More losses for U.S. stocks 📉

U.S. benchmarks failed to break into positive territory for the third time this week.

Author

Adam Garcia
April 17, 2024

Good Afternoon! 

Hey, everyone. It's Adam from Elite Trade Club. 

Here’s what moved the market today.

Markets 📈

Stocks continued their slide with another day of losses on Wednesday. The Nasdaq was the day’s leading loser with a decline of more than one point.

  • DJIA [-0.1%]

  • S&P 500 [-0.5%]

  • Nasdaq [-1.1%]

  • Russell 2K [-0.9%]

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Market-Moving News 🔎 

📉 Rising Yields Spells Trouble for Stocks

A critical indicator for market dynamics, the equity risk premium, is currently under the spotlight. This measure, often calculated as the difference between the S&P 500's earnings yield and the yield on 10-year Treasury bonds, has significantly narrowed recently. According to FactSet, over the past week, this gap has reached its lowest point in over two decades, signaling diminishing rewards for stock market risks relative to virtually risk-free government bonds.

Risk Premium 🏦
As bond yields continue to climb, the appeal of investing in stocks becomes increasingly questionable. The reduced equity risk premium indicates that the additional compensation investors receive for bearing the higher risk associated with stocks has lessened. This shift can lead many investors to reconsider the attractiveness of stocks compared to safer bond investments.

Broader Implications 🌐
This tightening of the equity risk premium not only makes stocks less appealing but also elucidates one of the reasons why rising bond yields have a destabilizing effect on the stock market. With higher returns on government bonds, the incentive to endure the volatility and uncertainties of the stock market decreases, potentially leading to reduced equity investments and increased market volatility.

Navigating the Landscape 🚀
Investors are now faced with a challenging investment landscape where traditional risk-reward calculations are being upended. Those managing portfolios may need to adjust their strategies, perhaps increasing their bond holdings or seeking stocks with exceptionally compelling earnings prospects to justify the heightened risks in a rising yield environment.

Top Winners and Losers 🔥

WiSA Tech [WISA] $9.25 (+51.6%)
rallied for the 2nd day in a row after its WiSA Association unit executed its fourth 5-year licensing agreement with a fourth major HDTV/PTV.

INVO Bioscience [INVO] $1.82 (+139.4%)
says its Q4 sales came in at $1.38 million, marking a 396% increase from the year-ago quarter’s top-line figure of $278K.

Edible Garden [EDBL] $6.66 (+46.3%)
noted significant increased in revenues from its produce & cut herb units in a preliminary Q1 earnings release.

ICZOOM [IZM] $5.99 (88.2%)
announced the cancellation of a proposed public offering due to market pricing that isn’t in the best interests of it or its shareholders.

iLearningEngines [SDIG] $10.00 (44.4%)
fell in its first day of trading following the closing of its business combination with Arrowroot Acquisition Corp yesterday.

Sunshine Bio [SBFM] $3.80 (44.1%)
continued to slide after announcing a 1-for-100 reverse stock split late last week.

That's it for today! Please, write us back, and let us know what you think of the Closing Bell Roundup. We're always eager to hear feedback from our members!

Thanks for reading. I'll see you at the next open! 

Best Regards,
— Adam G.
Elite Trade Club

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A radical new A.I. development is about to blindside millions of Americans.

This early A.I. pioneer just issued an urgent warning explaining everything.