The futures were trading higher after a gut-wrenching day for the stock market, which was hammered in a big way for the worst trading day since back in March. All the major indexes finished the day lower, with the Nasdaq taking the biggest hit, closing down 1.87% at 13,059.47. The venerable S&P 500 was not far behind, closing down 1.37% at 4,229.45, while the Dow Jones industrials, which have lagged dramatically and are actually now negative for this year, closed at 33,002.48, down 1.29%.
While there is a plethora of reasons for the equity weakness, the surge higher in interest rates is the biggest tailwind for the risk-off move now. It has been reported that big hedge funds like Bill Ackman’s Pershing Square are shorting the long end of the Treasury market, and given the fact that Wall Street portfolio managers are copycats, it is a good bet others are using the same tactic. Ackman was quoted as saying he thinks the 30-year bond can trade to 5.5%.
Treasury yields soared again on Tuesday, especially on the longer maturities, while there actually was some muted buying on the very short maturities. The 10-year note finished the day at 4.80%, while the two-year paper was last seen at 5.15%. The aforementioned 30-year long bond closed the day at 4.92%. Yields are trading at their highest level since 2007. In addition, the 30-year fixed rate mortgage at 7.80% is the highest since 2000.
Brent and West Texas Intermediate crude were among the winners on Tuesday, after starting off the week and the quarter lower. Buyers took advantage of the dips and both benchmarks finished higher Tuesday, with Brent up 0.39% at $91.06 and WTI closing the session up 0.74% at $89.48. Natural gas also had a positive day closing at $2.94, up 3.49%.
The sell-off in gold continued forward for another session, as the bullion closed the day down another 0.40% with the December contract ended trading at $1,839.80. Ongoing dollar strength and the rise in interest rates were cited as major reasons for the ongoing weakness. Bitcoin closed modestly lower after Monday’s wild session, which had some huge back-and-forth swings. The cryptocurrency giant finished Tuesday down 0.47% at $27,374.30.
24/7 Wall St. reviews dozens of analyst research reports each weekday with a goal of finding fresh ideas for investors and traders alike. Some of these daily analyst calls cover stocks to buy. Other calls cover stocks to sell or avoid. Remember that no single analyst call should ever be used as a basis to buy or sell a stock. Consensus analyst target data is from Refinitiv.
These are the top analyst upgrades, downgrades and initiations seen on Wednesday, October 4, 2023.
Applied Digital Corp. (NASDAQ: APLD): Roth MKM started coverage with a Buy rating and a $14 target price. The consensus target is $15.42. The stock closed down 12% on Tuesday at $5.38 despite the initiation.
Camden Property Trust (NYSE: CPT): Wedbush initiated coverage with an Outperform rating and a $110 target price. That compares with a consensus target of $124.28 and Tuesday’s closing share price of $92.51.
CDW Corp. (NYSE: CDW): UBS started coverage with a Buy rating and a $237 target price. The consensus target is $216.67. The shares closed on Tuesday at $210.77.
Dycom Industries Inc. (NYSE: DY): BofA Securities initiated coverage with a Buy rating and a $120 target price. The consensus target is $125.88. The shares closed on Tuesday at $86.50.
Emerson Electric Co. (NYSE: EMR): Though UBS downgraded the stock to Neutral from Buy, its $97 target price rose to $104. The consensus target is $109.29.Tuesday’s close was at $94.85.
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