Good day, readers! Today, we have some exciting news in the world of stocks and finance. Republicans and Democrats have set aside their policy differences to avoid a government shutdown, bringing relief to the markets. The potential shutdown had threatened to extend a lackluster period for U.S. shares, but now we can breathe a sigh of relief. The surprise votes over the weekend to fund federal operations through mid-November have avoided a partial closure that would have furloughed workers and risked delaying paychecks.
Meanwhile, benchmark Treasury yields settled at 4.683% on Monday, reaching their highest level since October 2007. This increase in yields has caused the dollar to gain strength against other currencies, which is threatening global central bankers' task of bringing down inflation while protecting fragile economic growth. The dollar's rise has been especially hard on some emerging-market currencies, including the Chilean peso and the Hungarian forint.
In the world of tech stocks, we have an interesting development. The so-called Magnificent Seven tech stocks, including Apple, Microsoft, Alphabet, Amazon.com, Nvidia, Tesla, and Meta Platforms, have seen a decline in their valuations over the last two months. In fact, their valuations have declined by 20% in aggregate, according to Goldman Sachs. This decline in valuations presents an opportunity for investors as these tech stocks are getting relatively cheaper. The tech-heavy Nasdaq rose 0.7% on Monday, while the S&P 500 was little changed and the Dow Industrials fell 0.2%.
Now, let's take a look at some other interesting news. China's property market is experiencing a bust, which has raised concerns about a potential financial crisis. Major developers are teetering, and housing sales are at levels last seen in 2015. Will this lead to a financial crisis? Only time will tell.
In the bond market, we are witnessing a regime change that is impacting stocks. Stocks and bonds closed the third quarter with losses as 10-year Treasury yields jumped to a 16-year high. This rise in yields is attributed to robust economic data for the U.S. and an increase in oil prices that is reviving inflation. The bond market, which has been a key source of support for stocks, may no longer be as friendly as it used to be.
That's all for today's market update. Stay tuned for more exciting news and developments in the world of finance. Happy investing!
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