Google and Microsoft earnings last night may well serve to soften equity prices today–at least the Nasdaq and the S&P500. Both big tech firms missing the earnings forecast and it is almost a certainty that Meta Platforms (Facebook) will miss tonight. Of course this is not my area of interest on a company level basis–but it does serve to show a potentially weakening macro environment. Plus it appears that some of these big tech firms are going to have to have layoffs – certainly something they have not dealt with in recent years (if ever).
The 10 year treasury yield is off 4 basis points this morning at 4.06%. Will rates break back below 4%? Have rates peaked? It is possible, but I doubt it—but no one knows. The ‘smart people’ have posited a peak for the last 50 basis points—completely wrong of course. Income securities barely moved on yesterdays interest rate drop–we need this area of rates to hold for a week or more to build investor confidence.
Yesterday we had house price news with both Case Shiller and FHFA showing softening house prices–although far from falling off a cliff. Consumer confidence came in soft as well with a reading of 102.5 versus a forecast of 106.3.
Today we have new home sales being announced with a forecast of 593,000 which would be around 15% below a year ago. If we were to see a large deviation on this number it could move interest rates in either direction.