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Waves of Worry: U.S. Markets’ Rollercoaster Ride Driven by Rate Hikes and Earnings Blues

Last week, the U.S. equity markets looked like they’d stumbled into a financial funhouse. It was a wild ride, all thanks to the looming specter of more Federal Reserve rate hikes and some pretty lackluster corporate earnings. The 10-Year Treasury Yield decided to break free and party like it’s 2002, reaching heights not seen in decades. Meanwhile, the CBOE Volatility Index took us on a thrill ride not seen since mid-March.

The real estate world wasn’t spared from this financial frenzy, with both the Equity REIT Index and Mortgage REIT Index taking a hit as interest rates started to rise. It’s like a game of dominos: higher mortgage rates mean a bumpy ride for the housing market, and that’s just what we got.

But in this tumultuous landscape, there were a few daredevils. Equity LifeStyle (ELS) managed to keep its head above water, defying the market’s gravity-defying moves. On the flip side, Prologis (NYSE:PLD), Crown Castle (NYSE:CCI), SL Green (SLG), VICI Properties (NYSE:VICI), and Alpine Income (PINE) all reported declines. Even Blackstone (NYSE:BX), the private equity wizards, got a taste of the turbulence, with softer earnings. It was a rocky path for residential mREIT Orchid Island (ORC) too, with those rising benchmark interest rates and sliding MBS valuations. The iShares Mortgage Real Estate ETF (REM) took a dip as a result.

As if that wasn’t enough, U.S. 10-year bond yields jumped by a whopping 30 basis points to 4.93% last week. Blame it on Jerome Powell, the charismatic Federal Reserve chairman, who painted a picture of a bustling economy making it tricky for the Fed to hit the brakes on rate hikes. So, high-interest rates might be here for a while, and that left investors saying goodbye to any dreams of an imminent rate cut.

It’s all part of the rollercoaster ride that is the financial world, driven by shifting expectations about short-term rates, a premium for holding onto those long-term securities, and perhaps a few nightmares about the growing U.S. budget deficit and its potential impact on bond issuance. Strap in, folks – the markets are giving us one heck of a thrill!

Dow futures lift, major tech earnings in focus

US stock futures ticked higher on Sunday night following significant weekly declines among major benchmark averages, as market participants braced for a fresh deluge of earnings results from major tech companies including Alphabet (NASDAQ:GOOGL), Inc (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT).

By 6:45:pm ET (10:45pm GMT) Dow Jones Futures were up by 0.1%, while S&P 500 Futures and Nasdaq 100 Futures lifted 0.2%.

On the economic calendar, investors will be looking towards preliminary manufacturing and services PMIs, building permits, new and pending home sales, core durable goods orders, preliminary GDP and goods trade balance, PCE price index data, Michigan consumer sentiment and expectations surveys as well as speeches from Powell, Waller and Barr.

On the earnings front, companies set to report results throughout the week include W. R. Berkley Corp (NYSE:WRB), Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc Class C (NASDAQ:GOOG), Visa Inc Class A (NYSE:V), Coca-Cola Co (NYSE:KO), Meta Platforms Inc (NASDAQ:META), International Business Machines (NYSE:IBM), Moodys Corporation (NYSE:MCO), Inc (NASDAQ:AMZN), Mastercard Inc (NYSE:MA), Intel Corporation (NASDAQ:INTC) and Ford Motor Company (NYSE:F).

During Friday’s regular trade, the Dow Jones Industrial Average fell 286.9 points or 0.9% to 33,127.3, the S&P 500 lost 53.8 points or 1.3% to 4,224.2 and the NASDAQ Composite lost 202.4 points or 1.5% to 12,983.8.

For the week, the Dow registered declines of 2.1%, the S&P 500 dropped 2.7% and the NASDAQ tanked 3.5%.

On the bond markets, United States 10-Year rates lifted to fresh 16-year highs of 4.918%.



Tevva Resumes Merger Talks After ElectraMeccanica Deal Cancellation and Confirms Truck Production

British electric truck manufacturer Tevva is back in the game after its whirlwind romance with ElectraMeccanica took an unexpected turn. The planned merger with ElectraMeccanica, which had all the makings of a billion-dollar power couple, hit a snag when ElectraMeccanica called it quits, claiming Tevva had kept some crucial information under wraps.

Now, Tevva, with a whopping $140 million in its pocket from investors, is determined to clear its name and is exploring new merger options. It’s swiping right on potential partners and getting back in the fast lane, ready to make sparks fly once again.

Oh, and in case you were wondering, Tevva’s trucks are still rolling off the production line, because in this electrifying world of EVs, the show must go on!

Samsung SDI to Begin Supplying EV Batteries to Hyundai Motor starting in 2026

Samsung SDI, a prominent South Korean battery manufacturer, announced on Monday its agreement to provide Hyundai Motor with electric vehicle (EV) batteries for a duration of seven years, commencing in 2026. This landmark deal signifies the first-ever collaboration in the realm of electric vehicle batteries between Samsung and Hyundai Motor Group.

In a statement, Samsung SDI expressed its enthusiasm for this pioneering partnership, underlining the significance of their foray into the electric vehicle battery sector. The company, renowned for supplying batteries to automotive giants such as General Motors, Stellantis, and BMW, disclosed that it will furnish prismatic batteries produced at its Hungarian facility to power Hyundai Motor’s EVs intended for the European market from 2026 to 2032.

While the precise size of the contract remains undisclosed by both Samsung SDI and Hyundai Motor, industry insiders estimate that Samsung SDI’s battery supply is likely to cater to approximately 500,000 electric vehicles over the coming seven years.

As news of this collaboration broke, Samsung SDI’s stock experienced a modest decline of 1.2%, juxtaposed against the benchmark KOSPI index’s 0.2% drop as of 0050 GMT.

Ah, investing after a weekend is like the stock market’s version of Monday morning quarterbacking. You’ve had your weekend, made your brunch decisions, and now you’re staring at those market charts, contemplating whether you should’ve ordered the avocado toast or gone all-in on blockchain. It’s a fresh start, a new chance to turn your financial dreams into reality, or at the very least, figure out if your investment portfolio is as unpredictable as your Sunday brunch plans. So, sip that coffee, embrace the unpredictability, and remember, in both investing and brunching, it’s all about finding the right balance!