US stock investors last week set their expectations for an unusually heavy October, before the US central bank entered the scene and set the stock market on fire.
The Federal Reserve announced that it would leave its key interest rate unchanged for the time being, which led to a noticeable decline in interest rates – and a sharp rise in the prices of US stock indexes.
On Friday, the important Non-Farm Payrolls came in weaker than expected for October – interest rates fell further, while stocks rose further. It was the best week of the year so far.
Major indices opened higher on Monday, but gradually retreated. This is what it looks like at 20.00 Norwegian time:
- The Standard & Poor’s 500 index fell 0.2%.
- The Nasdaq Composite Index fell 0.2%.
- The Dow Jones Industrial Average fell 0.1 percent
Oversold investors, strong earnings numbers, hopes that the Fed is done raising interest rates and a marked decline in interest rates have brought buyers back into the market, insists LPL Financial’s Adam Turnquist. CNBC.
Ten-year US government bonds were trading Monday afternoon at a yield of about 4.59 percent, a drop of just under 30 basis points in one week. Recently, the ten-year interest rate, or the most important interest rate in the world, reached five percent, the highest level since 2007.
Stop trading in a scandalous company
The Financial Times reported Before the stock market opens on Monday, office community player WeWork is on the verge of filing for bankruptcy. Trading in the stock has also been temporarily suspended.
The company, which was founded by Adam Neumann and received billions of dollars from Japan’s SoftBank, now has a market capitalization of just under $50 million. At its peak, the stock was valued at $47 billion.
Earlier this year, WeWork announced that it would not be able to pay interest to bondholders while it worked on a comprehensive restructuring. Most corporate bond debt trades at a very high effective interest rate.
Investors have a quiet week ahead of them
While the past two weeks were full of quarterly numbers from the largest US companies as well as important macro indicators from the US, this week will be quieter.
About 80% of companies in the S&P 500 have already provided quarterly numbers, and the analysis provider FactSet It finds that 82 percent of these have again beat the earnings estimates that the analyst panel had in advance.
If the stock holds up until all companies report quarterly results, it will be the highest since the third quarter of 2021 stock market euphoria. It should be said that in the past 10 years, 74 percent of companies have exceeded earnings expectations, according to FactSet.
Overall, companies reported earnings 7.1 percent higher than the average analyst estimate. This is also higher than the average over the past 10 years. Eight out of eleven sectors reported year-on-year earnings growth, with growth being greatest in the telecommunications, retail and financial industry sectors. The energy, health and materials sectors recorded a decline in income compared to last year.(conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using links that lead directly to our pages. No copying or other use of all or part of the Content may be permitted except with written permission or as permitted by law. For more terms see here.
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