The 10-year Treasury yield could be about to hit 3 percent

All eyes are on the U.S. 10-year Treasury yield on Monday as it could imminently hit the 3 percent threshold a level deemed particularly worrying by investors.

“The 3 percent level is a big psychological point for investors and has gained huge focus,” Roger Jones, head of equities at London and Capital, told CNBC via email.

Indeed, the 10-year Treasury yield was at 2.9882 percent at about 6:20 a.m. ET, inching closer to 3 percent a level not seen since 2014.

Subsequently, yields have mostly followed a downward path on the back of support from central banks, which tapped into bond markets in the wake of the global financial crisis in 2008 to boost their economies. But their prolonged intervention has made investors accustomed to their support and to the guarantee that central banks would be there in case things turned badly leading to higher equity investing, when investors buy shares of companies.

Government bond markets sell off, bond rout continues German bund Getty Images

As the 10-year yield stops following that downward trend, it raises concerns that the positive outlook for equity investment is about to end.

“It is not the move towards 3 percent Treasury yields which is unusual, but the historically low level of yields we’ve seen in recent years, reflecting the long-lasting scars of the financial crisis,” Seamus Mac Gorain, fixed income portfolio manager at J.P. Morgan Asset Management, told CNBC via email.

“The now healthier global economy justifies these higher yields. We expect 10-year Treasuries to end the year between 3 and 3.5 percent,” he added.

But, above all, the 3 percent level has a “psychological” aspect that makes markets anxious. The 10-year note is used as a benchmark for many financial instruments, including mortgages and as a barometer of investor confidence.

“Three percent is a psychological level Rates were never able to break that trend-line durably event since the early ’80s,” Francesco Filia, chief executive of Fasanara Capital, told CNBC via email. “To break it neatly and clearly would reignite fears that rates rise is durable.”

The problem of a long period of rates increases is the implication for those making investments. Higher rates mean that companies will have higher costs when borrowing money, but they also mean that their debts become more expensive. As a result, companies will have less room to increase salaries, to invest in their business and to give returns to shareholders.

“Higher rates are unloved by equities,” Filia said, adding that, ultimately, higher rates also increase the risk of defaults.

So higher rates not only make equities less attractive, but they also signal that the economy is, or could be, at risk. If companies see their margins squeezed, they might be forced to pay less to employees, even lay-off people.

The particular effect of higher rates on mortgages also lowers people’s ability to spend elsewhere. Therefore, society is no longer able to spend the way it has been, and this ultimately kicks off an economic crisis.

Starbucks Got a Few Things Wrong in Managing Crisis, Expert Says

Starbucks Corp. (SBUX) got a couple things wrong in its initial response to a case in which two black men were arrested in one of its Philadelphia stores, a crisis-management expert said.

“The initial statement from the company ignored the racial profiling element and used the word ‘disappointed.’ It fell short,” Dorothy Crenshaw, the principal of Crenshaw Communications, who worked with Starbucks 10 years ago, told TheStreet. “It failed to mention the words racial profiling at first, which is what it [the situation] was.”

Starbucks apologized on April 14 on Twitter and said it’s reviewing its policies and will work with “the community and police department to try to ensure that these types of situations never happen in any of our stores.”

Two black men were arrested while waiting for a friend at a Philadelphia Starbucks after a Starbucks employee called the police. Customers filmed the incident and it went viral. A similar incident also came to light at a California Starbucks, where a black man was denied use of a bathroom. This week the brand’s approval rating plunged, according to YouGov Brand Index, which tracks brands’ reputation; Starbucks’ Buzz score fell from 13 to -9 on Thursday.

“Most people are unimpressed by the company’s follow-up,” analyst Neil Saunders, managing director of GlobalData Retail, said in a statement. “While most people will take no action, the sizeable minorities saying they will use Starbucks less or boycott the chain for a bit is worrying. It underscores that the incident is likely to have a material impact on Starbucks revenues – even if only in the short term.”

According to research conducted by GlobalData, 72% of those questioned by the firm said the company handled the situation either “quite or very badly,” while 12% said Starbucks’ dealt with the response “very well or quite well.”

Through it all, though, Starbucks’ stock hasn’t taken a hit. In the first day of trading after the news broke, Monday, April 16, the stock closed at $59.43. It closed Thursday at $59.22.

Since Starbucks’ initial response to the Philadelphia arrests, the company has amped up its response, including more forceful apologies from both current and past CEOs, Kevin Johnson and Howard Schultz respectively, and a plan to conduct in-house training on May 29 at all 8,000 of its company-owned stores in the U.S. Those stores will close for a half-day in the afternoon.

Crenshaw said, “Schultz has a knack for saying the right thing,” and she praised the company for its training plans. “They needed a response that incorporated the entire Starbucks partner organization, and it represents real financial commitment. I don’t think people understand what goes into closing for a half-day for a company of its size,” she added.

