Stocks fluctuated as traders waded through corporate earnings and awaited Jerome Powell’s speech for clues on the Federal Reserve outlook. Treasuries trimmed losses after the 10-year yield approached 5%.
(Bloomberg) — Stocks fluctuated as traders waded through corporate earnings and awaited Jerome Powell’s speech for clues on the Federal Reserve outlook. Treasuries trimmed losses after the 10-year yield approached 5%.
The S&P 500 was little changed. Netflix Inc. surged as much as 18% after posting its best quarter for subscriber growth in years. Tesla Inc. slumped 6% after missing both earnings and sales estimates for the quarter. Ten-year US government bond rates advanced three basis points to 4.94% — after earlier approaching 5%.
Powell is set to deliver his remarks at the Economic Club of New York at 12 p.m., leading a busy schedule of Fed speakers Thursday. Regional presidents Austan Goolsbee (Chicago), Raphael Bostic (Atlanta), Patrick Harker (Philadelphia) and Lorie Logan (Dallas) were also due to speak at different events. Applications for US unemployment benefits dropped to the lowest level since January last week as the labor market kept powering ahead.
“The new information has failed to materially shift the broader tone as we continue to monitor 5% in 10-year yields,” said Ben Jeffery, a US rates strategist at BMO Capital Markets. “We suspect investors will be reluctant to press the trade in either direction until Powell delivers his comments.”
Powell is expected to suggest that the recent Treasury yield increase means the Fed probably won’t have to raise rates when it meets on Oct. 31-Nov. 1. But with inflation still well above the Fed’s 2% goal, he’s likely to hold out the possibility of an increase at its final meeting of the year, in December.
“With little question about what the Fed will do at its Nov. 1 meeting, we expect he will be intentionally vague about the path of future policy,” said Will Compernolle, macro strategist at FHN Financial.
Read: GLOBAL INSIGHT: Yields Near 5% Show Shape of Things to Come
Traders also continued to closely watch the latest geopolitical events.
As part of a broad-based push to contain the Israel-Hamas war and provide vital humanitarian supplies to Gaza, UK Prime Minister Rishi Sunak, United Nations Secretary-General Antonio Guterres and Germany’s top diplomat are visiting the region. US President Joe Biden said trucks with aid such as food are ready to enter Gaza via the Rafah crossing with Egypt.
- American Airlines Group Inc. topped expectations for profit even as its forecast for the rest of the year fell short.
- Union Pacific Corp. reported profit that topped analysts’ estimates, which had been adjusted down in the last month, as the railroad leaned on efficiency to make up for lower carloads and higher labor costs.
- AT&T Inc. raised its free cash flow guidance for the full year after posting mobile subscriber gains and profit that beat analysts’ estimates.
- Lam Research Corp.’s revenue fell for a third straight quarter, a sign demand for chipmaking equipment remains sluggish.
- Blackstone Inc., grappling with higher interest rates and stung by a pullback in dealmaking, reported a 12% decline in quarterly profit available to shareholders.
- Las Vegas Sands Corp. authorized its first share buyback program since 2020, signaling management’s confidence in the business after years of pandemic-related hardship.
- Equifax Inc. tumbled after the credit-reporting agency cut its adjusted earnings-per-share guidance for the full year, with analysts pointing to a knock-on impact from a softer mortgage market in the US.
- VMWare Inc. slid after the Financial Times reported Chinese regulators may hold up its $61 billion acquisition by Broadcom Inc., the latest chip deal to get snarled in Beijing.
Key events this week:
- Japan CPI, Friday
- China loan prime rates, Friday
- Philadelphia Fed President Patrick Harker speaks, Friday
Some of the main moves in markets:
- The S&P 500 rose 0.1% as of 9:36 a.m. New York time
- The Nasdaq 100 rose 0.4%
- The Dow Jones Industrial Average was little changed
- The Stoxx Europe 600 fell 1.1%
- The MSCI World index fell 0.3%
- The Bloomberg Dollar Spot Index was little changed
- The euro rose 0.3% to $1.0569
- The British pound was little changed at $1.2144
- The Japanese yen was little changed at 149.83 per dollar
- Bitcoin rose 0.9% to $28,504.88
- Ether fell 0.4% to $1,556.58
- The yield on 10-year Treasuries advanced three basis points to 4.94%
- Germany’s 10-year yield declined one basis point to 2.92%
- Britain’s 10-year yield advanced two basis points to 4.68%
- West Texas Intermediate crude fell 1.3% to $87.20 a barrel
- Gold futures fell 0.3% to $1,963.30 an ounce
This story was produced with the assistance of Bloomberg Automation.
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