MARKETS TODAY Oct 21 (Vica Partners) – The S&P 500 up 0.52% as of 11.22 a.m. Eastern. The Dow Jones Industrial Average up 217 points, or 0.72%, to 30,552. The tech based Nasdaq up 0.05%.
Stocks opened lower this morning and recovered in the late morning session, the 10-year Treasury continues to move higher with a yield at 4.242%. U.S. Dollar Index (DXY) up to $113.10. Oil prices flat with Brent crude $92.46, +0.09%, and US West Texas Intermediate $84.24, -0.32%.
Companies continue to report mixed third quarter earnings
Schlumberger (SLB) earnings top estimates this morning, earnings grew 75% to 63 cents per share while revenue increased 10% to $7.5 billion. Analysts expected revenue to increase 22% to $7.1 billion
The company expects full-year revenue of at least $27 billion. In Q1, the company increased its revenue by 14% to $5.9 billion. Its EPS jumped 62% to 34 cents. SLB is expecting year-over-year revenue growth of around 14% and adjusted EBITDA margins at least 200 basis points higher than Q4 2021.
The company is one of the world’s largest providers of offshore drilling services. It also provides technology for well drilling, production, and oil and gas processing.
Other important earning today
- Verizon Communications Inc (VZ) reported 23% fall in third-quarter profit and missed market estimates for wireless subscriber additions, as customers opted out for cheaper plans.
- American Express (AXP) earnings beat expectations, company reaffirms full-year revenue forecast however the company raised its provisions for credit losses amid uncertain economic outlook. The stock is currently down -6.78% on the provisional news.
Fed set to raise rates by three-quarters of a point
Expect that Fed will raise rates by three-quarters of a point at the end of its meeting on Nov. 2. Try to ignore the headlines as the move has already been priced into the market and any daily pricing changes will bounce back.
No surprise that U.S. existing home sales dropped in September while mortgage rates continue to rise
Sales of existing U.S. homes dropped off again for an eighth straight month in September. The 30-year fixed mortgage rate averaged 6.94% in the latest week, the highest in 20 years, up from 6.92% in the prior week, according to data from mortgage finance agency Freddie Mac.
Existing home sales fell 1.5% to a seasonally adjusted annual rate of 4.71 million units last month, the lowest sales level since September 2012. Economists had forecast sales would decrease to a rate of 4.70 million units.
IMPORTANT TO READ as low interest rates will return
The Federal Reserve will be forced to cut interest rates in 2023 if a deep recession occurs as the cure for inflation is not just raising rates. As we see a significant policy change coming by late Spring of 2023 with Powell reversing direction… just look at 12 month declining lower commodity pricing and new reports on rising retail inventories.
Yearly commodity prices will rise “as there are production shortages” which include: iron, copper and crude oil. Upside will continue!
Solid strategy for these type of market days ….
We suggest investing in companies that have solid balance sheets and offer dividends.
Best to continue to cost average buy value stocks and resist most all tech and growth stocks where companies have negative margins. Our Teams forecast a negative 5-7% valuation correction for speculative stocks. DON’T try to time market lows!
*** Watch for our emerging 90 day Sector and leading company watchlist’s
*** Look to Index ETF’s like SPY to outperform stocks and most managed funds
*** Energy is the Top Performing Sector in S&P 500 Year to Date and will regain strength shortly
*** Banks will profit from higher interest rates on new loans and other products
