U.S. equities are mixed in restrained trading, with investors awaiting the next two pieces to complete the October inflation picture. The economic docket, while empty today, will offer the Producer Price Index (PPI) and the Import Price Index beginning tomorrow. The releases will come as last week's cooler-than-expected Consumer Price Index (CPI) appeared to soothe concerns about how aggressive the Fed will need to remain. Treasury yields are higher, and the U.S. dollar is trading solidly to the upside, paring some of last week's tumble. Crude oil prices are little changed, and gold has reversed to the upside. Equity news is light, with Tyson Foods missing on the bottom line, but reporting record sales for the year and upping its quarterly dividend. Stocks in Asia were mixed, with Hong Kong leading to the upside on a jump in property stocks, while markets in Europe are mostly higher in cautious trading.
At 10:50 a.m. ET, the Dow Jones Industrial Average is up 0.2%, while the S&P 500 Index is nearly unchanged, and the Nasdaq Composite is declining 0.5%. WTI crude oil is nudging $0.11 lower to $88.85 per barrel, and Brent crude oil is decreasing $0.07 at $95.92 per barrel. The gold spot price is trading $4.60 higher to $1,774.00 per ounce, and the Dollar Index is rising 0.6% to 106.93.
Tyson Foods Inc. (TSN $68) reported adjusted fiscal Q4 earnings-per-share (EPS) of $1.63, short of the $1.70 FactSet estimate, with revenues rising 7.2% year-over-year (y/y) to $13.74 billion, above the Street's forecast of $13.49 billion. The protein producer said it experienced record sales and earnings for the full year, citing a diverse portfolio and continued consumer demand for protein products. TSN said it saw historically strong operations in its beef segment and an improvement in its chicken unit, while gaining market share in foodservice and retail business lines, which include Jimmy Dean, Ballpark and Hillshire Farm. TSN also upped its quarterly dividend by 4.3% to $0.48 per share. TSN is trading higher.
Stocks rallied last week in the wake of a favorable consumer price inflation report, while Q3 earnings season is in the last innings with several high-profile retailers set to add the finishing touches. Schwab's Chief Investment Strategist Liz Ann Sonders discusses in her article, Disappearing Act: Earnings, how earnings weakness is starting to materialize across a broader swath of industries, with hits coming from a strong dollar, weaker demand, and aggressive monetary policy.
Additionally, Schwab's Chief Global Investment Strategist Jeffrey Kleintop, CFA, notes in his article, The End of Earnings Growth?, how the earnings outlook is dimming as the economy slows, which could result in cuts to earnings forecasts and downside for stocks. However, Jeff points out that U.K. earnings have been a surprising outperformer.
Treasury yield higher amid dormant economic calendar
Treasury yields are higher with the economic calendar void of any reports to provide any sway, with the yield on the 2-year note up 10 basis point (bps) at 4.42%, the yield on the 10-year note gaining 6 bps to 3.88%, and the 30-year bond is 1 bp higher at 4.07%.