Mortgage rates tick higher, market takeaways: Asking for a Trend

On the latest Asking for a Trend:

The average rate on a 30-year fixed mortgage rose slightly for the week ending October 3. Yahoo Finance Senior Reporter Claire Boston breaks the data down.

Intuit (INTU) CFO Sandeep Aujla joins the program to share how the company is using AI to help customers and generate revenue.

And Yahoo Finance Senior Reporter Alexandra Canal shares some of the biggest takeaways from the trading day, including the rise in utility stocks and oil prices (CL=F, BZ=F).

For more expert insight and the latest market action, click here.

Video Transcript

Hello and welcome to asking for a trend.

I'm Madison Mills for the next half hour.

We're breaking down the trends of today that move stocks tomorrow.

There's a lot to keep track of.

So we're focusing on what you need to know to get ahead of the curve here.

Some of the trends we're going to dive into for you.

First, future of A I and your wallet is happening right now into it.

The owner of turbotax has unveiled a A I driven expert platform and helping consumers make smart money decisions year round, not just during tax season.

I'm speaking with the company CFO in just a few moments.

Plus another housing hurdle for buyers and sellers is the decline in mortgage rates has stalled the question.

Lingers.

What was the markets enthusiasm on that rate cut?

Meaning and was perhaps a bit premature.

We're going to break down the numbers later in the show and the dock workers strike at the East and Gulf Coast ports could give at least one sector a major hangover.

I catch up with the President and CEO of Distilled Spirits Council about the impact of the work stoppage and what that could mean for the beverage industry moving forward here.

Well into it is expanding into artificial intelligence.

The financial tech company recently unveiling new A I powered innovations.

The goal to connect products in its consumer financial and business platforms here with more on A I connectivity.

We've got into its CFO Sandeep A Jula joining us now, Sandeep.

It's great to have you.

Thank you so much for making the time with us.

So I know into it just had its Investor day I keyword search the transcript from that day and saw over 100 mentions of A I and then I just stopped counting.

I figured that was kind of speaking for itself.

But how are into its new A I offerings contributing to the company's bottom line?

Hey Madison, thank you so much for having me.

We couldn't be more excited about the fact that we were early to invest in A I.

We declared our strategy to be an A I driven expert platform in 2018 when most were still trying to grasp the potential of A I.

And by being early by investing significantly into A I and by leaning into building uh experiences, the D four experiences using Intuit assist, which is our gen A I platform we have are making meaningful progress.

We are making sure it is a durable advantage for us in terms of the experiences we could deliver to our nearly 100 million customers across the consumers and the small businesses we serve and it really comes down to these customers, rely on us to making the most critical decisions in their financial lives, whether it's their personal life or their business life.

And by using into the system and by leaning into using our A I driven expert platform, we are making sure they walk away with the utmost confidence in the decision they're making and is showing tangible impact on the their bottom line and their top line growth as well.

So Sandeep, talk to me about how much revenue you think you're gonna be able to attribute to A I moving forward.

I mean, you're the CFO I know you're constantly looking at that balance sheet.

What are you expecting?

You know what excites me about the potential for A I is how it's going to redefine customer experiences and that leads to business upside from three primary avenues for us.

First and foremost, Intuit says, Gen A I in essence, is going to redefine how easy it is going to be on board into our platform and discover the offerings across a platform that can help a consumer or small business that leads to increased higher customer growth and increased adoption of the platform, both a direct relationship to driving revenue growth.

Secondly, the name of the game on A platform is getting the utmost confidence and decisions you need to make.

And intuit assist provides a seamless unlock to A I powered virtual experts that we have embedded through our experiences.

So that means a customer can quickly go from A I to engaging with a live human expert who has contextual awareness of the situation and deep expertise in the topic that customers trying to make an investment that itself provides an A block into increased A R PC.

Because those virtual experts come at a higher A R PC.

And third, we are testing and we are learning about potentially launching done for you a experiences, things such as our chim offering where we have the potential to manage the end to end marketing campaign for a customer or in our money products where we can help customers get paid faster.

And we're seeing that through our early test, customers are getting paid 45 percent faster when they use to assist to send invoices and invoice reminders.

These are all areas where we are excited about the potential to have A I generated or A I excuse, but the potential is meaningful across those three avenues that we are looking at to generate a business upside from into the system and Sande I want to end by just getting a sense of what you're seeing in terms of the health of small businesses.

