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Stocks Drop, Bond Yields Fall, Oil Prices Stable

The bearish attitude of the stock market has investors on edge as bond yields plunge and crude oil prices hold steady. It’s a volatile time in the financial world, and experts are keeping a close eye on the shifting economic landscape. Will there be a rebound, or are we in for a bumpy ride? Only time will tell.

On Tuesday, Wall Street had a rough ride as the bears came to town. Numbers showed a slowdown in hiring and a decrease in factory orders, causing the S&P 500 and Dow Jones to take a dip of nearly 0.6%.

The tech-focused Nasdaq Composite didn’t escape unscathed either, experiencing a 0.5% slide. Despite the stock market hiccup, oil prices managed to keep their cool.

Increasing Oil Prices

Traders held their breath as the price of oil tiptoed around the $80 mark, like a wrestler sizing up their opponent.

While oil had surged ahead on Monday, it returned to familiar territory as news broke that OPEC+ had agreed to cut production by a hefty 1.16 million barrels per day. 

Despite the temptation to panic, oil prices stayed the course, and the market held its breath for what would come next.

Job Data Update

The economic landscape in the US saw some changes with a surprising drop in job vacancies, from 10.5 million to 9.93 million.

But it’s not all bad news as there was an increase in individuals choosing to leave their jobs voluntarily and a decrease in layoffs. To add to the mix, factory orders also saw a small drop of 0.3%.

As the number of unfilled job opportunities decreases, certain economic experts see it as a step towards achieving the Federal Reserve’s desired balance between the number of job seekers and job openings. It’s a unique perspective that suggests a changing landscape in the job market.

The Fed is keeping a watchful eye on the economy, and while they may be happy with recent data, they’re still waiting for Friday’s employment report to make their move.

They’re determined to keep pushing for a stronger job market and keeping inflation under control by raising interest rates in upcoming meetings.

Wall Street’s attention is fixed on Friday’s upcoming jobs report, which has the potential to raise eyebrows on Main Street. The expectations are that the report will reveal 240,000 jobs were added in the past month, which falls short of the average of 343,000 jobs added over the last half-year.

The analyst’s observation is noteworthy, affirming the significance of this report for investors and policymakers alike.

Declining Bond Yields

The numbers are in and it’s causing a stir in the financial world – bond yields have taken a downward turn! Investors and economists alike are analyzing the latest data prints and one thing is clear, the yield on the 10-year U.S. Treasury note dipped to 3.35% on Tuesday. It’s a fascinating development that has everyone on the edge of their seats wondering what will come next.

On Tuesday, the stock market reacted to Monday’s upward trend, with the Dow leading the way and the S&P 500 staying strong. However, the Nasdaq 100 seemed to suffer a bit, taking a dip.

Additionally, the bond yields were down and manufacturing activity also hit a low point, indicating that the future may hold even more dreary news. Investors should prepare for a bumpy ride as credit conditions continue to tighten.

On Monday, James Bullard, President of the Federal Reserve Bank of St. Louis, talked about the strength of the labor market and how it could help the Fed fight inflation.

He also had some concerns about OPEC’s decision to cut output and how it would affect inflation due to the rise in oil prices. But, his optimistic tone suggested that the Fed still has some tricks up its sleeve to keep inflation in check.

Federal Reserve Governor Lisa Cook acknowledges the labor market’s ongoing tightness and the potential inflation that could arise from it. Despite this, wage gains have slowed down considerably.

The Federal Reserve remains steadfast in its focus on inflation, even amidst recent banking unrest that has begun to show signs of subsiding.

With the Fed rate looking steady for the next meeting, there is a small climb of 1.6 basis points to 4.973%. However, the real excitement lies in the possibility of a 25 basis-point hike next month, with a 63% chance priced in. Keep your eyes peeled for any potential changes!

The aftermath of Silicon Valley Bank and Signature Bank’s failures is still causing ripples in the banking industry, showing that the banking troubles are far from resolved.

Axel Lehmann, chairman of Credit Suisse, issued a belated apology for the bank’s inability to rescue itself from the financial brink after siphoning deposits for months.

Despite this, the outlook doesn’t look promising for equities with the current climate, as bank collapses are causing instability. There are fears that the recent oil disaster and a decline in growth could cause the stock market to plummet back to its dismal levels of 2022.

Investors witnessed a rollercoaster of single-stock moves that left some stocks spiralling down on Tuesday. AMC Entertainment Holdings (AMC) saw its shares plunge after a settlement that allowed the company to convert APE preferred shares into common AMC stock.

Meanwhile, Virgin Orbit Holdings, Inc. (VORB) took a nosedive after filing for bankruptcy and laying off a staggering 85% of its staff in March., Inc. (AI) had a rough day at the market as well, with shares dropping 26% after Kerrisdale Capital – a firm with a short position in AI stock – made moves that spooked the market.

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  • Phyllis Wangui

    Phyllis Wangui is a Financial Analyst and News Editor with qualifications in accounting and economics. She has over 20 years of banking and accounting experience, during which she has gained extensive knowledge of the forex, stock news, stock market, forex analysis, cryptos and foreign exchange industries. Phyllis is an avid commentator on these topics and loves to share her insights with others through financial publications and social media platforms.

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