Stock gains moderate after jobs report rises

Rivian stumbles as electric vehicle maker cuts production forecasts

14 minutes ago

Shares of Rivian Automotive ( RIVN ) sank on Friday as the electric vehicle maker missed third-quarter delivery estimates and cut its full-year production forecast due to difficulties getting a portion of it.

Rivian said it built 13,157 electric vehicles in the quarter, and delivered 10,018 vehicles. Analysts surveyed by Visible Alpha were looking for deliveries of up to 12.08O. The latest company news has continued a recent decline in the stock, which has fallen from levels seen this summer following an investment from Volkswagen.

The company lowered its 2024 production estimates due to a shortage in supply of the component used to build its R1S SUV and RCV commercial truck. She added that the problem began in the third quarter, and “has become more severe in recent weeks and is still continuing.”

Rivian now expects it will make between 47,000 and 49,000 electric vehicles this year, down from its previous forecast of 57,000.

Rivian shares fell 7% in recent trading and have lost more than half their value since the beginning of the year.

–Bill McCall

Frontier and JetBlue Soar after Report of Spirit's Bankruptcy Talks

47 minutes ago

Shares of Frontier Group Holdings (ULCC) and JetBlue Airways (JBLU) took off on Friday following a report that discount airline rival Spirit Airlines (SAVE) is considering filing for bankruptcy. Spirit shares fell 25% shortly after the markets opened.

The Wall Street Journal It stated that Spirit is in discussions with bondholders and other creditors about potential terms for filing under Chapter 11, although it noted that such a filing would not be imminent. Spirit is also looking to restructure its balance sheet through an out-of-court deal, although the focus has been on bankruptcy negotiations, the newspaper said.

Spirit faced losses and declining revenues due to intense competition from low-cost competitors and major airlines. It failed in its $6.6 billion plan to merge with Frontier in 2022. Spirit subsequently agreed to a takeover by JetBlue, only to see that fall through the roof this year as regulators challenged it over antitrust concerns.

Frontier shares were up 21% in recent trading, while JetBlue shares were up 17%.

–Bill McCall

Higher Treasury yields, lower expectations of interest rate cuts

1 hour and 59 minutes ago

Treasury yields jumped and market expectations for a rate cut fell on Friday morning after a surprisingly strong jobs report dispelled some fears that the Federal Reserve needs to rescue the weak labor market.

Market participants lowered their expectations for interest rate cuts in the wake of the report. The odds that the Fed will cut interest rates by 50 basis points, or half a percentage point, at its next meeting in November fell from 30% to about 5%, according to federal funds futures trading data. Market participants now place a less than 30% chance that the Fed will cut its benchmark interest rate by a total of 75 basis points by the end of the year, which compares to the 56% odds that were priced in yesterday.

The revised forecasts helped align Wall Street's view with that of Fed officials, who in their quarterly economic forecasts expected modest interest rate cuts at each of its two remaining meetings this year.

Treasury yields rose in the wake of the report, with the yield on the 10-year Treasury note jumping about 10 basis points to 3.95%, its highest level since mid-August. The yield on two-year Treasury bonds, which is strongly influenced by market expectations of the Federal Reserve's benchmark interest rate, jumped 15 basis points to 3.87%, the highest level in one month.

–Colin Ledley

Major stock futures rose ahead of the jobs data

3 hours and 53 minutes ago

Futures linked to the Dow Jones Industrial Average rose 0.1%.

S&P 500 futures rose 0.3%.

Nasdaq 100 futures rose 0.4%.