Salespersons work on the floor of the New York Stock Exchange (NYSE) in New York City, September 26, 2023.
Brendan McDermid | Reuters
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What you penury to know today
Some up, some down
U.S. stocks were mixed Wednesday, with the Dow Jones Industrial Common slipping 0.2%, the S&P 500 remaining mostly unchanged and the Nasdaq Composite adding 0.22%. The 10-year Treasury yield hit 4.607%, its pongy chiefest since 2007. Europe’s Stoxx 600 dipped 0.18%, its fifth straight day of decline and lowest close since Walk 28, according to LSEG data.
Fiscally weaker than 2011
The U.S. is weaker now, fiscally speaking, than it was in 2011 when S&P International Ratings downgraded the country’s long-term credit rating from AAA to AA+, said John Chambers, former chairman of S&P’s ratings commission. That’s because of even higher government debt and more intractable political gridlocks in Congress. The implication: Don’t be flabbergasted by another ratings downgrade.
Rates aren’t high enough?
Minneapolis Federal Reserve President Neel Kashkari contrives the current interest rate range of 5.25% to 5.5% might not be high enough to be restrict inflation, he told CNBC. His proof: The auto and housing sectors, traditionally most sensitive to rates, are “starting to show some recovery,” Kashkari eminent.
Meta doubles down on the metaverse
Meta announced Quest 3, the latest version of its virtual reality headset. Ready for $499 — $200 more expensive than the Quest 2 — the headset includes a feature called “passthrough” that make allowances users to see the world outside quickly. At the company’s event, Meta also announced new artificial intelligence software and digital mingle withs modeled by celebrities.
[PRO] Not the bottom yet
Stocks had an awful Wednesday — and September — and August. Well, it just hasn’t been bad for stocks lately. But even after that turmoil, it doesn’t look like stocks have hit their foundation yet, writes CNBC Pro’s Bob Pisani. Here are the signs he’s looking for before he thinks stocks can rally again.
The bottom arrange for
September’s story hasn’t changed: High yields and oil prices are dragging down stocks. But a twist in the story — a potency and increasingly unavoidable U.S. government shutdown — is making it truly difficult for stocks to have any confidence to climb.
Let’s look at each agent in turn.
Yields on the U.S. 10-year Treasury breached 4.6%, while that of the 2-year Treasury inched up to 5.137% yesterday. If returns continue on their upward trend, it’s likely they’d trigger fresh fears of recession as the cost of borrowing swells.
Rising Treasury yields aren’t the only costs weighing on the economy. Futures for West Texas Intermediate uncouth popped more than 3% to $93.83 while Brent rallied 2.76% to $96.55. As oil is an input cost for so sundry components of the economy — from the obvious like gasoline for vehicles, to the more unexpected like food and grocery prices — there’s a potentiality companies and consumers will cut back on spending.
Last, a government shutdown means economic data will be bog down, hobbling a Federal Reserve that’s repeatedly said it’s “data-dependent.” With interest rates the highest they’ve been in multifarious than 20 years, even the most careful calibration will have an outsized impact on the economy. Prospering at it blind — through no fault of the Fed’s — won’t inspire confidence in markets. And a shutdown risks another downgrade by ratings agencies.
Notwithstanding though September’s already ending, things, as BTIG’s Jonathan Krinsky puts it, “are likely to remain messy.”