Here are the key news highlights that investors should be aware of as they begin their trading day:
1. A Slow Start
Despite high hopes of leaving behind the losses of September, the first week of October has not proven to be any more favorable for investors. The Dow is currently set to conclude its third consecutive negative week, and the broader S&P 500 is on track for its fifth consecutive week of losses. The Nasdaq, on the other hand, is relatively stable as it enters Friday.
Investors are particularly concerned about the upcoming earnings season, which is set to kick off in earnest next week, featuring notable companies like Delta Air Lines and major banks, including JPMorgan Chase.
However, two primary factors are dominating investors’ thoughts at the moment: the surging Treasury yields and the recently released September jobs report (more details on this below). Be sure to stay tuned for live updates on the market.
2. All Eyes on Jobs
Will today bring another scenario where positive news for American workers translates to negative news for the stock market? Treasury yields surge upwards this week, driven by the ongoing robust performance of the economy, especially following an unexpected uptick in job openings. Now, the focus shifts to the release of the September jobs report.
According to economists surveyed by Dow Jones, it is anticipated that the economy added 170,000 jobs last month, marking a slight decline from the 187,000 jobs added in August.
If the job figures exceed expectations, there is a possibility that the Federal Reserve may consider raising its benchmark interest rate.
3. Streaming Slam Dunk?
The future landscape of the media industry may hinge significantly on the NBA. The NBA’s current broadcasting agreements with Disney (the parent company of ESPN and ABC) and Warner Bros.
Discovery (the home of TNT) is set to expire after the 2024-25 season. Interestingly, potential media collaborators, including Google’s YouTube TV and, somewhat surprisingly, Netflix, are already positioning themselves strategically to outmaneuver competitors.
The media sector currently finds itself at a critical juncture, with streaming services grappling to generate profits, while the costly rights to sports content remain a key factor preventing the complete erosion of traditional cable bundles due to cord-cutting. In April, the NBA will commence negotiations with potential partners beyond Disney and Warner Bros.
4. SEC and Musk War Continues
Their actions are far from over. The Securities and Exchange Commission (SEC) is displeased that Elon Musk chose to disregard a subpoena to testify last month in the SEC’s investigation into potential securities fraud concerning the billionaire CEO of Tesla and his 2022 acquisition of Twitter, now rebranded as X.
Consequently, the regulatory body filed a lawsuit against him to compel his testimony. The SEC and Musk have a contentious and lengthy history, marked by a prior settlement five years ago in a fraud investigation related to Musk’s tweet about taking Tesla private.
However, since then, Musk has made unsuccessful attempts to undermine this settlement. In response to the recent development, Musk called for a “comprehensive overhaul” of the SEC and other regulatory agencies on Thursday.
5. Grinding Gears
General Motors, witnessed a decline in its stock value on Thursday, grappling with ongoing challenges stemming from the United Auto Workers union’s strike and a concerning report revealing that approximately 20 million of the company’s vehicles may have a potentially hazardous airbag component.
In response, GM stated that it “believes the evidence and data presented by NHTSA at this time does not provide a basis for any recall” beyond those it has already initiated. The stock price dipped below $30 for the first time in over three years before experiencing a partial recovery. It was a challenging day for other automotive companies as well.
Electric vehicle (EV) truck manufacturer Rivian saw its stock fall by over 20% after announcing plans to raise $1.5 billion, while fellow EV firm Lucid registered a 7% decline following the introduction of a more affordable variant of its luxury Air sedan.
Summary
The first week of October brings investor concerns as stocks decline. The focus is on surging Treasury yields and the forthcoming September jobs report, which may influence Federal Reserve decisions. The media industry watches NBA broadcasting rights, with Netflix and YouTube TV vying for position. SEC’s battle with Elon Musk continues, and General Motors faces challenges. Markets remain unpredictable.
