Shares of banks and other financial institutions have rebounded, recovering some of the losses suffered in September. As investors await Friday's September jobs report, they are cautiously navigating the markets.
Bond Market Influence on Stock Market
Treasury yields have slightly decreased ahead of the upcoming data, which has helped alleviate some concerns. According to JJ Kinahan, CEO of IG North America and president of tastytrade brokerage, investors worldwide have become bond traders, whether they are aware of it or not. The bond market now plays a significant role in influencing the stock market. Kinahan also points out that the current generation of investors under 45 years old has not experienced a rising rate environment before.
Positive Movement for Financial Industry Group
The SPDR Select Sector Financial exchange-traded fund, which closely tracks the financial industry group on the S&P 500, has witnessed an upward trend.
Concerns Over FTX and AAA Rating
Months prior to the collapse of FTX, some U.S.-based employees reportedly uncovered a backdoor used by Alameda Research to withdraw billions of dollars from the cryptocurrency exchange. This revelation, as reported by The Wall Street Journal, has left investors worried.
In addition to this, the ousting of House Speaker Kevin McCarthy has raised concerns about a possible government shutdown. Investors fear that these developments could lead to the U.S. losing its final AAA rating.