The Magnificent Severn tumbled over 3% as disappointing outlooks from giants MSFT and META fueled concerns that the AI frenzy that has powered this cohort has gone too far. As noted several times, the mega sized techs have been priced to perfection and anything short of such—either in the current or in future—would be met with selling.
The political narrative is also having an impact on the markets. The polls indicate it is a dead heat but the betting markets are greatly skewed towards Trump. Speaking of which, yesterday I heard an advertisement that Robinhood is permitting option trades on the outcome of the election.
Is this not the ultimate measure of hype and speculation?
Treasuries were volatile yesterday, ending the worst month in over two years with yields increasing to over 60 bps. As noted yesterday, at the start of the month “Treasury longs” were at the greatest level in three years under dovish monetary policy assumptions.
After the close, both AAPL and AMZN posted results. AMZN is up about 6% on optimistic report while AAPL declined about 2%.
At 8:30 the all-inclusive unemployment data is released. How will the statistics impact outlooks? Non-farm and private sector payrolls are expected to increase by 105k and 70k, respectively, a 4.1% unemployment rate, a 0.3% increase in average hourly hours, a 34.2 hour work week and a 62.7% labor participation rate.
Last night the foreign markets were mixed. London was up 0.73%, Paris up 0.65% and Frankfurt up 0.55%. China was down 0.24%, Japan down 2.63% and Hang Seng up 0.93%.
Futures are mixed on earnings reports and a very muddied jobs report because of the strike and hurricanes. The 10-year is of 3/32 to yield 4.30%.
