Markets wobble as Tesla's rally does not spread in the stock market

Dow declined 147, advancers over decliners about 5-4 & NAZ went up 99.  The MLP index stayed near even at 284 & the REIT index was up 1+ to the 435s. Junk bond funds barely budged in price & Treasuries had limited buying which reduced yields marginally.  Oil slid fractionally lower but held above 70 & gold rebounded 17 to 2746.

Dow Jones Industrials

Boeing’s (BA), a Dow stock, machinists voted against a new labor deal that included 35% wage increases over 4 years, their union said, extending a more than 5-week strike that has halted most of the company's aircraft production, which is centered in the Seattle area.  The rejection by 64% of the voters is another major setback for the company, which warned earlier that it would continue to burn cash thru 2025 & reported a $6B quarterly loss, its largest since 2020.  A simple majority was needed for the contract to pass.  The strike is costing the company about $1B a month, according to S&P Global Ratings, & it has put BA's investment-grade credit rating at risk, which could drive up its borrowing costs just as it seeks to raise cash.  New CEO Kelly Ortberg had said reaching a deal with machinists was a priority in order to get the company back on track after years of safety & quality problems.  “My focus is getting everybody looking forward, get them back to work, improve that relationship,” Ortberg said when asked about the strike.  He laid out his vision for BA's future, which could includes slimming down the company to focus on core businesses.  Earlier this month, he announced BA will cut 10% of its global workforce of 170K people.  The stock fell 1.68.

Boeing machinists reject new labor contract, extending more than 5-week strike

Tesla (TSLA) reported 3rd-qtr earnings that topped estimates even as revenue came in just shy of expectations.  Revenue increased 8% in the qtr from $23.35B a year earlier.  EPS was 62¢, up from 53¢ a year ago.  Profit margins were bolstered by $739M in automotive regulatory credit revenue during the qtr.  Automakers are required to obtain a certain number of regulatory credits each year.  If they can't meet the target, they can purchase credits from companies such as TSLA, which has excess credits because it makes only electric vehicles.  Automotive revenue increased 2% to $20B from $19.6B in the same period a year earlier & is about flat since late 2022.  Energy generation & storage revenue soared 52% to $2.38B, while services & other revenue, which includes revenue from non-warranty repairs of TSLA vehicles, jumped 29% to $2.79B.  CEO Elon Musk said that his “best guess” is that “vehicle growth” will reach 20-30% next year, due to “lower cost vehicles” & the “advent of autonomy.”  Analysts were expecting a total increase in deliveries next year of about 15% to 2.04B.  The stock soared 39 (18%).

Tesla shares jump on profit beat, Musk’s prediction of at least 20% ‘vehicle growth’ next year

The yield on the 10-year Treasury dipped, easing from the near 3-month highs reached in the previous session, as traders continue to digest the trajectory of interest rate cuts.  The 10-year Treasury yield slid about 2 basis points to 4.22%, while the 2-year Treasury fell almost 3 basis points to 4.059%.  Yields move inversely to prices & 1 basis point equals 0.01%.  The benchmark 10-year Treasury yield had climbed to its highest level since late Jul yesterday, breaking above 4.25%.  Gregory Faranello of AmeriVet Securities said that the recent move higher may seem counterintuitive, but that “as we witnessed toward the end of 2023 these markets get way ahead of themselves and then reprice. It’s been like clockwork.”  “Unlike the most recent easing cycles, the Fed continues to shrink its balance sheet not grow it. This could very well change in time but it’s counter to what we had in 2008/2020, and even 2019,” Faranello continued.  Initial jobless claims data came out at 227K for last week, lower than the estimate of 245K.

10-year Treasury yield moves lower, pulling back from three-month highs

The excitement in TSLA's stock had only limited effect for the rest of the stock market.  The rejection of BA's offer to end its strike had a very chilling effect on the stock market.  Strikes & wars are not being viewed favorably by investors.

Markets drop as investors weigh doubts about rate cuts

Dow sank 296, decliners over advancers better than 3-1 & NAZ tumbled 409.  The MLP index hardly budged in the 283s & the REIT index rebounded 4+ to the 434s.  Junk bond funds fluctuated & Treasuries saw more selling which brought higher yields.  Oil was off about 1 to just under 71 & gold tumbled 32 to 2727 (more on both below).

Dow Jones Industrials 

Apple (AAPL), a Dow stock, released a beta version of a slew of Apple Intelligence features, including its long-awaited ChatGPT integration.  The company announced its answer to the artificial intelligence boom this summer, but is slowly rolling out its features to users.  Investors hope AI features will spur a wave of iPhone upgrades because the tools are only available on newer devices.  AAPL Intelligence has been available in previews for developers & early adopters, but the official public release will come next week as part of the official iOS 18.1 release, AAPL said.  This latest batch of features is included in a beta version of iOS 18.2 for software developers that was released today.  AAPL developer betas typically go thru a cycle of weeks before they are released to the public.

The preview included with iOS 18.2 contains:

• New abilities to describe how the user wants AAPL Intelligence to rewrite a chunk of text.
• Genmoji, AAPL's image generator for new emojis.
• Image Playground, AAPL's AI image generator.
• Image Wand, a feature that allows users to remove objects or distractions from photos.
• Integration with OpenAI’s ChatGPT.

