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November 2, 2024

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In Stocks

Election-Related Market Swings: How to Stay Ahead

5 Mins Read

After yesterday’s “trick,” investors received a “treat” at the end of the trading week, as the stock market regained its footing and bounced back a bit.

Even though the October nonfarm payrolls were much weaker than expected—up by 12,000 when the Dow Jones estimate was for an increase of 100,000 jobs—the market shook it off. The decline is attributed to Boeing’s strike and two major hurricanes. According to a recent Barron’s report, the Bureau of Labor Statistics survey responses were below average, so the data may be skewed. Unemployment is steady at 4.1%, and wages grew by 4.4% annually.

Stocks Bounce Back

The data doesn’t indicate the US economy is heading toward a recession. The major stock market indexes bounced back, with the Nasdaq Composite ($COMPQ) gaining the most after Thursday’s spooky selloff. However, Friday’s bounce didn’t change the Nasdaq’s big picture (see daily chart below).

FIGURE 1. NASDAQ COMPOSITE SHOWS DOWNSIDE MOVEMENT. Friday’s selloff didn’t change the technical picture. The index needs to close above its 21-day EMA to reverse the downside move.Chart source: StockCharts.com. For educational purposes.

The Nasdaq broke above its tight consolidation range on Monday, but, after Thursday’s selloff, it closed well below its 15-day exponential moving average (EMA). Friday’s rebound didn’t change the technical picture. The index went as high as the 15-day EMA, but closed below it in what resembles an inverted hammer, although it didn’t close lower than Thursday’s close.

There is a weakening in market breadth, as displayed by the breadth indicators—Bullish Percent Index, Percentage of Nasdaq stocks trading above their 200-day moving average, and the Advance/Decline Line—displayed in the lower panels.

Small Caps Ain’t Getting Much Love

With interest rate cuts already in play and with more to come, you would think that small-cap stocks would start getting some attention. But we haven’t seen that yet. Even though the S&P 600 Small Cap Index ($SML) broke above a trading range on the weekly chart, there’s not enough buying pressure to send the index into an uptrend.

FIGURE 2. SIDEWAYS FOR SMALL-CAP STOCKS. The high probability of a 25-basis-point interest rate cut at the next FOMC meeting isn’t helping small-cap stocks, which continue to trade in a consolidation.Chart source: StockCharts.com. For educational purposes.

Treasury Yields Jump

Yields fell after the weak jobs report, but that was short-lived. Treasury yields reversed and climbed higher, with the 10-year US Treasury yield closing at 4.36% on Friday (see chart below). $TNX is trading above its 15-day EMA. The question now is whether $TNX will reach its July 1 high.

FIGURE 3. 10-YEAR US TREASURY YIELD INDEX ($TNX) KEEPS ON RISING. $TNX has been on a steady rise since the end of September, when it broke above its 15-day EMA.Chart source: StockCharts.com. For educational purposes.

Treasury yields have been trending up after breaking above the 15-day EMA at the end of September. The rise in yields doesn’t help bond prices, which move in the opposite direction.

The iShares 20+ Year Treasury Bond ETF (TLT) has been trading below its 15-day EMA since September 19, and Friday’s price action was very bearish (see chart below).

FIGURE 4. BOND PRICES SINK. The iShares 20+ Year Treasury Bond ETF (TLT) has been cascading lower since mid-September when it broke below its 15-day EMA.Chart source: StockCharts.com. For educational purposes.

While Treasury yields climb, the economic data shows the economy is growing while the labor market is cooling. This supports the narrative of an interest rate cut. The CME FedWatch Tool shows a 99.7% probability of a 25-basis-point interest rate cut on November 7.

Next week could bring some volatile action to the market, although given the way the stock market has been acting in the last two weeks, there’s no telling what it will do. The best you can do is take it one day at a time.

End-of-Week Wrap-Up

  • S&P 500 closed down 1.37% for the week, at 5728.80, Dow Jones Industrial Average down 0.15% for the week at 42,052.19; Nasdaq Composite closed down 1.50% for the week at 18,239.92
  • $VIX up 7.62% for the week, closing at 21.88
  • Best performing sector for the week: Communication Services
  • Worst performing sector for the week: Real Estate
  • Top 5 Large Cap SCTR stocks: Summit Therapeutics (SMMT); Reddit Inc. (RDDT); Ubiquiti, Inc. (UI); Applovin Corp. (APP); Carvana (CVNA)

On the Radar Next Week

  • US Presidential Election
  • October ISM Services PMI
  • Fed Interest Rate Decision
  • Fed Press Conference
  • November Michigan Consumer Sentiment Index
  • Earnings from Palantir Technologies (PLTR), Marathon Petroleum Corp. (MPC), Novo Nordisk (NVO), Arm Holdings (ARM), Gilead Sciences (GILD), Applovin Corp (APP), among many others.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

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In World news

Horrific details emerge of how victims died in Spain’s flash floods

4 Mins Read

The full horror of the flash flooding in Spain began to emerge on Friday, just as new rainfall lashed southern parts of the country.

The storm has killed at least 205 people, with 202 of those in the hardest-hit region of Valencia, emergency services in the region said Friday.

It marks Spain’s deadliest natural disaster in decades.

The death toll is expected to rise as emergency workers fight to rescue those who are trapped and recover bodies. Authorities warned Friday that roads have collapsed in some areas, with emergency services unable to get access.

