 | | |  Good morning. After two negative quarters in a row, the economy, as measured by GDP, rose by 2.6 percent annualized in this quarter. However, behind the headlines, this may just prove a bit of window dressing ahead of the midterm elections.
For starters, the growth occurred entirely thanks to trade, as net exports increased. Meanwhile, private inventories shrank, as did personal income and wages. With inflation still running over 8 percent annualized, it's clear that in real terms the economy is still struggling.
Markets are more interested in the rumor that the Fed may make its monetary policy pivot by the end of the year. This latest data point offers little more than the likelihood of more market volatility ahead, and the chance to profit on both the long and short side.
Now here's the rest of the news: | | | | | |
| | |  | DOW 32,033.28 | +0.61% | | |  | S&P 3,807.31 | -0.61% | | | | | NASDAQ 10,792.67 | -1.63% | | | | | *As of market close | | | • | Stocks traded mixed on Thursday, amid another busy day for earnings. | | | • | Oil rose 1.2 percent, closing at $89.00 per barrel. | | | • | Gold traded flat, last going for about $1,666 per ounce. | | | • | Cryptocurrencies slightly dropped, with Bitcoin at $20,614 at the stock market close. | | | | | | | |
| | | Buy Strong Brands Being Hit by the Stronger Dollar | | | | One trend this earnings season has been a number of companies impacted by the strength of the US dollar in currency markets. As a result, multinational companies are reporting headwinds, as a strong dollar makes them relatively more expensive in local markets.
That trend will end in time, and may even shift quickly once monetary policy stops tightening. As the trend reverses, companies that have been adversely impacted will suddenly benefit.
» FULL STORY | | | | |
| | Insider Trading Report: Crown Castle (CCI) | | | | Kevin Stephens, a director at Crown Castle (CCI), just added 2,000 shares. The buy increased his holdings by nearly 19 percent, and came to a total cost of $247,000.
The buy came a few days after another director bought 1,215 shares for an even $150,000. Over the past three years, there's been a generally equal mix of insider buys and sells, with company directors likely to be buyers and executives likely to be sellers.
» FULL STORY | | | | |
| | Unusual Options Activity: AngloGold Ashanti (AU) | | | | Shares of gold mining operation AngloGold Ashanti (AU) are down 32 percent in the past year, amid a drop in gold-related stocks overall. One trader sees the potential for a surge higher at some point in the next six months.
That's based on the April 2023 $18 calls. With 175 days until expiration, 2,050 contracts traded compared to a prior open interest of 128, for a 16-fold rise in volume on the trade. The buyer of the calls paid $0.68.
» FULL STORY | | | | |
| | • | Economy Grows in Third Quarter
The US economy saw 2.6 percent annualized growth in the third quarter of the year. That reversed two quarters of negative GDP numbers, historically a condition that has resulted in the declaration of a recession. While the numbers were strong, they also hint that rising interest rates are likely to continue, which may continue to weigh on asset classes. | | | | • | Jobless Claims Rise Slightly
Initial jobless claims rose to 217,000, a 3,000 rise from the prior week, when seasonally adjusted. That's close to the 2019 average of 218,000. Continuing claims rose to 1.44 million, up from 1.38 million. The slight increase in initial claims and slight slowdown in hiring indicates that the labor market is still strong, but cooling. | | | | • | Mortgage Rates Hit 20 Year High
30-year fixed-rate mortgages topped 7.08 percent this week, hitting their highest level since 2002. The rate was a slight increase over last week's 6.94 percent average. Mortgage rates have now more than doubled since the start of the year, a fast increase that may cause the housing market to slow significantly more in the months ahead. | | | | • | ECB Hikes Rates By 0.75 Percent
The European Central Bank (ECB) has raised its interest rates by 0.75 percent. The bank also announced that it would scale back refinancing options for European banks. The ECB notes that it is not done raising interest rates yet. The rate hike leaves the ECB rate at 1.5 percent, a level last seen in 2009. | | | | • | Versa Raises $120 Million
Cybersecurity and networking firm Versa has raised $120 million in a mix of debt and equity. Private equity giant BlackRock (BLK) led the funding round. The investment comes as investments in cybersecurity companies have trended lower than 2021, but still higher than 2020. | | |
| | | | TOP | | | NOW | 13.258% | | | | ANET | 9.544% | | | | CHKP | 9.065% | | | | CAT | 7.849% | | | | RE | 6.678% | | | | BOTTOM | | | META | 24.484% | | | | ALGN | 18.178% | | | | WST | 12.74% | | | | INVH | 7.117% | | | | BMRN | 7.041% | | | | |
| | |  | | The intraday action of the day is kind of a microcosm of what we've been feeling as investors over the past several weeks. The optimism is built almost entirely on a pessimistic outlook. The optimism of the Federal Reserve pivoting only occurs in a scenario where things deteriorate more quickly, from a macroeconomic standpoint. The volatility is here, and it's been here for a while, and I think it's probably here to stay. Not on a day-to-day, week-to-week, but on an intraday basis, just because of the position that investors are in now. | | - Keith Buchanan, portfolio manager at GLOBALT Investment, on why markets will likely remain volatile as traders treat bad corporate news as good news from a monetary policy standpoint – and vice versa. | |
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