Market Roundup: Tesla's Surge Sparks Mixed Trading as Yields Retreat

Image Souce: Krish Capital Pty Ltd

Index Update

US stocks closed mixed as markets reacted to earnings and a dip in bond yields. The S&P 500 rose 0.2%, snapping a three-day losing streak, while the Nasdaq climbed 0.8%. The Dow fell 120 points, impacted by declines in IBM, Honeywell, and Boeing. Also, Treasury yields pulled back after recent rises

Market Movers

Tesla soared 21.9%, adding over $100B in market value after strong Q3 profits and a bullish sales forecast! UPS gained 5.3% on solid earnings, and ServiceNow jumped 5.4% thanks to strong subscription revenue. On the downside, Boeing slipped 1.2% as its union rejected a labor deal, Honeywell dropped 5.1%, and IBM fell 6.2% due to revenue misses.

Macro Update

The Bank of Russia has raised its key interest rate by 200bps to 21%, surpassing market expectations of a 100bps hike. This marks the highest rate on record, driven by soaring inflation and economic challenges amid ongoing sanctions. A December increase seems likely as inflation continues to outpace projections.

US Manufacturing PMI edged up to 47.8 in October from a 15-month low of 47.3 in September, signaling a continued but moderating decline in business conditions. New orders and stock levels remain a concern, while production and employment fell at slower rates.

On a brighter note, the S&P Global US Composite PMI rose to 54.3, indicating solid growth, driven by a strong service sector (PMI at 55.3). Input costs are cooling, reflecting lower fuel prices and competitive pressures. Confidence is improving as businesses look ahead to a post-election landscape

Commodities Update

WTI crude oil futures climbed to $70.5/bbl as geopolitical tensions in the Middle East keep investors on edge about supply disruptions. Meanwhile, Eurozone business activity stagnates, raising demand concerns, especially from China as traders await stimulus clarity. On the bright side, US refinery processing hits a 6-year high! Silver steadied around $33.5/oz after recent declines, while gold eased to just below $2,730/oz as a strong dollar and rising Treasury yields weigh on its appeal. Geopolitical tensions and election uncertainties keep markets volatile.

Futures Update

US stock futures are hovering around the flatline as we head into Friday. After a strong session, the S&P 500 rose 0.2% and the Nasdaq advanced 0.8%, fueled by a remarkable 21.9% surge in Tesla’s stock, adding over $140 billion in market cap!

Additionally, the retreat of the 10-year US Treasury yield from a three-month high is providing a boost to equity sentiment, as lower yields often support stock prices.

Market watchers will be keen to see if this momentum continues!

After a significant decline on Wednesday, the major U.S. stock indexes displayed mixed results during Thursday's trading session. The S&P 500 increased by 12.44 points, or 0.21%, closing at 5,809.87. The Nasdaq saw a more substantial rise, climbing 138.83 points, or 0.8%, to finish at 18,415.49, largely driven by a remarkable 21.9% surge in Tesla (TSLA) shares. From a technical analysis standpoint, the S&P 500 seems to be developing a rising wedge pattern, suggesting potential caution due to its swift price movements along an upward trendline. Additionally, the 14-period RSI indicates a bearish divergence relative to the price action, hinting at a negative outlook. Traders should keep a close eye on critical price levels, with resistance noted at 5,840 and support identified around 5,700.