Wall Street Breakfast: What Moved Markets

The S&P 500 (SP500) retreated 2.53% for the week to close at 4,117.37 points, posting losses in four out of five sessions. The benchmark gauge's slide pushed it into correction territory, with Friday's closing price marking a more-than-10% drop from the S&P's 52-week closing high of 4,588.96 points notched on July 31. That comes just two days after the Nasdaq Composite (COMP.IND) also entered correction territory. The main driver of Wall Street's retreat this week was a slide in megacap technology stocks. Ten of the 11 S&P sectors ended in the red. Defensive name Utilities (XLU) was the only gainer. The losers were led by outsized declines of more than 6% and 5% in Energy (XLE) and Communication Services (XLC), respectively. Technology (XLK) shed nearly 2%.

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Top News Shutterstock The S&P 500 (SP500) retreated 2.53% for the week to close at 4,117.37 points, posting losses in four out of five sessions. The benchmark gauge's slide pushed it into correction territory, with Friday's closing price marking a more-than-10% drop from the S&P's 52-week closing high of 4,588.96 points notched on July 31. That comes just two days after the Nasdaq Composite (COMP.IND) also entered correction territory. The main driver of Wall Street's retreat this week was a slide in megacap technology stocks. Ten of the 11 S&P sectors ended in the red. Defensive name Utilities (XLU) was the only gainer. The losers were led by outsized declines of more than 6% and 5% in Energy (XLE) and Communication Services (XLC), respectively. Technology (XLK) shed nearly 2%. M&A Merger Monday Merger Monday rang in with two major multibillion-dollar deals. Chevron (CVX) will acquire Hess Corp. (HES) in a $53B all-stock deal to expand its DJ and Permian Basin operations. The news comes less than two weeks after Exxon Mobil (XOM) announced its $60B acquisition of Pioneer Natural Resources (PXD). The deal pushed Chevron's stock 3% lower, while Hess rose over 2% at the time of the announcement. Separately, Roche (OTCQX:RHHBY) will buy Telavant Holdings from Roivant Sciences (ROIV) and Pfizer (PFE) for $7.1B upfront. The deal includes the development and commercialization rights in the U.S. and Japan for RVT-3101, the new therapy that is being tested to treat inflammatory bowel disease. The news sent Roivant soaring 15% before the bell. (143 comments)       Bonds Bonds and Bills Wild swings continue to envelop the bond market, with two notable names in the industry making fresh calls on the sector. Bill Ackman and Bill Gross' statements came just hours apart from each other. The yield on the 10-year Treasury (US10Y) jumped to 5% on Monday, while the 30-year Treasury (US30Y) rose to a high of 5.15% in just under two months. "The Treasury yield curve has been inverted since 2022, signaling a potential economic downturn, and analytics suggest the ballooning budget deficit is hiding weakness in the economy," said SA analyst Adam Vincze. Meanwhile, Bitcoin (BTC-USD) bulls returned this week, with the cryptocurrency briefly touching $35K on Tuesday, as traders continued to bet on the potential approval of the first U.S. ETF that invests directly in the token. (60 comments)       Tech Tech earnings Tesla down, Netflix up, Google down, Microsoft up, Meta down... Amazon up. The tech earnings season brought on a mixed bag of results, sending each company's shares in opposite directions. Meta Platforms (META) initially rose 4% in AH trading on Wednesday, with revenue, profits and users all topping forecasts. But the sentiment didn't last long as the stock fell nearly 4% by the end of Meta's earnings call, which forecast "greater uncertainty" and "volatility." Note that the tech-focused Nasdaq Composite Index (COMP.IND) fell into correction territory on Thursday. In other news, Meta (META) was sued by California and more than two dozen U.S. states, which allege that Instagram and Facebook exploit young people for profit. Snap (SNAP), TikTok and Google (GOOG, GOOGL) are all facing hundreds of similar lawsuits. (172 comments)       Economy GDP reaction The first reading of U.S. GDP for Q3 blew every analyst estimate out of the water, especially when most economists had expected the country to be mired in a recession by this time in 2023. The American economy expanded at an annualized rate of 4.9% to reflect the strongest quarter since Q4 2021, exceeding the +4.2% expected and powering up from the 2.1% advance in Q2. The increase was driven by strong consumer spending, among other variables, with many quick to comment on what the fresh data might mean for the Federal Reserve: "Another interest rate hike by year-end is a sure thing," wrote SA Investing Group Leader Value Digger. "I think you're getting ahead of yourself," countered 2MuchDebt. "Nov. Fed meeting is currently a 100% chance of no hike and Dec. Fed meeting is currently a 75.5% chance of no hike according to Fed Fund futures." (167 comments)       Automotive Speed bumps After suspending operations in San Francisco, General Motors' (GM) Cruise self-driving vehicle unit is pausing the operations of its entire autonomous vehicle network. Things started to spiral after the California DMV froze Cruise's permits after an Oct. 2 incident in which one of the company's AVs was involved in a hit-and-run. "The most important thing for us right now is to take steps to rebuild public trust," Cruise said in a statement. "In that spirit, we have decided to proactively pause driverless operations while we take time to examine our processes, systems, and tools." Besides San Fran, Cruise has operations in Austin, Dallas, Houston, Phoenix and Miami. (7 comments)       Weekly Movement U.S. Indices Dow -2.1% to 32,418. S&P 500 -2.5% to 4,117. Nasdaq -2.6% to 12,643. Russell 2000 -2.6% to 1,637. CBOE Volatility Index -2.% to 21.27. S&P 500 Sectors Consumer Staples -1%. Utilities +1.2%. Financials -2.4%. Telecom -6.3%. Healthcare -3.9%. Industrials -2.3%. Information Technology -1.7%. Materials -0.5%. Energy -6.2%. Consumer Discretionary -1.1%. Real Estate -1.2%. World Indices London -1.5% to 7,291. France -0.2% to 6,800. Germany -0.8% to 14,687. Japan -0.9% to 30,992. China +1.2% to 3,018. Hong Kong +1.3% to 17,400. India -2.5% to 63,783. Commodities and Bonds Crude Oil WTI -4.1% to $85.16/bbl. Gold +1.1% to $2,016.3/oz. Natural Gas +18.7% to 3.44. Ten-Year Bond Yield -0.2 bps to 4.845. Forex and Cryptos EUR/USD -0.25%. USD/JPY -0.13%. GBP/USD -0.3%. Bitcoin +13.9%. Litecoin +4.8%. Ethereum +9.8%. XRP +4.5%. Top S&P 500 Gainers Willis Towers Watson Public Limited Company (WTW) +11%. Rollins (ROL) +9%. Raytheon Technologies (RTX) +9%. Capital One Financial (COF) +8%. NextEra Energy (NEE) +8%. Top S&P 500 Losers Align Technology (ALGN) -29%. Whirlpool (WHR) -21%. Hasbro (HAS) -18%. Enphase Energy (ENPH) -17%. FMC Corporation (FMC) -15%. Where will the markets be headed next week? Current trends and ideas? Add your thoughts to the comments section. Seeking Alpha's Wall Street Breakfast Podcast Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day.
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