However, the long-awaited ability for Siri to take actions inside of apps isn't included in this update, but is expected soon.  In Jun, AAPL announced its integration with ChatGPT.  Although AAPL Intelligence & Siri mostly rely on AAPL's chips inside its devices, the company said at the time that for more sophisticated problems or questions, users can get responses from OpenAI’s chatbot instead.  The stock dropped 5.10.

Apple releases new preview of its AI, including ChatGPT integration

An escalation of trade & tariffs tensions between the US & China would have “costly” economic consequences around the world, Gita Gopinath, deputy managing director of the International Monetary Fund (IMF) said.  “We are seeing geopolitically driven trade around the world, which is why when you look at overall trade to GDP that’s holding up fine, but who’s trading with whom is certainly changing,” she added.  The US & China are trading with one another less, & some parts of their trade is being re-routed thru other countries, she noted.  Trade tensions between the US & China & the European Union & China have been mounting this year, with both the US & EU implementing higher tariffs on some Chinese goods over what they claim are unfair trade practices from Beijing.  China has also announced higher temporary tariffs on some imports from the EU as the tit-for-tat measures continue.  If tariffs were escalated, modelling from the IMF suggests it would be “costly for everybody,” Gopinath said on the sidelines of the agency's annual meeting in DC.  “Output is going to be much lower than what we are projecting for all countries in the world, there’s going to be pressure on inflation, so that’s not the direction in which we should be going,” she explained.  Gopinath's comments come after IMF Managing Director Kristalina Georgieva said last week that intl trade would no longer be the “engine of growth” it once was & that “retaliatory” trade measures could hurt those imposing them as much as their targets.

U.S., China trade tariffs escalating would be ‘costly for everybody,’ IMF deputy director says

US economic activity was little changed from Sep thru early Oct while firms saw an uptick in hiring, continuing recent trends that have reinforced expectations the Federal Reserve will opt for a smaller 25-basis-point reduction in borrowing costs in 2 weeks.  The central bank's latest temperature check on the health of the economy also showed that inflation pressures continued to moderate.  The economy, & inflation in particular, remains a key issue among voters ahead of the presidential election.  "On balance, economic activity was little changed in nearly all Districts since early September, though two Districts reported modest growth," the Fed said its "Beige Book," which polled the business contacts of each of its 12 regional banks through Oct 11.  "Despite elevated uncertainty, contacts were somewhat more optimistic about the longer-term outlook."  The central bank last month began an easing cycle with an unusually large ½-percentage-point cut in its policy rate, lowering it to  4.75%-5.00%, amid increasing concerns about the labor market.  The Fed hiked rates by 525 basis points in 2022 & 2023 to quash high inflation.  A string of stronger-than-expected economic data on consumer spending, job gains & inflation since then has caused investors to dial back bets on the pace & extent of rate cuts. US job gains increased by the most in 6 months in Sep & the unemployment rate fell to 4.1%, while retail sales increased solidly last month.  The resilient economy has been underpinned by firm income growth & ample household savings.  Though labor market momentum has slowed, the level of layoffs remains historically low, supporting wage gains.  Investors currently expect the Fed to cut rates by a qtr of a percentage point at its Nov 6-7 policy meeting, with another reduction of the same size in Dec.

US economic activity little changed in recent weeks, Fed survey shows

Gold prices fell over 1% after hitting a record high today, as a stronger $ & a rise in Treasury yields countered support from safe-haven demand linked to the Nov 5 U.S. election & Middle East war.  Spot gold was down 1.2% to $2714 per ounce after hitting a record high of $2758 earlier in the session & US gold futures settled 1.1% lower at $2729.  Bullion, considered a hedge against political & economic uncertainty, has climbed more than 31% this year, shattering multiple record peaks as the Federal Reserve's interest rate cut last month combined with safe-haven demand set up a perfect storm for the precious metal.  The $ index, rose 0.4% to near a 3-month high, making gold less appealing for other currency holders, while US bond yields climbed to a 3-month high.  With the US presidential election less than 2 weeks away, VP Kamala Harris holds a marginal 46% to 43% lead over Rep former Pres Donald Trump.

Gold's Record Rally Pauses Due to Stronger Dollar, Higher Yields

Oil prices fell after industry data showed US crude inventories swelled more than expected, though crude futures were still up about 3% this week as traders factored in continuing conflict in the Middle East.  Brent crude futures dropped 73¢ (1%) to $75.31 a barrel & West Texas Intermediate crude futures shed 74¢ (1%) to $71.00 a barrel.  Oil had settled higher in the previous 2 sessions, paring the previous week's losses of more than 7%.  Those declines stemmed from worries about Chinese demand & some easing concerns around Middle East oil supply being disrupted.  Today's price drop came after data showed US crude stocks rose by 1.64M barrels last week.  Analysts had expected an increase of 300K barrels.  Official US gov oil inventory data is later today.  But the inventories impact on prices was countered by stubborn concerns over potential risk to oil supply from conflict in the Middle East.

Oil slips on higher US crude stocks; market watches Middle East

Stocks paused as doubts about rate cuts weighed on investors dealing with a busy day of earnings.  Investors are debating how quickly the Federal Reserve will cut interest rates next year.  Gloom about the prospect of rates staying higher for longer has been a drag on bond prices in recent days, sending the 10-year Treasury yields to levels not seen in 3 months.  Gold was caught up in the selling today.

