Page One
Briefing.com Summary:
*Oil prices have jumped on a host of concerning factors.
*The 10-yr note yield climbed to 5.35% before running into resistance again at its 2002 high.
*Initial jobless claims remain on a low trajectory that reflects a solid demand environment.
The broken record is playing again this morning, and the tune, in case you forgot, is this: oil prices are up, Treasury yields are up, and equity futures are lower.
Specifically, WTI crude futures are up 4.7% to $92.44/bbl, and the 10-yr note yield is up four basis points to 5.32% (after reaching 5.35% earlier). The S&P 500 futures are down 32 points and are trading 0.5% below fair value, the Nasdaq 100 futures are down 214 points and are trading 0.8% below fair value, and the Dow Jones Industrial Average futures are down 334 points and are trading 0.7% below fair value.
It had been worse for the equity futures market. The DJIA futures, for instance, had been down close to 500 points. The improvement has coincided with the 10-yr note yield pulling back from its earlier high, having been met with resistance again at its 2002 high.
Yesterday's strong 10-yr note auction helped cool things down, so the recovery try today is looking more like a technical move at the moment than anything else. There is a $22 billion 30-yr bond auction today. Results will be announced at 1:00 p.m. ET.
Oil prices, however, are holding fairly firm this morning at higher levels, energized by a host of factors that include President Trump saying a deal with Iran isn't something he really wants to do, reports that the U.S. is preparing a plan for possibly renewing its bombing campaign against Iran, an escalation of hostilities between the Houthis and Saudi Arabia, increased attacks on tankers in the Strait of Hormuz, and Hurricane Isaias forcing crew evacuations in the Gulf and threatening refinery shutdowns.
Sticking with the broken record theme, airline stocks and cruise line stocks are under some early selling pressure with the jump in fuel costs.
A better tune emanating from the broken record is that initial jobless claims remain quite low. For the week ending October 3, initial claims decreased 2,000 to 197,000 (Brieifng.com consensus: 200,000). Continuing claims for the week ending September 26 were up 17,000 to 1.716 million.
The key takeaway from the report is a broken (but pleasant-sounding) record: layoff activity continues to run at low levels that reflect a solid demand environment.
Speaking of demand, there remains plenty of it in the AI space. Taiwan Semiconductor Manufacturing Company (TSM) said its September revenues were up 55% year-over-year; meanwhile, Samsung Electronics (SSNLF) is estimating its Q3 revenue to be up 127% year-over-year.
These stocks have been slow to react to the heady growth figures, partly because they were already embedded in stock prices and partly because investors' expectations have gotten exceedingly high.
In any case, there isn't a rush to sing the praises of these stocks or many other stocks this morning, because oil prices and Treasury yields are in tune on the broken record.
