To begin their trading day, investors should be aware of the following key news items:
1. Glide in place
After ending Tuesday’s trading session higher, the Nasdaq and the S&P 500 are riding their longest winning streaks in over two years. On the other hand, the Dow is enjoying its longest winning run since July. The increase coincides with Treasury yields easing slightly from their recent highs as the Federal Reserve keeps interest rates unchanged and recent jobless data points to some slowing of the economy. As the season draws to a close, investors will also be watching the profits of the few major companies still to report, including Disney on Wednesday and Walmart and Target the next week.
2. Tea leaves for Election Day
While Tuesday’s results may not provide much insight into next year’s election—when President Joe Biden is anticipated to seek reelection—it was an off-year election with a focus on state contests. Polls show that Biden’s popularity is declining, and calls for his resignation are intensifying. Nonetheless, this week’s impressive Democratic performances offered the president cause for celebration: While Ohio voters enshrined the right to an abortion, Democratic Gov. Andy Beshear of Kentucky won reelection in the red state, defeating a candidate sponsored by prospective Biden rival Donald Trump.
3. There is a pulse in mortgage demand.
It seems easy enough: demand for mortgages increases when interest rates decline. According to CNBC’s Diana Olick, this is precisely what occurred in recent days as mortgage rates had their largest one-week drop in more than a year, sparking the first increase in demand for house loans in a month. The 30-year fixed mortgage rate reached above 8% at one point due to the recent spike in Treasury yields, which drove mortgage rates even higher. However, yields have decreased after the Federal Reserve decided against raising the benchmark rate once again and as October’s jobs report was less positive than anticipated.
4. Disney is the centre of attention
A victory is what Disney and CEO Bob Iger are chasing. Investors are curious to see whether and when Iger’s restructuring of the corporation will truly pay off now that he has returned, around a year ago. They are not impressed at this time. In contrast to the overall market’s advances, the stock has experienced a modest decline this year. Due of its weakness, activist investor Nelson Peltz and his company Trian have entered the conflict once more.
5. Microsoft AI-powered record
Tuesday saw an all-time high for Microsoft’s shares as the company’s prospects in artificial intelligence continued to inspire excitement. Microsoft has made a $13 billion investment in OpenAI, a business whose ChatGPT software has come to represent the rise in popularity of AI. Wall Street believes that the alliance will benefit Microsoft’s Azure cloud business and Office products. In fact, Satya Nadella, the CEO of Microsoft, bragged last week about how Azure enables developers to use OpenAI technology to rapidly bring their ideas to market. According to UBS analysts, “What is good for Azure is good for OpenAI,” they said in a note on Monday.
Source (CNBC)
