💣Bond yields adding pressure🧸

The stock markets continue declining for the second day as investors plough into the latest earnings and economic data. 

We see the giving up of weekly gains after investors put some cash to work during the early week, hoping for a brightening economic and earnings outlook. And indeed, they did get what they wished for, just not in the right framework. 

With around 2/3 of the S&P 500 companies reporting their results and the majority beating estimates, the fear of a recession seems not loud noise. Yet, a higher interest rate will likely damage earnings soon while curbing inflation. 

💎Economic data remains resilient🗽

The latest jobless claims fuel the call for an aggressive rate hike. We saw fewer jobless claims, which stood at 214,000, a remarkable fall from 226,000 last week. This hints at a robust labour market that is a recipe for continued elevated inflation, thus giving incentive for the Fed to continue its monetary tightening stance. 

While existing home sales fell to 4.81 million from 4.8 million in the prior month, the figure was still better than expected. Hence, the data shows strength and is sufficient to boost bond yield. 

The 10-year Treasury yield is now at a high of 4.225% as investors baked in more hikes in the upcoming meeting.

Pika World will monitor the stresses of the inverted yield curve as the shorter treasury yield, such as the 2-year, rises swiftly. 

💸Snap: Yeah, a snap off momentum🕹

Shares of the social media company fell by a quarter in the after-hours trading as the company announced a weak outlook on its fourth-quarter revenue. Unfortunately, there aren’t any formal forecasts for the 4Q, and this is a distress to investors. 

There is collateral damage across tech giants like Meta, portraying softer advertising spending. Despite the board approving a $500 million share purchase, investors are buying the transformation narrative of the company. 

Unless there is a re-acceleration and broad diversification of its revenue growth, investors will stay sidelined until the sky is blue again.