Stocks are under a bit of pressure along with bonds in the early going. Gold, silver, and crude oil are mostly flat, while the dollar is up a smidge.
On the news front...
President Biden will travel to Israel tomorrow as part of a demonstration of solidarity, while a contingent of 2,000 US Marines and sailors are steaming to the eastern Mediterranean to serve as a rapid response force should Americans need to be evacuated. Israel is continuing to bombard targets in Gaza from the air, prompting Iran to warn that proxy forces like Hezbollah could open “multiple fronts” against the country in retaliation for Palestinian casualties.
Could stronger Q3 earnings be the catalyst for the proverbial year-end rally? That’s what some investors argue in this Bloomberg piece, including MoneyShow contributor Thomas Hayes of Great Hill Capital. They also note that valuations are reasonable, at least if you use the equal-weight S&P 500 index versus the capitalization-weighted version that’s influenced by a handful of more-expensive big cap tech stocks.
Bank of America (BAC)
Bank of America (BAC) may help markets a bit as its Q3 profit rose 10% year-over-year. That said, the mega-bank is suffering from an ill-timed, aggressive foray into low-yielding, longer-term Treasury and mortgage bonds. They’re racking up large losses on paper thanks to the surge in interest rates we’ve seen. Charge-offs are also rising because more borrowers are have trouble paying back loans.
In economic news, September retail sales rose 0.7% on the headline and 0.6% on an ex-autos basis. That easily beat the +0.3% and +0.2% consensus forecasts and put upward pressure on interest rates in the early going.
Finally, we just got even more proof of how it can pay to invest in things like collectibles rather than just stocks and bonds! A model X-wing spaceship sold for a whopping $3.1 million at an estate sale, according to sponsor Heritage Auctions. The Rebel Alliance starfighter was used in the filming of the original Star Wars movie in 1977. It was part of a collection accumulated by long-term Hollywood effects artist Greg Jein, who passed away last year.