Markets fall as Treasury yields keep rising

Dow dropped 369, decliners over advancers about 3-1 & NAZ sank 185.  The MLP index was steady in the 283s & the REIT index bounced back 2+ to the 342s.  Junk bond funds slid lower & Treasuries were sold, raising yields (more below).  Oil was off 1+ to go under 71 following its recent rise & gold tumbled 28 to 2731.

Dow Jones Industrials

Coca-Cola (KO), a Dow stock & Dividend Aristocrat, reported quarterly earnings & revenue that topped expectations, thanks to a boost from higher prices that offset sluggish demand.  3rd-qtr EPS was 66¢, down from 71¢ a year earlier.  Excluding items, the company EPS was 77¢.  Adjusted net sales of $11.9B were roughly flat from a year earlier.  Organic revenue, which strips out the impact of acquisitions, divestitures & currency, climbed 9% during the qtr.  Unit case volume fell 1% in the qtr, driven by weakening demand in some intl markets.  The metric strips out the impact of pricing & foreign currency to reflect demand.  Consumer companies, including KO, have reported in recent months that customers are more price sensitive, leading to sluggish demand for its products as prices remain high.  Globally, volume for its sparkling soft drinks, like Sprite, & for its namesake soda were both flat for the qtr.  Its juice, dairy & plant-based beverages division reported a 3% decline in volume.  Its water, sports, coffee & tea segment saw volume fall 4%, fueled by a 6% drop in bottled water.  Pricing rose 10%.  Roughly 4% of that increase comes from markets experiencing intense inflation, like Argentina, while the rest is the result of price hikes & customers trading up to pricier options.  For 2024, KO expects organic revenue growth of roughly 10%, on the high end of its prior range of 9-10%.  The company reiterated its projection that comparable EPS will rise 5-6%.  The stock fell 1.77.

Coca-Cola tops earnings estimates, as higher prices offset sluggish demand

Sales of previously owned homes fell 1% in Sep compared with Aug, to a seasonally adjusted, annualized rate of 3.84M units, the slowest pace since 2010, according to the National Association of Realtors (NAR).  Sales were 3.5% lower than in Sep 2023 & sales fell in 3 out of 4 US regions, with just the West region seeing a gain.  This count is based on closings, representing contracts signed likely in Jul & Aug.  Mortgage rates started Jul near 7% on the 30-year fixed & then fell slowly thru Aug to just below 6.5%.  Rates are now more than a full percentage point lower than they were a year ago.  “Home sales have been essentially stuck at around a four-million-unit pace for the past 12 months, but factors usually associated with higher home sales are developing,” said Lawrence Yun, chief economist for the NAR.  Inventory rose 1.5% month to month to 1.39M homes for sale at the end of Sep.  That represents a 4.3-month supply at the current sales pace.  Inventory was 23% higher from Sep 2023.  “More inventory is certainly good news for home buyers as it gives consumers more properties to view before making a decision,” Yun added.  “However, the inventory of distressed properties is minimal because the mortgage delinquency rate remains very low. Distressed property sales accounted for only 2% of all transactions in September.”  The pressure of still low inventory continues to push prices higher.  The median price of an existing home sold in Sep was $404K, an increase of 3% year over year and the 15th consecutive month of annual price gains.  Homes are sitting longer, an average of 28 days compared with just 21 days a year ago.  First-time buyers pulled back again, making up just 26% of Sep sales.  That matches the all-time low from Aug.

September home sales drop to lowest level since 2010

The US 10-year Treasury yield rose again as traders digested the latest comments from Federal Reserve officials on the trajectory of interest rate cuts.  The yield on the 10-year Treasury rose more than 2 basis point to 4.2%, not seen since late Jul.  At its session high, the benchmark rate traded at 4.24%.  That move comes after the 10-year soared 12 basis points on Mon & broke above 4.2% yesterday.  Meanwhile, the yield on the 2-year Treasury stood at 4.05%, up more than 1 basis point.  It hit a high of 4.065% earlier in the day, a level not seen since Oct 10.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  Higher Treasury yields are putting pressure on equities, with stock futures falling, the declines coming after the S&P 500 posted its first back-to-back loss since early Sep.  Robust economic data & deficit worries are among the factors behind the rise in the 10-year Treasury yield, despite a ½-point rate cut from the Fed in Sep.  Traders have become concerned that the central bank may be less inclined to reduce rates, even as the Fed had forecast another ½-point worth of cuts before the year ends.

10-year Treasury yield climbs to highest level since late July

Doubts about rate cuts weighed on investors.  The rally in stocks has stalled as investors debate how quickly the Federal Reserve will cut interest rates over the next year.  Gloom about the prospect of rates staying higher for longer has dragged on bond prices in recent days, sending the 10-year Treasury yield to levels not seen since Jul.  The yield rose slightly today, firmly above the 4.20% level.

Markets recover from lows while Treasury yields continue to rise

Dow finished down 6, decliners over advancers 5-4 & NAZ added 33.  The MLP index was fractionally higher to the 283s & the REIT index rebounded, up 1 to 430.  Junk bond funds slid a little lower & Treasuries continue to be sold, bringing higher yields with the yield on the 10 year note still above 4.2%.  Oil continued higher, up 1+ to the 72s & gold crawled up 20 to another record (more on both below).

