Wall Street erases yesterday gains. US100 loses 1,1% 📉

• Wall Street indexes opened in slightly weaker mood after strong US claims reading
• Yields on 20-year US treasuries near historic highs
• US100 loses 1.16% after yesterday rally fueled by weak ADP and oil declines
• Rivian (RIVN.US) records 16% sell-off after news of convertible bond issue

Sentiment in the US stock market remains weak. Unemployment claims in the US once again turned out to be low (and lower than forecasts). They amounted to 207,000 versus 210,000 forecasts and 204,000 post-prandial, which shows that the overall condition of the US labor market remains strong and may reassure the Fed to maintain restrictive monetary policy for an extended period of time.  The strong claims undermined yesterday's lower ADP report and added uncertainty about tomorrow's NFP reading, the most important report on the US labor market.  Oil failed to make up for yesterday's declines and is still trading under pressure - but not enough to improve sentiment. Declines are particularly evident today in BigTech stocks, where Meta Platforms (META.US) and Amazon (AMZN.US) are the weakest performers today - both companies are trading about 2% ahead. Fed members Barr and Daly will speak in the following hours.

Percentage changes of companies in the S&P 500 index. The pharmaceutical and insurance sectors are doing well. Source: xStation5

US30 and US100 charts

Looking at the US30 index looking at the volume, we see that sellers have been prevailing recently. Contracts on the DJIA (US30) yesterday failed to gain comparably to the US100, and today are trading down 0.2%. A potential slide below the psychological support at 33,000 points could herald another major wave of selling. Source: xStation5Short-term contracts on the Nasdaq 100 (US100) approached the oversold level with the RSI at 26 points. Currently, bulls are trying to halt declines at the 61.8 Fibonacci retracement level of yesterday's upward wave driven by a weaker ADP report and declines in oil prices. Source: xStation5

News

• BioXcel Therapeutics (BTAI.US) asTruist Securities lowered its recommendation on the biotech company to 'hold' from 'buy'
• Cambium Networks (CMBM.US) shares are losing because the wireless network infrastructure company reported weak preliminary third-quarter revenues - these prompted analysts to downgrade.
• Ceridian (CDAY.US) shares gained as Needham analysts upgraded their rating on the company to 'buy' from a previous 'hold'
• Clorox (CLX.US) chemical maker is still battling the effects of a cyber-attack that disrupted production - preliminary net sales disappointed the market (down 23-28% y/y in Q3).
• Nanobiotix ADRs (NBTX) loses as the company reported 10 deaths in 180 days since it registered an experimental therapy to treat patients with locally advanced head and neck cancer.
• Shares of UWM Holdings Corp. (UWMC.US) are gaining as analysts at BTIG raised their rating on the mortgage company to 'buy' from a previous 'hold'

Rivian under cost pressure

Electric car maker Rivian (RIVN.US) is losing nearly 16% after the company announced a plan to issue convertible bonds. According to a report provided by WSJ, the company is losing $33,000 on each electric truck produced.

• Rivian plans to dramatically cut costs (to $40,000 on each model) to become profitable as late as 2024 The company will offer $1.5 billion in convertible debt and disclose initial revenues.
• Bond buyers will have an option to redeem another $225 million of the company's debt. Rivian intends to use the proceeds to finance projects it has started. According to the WSJ report, Rivian intends to drastically reduce production costs for R1T and R1S vehicles. Rivian's cars cost more than $80,000 on average.
• However, they are so expensive to produce that in Q2 the company lost $33,000 on each model sold. That's roughly the price of a basic version of the Ford F-150.

Rivian (RIVN.US) shares have reduced much of June's euphoric appreciation, and demand is now trying to halt declines near the 61.8 Fibonacci retracement of the upward wave from the second half of June this year. If the area around $19 is not held, the next important support level may turn out to be the 71.6 Fibo at $17.5 per share. Higher Fed rates for a longer period of time is hurting the company, which business is still requires external financing. Source: xStation5