{"id":61764,"date":"2022-06-09T09:01:49","date_gmt":"2022-06-09T13:01:49","guid":{"rendered":"https:\/\/www.t3live.com\/blog\/?p=61764"},"modified":"2022-06-09T09:02:28","modified_gmt":"2022-06-09T13:02:28","slug":"coffee-with-greta-stocks-are-falling-because-yields-are-popping","status":"publish","type":"post","link":"https:\/\/blog.t3live.com\/2022\/06\/09\/coffee-with-greta-stocks-are-falling-because-yields-are-popping\/","title":{"rendered":"Coffee With Greta: Stocks Are Falling Because Yields Are Popping"},"content":{"rendered":"

Editor's Note:<\/strong> Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here<\/span><\/a><\/strong>.<\/p>\n

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DJIA Futures: <\/b>-55 (-0.2%)<\/span><\/p>\n

SPX Futures: <\/b>-10 (-0.3%)<\/span><\/p>\n

NASDAQ Futures: <\/b>-49 (-0.4%)<\/span><\/p>\n

Good morning friends!<\/span><\/p>\n

Futures are slipping as Treasury yields pop.<\/span><\/p>\n

Let\u2019s get right to it!<\/span><\/p>\n

Treasury Yields Jump On ECB Rate Hike Announcement<\/strong><\/h2>\n

U.S. Treasury yields are rising this morning, pushing down stocks.\u00a0<\/span><\/p>\n

The 10-year yield is up about 5 basis points at 3.07% while the 30-year yield is up nearly 3 basis points to over 3.2%.<\/span><\/p>\n

The gains come after the European Central Bank announced today it will officially end quantitative easing and implement the first rate hike next month.<\/span><\/p>\n

European Central Bank To Start Rate Hikes<\/strong><\/h2>\n

The European Central Bank plans to raise rates by 25 basis points at its July meeting.\u00a0<\/span><\/p>\n

The bank said it then expects another hike at its September meeting, but the size depends on the evolving outlook.\u00a0<\/span><\/p>\n

In a statement, the ECB said, \u201cBeyond September, based on its current assessment, the Governing Council anticipates that a gradual but sustained path of further increases in interest rates will be appropriate.\u201d<\/span><\/p>\n

Like the U.S. Federal Reserve, the ECB has a target of 2% for inflation.\u00a0<\/span><\/p>\n

But Euro-zone inflation hit a record high of 8.1% in May.<\/span><\/p>\n

The ECB also downgraded its growth forecast and raised inflation projections.\u00a0<\/span><\/p>\n

The bank expects the economy to expand 2.8% in 2022 and 2.1% in 2023 and 2024.\u00a0<\/span><\/p>\n

That\u2019s a sharp downgrade from the previous forecast for growth of 3.7% in 2022 and 2.8% in 2023.<\/span><\/p>\n

The ECB expects inflation to remain at 6.8% by the end of 2022, 3.5% in 2023, and 2.1% in 2024.\u00a0<\/span><\/p>\n

That compares to its previous outlook for 5.1% in 2022, 2.1% in 2023, and 1.9% in 2024.<\/span><\/p>\n

Weekly Jobless Claims Rise More Than Expected<\/strong><\/h2>\n

Weekly jobless claims rose more than expected last week.\u00a0<\/span><\/p>\n

The Labor Department reported today that 229,000 Americans filed initial claims for unemployment benefits.\u00a0<\/span><\/p>\n

That was an increase of 27,000 from the previous week and higher than expectations for 210,000.<\/span><\/p>\n

That's the highest level of weekly jobless claims since January 15.<\/p>\n

Continuing claims fell by just 3,000 to 1.31 million in the week ending May 28, higher than expectations for 1.30 million.<\/span><\/p>\n

Nio Tumbles On Shrinking Margins<\/strong><\/h2>\n

Nio <\/b>(NIO) shares are tumbling 7.3% ahead of the open despite beating Q1 expectations.<\/span><\/p>\n

The Chinese electric vehicle maker reported an adjusted loss of $0.13 per share on $1.56 billion in revenue.\u00a0<\/span><\/p>\n

That was better than analysts\u2019 expectations for an adjusted loss of $0.14 per share on $1.49 billion in revenue.\u00a0<\/span><\/p>\n

But the stock is dropping on lower margins.\u00a0<\/span><\/p>\n

Nio\u2019s Q1 profit margins declined to 14.6% compared to 19.5% a yaer ago.<\/span><\/p>\n

The company blamed that drop on a \u201cdecrease of vehicle margin and the reduction in other sales margin resulting from the expanded investment in power and service network.\u201d<\/span><\/p>\n

The EV maker said it delivered 25,768 vehicles in the quarter, in line with expectations.\u00a0<\/span><\/p>\n

Nio forecast Q2 revenue between $1.47 billion and $1.59 billion, missing expectations.\u00a0<\/span><\/p>\n

The company expects to deliver 23,000 to 25,000 vehicles this quarter.\u00a0<\/span><\/p>\n

U.S. Gas Prices Inch Closer To $5<\/strong><\/h2>\n

The national average for a gallon of regular gas pushed closer to $5 overnight.<\/span><\/p>\n

AAA<\/span><\/a> shows that price rose to $4.970\/gal today.\u00a0<\/span><\/p>\n

That\u2019s up nearly 2 cents from just yesterday and more than 25 cents from a week ago.<\/span><\/p>\n

Prices have been surging after the U.S. officially entered \u201cpeak driving season\u201d over Memorial Day weekend.\u00a0<\/span><\/p>\n

The national average is on track to hit $5\/gal for the first time in history this week.<\/span><\/p>\n

Oil Prices Near 3-Month High<\/strong><\/h2>\n

Oil prices are hovering near three-month highs after closing at the highest level since March 8 on Wednesday.<\/span><\/p>\n

West Texas Intermediate crude futures are up 0.02% at $122 bbl while Brent crude futures are up 0.1% at nearly $124 bbl.\u00a0<\/span><\/p>\n

The Energy Information Administration reported Wednesday that U.S. crude inventories fell by 2 million barrels last week while gas stockpiles fell by 800,000 barrels.<\/span><\/p>\n

That was a smaller drop in oil inventories than expected but sharply missed expectations for gasoline inventories to rise.\u00a0<\/span><\/p>\n

In Case You Missed It<\/strong><\/h2>\n