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NEWS
Bears Break Bulls' 6-Week Win Streak

Bears finally broke the bulls’ six-week win streak, with concerns about earnings and the recent rise in yields weighing on markets. Next week will help set the tone for markets through the election and year-end, with key U.S. labor market data and the bulk of the “Magnificent Seven” stocks set to report results. 👀

Today's issue covers NYCB’s earnings miss, Booz Allen Hamilton’s new all-time highs, and other noteworthy pops and drops. 📰

Here’s the S&P 500 heatmap. 3 of 11 sectors closed green, with technology (+0.52%) leading and utilities (-1.48%) lagging.

And here are the closing prices: 

Most bullish/bearish symbols on Stocktwits at the close: 📈 $TPR, $SAIA, $DECK, $SMMT, $BAH, 📉 $FIX, $UHS, $CSL, $THC $WEST*

*If you’re a business and want to access this data via our API, email us.

EARNINGS
Bulls Bet On An NYCB Comeback 🤔 

New York Community Bancorp (NYCB) reported a rough Q3 2024, with net losses piling up to $280 million, or $0.79 per diluted share. Even after factoring out merger-related expenses and a mortgage warehouse sale, the bank’s adjusted net loss still clocks in at $243 million, or $0.69 per share. 😨 

NYCB has some silver linings, like a $4 billion deposit growth led by retail and private bank clients, but these gains couldn’t offset the earnings hit.

NYCB’s net interest income fell 42% compared to last year, to $510 million. Rising funding costs and a tough interest rate environment are squeezing margins. The bank’s net interest margin fell hard, landing at 1.79%, down from 3.27% a year ago— a reflection of how much higher funding costs are weighing down profitability. 📉 

Loan Adjustments and Risk Management

To manage risk, NYCB reduced wholesale borrowing by 31% and reduced riskier CRE and multi-family loan balances. $2.5 billion in loans have shifted to non-accrual status, showing a significant uptick in loan quality issues from last year.

NYCB’s moves to reduce risky assets are a start, but the hurdles of high funding costs and deteriorating loan quality make clear that the road to recovery is still in sight but far from reach. Despite the challenges, retail is betting on a comeback, with Stocktwits sentiment firmly in ‘bullish’ territory. 👐 

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