Rising Bond Yields, Oil Prices Highlight Final Week of the Quarter

Oil prices jumped above $95 per barrel briefly this week

Deputy Editor
Sep 29, 2023 at 11:28 AM
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Things got off to a rocky start Monday, with the Dow Jones Industrial Average (DJI) eyeing its fifth-straight skid, though the blue-chip index managed to turn things around by the end of the day. The week's theme solidified itself early on, however, as all eyes turned towards surging bond yields and a rising Cboe Volatility Index (VIX), with the S&P 500 Index (SPX) closing below 4,300 for the first time since June. A pop in crude prices also weighed on investor sentiment, though higher energy stocks helped the Nasdaq (IXIC) outperform.

Ultimately, the latter part of the week saw the major indices moving higher despite rising Treasury notes and oil prices, with the 10-year rate hitting a 15-year high, while black gold moved above $95 per barrel for the first time this year.  As of Friday afternoon, the Dow is pacing for its second consecutive weekly loss, while the Nasdaq and S&P 500 head for their fourth-straight weekly losses. For the month and quarter, all three indexes are headed for sharp deficits. 

Quick Tech Roundup

Amazon.com (AMZN) is getting ready to enter the artificial intelligence (AI) space, ramping up competition with Alphabet (GOOGL) and Microsoft (MSFT). Speaking of Microsoft, the blue-chip equity saw some of the highest weekly options volume over the last two weeks.

Elsewhere, Peloton (PTON) mounted a comeback after solidifying a five-year partnership with Lululemon Athletica (LULU). Fintech firm Workday (WDAY) nabbed a bevy of bear notes, with analysts also citing macroeconomic challenges. Finally, two electric vehicle (EV) stock made major moves, with ChargePoint (CHPT) popping on new bullish coverage, and Fisker (FSR) receiving praise for its "pure-play exposure" and upbeat delivery update. 

Stocks to Avoid/Buy

Travel concern Royal Caribbean Cruises (RCL) is facing tons of technical resistance and could soon move lower according to our analysts. Similarly, a historically bearish signal is flashing for mining stock Agnico Eagle Mines (AEM). 

Conversely, travel stock Delta Air Lines (DAL) could lift off thanks to help from a historically bullish, long-term moving average. In addition, FedEx (FDX) recently climbed near its annual high while its implied volatility (IV) sat at historically low levels -- a typically bullish sign. It's also worth keeping an eye on biotech stock Seagen (SGEN) and energy drink firm Celsius Holdings (CELH).

New Month and Quarter Ahead

Lastly, Senior V.P. of Research Todd Salamone breaks down what to expect in October, should the put magnet effect keep up momentum. Plus, Senior Quantitative Analyst Rocky White points towards more weakness ahead. Next week marks the beginning of a new month and quarter, and investors have a lot to track in the political landscape. What's more, quarterly reports from Carnival (CCL), Conagra (CAG), Constellation Brands (STZ), McCormick (MKC), and Levi Strauss (LEVI) will be highlighting the earnings docket.


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