Dow Jones Industrials 

Walmart (WMT), a Dow stock & Dividend Aristocrat, announced that it will deliver prescription drugs from stores directly to customers as it competes with rivals like Amazon (AMZN).  The retailer is joining a list of companies that have embraced the trend of delivering prescriptions directly to consumers that have become more reliant on e-commerce.  Its service applies to both new prescriptions along with medication refills, according to the retailer.  All medication, barring some exceptions, will be available for this service, too.  Customers will be able to receive their deliveries in as soon as 30 minutes thru the company's express delivery option.  The new pharmacy delivery service launched in 6 states – Arkansas, Missouri, New York, Nevada, South Carolina & Wisconsin – & is expected to be available in 49 states by the end of Jan.  Its nearly 4600 store locations with pharmacies across the US enable it to deliver to more than 86% of households.  "We understand that health care is not a one-size-fits-all solution. It’s hyper-local. Each community has unique needs. This new offering allows us to continue serving customers while also giving more time back to our pharmacies for high-touch health services," Kevin Host, senior VP of pharmacy at Walmart US, said.  The company launched the service after receiving feedback from a significant number of customers who wanted to have their prescriptions delivered along with their groceries & other items they need in a single online order.  The stock was up 1.36.

Walmart launches nationwide same-day prescription delivery

Target (TGT), a Dividend Aristocrat, is slashing prices on 2000 items this holiday season to gain an edge over competitors during this critical shopping period.  This marks its 2nd round of price cuts, following a successful summer effort that boosted sales despite cautious consumer spending.  The retailer said it will cut prices on its in-house & national brands, including food & beverages, everyday essentials, holiday gifts & items to prep the home for the holidays.  The lower prices have already started to take effect in stores across the country.  The price cuts can also be found online at Target.com & on the Target app.  The price cuts that can be found online & thru the Target app in addition to in stores come ahead of the holiday shopping season.  National Retail Federation (NRF) chief economist Jack Kleinhenz projected that while household finances are stable, & there is optimism about economic activity, consumers "will spend more cautiously."  While TGT is promoting these cuts as a way to help shoppers save on holiday preparations & gifts, it is aiming to mimic the success it experienced over the summer when households proceeded "with measured spending," according to Kleinhenz.  CEO Brian Cornell said in Aug that the company reduced prices on thousands of items in various markets over the summer, resulting in an "acceleration" in unit & $ sales trends during the 3-month period ending Jun 30.  "We feel really good about the way the consumers reacted to the price investments we've made on those 5,000 frequently purchased items," Cornell added.  The company's essentials & food & beverage categories saw growth in traffic in the qtr, reflecting how "consumers are responding to our offerings in an environment where they are focused on value," Cornell noted.  The stock fell 1.66.

Target cutting prices on 2,000 items ahead of holiday shopping season

Boeing (BA), a Dow stock, has already braced investors for a rough quarterly report.  Now, new CEO Kelly Ortberg has the chance to share his vision for the troubled manufacturer, from a potential strike-ending labor agreement to a slimmed-down future.  When he takes the mic for his first earnings call as CEO tomorrow, more than 32K striking machinists will start voting on a new, sweetened contract proposal.  Results of the labor vote are expected tomorrow night.  Analysts are cautiously optimistic that the new proposal, which requires a simple majority of the vote, could pass, putting an end to the more than 5-week work stoppage that has halted most of the company's production of airplanes & added to its cash burn of about $8B in the first ½ of the year.  BA last posted an annual profit in 2018.  “I think it’s going to be a tight vote,” Jon Holden, pres of the Intl Association of Machinists & Aerospace Workers District 751, said.  Investors, analysts & the public could get clues from Ortberg about what BA will look like in the coming years as well as clearer estimates on the company's production targets for the next year.  The stock was off 10¢.

Boeing CEO to discuss company’s future while workers vote on contract

Gold climbed 1% to hit an all-time peak as factors including safe-haven demand, spurred by US election uncertainties & the Middle East war, combined with expectations of further monetary easing to amplify bullion's surge.  Spot gold rose 0.9% to $2746 per ounce after hitting a record $2748 earlier in the session.  US gold futures settled 0.8% higher at $2759.  Bullion, considered a hedge against geopolitical & economic uncertainties, has gained over 33% this year, reaching multiple records.  Lower interest rates also increase the appeal of holding gold.  Geopolitical tensions remain the primary driver & 2 weeks out from the US election, the race seems to still be a dead heat, so a fair amount of political uncertainty is also driving safe haven interest in gold.  From the technical point of view, the Relative Strength Index (RSI) for gold, currently at 74, suggests that gold prices moved into "overbought" territory.

Gold scales record peak as US election jitters drive safe-haven rush

Oil prices rose for the 2nd consecutive session, as traders downplayed hopes of a Middle East ceasefire & focused on a tightening global supply & demand balance.  Brent crude futures for Dec were up $1.61 (2.2%) to $75.90 per barrel.   US West Texas Intermediate futures for Nov, which expires after today's settlement, were up $1.54 (2.2%) at $72.10 a barrel.  US Secretary of State Antony Blinken met Israeli Prime Minister Benjamin Netanyahu in the first big push for a Middle East ceasefire since Israel killed the leader of Hamas last week.  The US hopes this will provide an opportunity for peace.  But oil traders were not convinced this push will be much different from hiss previous 11 visits to the region since the war in Gaza erupted last year.  Israel has so far shown no sign of relenting in its Gaza & Lebanon campaigns, while Iran-allied Hezbollah ruled out negotiations while fighting with Israel continues.  Oil traders are also weighing implications for fuel demand from China's stimulus measures & a tightening global supply-demand balance.