The Spanish Armed Forces have already rescued 4,607 people, Spain’s Minister of Territorial Policies Ángel Víctor Torres Pérez said on Friday.

SOS Desaparecidos, an association dedicated to sharing information about those missing through social media, said they have received reports of at least 1,300 people who remain unaccounted for.

The country has experienced significant autumn storms in recent years, but nothing comes close to the devastation wrought in the past few days.

More details are emerging of the devastation in the Valencia region, with residents reporting large amounts of damage and horrific encounters with the rapidly rising water. A courthouse was turned into a temporary morgue in the region’s capital, Valencia city.

In the city’s La Torre neighborhood, where the water rose to chest level, volunteers continue to search for more missing people.

Rescue teams discovered the bodies of seven people in an underground parking garage there on Thursday, according to national broadcaster RTVE, citing police.

In photos: Flash flooding devastates parts of Spain

The father of one of those who died in the parking garage, a local policeman, told Spain’s El Mundo newspaper that residents had rushed to move their cars, but the water rose faster than people were expecting, trapping them. Another woman was dragged into the parking lot by the moving water and died, he said.

The town of Paiporta, Valencia, where at least 62 people died, was described by Spanish public broadcaster RTVE as the “ground zero of the tragedy.”

A witness who was caught in the flash flood there told RTVE that he saw multiple cars floating past him with people begging for help. Many drivers found themselves caught on a highway and were swept away in their cars, as the road appeared to merge with a nearby river. A bridge also collapsed in the area.

At least six people died in a nursing home on the outskirts of the town, Paiporta’s mayor told the Spanish national broadcaster. While staff managed to bring most of the elderly people to the first floor, they were unable to save everyone.

Mud still fills the streets in many areas, with the mayor of Valencia sharing images of community clean-up efforts on Friday. “Vehicles are being removed, the square is being cleaned and food and water are being collected,” Mayor María José Catalá said of La Torre.

The regional government of Valencia said power has been reestablished in 90% of places.

Carlos Mazon, the president of the Valencia’s regional government, defended his administration amid accusations that authorities failed to alert residents on time.

“The forecasts we received initially did not predict this (meteorological) revolution,” he said in a video posted on X.

Mazon said the regional government sent out “close to hundreds” of red alerts during the day of the storm, “including an SMS alert reserved for the worst possible scenario.”

Parts of Spain continue to see intense rainfall on Friday, and authorities issued a red warning overnight for the Huelva coast, in Andalusia, which had 140mm (5.5 inches) of precipitation in just 12 hours. Orange and yellow alerts also remain in place in isolated parts of Valencia.

This post appeared first on cnn.com

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In Business

Peloton announces Ford exec, founder of Apple Fitness+ Peter Stern as its next CEO

3 Mins Read

Peloton on Thursday said it has appointed Peter Stern, a Ford executive and the co-founder of Apple Fitness+ to be its next CEO and president. 

Stern, the president of Ford Integrated Services, primarily oversees the automotive company’s subscription services, such as BlueCruise, Pro Intelligence, connectivity and security. He also led the company’s digital product team. 

Stern is slated to step down from his role at Ford and take the helm of Peloton on Jan. 1. Interim co-CEO Karen Boone will stay in the role through the end of the calendar year, while her counterpart, Chris Bruzzo will step down from the co-CEO role on Friday. Both Boone and Bruzzo will stay on Peloton’s board.

Stern is the third CEO to lead Peloton in its history. The news came alongside Peloton’s fiscal first-quarter earnings report. Shares of the company jumped more than 20% in early trading.

“Peter is a seasoned strategist with a track record of driving sustainable growth through innovation, and we have every confidence in his ability to lead Peloton during this important time. He brings meaningful expertise in scaling differentiated technology-oriented platforms and has a deep understanding of the health and wellness sector — making him uniquely suited to serve as Peloton’s next CEO,” Jay Hoag, the chairperson of Peloton’s board, said in a news release.

“What’s more, Peter embodies Peloton’s core values, including operating with a bias for action, empowering teams of smart creatives and working together.”

The announcement comes about six months after Peloton announced that former Spotify and Netflix executive Barry McCarthy would be stepping down after about two years on the job. 

McCarthy had taken over from founder John Foley and had worked to bring Peloton back from the brink of extinction by dramatically cutting costs and redirecting strategy. 

Peloton’s decision to hire Stern indicates that it is tripling down on the company’s main value proposition to investors at the moment: its high-margin, recurring subscription revenue. 

Stern’s background running Ford’s subscription business will likely assist in building out, and sustaining, Peloton’s connected fitness subscribers and app subscribers.

In a news release, Peloton said that it sought out a new CEO who appreciates and loves Peloton’s products, understands the company’s challenges and opportunities, and is passionate about helping people achieve their fitness goals.

Stern was an early adopter of Peloton, having been a member since 2016, and “has spent over 20 years operating at the nexus of hardware, software, content and services at Ford, Apple and Time Warner Cable,” the company said.

As the co-founder of Apple Fitness+, he helped the vertical grow its subscription base into the millions and knows how to operate a “complex, subscription-based business,” Peloton said.

The company said it was also looking for a product innovator and strategist and pointed to the 30-plus patents Stern has secured over the years, including an online media content patent.

“Working for Peloton is a dream come true for me,” Stern said in a statement. “My goal is to help millions of people live longer, healthier and happier lives. Peloton, with its unique combination of people, products and passionate Members, provides me an opportunity to do just that.”

This post appeared first on NBC NEWS

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