A similar type of short-time mood, which are usually created when any upticks are sold on a dime, have become a peculiar characteristic of the overall Wall Street behaviour, which was additionally nursed by extremal highs of the U.S. Treasury yields during the fall of the chaotic 2008. And therefore, Wall Street yielded to circumstances.
In addition to unfavourable associations with the Great Financial Crisis of 2008, the mathematical fact that a fixed income of ten-year public bonds have already stepped into the 4.15% area, may encourage the crowd of private investors, as well as conservative managers of pension funds and even the sharks from large banking groups, to give priority to the most reliable tools, such as, government-backed debt. The yields of five-year Treasuries exceeded 4.35% by the end of the week. The Greenback continued its all-out blitz on the currency market.
The soaring return from bond investments is overshadowing some positive momentum created by better-than-expected earnings of the leading American banks as financial institutions represent the only sector which is able to partially offset other business risks. The majority of U.S. banks have already reported their Q3 financial results above expectations, which immediately helped stock indices.
But this is certainly not enough to keep the S&P 500 broad market index afloat. Other companies form the consumer segment or Big Techs are losing upside momentum. Procter & Gamble, a consumer goods giant, finally decided to cut its full-year sales forecast, due to higher pricing to offset a potentially lower demand for its products. Apple Inc is reportedly cutting production of its new iPhone 14 Plus within several weeks.
Tesla shares joined the red-coloured club amid disappointing earnings results. Its up-to-date report referred to significant delivery issues in the final weeks of the quarter, so that the transportation capacity became more expensive and it was difficult to maintain strong operating margins. Tesla management continues to say that battery supply chain constraints could be the main limiting factor for further growth of this market in the medium and long term, which is definitely not the worst case scenario compared to low demand. Esperio analyst believe that the latter problem may be a much more powerful inhibitor for less innovative companies than Apple and Tesla in the midst of raging inflation storms.
Alex Boltyan, senior analyst of Esperio company