Quiver Quantitative - Global stock markets have been deeply impacted by the mounting concerns over the Israel-Hamas conflict, potentially escalating to a wider Middle Eastern dispute. The S&P 500 saw a drop of over 1%, its most significant weekly decline in a month. Oil prices, having recently touched $90 a barrel, played a role in this downturn. This market unrest has led traders to pivot to more secure assets, with gold nearing the $2,000 an ounce threshold.
Against the backdrop of these geopolitical tensions, the market grapples with the repercussions of surging Treasury yields. The increased yields, coupled with concerns about sustained high interest rates, have instigated marked shifts in market dynamics. Loretta Mester, President of the Federal Reserve Bank of Cleveland, alluded to the U.S. central bank wrapping up its tightening campaign if the economy moves in the projected direction.
The corporate earnings season offers another layer to the financial narrative. From the S&P 500 companies that have reported results, 74% have surpassed profit expectations, a slight decrease compared to the previous year's average. Though individual stocks have responded to these earnings announcements, overarching concerns like the Middle East conflict and elevated Treasury yields have largely steered collective movement among the S&P 500 constituents.
On the corporate front, American Express (NYSE:AXP) witnessed an unexpected reduction in card volumes for Q3. Concurrently, Regions Financial Corp (NYSE:RF). voiced apprehensions about potential reductions in net interest income due to prevailing high rates. In the automotive sector, Detroit's leading carmakers, including Stellantis (STLA), General Motors (NYSE:GM), and Ford Motor (NYSE:F), have proposed a wage increase of 23%.
This article was originally published on Quiver Quantitative