Markets climb with Google breakup in focus

Dow advanced 278, advancers over decliners better than 3-2 & NAZ went up 72.  The MLP index hardly budged in the 286s & the REIT index was off 1+ to the 423s.  Junk bond funds inched higher & Treasuries saw limited selling after significant selling this week (more below).  Oil slid lower in the 73s as weekly US crude supplies climb & gold was off 1 to 2634.

Dow Jones Industrials

Main Street is feeling more uncertainty than ever, according to the National Federation of Independent Businesses (NFIB).  The NFIB's Uncertainty Index surged 11 points in Sep to 103, the highest reading on record, indicating small business owners' jitters about the future are at an unprecedented level.  "Uncertainty makes owners hesitant to invest in capital spending and inventory, especially as inflation and financing costs continue to put pressure on their bottom lines," said NFIB chief economist Bill Dunkelberg.  "Although some hope lies ahead in the holiday sales season, many Main Street owners are left questioning whether future business conditions will improve."  Shawn Cole, co-founder of Cowen Partners Executive Search, says the findings come as no surprise, saying "It feels like we're in a stalemate right now."  "What makes this stalemate so frustrating is how long it’s dragged on," he said.  "Inflation remains a top concern, and with broader economic issues, like the upcoming elections, there’s no clear path forward."  Inflation remains the top operating problem small business owners cited in the survey, as they continue to face cost pressures.  One small business owner from Georgia said why that is.  "Inflation may be coming down, but prices aren’t coming down they are just going up slower," business consultant & oXYGen co-founder Ted Jenkin said.  "When you couple that with the rising pressures of growing wages to maintain your labor force, it’s a real challenge as a small business owner to realize you can only raise your prices so high before you price yourself out of the market."  Jenkins also suggested election concerns are part of the equation that is driving up small business anxieties.  "We hear from the Democrats that they want to help small businesses, but health insurance costs (really all insurance costs) continue to crush us and we hear that if we actually succeed and financially do well we will just be subject to pay a lot more in taxes," he added.  "All these factors leave a grey cloud over the head of small business owners across America."

Small business uncertaintly hits all-time high: NFIB

The Dept of Justice (DOJ) made recommendations for Google's (GOOG) search engine business practices, indicating that it was considering a possible breakup of the tech giant as an antitrust remedy.  The remedies necessary to “prevent and restrain monopoly maintenance could include contract requirements and prohibitions; non-discrimination product requirements; data and interoperability requirements; and structural requirements,” the department said.  The DOJ also said it was “considering behavioral and structural remedies that would prevent Google from using products such as Chrome, Play, and Android to advantage Google search and Google search-related products and features — including emerging search access points and features, such as artificial intelligence — over rivals or new entrants.”  Additionally, the DOJ suggested limiting or prohibiting default agreements & “other revenue-sharing arrangements related to search and search-related products.”  That would include GOOG's search position agreements with Apple's (AAPL) iPhone & Samsung devices, deals that cost the company Bs of $s a year in payouts. The agency suggested one way to do this is requiring a “choice screen,” which could allow users to pick from other search engines.  Such remedies would end “Google’s control of distribution today” & ensure “Google cannot control the distribution of tomorrow.”  The recommendations come after a US judge in Aug ruled that GOOG holds a monopoly in the search market.  That ruling came after the gov in 2020 filed the landmark case, alleging that GOOG has kept its share of the general search market by creating strong barriers to entry & a feedback loop that sustained its dominance. The court found that Google violated Section 2 of the Sherman Act, which outlaws monopolies.  Kent Walker, GOOG's pres of global affairs, said the company plans to appeal the ruling & highlighted the court’s emphasis on the high quality of GOOG 's search products, which the judge also noted in his ruling.  The stock dropped 3.19.

DOJ indicates it’s considering Google breakup following monopoly ruling

Treasury yields shifted slightly lower days after the rate on the 10-year note hit its highest level in more than 2 months.  The 10-year Treasury yield's jump to 4% on Mon came after last week's stronger labor market readings & follows on from the Federal Reserve’s rate cut last month.  The 10-year Treasury' yield was last flat at 4.037% & the 2-year Treasury was less than a basis point higher at 3.986%. Yields move inversely to prices.  One basis point equals 0.01%.  The rebound in rates has been attributed mostly to a resetting of rate-cutting expectations, with rising oil prices owing to geopolitical tensions in the Middle East & a stimulus plan in China also raising concerns that inflationary pressures will return, perhaps driving some investors away from bonds &, in turn, raising yields.  More inflation news due out this week will also inform next month's decision.  That includes the Sep consumer & producer price index readings slated for tomorrow & Fri, respectively.

10-year Treasury yield shifts lower but hovers above 4%

The stock market popped as the risk of a GOOG breakup prompted a pause for thought in the wait for more Federal Reserve clues to the chances of a "soft landing."  Stocks have whipsawed this week amid intense debate over the state of the economy after the Fed has finally eased up on its policy.  The decision to cut by a jumbo 50 basis points raised concerns it might see risks the market could not.