Here are the key news for people who invest and want to know what’s happening in the market:
1. Treasury Yields are Rising
The interest rate on the 10-year Treasury bond has gone up quite a bit, going above 4.9% for the first time since 2007. It’s getting close to 5%. At the same time, stock prices dropped quickly, and none of the three major stock market measurements showed positive results at any point during the trading day.
However, there were a couple of good things in the market. After the regular trading hours, Netflix went up by 12%, and Procter & Gamble’s stock increased by 2.6% because they reported good earnings (more details on that later).
Looking forward, nervous investors will be paying attention to what Fed Chair Jerome Powell says when he speaks on Thursday. You can follow live updates on the market.
2. Tale of Two Earnings
During this earnings season, both Tesla and Netflix revealed their third-quarter results after trading hours on Wednesday. Tesla didn’t do so well this time, as it missed its earnings and revenue targets for the first time since July 2019.
They also talked about their upcoming Cybertruck, which they say is still on schedule to be released later this year, but CEO Elon Musk, warned not to expect too much in terms of financial performance for this vehicle. On the other hand, Netflix had a more positive outcome.
They reported a significant increase in the number of subscribers, thanks to their efforts to crack down on password sharing and greater interest in their ad-supported subscription option. Netflix, which is also exploring live sports content, announced that they would be raising the prices for their basic and premium subscriptions.
3. Y2K All Over Again
You might recall the recent high in the 10-year U.S. Treasury yield. Well, here’s some more bad news, especially for people looking to buy homes. The average interest rate for the widely-used 30-year fixed mortgage reached 8% on Wednesday morning, as reported by Mortgage News Daily. This is the highest it’s been since the middle of 2000.
Mortgage rates tend to go up in a somewhat similar way to the 10-year Treasury yield. As a result, there’s been a sharp drop in the demand for home loans. To give you some perspective, just two years ago, the average rate for a 30-year fixed mortgage was as low as 3%.
4. Humanitarian Aid
The United States and Egypt have agreed to create a pathway for humanitarian aid through the border of Cairo to help the Gaza Strip, which has been under siege due to the ongoing conflict between Israel and the Palestinian group Hamas.
This agreement was reached following a phone call between U.S. President Joe Biden and Egyptian President Abdel Fatah el-Sissi, following Biden’s visit to Israel, according to Egypt’s statement.
The Gaza Strip has been facing severe shortages of essential supplies, as Israel had cut off its fuel, food, electricity, and water access since last week. Initially, the agreement will allow 20 trucks to deliver aid to Gaza.
5. Here We Go Again
Will it require 15 rounds of voting once again? Representative Jim Jordan from Ohio has, for the second time in as many days, failed to become the House Speaker. This time, even fewer Republicans supported his bid compared to the first attempt. It took Kevin McCarthy, the former speaker who was removed from his position over two weeks ago, 15 rounds of voting to secure his position.
Jim Jordan has announced his intention to continue in the race, and sources familiar with the situation informed NBC News that more voting will occur on Thursday. In the meantime, there’s a growing movement in Congress to give temporary Speaker Patrick McHenry more authority so that the chamber can pass bills even if there isn’t a permanent speaker in place.
Key news highlights include rising Treasury yields, mixed earnings reports from Tesla and Netflix, a notable increase in mortgage rates, a humanitarian aid agreement between the United States and Egypt for the Gaza Strip, and ongoing voting for the House Speaker position in the U.S. House of Representatives. Please stay updated for further developments in these areas.