I know that Intuit has a lot of touch points with small businesses across the country.

What can you tell us about the health of those businesses, Madison, I am always in awe of the resilience and the courage of the small business owners and we serve 10 million of them.

So we have a very good picture across geographies across the size of businesses and the industries that they serve.

These small businesses continue to do well.

But I would say that they are still not in uh clear skies, so to speak.

There are, their revenue growth is up versus where it was pre pandemic, but it's uh lower over the last quarter versus where it was at the start of the year.

Their profitability is doing better than where it was pre pandemic, but it's lower than where it was last year.

And uh their um their hours worked are higher but they are not looking for as much labor could be an indication of where the confidence is going forward.

But here's what I feel good about our, our platform helps small businesses succeed.

And when you look at the overall economy, 50% of businesses go out of business in the first five years, those on our platform, their success rate is 19% higher.

They are able to make smarter decisions.

So by being on a platform, we are truly helping these small businesses navigate what remains a relatively uncertain macroeconomic environment and help them ensure that they are making the best decision to drive the top line growth and get the maximum on the bottom line in terms of their profitability.

So it's an environment where it remains uncertain.

But the internet platform is really helping distinguish success and accelerate the prosperity of those who are are on the platform, Sandeep.

But Jula, we gotta leave it there but really appreciate you joining us, Sandeep is the CFO at Intuit.

Thanks so much.

Thank you, Madison.

Well, stocks clo closing the trading day lower as concerns over tensions in the Middle East keeping investors cautious.

Yahoo finance is Alexander Canal joining us now with the trading days takeaways.

Hey, hey ma yet markets taking a bit of a breather also in anticipation of that jobs report out tomorrow.

But if you think that that stood out to me as we really continue to track these market moves one being utilities and the strength that we've just continued to see in this sector.

We were a bit muted today but for the past seven days, every member in the utility sector has been training above its 200 day.

Moving average we about 20% ahead of those levels, which has only happened once before back in October 2000.

That was actually the height of the.com bubble.

So this really speaks to the market breath that we've been talking about this rotation out of tech utilities has been seen as a defensive move but also has benefited from the trickle down effect from the artificial intelligence boom as well.

And if we take a look at a sector year to date, utilities is leading up about 30% we talk a lot about tech.

That's all the way over here though.

So utilities is almost double that.

So certainly a sector to keep them watch, especially as we continue through the next half of the year.

Yeah, it certainly is.

And there's no shortage of catalyst for the utility space.

Obviously, it's defensive play, but also the A I boom could be, you know, contributing to its gains and also some of the energy stocks and movement that we've seen over the course of today could also be a positive move up for utility.

But what else are you looking at for this?

Another thing is oil.

If you follow Martha Stewart on TX, that is something that kind of circles around every time we see these huge jumps in oil.

Now, this stemmed after we saw supply concerns the top of mind for investors when it comes to a possible retaliatory strike from Israel to Iran.

And this is something that we continue to track when it comes to the Middle East.

And what could potentially happen with oil.

You're seeing that today, we were up more than 5% crude oil settling just below $74 a barrel Brent the international benchmark that settle just below 78 a barrel.

Also up 5% of take a look at a four day.

You'll see we're up 8% here and it really sort of speaks to this volatility factor.

Typically, when we see oil up we see the major indexes down, which is the narrative that played out today.

And since we're speaking about volatility, let's take a look at the VICS were trading around that 20 level, people are starting to pay more attention that we are off of the highs that we saw in mid July due to the unwinding of the yen carry trade, that unexpected uptick in unemployment.

But still something to keep in mind since geopolitical tensions often trickle through into the markets.

Then of course, you have that uh November election coming up as well.

You do, you've got a lot of stuff to monitor here and it looks like we are seeing a little bit of downside protection from traders, especially as we head into that non farm payrolls print tomorrow morning.

So perhaps that's one of the reasons that we are seeing this lift on the V here.

But what else do we need to know heading into that all important day tomorrow?

Yes, the jobs report, all eyes are on this jobs report and here's the expectations here.

We're expecting non farm payrolls to increase by 150,000 unemployment rate expected to hold steady at 4.2%.

Obviously, what we see tomorrow is going to factor into that policy whether or not we'll see that larger 50 basis point cut, perhaps a smaller 25 basis point cut.

