Equity market wobble as recession fear rose💣

The stock market lost footing on Wednesday as we saw more signs of a recession fear. For one, the 3-month Treasury yield had risen above the 10-Year Treasury yield during the morning trading session. 

Such turnout is uncommon as it adds to the growing confidence that we might be on the path of a recession. The inversion is significant for investors given the Fed’s commitment to tighten monetary policy and pushing for more capital to bonds with shorter maturities that are often less sensitive to interest rate changes. 

Pika World will still be cautious on the long end of the trade, although we continue to see resilience in small and medium-cap index such as Russell 2000. 

💸Meta: Weakening fundamental, a concern rose again🧸

Shares plunged in the after-hour as the weak quarter earnings stoked fear of the realisation of a further weakening advertising environment. It reflects the impatience investors have with Meta regarding its corporate strategy, especially with its aggressive spending on metaverse in 2023. 

Most importantly, the weakness in earnings arrived at all three major platforms: Facebook, Instagram and WhatsApp. Revenue declined 4% compared to a year ago. Even as CEO Mark Zuckerberg spoke about the strong fundamentals for firmer future revenue growth, there was little comfort in its earnings conference. 

It has been a challenging year as the company grapples with competition from TikTok and Apple’s focus on privacy, which weakens its ad-targeting business. The macroeconomic environment does not help with the softening economic outlook globally. 

📮What’s on the menu today?📖

At 8.30 pm, we will receive the Core Durable Goods Orders which we expect a modest growth of 0.2%. 

The GDP data from Q3 will be released at the same time. We are expecting a growth of 2.4%. 

Initial jobless claims are expected to remain pretty stable at 220K compared to 214K in the prior period when released at 8.30 pm too.