Oil prices rise on China stimulus amid Mideast ceasefire push

Stocks are treading carefully despite growing doubts that the Federal Reserve will continue to cut rates aggressively, or even hold steady in Nov.  Meanwhile, demand for gold continues strong from investors who are negative on the stock market.

Markets slip as rising yields weigh on market sentiment

Dow declined 90, decliners over advancers better than 3-2 & NAZ was off 22.   The MLP index edged up to the 283s & the REIT index inched higher in the 429s after yesterday's sharp decline.  Junk bond funds were slightly lower & Treasuries had limited selling which lifted yields (more below).  Oil rose 1+ to the low 72s & gold jumped 19 to 2758 for another record.

Dow Jones Industrials

The US 10-year Treasury yield was on the move higher again after Federal Reserve officials urged caution on the path of interest rate cuts.  The yield on the 10-year Treasury rose more than 1 basis point to 4.174%.  Earlier today, it climbed above 4.2% for the first time in 3 months, after jumping 12 basis points yesterday.  The yield on the 2-year Treasury was just below flat at 4.024%, meanwhile.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  Yesterday, Minneapolis Fed Pres Neel Kashkari said the longer-term trajectory for rates could be higher than it has been in the past, while Dallas Federal Reserve Pres Lorie Logan said a patient approach will be needed to lowering rates.  Kansas City Fed President Jeff Schmid also also a “cautious and deliberate” approach to rate cuts was appropriate after the Fed cut by a ½ percentage point in Sep.  Rates have actually increased since the Fed cut rates by a & point 1 month ago.  Strong economic data has been responsible for part of that gain, but so has uncertainty about how aggressive the central bank will be with rate cuts from here.  The market is pricing in a greater possibility that the Fed will only cut once thru the remainder of the year.  Traders see an 89% chance of a qtr-point cut at the Fed’s next meeting ending Nov 7. 

10-year Treasury yield tops 4.2% briefly

Much of the world has managed to successfully lower inflation & engineer an economic soft landing, avoiding recession, but faces rising geopolitical risks & weaker long-term growth prospects, according to the International Monetary Fund (IMF).  Global headline inflation will fall to 3.5% on an annual basis by the end of 2025, from an average 5.8% in 2024, the agency said in its World Economic Outlook.  Inflation peaked at a year-over-year rate of 9.4% in the 3rd qtr of 2022.  The yearend 2025 rate is slightly below the average annual rise in prices in the 2 decades before the Covid-19 pandemic.  “The global battle against inflation is almost won,” the IMF report trumpeted, even as it called for “a policy triple pivot” to address interest rates, gov spending & reforms & investment to boost productivity.  “Despite the good news on inflation, downside risks are increasing and now dominate the outlook,” said IMF chief economist Pierre-Olivier Gourinchas.  Now that inflation is headed in the right direction, global policymarkers face a new challenge stemming from the rate of growth in the world economy, the IMF warned.  The fund kept its global growth estimate at 3.2% for 2024 & 2025, which it called “stable yet underwhelming.”  The US is now forecast to see faster growth, & strong expansions are also likely in emerging Asian economies as a result of robust artificial intelligence-related investments.  But the IMF lowered its outlook for other advanced economies, notably the largest European nations, as well as several emerging markets, blaming intensifying global conflicts & ensuing risk to commodity prices.  The IMF, with 190 member countries, said in its overview that responsive monetary policy was key to bringing down inflation while labor market conditions normalized & supply shocks unwound, all of which helped avoid a global recession.  Central banks will need to remain vigilant in fully bringing down inflation, the report warned.  It added that services inflation still remains nearly double pre-pandemic levels as wages in certain countries continue catching up to an increase in the cost of living, leading several emerging market economies such as Brazil & Mexico to see an uptick in inflationary pressures.

IMF says global fight against inflation is ‘almost won’ but warns of rising risks

General Motors (GM) easily outperformed 3rd-qtr earnings expectations, leading the Detroit automaker in raising key guidance targets for 2024.  This marks the 3rd time this year that GM has updated its guidance after beating top- & bottom-line expectations, led by its North American operations.  GM is now forecasting full-year adjusted earnings before interest & taxes of $14-$15B ($10.00-$10.50 per share), up from $13-15B ($9.50 - $10.50 per share).  It also raised its adjusted automotive free cash flow forecast to $12.5-13.5B, up from $9.5-11.5B.  The automaker tightened its net income attributable to common stockholders, which excludes some div payouts, to $10.4-11.1B ($9.14-9.64 per share).  That compared to its previous guidance of $10-11.4B ($8.93-9.93 per share).  GM CFO Paul Jacobson warned earnings will be lower during the 4th qtr, citing timing of truck production, seasonality, lower wholesale volumes & vehicle mix, including selling more electric vehicles.  The automaker has topped EPS estimates for 9 consecutive qtrs & revenue for 8 straight qtrs.  “The consumer has held up remarkably well for us,” he said.  “Nothing we see has changed from where we’ve been for the last several quarters.”  The stock jumped 4.26 (9%).