But economists have often looked at the jobs picture and any or signs of that is a little bit spooky for investors because we could potentially be entering into a recession.

But this is an interesting chart for Bank of America that caught my eye.

We've seen the some rule be triggered.

This is a recession indicator.

It was triggered in July.

However, there's, it's never been triggered with claims this low.

This is initial jobless claims.

A number of folks filing for unemployment.

If we took a look back all the way to the early 19 nineties when this rule has been triggered, we are at this very low level and I think this just speaks to the interesting job market that we're in the interesting economy that we're in and how a lot of these recession indicators might not hold true.

And we could see ourselves in that goldilocks scenario, which is obviously the goal.

But tomorrow, depending on what we see that could obviously play a factor into that.

All right, a great chart here and great takeaways for the day.

Really appreciate you bringing us all of that.

Thank you so much.

Stick around because we've got more asking for a trend still to come right here on Yahoo.

Finance mortgage rates rose slightly this week, mirroring a jump in treasury yields especially the 10 year yield, which serves as a benchmark for the 30 year fixed mortgage rate.

So what is causing the uptick here?

And what does it mean for prospective home buyers joining us now to discuss.

We've got Yahoo Finances, Claire Boston in studio and Claire, it's great to speak with you.

So, I mean, are we all the way back for the housing market?

What's happening here?

You know, I don't think this is a great cause for panic.

If you are thinking about buying a home here, we saw treasury yields move up a little bit, a little bit this week and mortgage rates pretty much track that.

Exactly.

And so what we're seeing at this juncture is basically just, um, a little bit of reaction to what Jay Powell has been saying this week.

He basically said, you know, we don't think we need to lower interest rates too fast.

And so that's gonna kind of put a cap on how much further mortgage rates can fall from here.

Yeah.

And it certainly seems like we're seeing that play out, especially in the front end of the yield curve.

But when you think about home buyers who are just wanting to know when the right time to get in is, I feel like I've certainly spoken with a lot of sources who said the whole time just do it now because it's just too hard to predict what the relationship of rates to prices is going to look like.

What are your sources telling you?

Yeah, I'm hearing very similar things.

It is probably a mistake to try to time the market because no one really knows where rates are going to go from here.

You know, we could see mortgage rates go down a little bit further to end the year.

We were probably gonna be kind of range bound in this six ish percent space.

So, you know, someone who's looking to buy a home, looking to refinance, um, if it makes sense for them, you know, the time to act is probably now and real quick, any chance of prices starting to come in here, you know, it is is tough.

Um You know, there's not a lot of inventory right now and that is really, really putting a damper on housing affordability uh generally.

So, you know, we really need more supply.

I think before we're going to see home prices fall at all.

Yeah, and we're certainly hearing about increased supply and the challenges of that with both candidates running for office right now as well.

So something that we will continue to monitor Claire, thank you so much, really appreciate you joining us on set here.

Well, the dog walker, the dock workers strike at East and Gulf Coast ports could give at least one sector a major hangover, the distilled spirits industry and its consumers already facing impacts from the work stoppage and could experience even more if it continues.

The distilled Spirits Council of the United States warning that the ports are vital to the industry.

With 77% of us distilled spirits exports and 43% of distilled spirits imports, passing through those ports in the year 2023.

Joining us now for more, we've got Chris stronger distilled spirits, Council president and CEO.

Thank you so much for joining us here.

So, talk to me about what you're already seeing on the heels of the strike.

Have you started to see any impact yet?

Hey, Madison.

Thank you.

Yes, absolutely.

First and foremost, let me just say we don't like hangovers and we just want everybody that who uh enjoys beverage al call to do so in moderation and responsibly.

But as the chart shows, 77% of us distilled spirits exports go out of the 26 ports uh that are being impacted in 43% of imports coming into the country.

That is great.

Scotch, Irish whiskey, Cognac rum, vodka, gin.

You name it coming into the country and even a day's strike was going to have a ripple effect in the supply chain and impacting our retailers and distributor partners and bartenders and all of the above.

Now we're at the end of day three.

that impact is only gonna get more significant as we go on.

So what's the potential pricing impact going to be?

Are you already thinking about raising prices?

