US OPEN: Wall Street drops as yields continue to climb

• Wall Street indices open lower
• 10-year US yield jumps above 4.70%
• US100 slides back below 15,000 pts mark

Wall Street indices launched today's trading lower. S&P 500 and Nasdaq traded around 0.5% lower at the session launch, Dow Jones dropped 0.4% and small-cap Russell 2000 declined 0.7%. This comes after a downbeat trading in Europe where the majority of blue chips indices trade 0.5-1.0% lower. Continued pick-up in yields is playing a major role in the current sell-off with 10-year US yield climbing another 4 basis points today, to 4.72%.

Source: xStation5

Nasdaq-100 futures (US100) managed to defend the lower limit of the Overbalance structure last week, thus confirming that the uptrend is still in play. However, the index is taking a dive today and threatening to retest the support zone ranging above 23.6% retracement of the upward move started in October 2022. A lot will now depend on how the price reacts to this support and, should we see a break below, how it will react to another test of the lower limit of the Overbalance structure. In theory, each subsequent test of the support zone increase the likelihood of the breakout.

Company News

McCormick (MKC.US), US manufacturer and marketer of spices and seasoning mixes, is trading lower today after reporting a miss in fiscal-Q3 2023 sales (June - August 2023 period). Company reported a 5.6% YoY increase in net sales, to $1.68 billion (exp. $1.70 billion). Adjusted EPS came in at $0.65 and was lower than $0.69 reported a year ago. However, EPS was in-line with market expectations. Increase in sales was due to increase in pricing as volume dropped 2% (exp. -0.6%). McCormick expects full-year sales to grow 5-7%, operating income to increase 11-13% and adjusted EPS to reach $2.62-2.67, up from previous $2.60-2.65 forecast range.

Eli Lilly (LLY.US) agreed to purchase Point Biopharma, a company developing biopharmaceuticals for cancer treatment, for $12.50 per share. Acquisition price represents an over-80% premium over Point Biopharma's closing price from Monday, October 2. Deal is valued at $1.4 billion and is not subject to any financing conditions. Deal is expected to close near the end of this year.

Analysts' actions

• Emerson Electric (EMR.US) rated "new overweight" at KeyBanc. Price target set at $120.00
• HP (HPQ.US) upgraded to "buy" at Bank of America. Price target set at $33.00
• CDW Corp (CDW.US) rated "buy" at UBS. Price target set at $237.00
• Essex Property (ESS.US) rated "neutral" at Wedbush. Price target set at $225.00

McCormick (MKC.US) launched today's trading around 5% lower after reporting a disappointing fiscal-Q3 earnings report. Stock is breaking below the $71.00 support zone, marked with lows from September 2022 and March 2023, and trades at the lowest level since Q1 2020. Source: xStation5