GM raises 2024 earnings guidance after easily topping Wall Street’s third-quarter expectations

Stocks were sold as investors digested a recent bond-market selloff & braced for the next wave of earnings reports.  The stock market is coming under pressure amid growing doubts that the Federal Reserve will continue to cut rates aggressively, or even hold steady in Nov.  Strength in the economy, cautious Fedspeak & concerns about the fiscal impact of an election win by Rep nominee Donald Trump are factors in play.  Amid the uncertainty, the 10-year Treasury yield steadied around 4.2% after yesterday's sharp gains helped push it above that level for first time since Jul.

Markets fall as Treasury yields rise

Dow retreated 344, decliners over advancers 4-1 & NAZ edged up 50.  The MLP index slid back 2+ to the 283s & the REIT index remained weak, down 8+ to the 429s.  Junk bond funds were mixed & Treasuries continued to be sold, raising yields sharply.  Oil rose 1.40 to go over 70 as traders weigh China demand concerns & gold inched up 1 to 2731 (more on both below).

Dow Jones Industrials 

For some shoppers, the upcoming holiday season may lead to significant credit card debt.  Meanwhile, some people are still paying off debt from last year's gift buying.  In fact, 28% of shoppers who used credit cards have not paid off the presents they purchased for family & friends last year, according to a recent holiday spending report by NerdWallet.  The site polled more than 1700 adults in Sep.  “Between buying gifts and booking peak-season travel, the holidays are an expensive time of year,” said Sara Rathner, NerdWallet's credit cards expert.  “Not only are consumers at risk of getting into credit card debt, but that debt can stick around long after the decorations come down.”  The stakes are higher in 2024 with credit card debt already at $1.14T.  This year, spending between Nov 1 - Dec 31 is expected to increase again to a record total of $979-989B, according to the National Retail Federation.  Shoppers may spend $1778 on average, up 8% compared to last year, Deloitte's holiday retail survey found.  Most will lean on plastic: About 3-qtrs, 74%, of consumers plan to use credit cards to make their purchases, according to NerdWallet.  Meanwhile, credit cards are 1 of the most-expensive ways to borrow money.  The average credit card charges more than 20%, near an all-time high.

28% of credit card users are still paying off last year’s holiday debt

Minneapolis Federal Reserve Bank Pres Neel Kashkari repeated he expects "modest" interest-rate cuts over the coming qtrs, though a sharp weakening of labor markets could move him to advocate for faster rate cuts.  "If the labor market weakens surprisingly, that would cause me to take a fresh look at my 'dots,'" Kashkari said in a town hall, using "dots" as short-hand for his view of the appropriate path ahead for interest rates.  Currently, he said, he believes rates are putting the brakes on the economy.

Fed's Kashkari: any surprise job market weakness could trigger rethink of rate-cut pace

GE HealthCare announced a new artificial intelligence application it said will save time for doctors who diagnose & treat cancer.  CareIntellect for Oncology, as the tool is called, will help oncologists get up to speed on a patient's history & disease progression by quickly showing them the data they need.  GE said it wants to spare oncologists the headache of digging thru records so they can focus on caring for their patients.  Health-care data is notoriously difficult to analyze, & as much as 97% of the data produced by hospitals goes unused, according to a Deloitte report.  That information is stored across numerous vendors & file formats such as images, lab test results, clinical notes & device readings, which can be extremely taxing for doctors to sort thru.  “It’s very time-consuming, very frustrating for these clinicians,” Dr Taha Kass-Hout, GE HealthCare's global chief science & technology officer, said.  CareIntellect for Oncology will be able to summarize clinical reports & identify when patients are deviating from their treatment plans, Kass-Hout said.  The system can flag when a patient misses a lab test, for instance, so that their doctor can determine the best next steps.  “For cancer patients, the treatment journey can last years and involve numerous doctor visits,” he added.  GE stock

GE HealthCare announces time-saving AI tool for doctors who treat cancer

Gold took a breather after surging to a record high, as higher Treasury yields & the $ offset support from growing uncertainties surrounding the US presidential election & the Middle East war.  Spot gold was little changed at $2723 per ounce after hitting a record $2740 earlier in the session.  US gold futures settled 0.3% higher at $2738.   10-year yields are moving a lot higher & the dollar index got stronger.  That's putting some weight on gold.  Benchmark 10-year Treasury yields rose to a 12-week high, while the $ index gained, making gold more expensive for overseas buyers.  Bullion, considered a hedge against political & economic uncertainty, has climbed over 32% so far this year, shattering multiple record peaks as the Federal Reserve's interest rate cut combined with safe-haven demand set up a perfect storm for gold.  Traders now see an 85% chance of a qtr basis point cut by the Fed in Nov.

Gold pauses for breath as US yields, dollar move higher

Oil prices settled nearly 2% higher, recouping some of last week's more than 7% decline, with no letup of fighting in the Middle East & expected Israeli retaliation on Iran worrying markets about supply from the region.  Brent crude futures were up $1.23 (1.7%) at $74.29 a barrel, while US West Texas Intermediate crude futures was $1.34 (1.9%) higher, at $70.56 a barrel.  Brent settled more than 7% lower last week, while WTI lost around 8%.  Those were the contracts' biggest weekly declines since Sep 2, due to slowing economic growth in China & falling risk premiums in the Middle East.  Israeli forces besieged hospitals & shelters for displaced people in the northern Gaza Strip, medics said, as they stepped up operations against Palestinian militants.  Israel also carried out targeted strikes on sites belonging to Hezbollah's financial arm in Lebanon.

