U.S. stocks fell on Tuesday as investors digested the recent bond market selloff and braced for the next wave of earnings reports.
The S&P 500 (^GSPC) fell about 0.2%. On the other hand, the Dow Jones Industrial Average (^DJI) and the tech-heavy Nasdaq Composite Index (^IXIC) both fell by about 0.1%.
Stocks are under pressure amid growing doubts that the Federal Reserve will continue to cut interest rates aggressively or even leave them unchanged in November. Factors include a strong economy, cautious Fedspeak, and concerns about the fiscal impact of Republican candidate Donald Trump’s election victory.
Read more: What Fed Rate Cuts Mean for Bank Accounts, CDs, Loans, and Credit Cards
Amid uncertainty, the 10-year U.S. Treasury yield (^TNX) rose sharply on Monday, above that level for the first time since July, and stabilized around 4.2%. Bond selling has weighed on interest-rate-sensitive stocks such as real estate, and rising yields typically trigger stock prices to fall.
In terms of profits, General Motors (GM) raised its earnings forecast for the third time this year, as quarterly profits and sales exceeded due to strong EV sales. GM stock rose more than 9%. In other earnings, mixed third-quarter results sent GE Aerospace (GE) stock down more than 7% and Verizon stock down about 5%.
At the same time, expectations for Wednesday’s Tesla (TSLA) earnings are rising as Wall Street debates whether the “Magnificent Seven” tech megacaps will drive the stock’s next rally.
Despite the rise in yields, gold (GC=F) prices have risen and are on track to reclaim Monday’s all-time highs. It rose as investors sought safety as the US presidential election looms and tensions in the Middle East remain high.
Live6 update
Tuesday, October 22, 2024 8:50 a.m. (Pacific Daylight Time)
Elections bring ‘high’ level of uncertainty to global economic outlook: IMF
Yahoo Finance’s Jennifer Schonberger reports:
The International Monetary Fund said on Tuesday that the global economy is on pace for a soft landing this year and in 2025, but the outlook is declining as elections around the world and potential changes to trade and fiscal policy take place. He said there was a “high” level of uncertainty.
The IMF says higher global tariffs will exacerbate trade tensions, disrupt global supply chains, and limit the positive spillovers from innovation and technology transfer that once fueled growth in emerging market and developing countries. This could put pressure on medium-term growth prospects, he said.
Click here for details.
Tuesday, October 22, 2024 7:59 a.m. PDT
Markets are discussing raising the Fed’s long-term interest rate stance
U.S. Treasury yields soared last month on a string of better-than-expected economic data and signs that inflation may take longer to fall toward the Fed’s 2% target than initially expected.
The 10-year Treasury yield (^TNX) has risen nearly 50 basis points over the past month as a result of this data, hovering around 4.2%, its highest level since July. As the chart below shows, the debate among investors is less about whether the Fed will cut rates again in November and more about how quickly the Fed will cut rates over the next year. It seems to be the one.
As of Tuesday morning, the market was still pricing in about an 88% chance that the Fed would cut rates at its November meeting, according to the CME FedWatch tool. However, by the end of next year, the market expects the Fed to cut rates by one less than expected on October 4th, and two fewer than expected on September 18th, when the Fed cut rates by 0.5 percentage point. It is considered that there is a high possibility that this will happen.
Tuesday, October 22, 2024 7:02 PDT
General Motors raises profit forecast, stock price soars
General Motors (GM) shares rose more than 7% Tuesday morning after the company raised its earnings outlook for the third time this year.
Yahoo Finance’s Pras Subramanian reports:
For the quarter, GM reported revenue of $48.78 billion, easily beating the Bloomberg consensus estimate of $44.69 billion and up from about $48 billion in the previous quarter. GM’s third-quarter sales also increased 10.5% year-over-year.
The company reported adjusted earnings of $2.96 per share, well above expectations of $2.44. The company reported EBIT-adjusted profit of $4.115 billion, an increase of 15.5% year over year, and EBIT-adjusted profit margin of 8.4%, up from 8.1% year-over-year.
Click here for details.
Tuesday, October 22, 2024 6:35 a.m. PDT
Stock prices fall due to
U.S. stocks fell on Tuesday as investors digested the recent bond market selloff and braced for the next wave of earnings reports.
The S&P 500 (^GSPC) fell more than 0.5%. The Dow Jones Industrial Average (^DJI) fell more than 120 points (0.3%), and the tech-heavy Nasdaq Composite Index (^IXIC) fell about 0.6%.
Tuesday, October 22, 2024 05:44 PDT
Companies reporting financial results on Tuesday morning
On Tuesday morning, many companies announced their third quarter results.
The stocks that moved the most before the market were GE Aerospace (GE), Verizon (VZ), 3M (MMM), and Philip Morris (PM). GE Aerospace stock fell more than 5% and Verizon stock fell about 3% after mixed third-quarter reports. Paint company Sherwin-Williams (SHW) fell 4% after poor results. Lockheed Martin (LMT) and Moody’s (MCO) were down less than 1% despite strong results.
Meanwhile, Philip Morris rose 3% after raising its guidance due to rising tobacco prices and a surge in smoke-free businesses. General Motors (GM) rose 1.4%, and high-tech manufacturing conglomerate 3M rose 6%, with higher profits.
Here are details about the company’s performance (as per Bloomberg consensus estimates):
GE Aerospace: Adjusted earnings per share of $1.15 vs. $1.13 expected, revenue of $8.9 billion vs. $9 billion expected.
Philip Morris: Adjusted EPS of $1.91 ($1.81 expected), net revenue of $9.9 billion ($9.7 billion expected).
Verizon: Adjusted EPS of $6.84 ($6.44 expected), revenue of $17.1 billion ($17.4 billion expected).
Moody’s: Adjusted EPS of $3.21 ($2.88 expected), revenue of $1.8 billion ($1.7 billion expected)
Lockheed Martin: Adjusted EPS of $6.84 ($6.44 expected), revenue of $17.1 billion ($17.4 billion expected)
Sherwin-Williams: Adjusted EPS of $3.37 vs. $3.53 expected, revenue of $6.16 billion vs. $6.21 billion expected.
3M: Adjusted EPS of $1.98 ($1.91 expected), revenue of $6.07 billion ($6.06 billion expected).
General Motors: Adjusted EPS of $2.96 ($2.45 expected), revenue of $48.8 billion ($44.69 expected)
Tuesday, October 22, 2024 5:06 a.m. PDT
good morning. Here’s what happened today:
Economic data: Philadelphia Fed Nonmanufacturing Business Index (October). Richmond Fed Manufacturing Business Index (October)
Revenue: General Motors (GM), 3M Company (MMM), RTX Corporation (RTX), Verizon Communications (VZ), GE Aerospace (GE), Lockheed Martin (LMT), Quest Diagnostics (DGX), Philip Morris (PM), Denny’s Corporation (DENN), Sherwin-Williams (SHW), Interpublic Group of Companies (IPG), Norfolk Southern Corporation (NSC), Texas Instruments (TXN), PulteGroup (PHM), Enphase Energy (ENPH)
Here are some of the biggest stories you may have missed throughout the night and early this morning.
GM raises profit forecast again after 3rd quarter earnings beat
Nvidia plans to invest in Thailand as Southeast Asia becomes AI hub
ASML: Growth in 2026, US-China tensions continue
Bullish Citi raises 3-month gold price outlook to $2,800
Trump tariffs: How big companies can avoid ‘blanket’ tariffs
