Tuesday, 18 June 2024
Trending
Stock Market

Rising Bond Yields and Unfavorable Corporate News Weaken Stocks

  • The S&P 500 Index, Dow Jones Industrials Index, and Nasdaq 100 Index are all lower today.
  • The shares of Tesla are down over -3%.
  • Vistra Corp. is up over 7% following the release of better-than-expected Q1 adjusted EBITDA.

Due to bad corporate news and rising T-note yields, the S&P 500 Index, Dow Jones Industrials Index, and Nasdaq 100 Index are all lower today. Tesla’s stock is down more than -3% following news from Reuters that US authorities are investigating whether the company deceived investors and customers about the self-driving capabilities of its electric vehicles.

After the US government canceled their permits to supply chips to Huawei Technologies, Intel and Qualcomm saw a decline of more than 2%. After reporting Q1 gross bookings below consensus and projecting lower-than-expected Q2 gross bookings, Uber Technologies is down more than -5%.

US Stock Movers

Positively, Vistra Corp. is up over 7% following the release of better-than-expected Q1 adjusted EBITDA. After revealing higher-than-expected Q1 adjusted EPS, Arista Networks is up more than +4%. After revealing higher-than-expected Q1 gross bookings and projecting Q2 gross bookings above consensus, Lyft is up more than 10%.

The majority of Q1 earnings results have been above expectations, which has helped equities. The current prediction for Q1 earnings is +6.5% y/y, which is significantly higher than the +3.8% pre-earnings season projection. Approximately 81% of reporting S&P 500 businesses have surpassed Q1 profit projections, according to Bloomberg Intelligence.

In the week ending May 3, US MBA weekly mortgage applications increased by +2.6%, with the refinancing mortgage sub-index growing by +4.5% and the purchase mortgage sub-index rising by +1.8%. Markets are pricing in a 25 basis point rate drop at 10% for the FOMC meeting on June 11–12 and 32% for the meeting on July 30-31.

Global stock markets are uneven, with Japan’s Nikkei Stock Index finishing lower by -1.63% and the Euro Stoxx 50 reaching a one-month high. Rates of interest are also declining; the yield on a 10-year T-note increased by +3.3 basis points to 4.490%.

This afternoon’s $42 billion 10-year T-note auction by the Treasury, which is part of this week’s May quarterly refunding, is putting supply pressure on T-note prices, which are already being impacted by higher European government bond yields. The following US companies are among the top stock

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