his final performance scheduled for October 20th. His next gig? A starring role as CFO in 3M’s healthcare extravaganza. Yes, you read that right; he’s swapping his medical device spotlight for a stint at a U.S. industrial conglomerate.

But here’s the real showstopper: 3M plans to spin off its healthcare unit into the big leagues of publicly listed companies. This plot twist, initially revealed last year, is set to unfold by the grand finale of 2023. What’s the unit’s specialty? It’s all about wound care, oral care, and the glitzy world of healthcare technology.

Now, you might be thinking, “But what about Insulet’s future without McMillan?” Fear not, for the company is not missing a beat. Insulet (NASDAQ:PODD) is standing firm on its annual sales forecast for its insulin pumps and total revenue, as boldly declared in August. Their revenue growth prediction has been tuned up to a range of 22% to 25%, and the outlook for total sales growth of their insulin delivery darling, Omnipod, now boasts a range of 25% to 28%.

In the meantime, as the hunt for a permanent CFO successor kicks into high gear, Lauren Budden, Insulet’s accounting virtuoso, will step up as the interim CFO. The show must go on, after all.

And here’s the encore: following this surprising twist in the corporate saga, shares of Insulet experienced a 1.4% surge in extended trading. It seems the market is eagerly awaiting the next episode of this financial drama. So, stay tuned, folks, because in the world of corporate theater, there’s always another act just around the corner.

Zoom Zooms Ahead with ‘Zoom Docs’: An AI-Powered Office Evolution  

In a bold move that could be called a “Zoom-alution,” Zoom Video Communications (NASDAQ:ZM) has unveiled ‘Zoom Docs,’ an AI-fueled document management tool. This announcement took center stage at the company’s annual conference, where Zoom made it clear that it’s not planning to take a backseat amid post-lockdown office revivals and fierce competition from tech titans like Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOGL).

With a market capitalization of $20.48 billion and a P/E ratio that looks like it’s doing a high-wire act at 142.21, Zoom is no small player. Despite a recent dip in earnings per share, their free cash flow manages to outshine their net income, painting a picture of robust earnings quality. And let’s not forget that Zoom has more cash than debt hanging out on its balance sheet, offering a rock-solid financial foundation for the company.

While Zoom’s stock has been doing a tango of sorts, refusing to follow the S&P 500’s 10% rise, their Chief Financial Officer, Kelly Steckelberg, sees ‘Zoom Docs’ as a significant leap forward for the platform. This move is par for the course for Zoom, which has often taken the road less traveled compared to the broader market trends.

Now, the battleground is set, and Zoom is diving headfirst into the competitive arena of collaborative applications, currently dominated by Microsoft with a hefty 30% slice, followed by Google with 13.5%, according to the International Data Corporation (IDC). Zoom, with an 11% market share, isn’t taking a backseat either. In the past twelve months, the company raked in $4,463.74 million in revenue, showing a steady growth of 3.92%, according to InvestingPro data.

‘Zoom Docs’ emerges just as Microsoft Teams has been swiping a few dates from Zoom’s customer dance card. But Zoom isn’t showing signs of losing its mojo. In fact, they reported a 7% boost in their enterprise customer base from the previous year, now flaunting a tally of 218,100 enterprises. It’s in line with InvestingPro Tips’ prophecy that Zoom’s net income is on the rise, and profitability is on the horizon.

So, while the office world evolves and tech giants slug it out in the arena, Zoom is saying, “Zoom Zoom” to a new era of productivity. Grab your digital pens and paper, folks, because the future of document management just got a whole lot more interesting.

Smart investing is like planting seeds in a garden of financial growth. You carefully choose your seeds (investments), tend to them with diligence (research), and patiently watch them grow into a lush, money-making forest. Just remember, while some investors might be out there chasing unicorns, the wise ones are more interested in cultivating a stable herd of cash cows. So, put on your financial gardening gloves, folks, because with smart investing, you’ll be harvesting success in no time!