Oil Prices Rise Nearly 2%, Recovers Some of Last Week's 7% Decline

Earnings season ramps up this week.  Early results were welcomed by investors but investors are feeling nervous about future reports.  Also, Boeing (BA), a Dow stock, faces a double-whammy on Wed, when it's expected to release earnings at the same time workers vote on whether to accept a tentative deal agreed with the union to end a 5-week strike.  This should be an eventful week in he stock market.

Markets are trading lower on worries about slower economic growth

Dow dropped 332, decliners over advancers better than 5-1 & NAZ was off 88.  The MLP index slid back 1 to the 284s & the REIT index sank 8 to 430 on higher interest rates.  Junk bond funds hardly budged & Treasuries saw more selling which brought higher yields (more below).  Oil was fractionally higher to the high 69s (more below) & gold added 4 to 2734.

Dow Jones Industrials

US crude oil futures jumped, reclaiming some of the losses from last week's steep sell-off.  The US benchmark finished last week more than 8% lower as traders increasingly believe Israel-Iran tensions will not lead to an oil supply disruption in the Middle East.  Prices rose today after China cut its benchmark lending rate.  Saudi Aramco CEO Amin Nasser said he remains “fairly bullish” on demand in the world's 2nd-largest economy.  West Texas Intermediate Nov contract was $70.82 per barrel, up $1.60 (more than 2%) & YTD, US crude oil has fallen about 1%.  Brent Dec contract was $74.50 per barrel, up $1.44 (2%) & YTD, the global benchmark has declined more than 3%.  The oil market has shifted focus back to supply & demand fundamentals, with consumption in China softening as supplies are expected to rise.

U.S. crude oil rebounds more than 2% after selling off last week

Inflation may have cooled, but retailers are still staring down a holiday season with plenty of uncertainty.  Several hard-to-predict factors will influence consumers' spending, as they deck the halls & look for the perfect gifts.  Volatile weather, election distraction & a deal-hunting mindset may shape the season.  And fewer days between Thanksgiving & Christmas than last year will put shoppers on the clock.  Yet there's reason for optimism for retailers: Shoppers are feeling more upbeat & plan to spend more compared with last holiday season, according to an annual survey by consulting firm Deloitte & a separate forecast by the National Retail Federation.  Holiday spending in Nov & Dec is expected to increase by 2.5 - 3.5% compared with 2023 & range between $979- $989B, according to the National Retail Federation (NRF).  That's a more modest increase than the 3.9% year-over-year jump from the 2022 to 2023 holiday season, when spending totaled $956B.  NRF's figure excludes automobile dealers, gasoline stations & restaurants.  Shoppers expect to spend an average of $1778 on the holidays this year, 8% more than last holiday season, according to consulting firm Deloitte’s survey.  The survey, which included about 4000 consumers & was conducted in late Aug & early Sep, attributed that spending increase to a more favorable economic outlook, a perception among respondents that prices would be higher & more willingness to spend among higher-earning households with an annual income of $100K-199K.  Low unemployment, a return to more typical inflation levels & a recent Federal Reserve interest rate cut are lifting consumers' spirits, said Stephen Rogers, managing director of Deloitte's Consumer Industry Center.  “People are still in a better frame of mind, despite the political chatter,” he said.  “When they look at their bank account and think about what their financial situation is, they feel better.”

Elections, hurricane damage and more: Here are four factors that will shape holiday shopping

The US 10-year Treasury yield rose above 4.11% as investors awaited a flurry of speeches from Federal Reserve policymakers.  The yield on the 10-year Treasury rose about 5 basis points to 4.128% & the yield on the 2-year Treasury was up about 3 basis points to 3.987%.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  On a day without any major economic data releases, market participants are likely to scrutinize comments from officials at the central bank.  Dallas Fed Pres Lorie Logan, Minneapolis Fed Pres Neel Kashkari, Kansas City Fed Pres Jeff Schmid & San Francisco Fed Pres Mary Daly are all expected to deliver remarks today as investors await clues on the Fed's monetary policy outlook.  Fed Governor Christopher Waller said last week that future interest rate cuts will be less aggressive than Sep's jumbo rate cut, expressing some concern that the US economy may still be running at a hotter-than-desired pace.  “While we do not want to overreact to this data or look through it, I view the totality of the data as saying monetary policy should proceed with more caution on the pace of rate cuts than was needed at the September meeting,” Waller said last week, citing recent reports on employment, inflation, gross domestic product & income.

10-year Treasury yield rises above 4.11% as investors monitor Fed speeches

Stocks tumbled as investors braced for a packed week of top-tier earnings that could drive or drag on a record-setting rally.  So far, 80% of 3rd qtr updates from those on the benchmark have topped the mark.  Comments by Fed officials on interest rates today will also drive the stock market.

Markets edge higher led by Netflix's advance

Dow rose a modest 36, advancers over decliners 5-4 & NAZ jumped 113.  The MLP index was steady in the 285s & the REIT index gained 3+ to 438.  Junk bond funds fluctuated & Treasuries saw limited buying which lowered yields.  Oil was down 1+ to the 69s & gold continued substantially higher, up 28 to 2635 (more on both below).

