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  • Writer's pictureKevin Hurley

Marketbites: Decline in Banks and Retail Shares


Portfolio Manager Commentary:

The broad-based S&P 500 slipped Tuesday, as it was unable to build on the momentum seen in the previous session. Investors remain cautious with the 10-year Treasury yield notching new highs this week, and ahead of Federal Reserve Chairman Jerome Powell’s key speech later this week.

Several regional and larger banks fell after S&P Global cut credit ratings and revised its outlook for multiple U.S. banks on Monday, citing “tough” operating conditions. The financial sector was recently down 0.8%, making it the worst-performing sector of the S&P 500. KeyCorp and Comerica dropped nearly 4% each. Big bank JPMorgan Chase also fell 2.1%. In the retail sector, Dick’s Sporting Goods and Macy’s fell by 24% and 13%, respectively, on cautious full-year forecasts, also leading the SPDR S&P Retail ETF lower. On the other hand, major tech-related names Netflix and Alphabet climbed.

Tuesday’s moves come as Wall Street keys on the bond market, a day after the benchmark 10-year Treasury yield hit its highest level since 2007. The 10-year yield eased slightly Tuesday to 4.33%. Crossmark Global Investments’ Victoria Fernandez expects a continuing pullback in the market, which she said will be influenced by climbing yields and a more cautious consumer.

Chart of the Day:

Pay for new hires is starting to shrivel after years of hefty salary bumps, requiring workers to reset what financial gains to expect from switching to a new job. Wages, especially for people who changed jobs, climbed in recent years as companies competed for workers to fill pandemic-induced labor shortages. Now, as the job market cools and businesses become more cautious in their hiring, many companies are paying new recruits less than they did just months ago—in some cases, much less.

Source: WSJ

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