Thursday, January 18, 2024

🔑The Market’s Still Obsessed With this Key Number

Good morning. Asset classes are interrelated. And where bond yields go, riskier assets like...
It's the monthly jobs numbers today and they're not going to be pretty and will be possibly the tip of the iceberg as we head into May.

Good morning. Asset classes are interrelated. And where bond yields go, riskier assets like stocks tend to move in the opposite direction. Monday's market selloff wasn't huge by any means. But it occurred at a time when the 10-year U.S. Treasury bond yield ticked back up to 4 percent.

The yield was as high as 5 percent, briefly touching that level in late October before pulling back. That's also the same time the stock market started its current strong run.

With strong expectations for declining interest rates this year, it's important to bear in mind that the move won't happen in a straight line. That should provide investors and traders alike with opportunities to buy oversold investments or take some profits in overbought markets.

Now here's the rest of the news:

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MARKETS
DOW 37,266.67 -0.25%
S&P 4,739.21 -0.56%
NASDAQ 14,855.62 -0.59%
*As of market close
Markets closed lower on Wednesday, but ended off the lows of the day.
Oil rose 0.4 percent, closing at $72.79 per barrel.
Gold slid 1 .1percent, ending trading at $2,009 per ounce.
Cryptocurrencies traded lower, with bitcoin at $42,613 at the stock market close.

Today's TOP TIPS
Follow the Profits in the Financial Sector
Big banks have kicked off earnings season. And there's been a mixed result overall. Most banks are taking a more conservative approach, as benefits the Fed's "higher for longer" strategy on interest rates.

However, while bank lending activity is down, the market's strong return is helping banks that have a large wealth management division to make better profits right now. That's a trend that could likely continue.

» FULL STORY

Insider Activity Report: Red Violet (RDVT)
Paul Livek, a director at Red Violet (RDVT), recently added 4,900 shares. The buy increased his stake by 115 percent, and came to a total cost of $90,174.

This is the first insider buy since last May, when a different director bought 2,000 shares, paying just under $49,000 to increase her stake by about 70 percent. Otherwise, a major holder sold 10,000 shares, netting about $250,000 for doing so.

» FULL STORY

Unusual Option Activity: Denison Mines (DNN)
Uranium producer Denison Mines (DNN) handily beat the market over the past year, gaining 52 percent. One trader sees shares trending higher in the months ahead.

That's based on the July $2.50 calls. With 182 days until expiration, 28,597 contracts traded compared to a prior open interest of 242, for a massive 118-fold rise in volume on the option trade. The buyer of the calls paid $0.25 to make the bullish bet.

» FULL STORY

IN OTHER NEWS
Corporate Debt Defaults Rose 80 Percent in 2023

153 companies defaulted on their debt payments in 2023, an 80 percent increase from 85 companies in 2022. Economists expect the rising trend to continue, as more debt comes due which can no longer be financed at the low interest rates that prevailed a few years ago. Corporate debt has risen 18 percent since 2020.
China's Economy Grew 5.2 Percent in 2023

China reports that its economy grew at 5.2 percent in 2023, just slightly above the country's official target rate of 5 percent. That's an increase from the 3 percent growth reported in 2022, when China was still imposing strict lockdowns to stop the spread of Covid.
Merger Between JetBlue and Spirit Airlines Blocked

A federal judge has blocked the merger between JetBlue (JBLU) and Spirit Airlines (SAVE), citing the fact that further industry consolidation would leave travelers with fewer options and reduce overall competition. The deal was valued at $3.8 billion, and would have combined the nation's 6th and 7th largest carriers.
Synopsis Makes $35 Billion Offer for Ansys

Electronic design automation company Synopsis (SNPS) has made an offer to buy competitor Ansys (ANSS) for $35 billion. The deal would be a combination of cash and stock. The deal will likely face some regulatory scrutiny, and is expected to close in the first half of 2025.
Uber Shutting Down Drizly

Ride share giant Uber (UBER) is shutting down alcohol delivery service Drizly, just three years after it was acquired for $1.1 billion. The subsidiary has been operating independently, and plans to integrate it into the wider Uber platform never materialized. Uber expects the brand to be discounted by March.

S&P 500 MOVERS
TOP
JCI 3.397%
CME 2.205%
HUM 2.015%
SJM 1.947%
PYPL 1.899%
BOTTOM
ALB 4.176%
FTRE 4.132%
BXP 4.116%
WYNN 3.897%
PEAK 3.594%

Quote of the Day
So far, it seems like the consumer is holding up fairly well. If you look across, the banks that have reported, in general, spending's okay. Credit card balances are up, but [we're] also getting more account growth.
- Tom Hainlin, senior investment strategist at U.S. Bank Asset Management, on why the economy is still in solid shape, even as bank earnings came in a bit lackluster this quarter.

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