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Stocks mixed amid rate hike concerns, Treasuries make decade-high rise, Mortgage demand falls as interest rates rise, Tesla stock falls on Investor Day, European inflation eases, Salesforce beats estimates
Stocks were mixed on Thursday as rising bond yields are stoking investor’s concerns of a potentially larger-than-expected interest rate hike from the Federal Reserve, CNBC reported.
In early morning trading, S&P 500 futures were down 18.5 points or -.47%, Dow Jones Industrial Average futures were up 52 points or +0.16%, and NASDAQ futures slid 86.5 points or -072%, Yahoo Finance reported.
In oil futures, WTI crude was up +0.23% and trading at $77.88 per barrel, while Brent crude was up +0.15% and trading at $84.38 a barrel as of 8:27 AM.
The 10-year U.S. Treasury rose above the 4% mark for the first time since early November, while the 2-year climbed to a level not seen in nearly a decade since mid-2006, CNBC reported.
The benchmark US 10-Year Treasury was up +0.0048 for a yield of 4.044%, while the 2-Year Treasury was up +0.019 to yield 4.908%, as of 8:25 AM EST.
Demand for new mortgages fell for the third straight week as interest rates increased, with applications to purchase a new home dropping 6% last week from the previous week, CNBC reported. The decreased demand comes as mortgage rates moved up half a percentage point higher in the past month. Mortgage application volume was 44% lower than the same week year-over-year and is now at a 28-year low.
Tesla hosted a 2023 Investor Day presentation in Austin, Texas, on Wednesday, with CEO Elon Musk taking the stage to share his “Master Plan 3,” CNBC reported. However, investors felt the plan was long on vision and short on specifics about new Tesla products and services, and as a result, Tesla stock fell more than 5 percent in after-hours trading. During the presentation, Musk vowed to halve EV production costs but kept the plans for the affordable cars under wraps, Reuters reported.
Musk also announced that Tesla’s next vehicle assembly plant will be in Mexico near Monterrey, CNN reported.
Salesforce shares jumped 16% after a better-than-expected forecast that beat Wall Street profit estimates, showing earnings of $1.68 per share, adjusted, vs. $1.36 per share as expected by analysts, CNBC reported. Revenue was $8.38 billion vs. $7.99 billion as expected by analysts, according to Refinitiv, a growth of 14% year-over-year in the fiscal fourth quarter, which ended on January 31.
This news comes as the company announced layoffs during the quarter and reported a loss of $98 million, or 10 cents per share, compared with a $28 million loss a year ago in the same quarter.
European stock markets recovered earlier losses on Thursday after key eurozone inflation data came in above expectations, with inflation easing to 8.5% from 8.6% a month earlier, CNBC reported. Nonetheless, the figure was above analysts’ and economists’ forecasts of 8.2%, leading to expectations of an interest rate hike from the European Central Bank. The pan-European Stoxx 600 index gained 0.01%, and construction stocks climbed 1%.
