 | | |  Good morning. After a rough week last week, Monday's rally may be a sign that the strong earnings season can shrug off a downgrade of America's credit rating. After all, corporate performance isn't the same as government performance. And investors may be following history. As we noted last week, markets ended up far higher one year after the last U.S. credit downgrade in 2011.
This time may be different however, as seen with yesterday's stock drop. Interest rates are well off of 0 percent – and may yet continue slightly higher. The higher costs of debt are adding up, and this year has already seen some big bank failures. While this has all been isolated so far, any fears of a systemic problem could lead to some danger.
For now, investors should plan on some weak market performance. Historically, September and October are the worst performing months for stocks. But a modest pullback now and in the coming months could set up for a year-end rally that pushes stocks near, if not past, all-time highs.
Now here's the rest of the news: | | | | | |
| | |  | DOW 35,314.49 | -0.45% | | | | | S&P 4,499.38 | -0.42% | | | | | NASDAQ 13,884.32 | -0.79% | | | | | *As of market close | | | • | Markets dipped on Tuesday, but closed near highs of the day. | | | • | Oil rose 1.1 percent, closing at $82.82 per barrel. | | | • | Gold dropped 0.5 percent, last going for $1,959 per ounce. | | | • | Cryptocurrencies generally rallied, with bitcoin at $29,889 at the stock market close. | | | | | | | |
| | | Slow and Steady Earnings Growth Will Win the Investment Race | | | | Investing is a marathon, although with all the day-to-day news and quarterly earnings report, it may not always feel like that. A handful of companies get their focus right, looking at the long haul versus short-term moves.
Those companies may not always please investors during their quarterly earnings reports. But all companies will have a disappointing quarter from time to time. Great companies don't let it faze them at all.
» FULL STORY | | | | |
| | Insider Activity Report: NXP Semiconductors (NXPI) | | | | Julie Southern, Chair of NXP Semiconductors (NXPI), recently added 203 shares. The buy increased her stake by 2 percent, and came to a total cost just over $44,260.
This is the first insider buy since Southern bought in March 2022, buying 135 shares and paying just over $24,000. Since then, there have been four insider sales, three coming from company vice presidents, but one from the company CEO.
» FULL STORY | | | | |
| | Unusual Options Activity: Block (SQ) | | | | Payment systems company Block (SQ) dropped following its earnings report last week. One trader sees shares rebounding in the coming months.
That's based on the December $50 calls. With 128 days until expiration, 16,004 contracts traded compared to a prior open interest of 193, for an 83-fold rise in volume on the trade. The buyer of the calls paid $17.00 to make the bullish bet.
» FULL STORY | | | | |
| | • | Central Bank Policies Suggest Slow Global Economy
Central banks around the world largely moved in the same direction in 2022, with increasing interest rates to bring down inflation. Now, with inflation dropping, there's been some divergence. In Japan, the Bank of Japan has started to tweak its policy of yield curve control as a means of keeping the economy from being too restrictive. And the European Central Bank continues to raise rates as inflation remains higher in the EU than the U.S. | | | | • | Multifamily Real Estate Sees $1 Trillion Debts Rolling Over Soon
Apartment buildings could be in for some challenging returns for investors in the years ahead. Nearly $1 trillion in debt is coming due on multifamily properties, and with interest rates soaring, the costs to refinance could soar. Meanwhile, rent increases have slowed down and have even declined in some markets over the past year. | | | | • | Chicken Sales Slump
Chicken prices are down, which is helping consumers with food inflation. However, food producers are also seeing lower demand. That's leading to the closure of a number of meat processing plants, with Tyson Foods (TSN) looking to shut down four plants. The company had previously announced the closure of two other facilities in the spring. | | | | • | Boeing Nearly Ready on Starliner Capsule
Aerospace producer Boeing (BA) reports that it will be ready to fly NASA astronauts with its Starliner capsule by next March. The company had previously delayed the launch due to assembly and production issues. So far, cost overruns on the next-generation space capsule have totaled $1.5 billion, with the cost being entirely absorbed by Boeing. | | | | • | Tesla CFO Resigns
Zachary Kirkhorn, CFO at Tesla Motors (TSLA) and dubbed "Master of Coin," has submitted his resignation from the company, effective at the end of the year. He has been at the electric vehicle manufacturer for 13 years, and has worked his way up through various finance roles, including at SolarCity before its acquisition by Tesla. | | |
| | | | TOP | | | LLY | 14.843% | | | | DISH | 9.555% | | | | OGN | 8.991% | | | | BR | 6.386% | | | | FOXA | 5.834% | | | | BOTTOM | | | IFF | 19.119% | | | | DXCM | 10.143% | | | | SEE | 9.006% | | | | PODD | 8.883% | | | | EXPD | 4.343% | | | | |
| | |  | | It's undeniable that the short-end of the curve, those are really attractive yields. But now you have all of a sudden, with some of the dialogue, you have real reinvestment risk. | | - Kristen Bitterly, Citi Global Wealth Head of North America Investments, on why investors interested in the bond market may want to start buying longer-dated bonds as interest rates are likely near a cycle peak, and could start trending lower in the months ahead, which would mean lower yields, but higher prices for those bonds. | |
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