Dow Jones Industrials 

Automaker Stellantis (STLA) plans to shutter & sell its large vehicle proving grounds in Arizona at the end of this year.  The decision is the latest cost-cutting measure by the trans-Atlantic automaker under CEO Carlos Tavares, who has been increasingly under pressure from analysts, dealers & the United Auto Workers union amid the its lagging financial performance, layoffs & overall business decisions.  The Arizona Proving Grounds covers 4000 acres between Phoenix & Las Vegas in Yucca, Arizona & has been used for vehicle testing & development since 2007.  As of Jul 2019, the operations employed 69 people, including workers represented by a local chapter of the UAW.  STLA plans to use a proving grounds in Arizona owned by Toyota Motor (TM) beginning next year.  TM opened its operations, which are costly to maintain, for other companies to use in 2021.  “Stellantis continues to look for opportunities to improve efficiency and optimize its footprint to ensure future competitiveness in today’s rapidly changing global market,” the company said.  The automaker also said it is “working with the UAW to offer proving ground employees special packages or they can choose to follow their work in a transfer of operations” but that employees could be placed on an “indefinite layoff, which would entitle them to pay and benefits for two years.”  STLA stock went up 27¢.

Stellantis to sell, close large testing facility in Arizona

Boeing (BA), a Dow stock, supplier Spirit AeroSystems (SPR) will furlough 700 workers as a strike by machinists at the plane maker enters its 6th week.  More than 32K BA workers walked off the job Sep 13 after overwhelmingly rejecting a tentative labor deal with BA, deepening the aircraft producer's financial strain & handing a new challenge to CEO Kelly Ortberg, who took the reins just over 2 months ago.  The temporary furloughs account for about 5% of SPR's US workforce.  Meanwhile, BA & its machinists’ union remain at an impasse, & SPR is considering deeper cuts.  “If the strike continues beyond November, we will have to implement layoffs and additional furloughs,” SPR spokesman Joe Buccino said.  SPR fell 47¢.

Spirit AeroSystems furloughs some 700 workers as Boeing strike continues

Netflix (NFLX) shares jumped after the media streaming giant reported 3rd-qtr earnings & revenue that beat expectations.  EPS was $5.40 for the 3-month period ended Sep 30, surpassing the $5.12 estimate.  Revenue also beat expectations, coming in at $9.83B, above the $9.77B anticipated by analysts.  Crucially, NFLX saw momentum in its ad-supported membership tier, which jumped 35% qtr over qtr.  While NFLX doesn't expect ads to become its primary growth drive until 2026, it said the ad-tier accounted for over 50% of sign-ups in the 3rd-qtr in countries where it’s available.  NFLX also gave an upbeat outlook for the Dec qtr, saying it expects 4th-qtr revenue to rise 14.7% to $10.1B & is forecasting revenue of $43-44B for 2025, which would mean growth of 11-13% from its expected 2024 revenue of $38.9B.  The stock surged 76+ (11%).

Netflix shares jump 11% after third-quarter earnings beat

Gold traded at a fresh record high, as the $ & treasury yields eased while expectations for further interest-rate cuts from the Federal Reserve & safe-haven buying continue to offer support.  Gold for Dec went up to $21 to $2729 per ounce, rising off yesterday's record close of $2707.  The price of the metal is up 4.2% over the past month as central banks in the US, Canada & Europe cut interest rates, lowering the carrying cost of owning gold, while safe-haven buying also offers support.  The $ moved lower, with the ICE dollar index last seen down 0.31 points to 103.52.  Treasury yields also eased, with the US 2-year note last seen paying 3.976%, down 0.65 basis points, while the yield on the 10-year note was down 1.6 points to 4.08%.

Gold Trading at a Record High as the Dollar and Treasury Yields Fall

Oil headed for a weekly decline, with eyes on developments in the Middle East after the death of Hamas leader Yahya Sinwar.  Brent traded below $75 a barrel, while West Texas Intermediate hovered around $71, with futures set for a drop of more than 6% this week.  The killing of Sinwar by Israeli soldiers led Pres Biden to renew calls for a cease-fire in Gaza, although Prime Minister Benjamin Netanyahu said operations are "yet to be completed."  Sentiment was lifted by a report yesterday that nationwide US petroleum inventories fell for a 4th week.  Data from China today also showed tentative signs of economic improvement in the world's 2nd-biggest economy, although apparent oil demand fell from a year earlier.  But Brent has failed to recover from sharp declines on Mon & Tues, after concerns eased that Israel would strike Iran's energy infrastructure in retaliation for an attack at the start of the month.  In the longer term, the Intl Energy Agency forecast that rising global supply could lead to a sizable surplus next year.  Brent for Dec lost 0.5% to $74.08 a barrel & WTI for Nov dipped 0.5% to $70.30 a barrel.

Oil Set for Weekly Decline With US Pushing for Truce in Gaza

Stocks were ready for records & impressive streaks as NFLX delivered powerful earnings & set the stage for Big Tech's corp results in the coming days.  But that enthusiasm barely spread to the rest of the stock market.  For the week Dow was up 407.  Meanwhile concerns about the Middle East conflict & uncertainty about the outcome of the US presidential election prompted a shift to less-risky assets like gold.