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Insights to Prepare for Friday's Stock Market Opening

Latest Business News

Key News Items for Investors to Start Their Trading Day

The stock market has faced a challenging start to October, with the Dow heading for its third consecutive negative week and the S&P 500 on track for five consecutive weeks of losses. The Nasdaq, meanwhile, is entering Friday with a flat performance for the week. As investors prepare for the upcoming earnings season, which includes reports from Delta Air Lines and major banks like JPMorgan Chase, there are two significant factors on their minds: rocketing Treasury yields and the release of the September jobs report.

Treasury Yields and the September Jobs Report

Treasury yields have surged this week, reflecting the continued strength of the economy, particularly after a surprising increase in job openings. Economists polled by Dow Jones estimate that the economy added 170,000 jobs in September, slightly lower than the 187,000 jobs added in August. A positive jobs report could potentially increase the likelihood of the Federal Reserve raising its benchmark interest rate. Investors will be closely watching the release of the jobs report at 8:30 a.m. ET.

The NBA's Impact on the Future of Media

According to CNBC's Alex Sherman, the future of the media industry could hinge on the NBA. The league's rights deals with Disney (owner of ESPN and ABC) and Warner Bros. Discovery (home of TNT) will expire after the 2024-25 season. However, potential media partners, including Google's YouTube TV and even Netflix, are already positioning themselves to outmaneuver rivals. The media industry is currently at a crossroads, with streaming services struggling to turn profits while expensive sports rights remain a crucial factor in preventing a complete cord-cutting wipeout. The NBA will begin negotiations with potential partners beyond Disney and Warner Bros. in April.

Elon Musk and the Securities and Exchange Commission (SEC)

Elon Musk, CEO of Tesla, is once again in the spotlight as the Securities and Exchange Commission (SEC) takes issue with his failure to comply with a subpoena to testify in their probe into potential securities fraud related to his Twitter deal to buy X, formerly known as Twitter. The SEC has sued Musk to compel his testimony, marking another chapter in their contentious history. Musk previously settled a fraud probe five years ago but has since attempted to challenge the settlement without success. In response to the recent news, Musk called for a "comprehensive overhaul" of the SEC and other agencies.

General Motors Faces Challenges

General Motors (GM) experienced a decline in its shares on Thursday due to ongoing disruptions caused by the United Auto Workers union strike and a report indicating that 20 million of the company's vehicles may have a potentially dangerous airbag part. GM maintains that the evidence and data presented by the National Highway Traffic Safety Administration (NHTSA) do not warrant additional recalls beyond those already initiated. The stock fell below $30 for the first time in over three years before staging a partial recovery. Other auto stocks also faced difficulties, with EV truck maker Rivian falling over 20% after announcing plans to raise $1.5 billion, and EV company Lucid experiencing a 7% decline after launching a more affordable version of its luxury Air sedan. In summary, investors should closely monitor the stock market's performance as the week concludes. The challenges faced by major indices, the impact of Treasury yields and the September jobs report, the future of media in relation to the NBA, developments involving Elon Musk and the SEC, as well as the obstacles confronting General Motors, all contribute to the dynamic landscape of the current trading day.

Key Market Trends Impacting New Business Formation

The current volatility in the stock market, marked by the Dow's potential third consecutive negative week and the S&P 500's five weeks of losses, poses significant challenges and opportunities for new business formation. As the Nasdaq enters Friday with a flat week, investors are bracing for an eventful earnings season, with reports from Delta Air Lines and major banks like JPMorgan Chase on the horizon.

Implications of Rising Treasury Yields and Jobs Report

The surge in Treasury yields and the anticipation of the September jobs report are key factors influencing investor sentiment. The economy's continued strength, reflected in the rise in job openings, could potentially lead to an increase in the Federal Reserve's benchmark interest rate. This scenario could impact new businesses, particularly in sectors sensitive to interest rates.

NBA's Role in Media Industry Evolution

The media industry's future could be significantly influenced by the NBA, as the expiration of the league's rights deals with Disney and Warner Bros. Discovery approaches. Potential media partners, including Google's YouTube TV and Netflix, are positioning themselves for a possible shift. This crossroads moment for the media industry, with streaming services struggling for profitability and sports rights preventing a total cord-cutting wipeout, could create unique opportunities for new entrants in the media and streaming industry.

Elon Musk's SEC Woes and Impact on Tech Sector

Elon Musk's ongoing tussle with the SEC, stemming from his failure to comply with a subpoena related to potential securities fraud, underscores the regulatory challenges faced by businesses in the tech sector. Musk's call for a "comprehensive overhaul" of the SEC and other agencies could spark discussions about regulatory reforms that could impact new tech startups.

Auto Industry Challenges

General Motors' recent challenges, from union strikes to safety concerns, highlight the complexities of the auto industry. The decline in auto stocks, including Rivian and Lucid, following significant announcements, underscores the sector's volatility. These developments could influence the strategies of new businesses entering the auto and EV sectors. Overall, the dynamic landscape of the current trading day, marked by major indices' challenges, rising Treasury yields, the impending jobs report, shifts in the media industry, regulatory issues in the tech sector, and volatility in the auto industry, offers both challenges and opportunities for new business formation.
Story First Published at: https://www.cnbc.com/2023/10/06/5-things-to-know-before-the-stock-market-opens-friday-october-6.html
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