Well, we do know uh we do know, look, I can't speak on behalf of our mem member companies, but we do know that suppliers and those that make the great distilled spirits products are now looking at alternative means of shipping here obviously is terrific, but it's more expensive.

We're looking for alternative ways to get into different uh ports.

What we're most alarmed about is we're leading into the holiday selling season.

That is the most important time for our industry.

Uh If this strike continues, uh it'll al almost without a doubt, have a direct impact on consumers being able to buy their favored distilled spirits brands to as gifts and uh during the holiday spirit.

So, uh on behalf of the hospitality industry in the United States, we are alarmed and worried and uh certainly call on all parties involved with this to try to find some common ground and get those ports reopened.

Yeah, Chris, we've seen the National Retail Federation pressuring the Biden administration to evoke the Taft Hartley Act if things move further here, is that something that you would also consider?

Uh we support those efforts?

Obviously, and we know the Biden administration is resistant to that at this point, we just really hope and appreciate that, you know, there's strong interest in all parties involved with this and we certainly recognize and appreciate those hard workers that get the products off the ships and on the trucks that go out to American citizens around the country.

We just really hope this gets resolved sooner rather than later in whatever means necessary in terms of the government, uh being involved and certainly uh having a fair deal for everybody involved.

So, uh it doesn't have a significant impact on our great industry, but the American economy as well.

It's a delicate situation.

Uh Our industry is very, very concerned about it and uh even, even a week's strike could take 4 to 6 weeks to overcome the backlog.

So we're really anxious and we're hoping things get resolved soon.

All right, Chris, we got to leave it there but really appreciate you making the time for us.

Thank you so much.

Thanks, Madison.

Thanks.

Stick around.

We've got much more asking for a trend still to come.

This is the autumn finance for our chart of the day.

We're looking at the rates of hires and quits among American workers.

Yahoo Finance's Josh Schafer joining me now with a closer look.

Hey, Josh.

Hey, Matty.

Yes.

What we're looking at right here is the quits rate, the number of workers that are quitting their jobs.

This is from the Bureau of Labor Statistics, jolt survey job, uh turnover survey.

And you can see here it came in at 1.9%.

That's a cycle low going back toward the pandemic.

And then you look really all the way across here.

We're at about 2015 levels for quits.

Now quits is considered a sign of confidence among workers.

I'm only going to quit my job if I feel confident I can get another one.

So as quits come down, that means workers are a little bit more worried about what they're seeing in the labor market, we flipped to our other line here.

Well, that adds up, you're seeing the hiring rate coming down.

So less companies are hiring less people are getting hired.

So that sort of corresponds with why quits are coming down.

Now, the key question when we look at data like this is how concerning is it?

And I pose that question to former Federal Reserve Bank of Atlanta, President Dennis Lockhart earlier today.

And I want to take a listen to what he had to say about jobs, quits and hires the quits rate that we saw, uh just after the pandemic.

Um, uh, in a very, very hot labor market was pretty extraordinary and it, and it reflected, I think the view on the part of many people in the labor force that they could improve their situation by improve their salaries by quitting one job and seeking another one.

And, uh this labor market is much, much cooler than that and that, uh, that assumption doesn't hold any longer.

So people are not quitting.

Uh, they're trying to hold on to their jobs.

We're not yet in a, a situation and I hope we don't get there of widespread firing of people layoffs and such, we've seen just a slowing of hiring and that feeds the quits rate, uh as well.

So Dennis pointing out that really the concern here is where we might be headed and Matty, we spoke to another guest earlier today, Neil Dutta over at Rack and he pointed out, he said he, the trend is clear.

He's talking about these lines coming down here.

He noted that as those lines come down, as quits come down and hires come down.

Normally the unemployment rate is a lot higher than 4.2%.

So that's his chief concern right now is that things like this are pointing to what could be a higher unemployment rate if not tomorrow jobs report, maybe in the jobs report we get for October and that's gonna be a key trend to watch moving forward as we keep our eyes on that labor market.

Yeah, it absolutely will be.

And certainly something that Neil is looking at as he calls for 100 basis points of cuts by your end.

Josh.

Thanks so much for bringing us the chart.

Appreciate it.

Well, that's a wrap on today's asking for a trend.

Be sure to come back tomorrow at 4:30 p.m. Eastern for all the latest market moving stories affecting your wallet.

Have a great night.

Thanks so much.