Markets rise as yields ease

Dow rebounded 109, advancers over decliners better than 2-1 & NAZ was up 248.  The MLP index remained in the 285s & the REIT index added 1+ to the 435s.  Junk bond funds hardly budged in price & Treasuries had very limited selling which hardly moved yields.  Oil crawled up to 71 & gold added up 1 to 2750 (more below).

Dow Jones Industrials

Waymo has closed a $5.6B funding round to expand its robotaxi service in & beyond Los Angeles, San Francisco & Phoenix, where it operates today.  The autonomous vehicle venture is owned by Google parent Alphabet (GOOG), which led the series C investment in Waymo, alongside earlier backers.  Waymo co-CEOs Tekedra Mawakana & Dmitri Dolgov said the funding would go toward expansion & advancing the Waymo Driver for business applications.  “With this latest investment, we will continue to welcome more riders into our Waymo One ride-hailing service in San Francisco, Phoenix, and Los Angeles, and in Austin and Atlanta through our expanded partnership with Uber,” they wrote.  The series C funding brings Waymo's total capital raised to $11.1B after it raised $3.2B & $2.5B in 2 earlier rounds.  GOOG CFO Ruth Porat announced in Jul that the parent company would commit to a multiyear investment of up to $5B in Waymo.  While many companies are testing autonomous vehicles, or AVs, on public roads in the US, including well-funded upstarts such as Wayve, Waymo is the only one to operate a commercial robotaxi service in several major metro areas.  The service has been embraced by some women who have safety concerns about riding with unknown human drivers.  And it has even been used by parents to send their teens to school when other transit options felt less safe or convenient.  Waymo now conducts more than 100K weekly trips for passengers in Los Angeles, Phoenix & San Francisco, who can hail their robotaxis via the Waymo One app.  More recently, Waymo partnered with Uber (UBER) to launch its robotaxi service in Austin, Texas, home of would-be rival Tesla's (TSLA) headquarters.  Alphabet (GOOG) rose 2.29.

Alphabet’s self-driving unit Waymo closes $5.6 billion funding round as robotaxi race heats up

The yield on the 10-year Treasury was flatish after hitting a 3-month high earlier this week.  The benchmark 10-year Treasury yield was less than 1 basis lower at about 4.2%, after breaching 4.25% on Wed & the 2-year Treasury  was fractionally lower at 4.064%.  Yields move inversely to prices & 1 basis point equals 0.01%.  Traders have been monitoring a slew of commentary from Federal Reserve policymakers this week reflecting on Sep's jumbo 50-basis-point interest rate cut & the potential path ahead.  Their tone has broadly been more cautious, with Beth Hammack of the Cleveland Fed yesterday cautioning “We are not saying mission accomplished when it comes to inflation.”  Others have stated the need to be “cautious and deliberate” & “patient” with further cuts.  Market pricing puts a 97% probability on the Fed cutting rates by 25 basis points in Nov, according to CME's FedWatch tool.

10-year yield is little changed after hitting 3-month high earlier in the week

Gold prices reached new record highs this week amid uncertainty surrounding the upcoming election & the rising US national debt.  Prices for gold futures have risen over 32% YTD & more than 38% in the past year & have set a number of new all-time highs in the process.  Gold reached new records of $2738 on Mon & $2760 on Tues, before paring back some of those gains & closing at $2749 yesterday.  Investors have turned to gold as a safe haven from a variety of geopolitical risks in the past year, including the ongoing conflicts in the Middle East & Ukraine.  Uncertainty surrounding the direction of US economic policy after the election, as well as the Fed's rate cutting plans & long-term trajectory of the growing national debt have also bolstered investment in gold.  "What we're really seeing is gold continuing to be viewed as a quintessential hedge against inflationary pressures along with the safe-haven demand and fund inflows, gold continues to be extremely well supported," said David Meger, director of metals trading at High Ridge Futures.  "Uncertainty leading into the US election is one additional pillar of support for the gold market, given the unease that the market may be feeling going into the election,"  He added that, "Concerns around the rising U.S. fiscal debt outlook is strengthening the investment case for gold."  The federal gov's budget deficit topped $1.8T in fiscal year 2024, which concluded at the end of Sep.  That amounted to the 3rd-largest budget deficit in history & trails only the FY2020 & FY2021 deficits that occurred amid elevated federal spending due to the COVID pandemic & related economic disruptions.

Gold prices rise to all-time highs with US debt mounting, election uncertainty

Stocks rose while Treasury yields eased lower, but markets were still on track for weekly losses as uncertainty over the Fed's next move shadowed an earnings season in full swing.  A pullback in US bond yields lifted some recent pressure on risk appetite for stocks.  The benchmark 10-year yield slipped to 4.19%, slipping back from a 3-month high above 4.25% hit midweek.  Meanwhile gold continues in high demand from nervous investors.