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Stocks mixed as investors closely watched protests in China – Home prices dropped for third straight month – Roku stock dropped more than 75% year-to-date – New 6.89% I Bonds will beat 9.62%
Stocks on Tuesday are mixed as investors monitor the latest developments with protests in China, particularly if unrest leads to any policy changes, Yahoo Finance reported.
The S&P 500 declined by 0.04% in early trading, while the Dow Jones Industrial Average inched down by 0.2%. However, the technology-heavy Nasdaq Composite nudged upward as much as 0.06%.
Following days of gains, the US dollar weakened against several peers.
The benchmark 10-year U.S. Treasury climbed 0.0352, a yield of 3.737 percent.
Oil rose, with Brent crude climbing 2.6% to trade above $86 a barrel.
Signs of a cooling US housing market continue as prices for September slipped 1.2% from a month earlier, marking the third straight decline for the seasonally adjusted measure of prices in 20 large US cities, according to the S&P CoreLogic Case-Shiller index, Bloomberg/Yahoo reported.
Although prices are rising year-over-year, they are decreasing quickly, as a nationwide gauge increased 10.6% in September from the previous year, down from a nearly 13% gain in August.
Roku shares dropped as much as 4% in pre-market trading on Tuesday as analysts downgraded the stock. Roku stock is down more than 75% year-to-date, Yahoo Finance reported. The market previously had bullish expectations of Roku; however, the company appears to be ceding market share and has not become the critical platform for partners that investors had envisioned. Further, Roku has greater tech debt in its AdTech stack than envisioned. 2024 profitability targets for the company are “challenged,” according to Keybanc.
Investors rushed to purchase the recently expired Series I bond with a yield of 9.26%, crashing the treasury.gov site at the end of last month. Many investors were left frustrated at missing the opportunity of the high-yield bond.
But it turns out that they may be the lucky ones, as the new I bonds yielding 6.89% in the latest auction will earn more money in only four years than the higher rate, Yahoo finance reports. The reason is the 9.26% rate was guaranteed only for the first six months.
The new 6.89% rates will earn more because of two components: a guaranteed base rate and an adjustable inflation rate that changes with every new semi-annual auction.
The previous bonds had a base rate of 0%. The new bonds will have a base rate of 0.40%.
The new inflation rate of 6.49% means all those previous investors will receive only that rate of return. However, buyers of the new bonds will receive a composite rate which includes the base of 0.40%, giving them 6.89%.
