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The major indexes retreated from their highs as traders digested the latest earnings reports and observed the 10-year bond yield slipping back towards 4% from yesterday’s surge to 4.10%. So far, 40 of the S&P 500 companies have reported their latest results, with 80% surpassing analysts’ expectations.
Despite some traders acknowledging that the S&P 500 might be slightly overvalued, positive news flow has provided support during this notoriously volatile period. Consequently, the major indexes remain higher for the month.
In other news, reports that Israel allegedly agreed not to target energy facilities caused crude oil prices to drop nearly 4%, though they managed to stay above $70. Semiconductor giant ASML reported dismal earnings and outlook, resulting in a 17% stock drop, erasing all its 2024 gains.
The MAG7 basket suffered collateral damage, giving back all of yesterday’s gains, which led the Nasdaq to close lower ahead of the Dow and S&P 500. Among the big banks, five out of six reported gains, with Citi Bank being the exception. Bond yields pulled back from their recent rise, with the 10-year yield trending back to 4%.
The dollar maintained its bullish momentum, achieving its highest close since early August, while gold continued to rise towards record highs, diverging from the currency. Bitcoin also continued its upward trend, breaking out of its descending trading channel.
As Zero Hedge pondered: Will Bitcoin maintain its tracking of global liquidity?
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