According to a Morningstar analyst and a separate calculation by TheStreet, respectively, the training could cost the company between $6 million and $8.7 million in lost sales.

The gold standard for handling a company’s public crisis effectively stemmed from the so-called Valentine’s Day Massacre in 2007 involving JetBlue Airways Corp. (JBLU) , said Crenshaw.

On Feb. 14, a forecast ice storm that was supposed to fade, worsened. While many carriers cancelled their flights, JetBlue continued flying, as best as it could. That day, only 17 of JetBlue’s 156 scheduled departures left John F. Kennedy International Airport, which caused ripple effects throughout the system and displaced crew and aircraft, reported the Harvard Business Review. It took six more days for normal operations to resume, but not until thousands of passengers had been angered and displaced by cancellations and delays of more and more flights. Some passengers spent 11 hours on the tarmac.

JetBlue was clearly in the doghouse.

Its CEO then, David Neeleman, took all the right steps, according to Crenshaw. First, he apologized immediately and often, taking to the airwaves to declare himself “mortified” and “humiliated,” and he used humor when appropriate. Part of his problem-solving strategy was to create a passenger bill of rights, which set guidelines on how to treat customers under various circumstances, such as flight cancellations and delays, and to offer a set timeline for dealing with customer complaints. After the dust cleared, the airline had retained most of its customers.

So the lesson for Starbucks and all companies, because most will have a crisis at some time, is to get out in front of customers right away with a sincere apology, let them know you understand their anger and frustration, and maybe throw in some dough or coupons. Then, following Neeleman’s playbook, think of what you can do for the industry, and put that in place, too.

PACIFIC for April 19: How Amazon owns the world

The Big Picture: The Membership Principle: Amazon has surpassed 100 million Prime members globally. Those are members, not subscribers. Members don’t just use a product, they live in a universe. They pay to join, pay to use and constantly supply data that informs and improves the product. Prime members aren’t fans, they’re season ticket holders. Amazon brought in $9.72 billion in revenue from them last year alone.

Sign up for PACIFIC: The new CNNMoney newsletter about the center of change and innovation

What’s Next: Jamie Dimon on Jeff Bezos for the new Time 100 List: “From the outset, the key to Jeff Bezos’ success has been his intense and unwavering focus on customer satisfaction and on his audience: the end user. … Jeff’s relentless attention to consumers is not defined by any boundaries. As Amazon has grown … he has never lost sight of the millions of people he is serving. And that is how you win in American business and raise the standards of what customers come to expect.”

The 10-year Treasury could test the stock market’s comeback

Suddenly, rising interest rates matter to the stock market again.

Stocks traded lower Thursday, as interest rates moved higher and tech was under pressure. The yield on the bench mark 10-year Treasury note edged up to 2.93 percent, a four-week high, and traders were watching to see if the yield would regain its February high, a key level that could signal a break out.

The next test for stocks will be if the 10-year Treasury yield returns to that February high of 2.957 percent and holds above it. The yield hit that level just after the stock market made a low in a correction sparked by rising interest rates and inflation fears.

Friday has no major economic data, but there are a few Federal Reserve speakers, and it’s been the chorus of hawkish Fed speakers this week that have helped drive up interest rates. Yields, which move opposite price, were higher across the curve. The 2-year, which is most sensitive to Fed policy, rose to 2.43 percent.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York. Brendan McDermid | Reuters Traders work on the floor of the New York Stock Exchange (NYSE) in New York.

Chicago Fed President Charles Evans speaks Friday at 9:40 a.m., and even the normally dovish Evans has said recently he thinks the Fed should raise rates and that inflation is rising. San Francisco Fed President John Williams speaks at 11:15 a.m. In June, he moves to the powerful New York Fed.

Later in the day, Minneapolis Fed President Neel Kashkari appears on CNBC at 2:15 p.m. ET.

“Today was the first day interest rates came back into the conversation in a long time,” said Scott Redler, partner and technical strategist with He said the market had been obsessing about geopolitical events like the bombing of Syria and trade talk and tariffs.

“Today was a healthy pull back day that was very controlled,” said Redler.

The S&P 500 lost 15.51 to close at 2,693.13 Thursday, while the Nasdaq slid 57.18 to 7,238.06 on weakness in tech. A warning from Taiwan Semiconductor weighed on U.S. chip stocks like Nvidia and Micron. But Apple also fell as analysts warned iPhone sales may be lower based on Taiwan Semi’s comment that weak demand in the mobile sector was the reason for its lowered revenue guidance.

Commodities continue to gain and a popular index, the Commodities Research Bureau CRB index was at a more than 2-1/2 year high. The move in commodities has stirred up talk in the bond market of inflation, another catalyst for higher yields. Oil, however, settled slightly lower Thursday, with West Texas Intermediate at $68.29 per barrel, after flirting with $70.

“Commodities usually rally when you get to the tail end of a major [stocks] rally. Commodities are the last thing to go. Commodities being more expensive don’t help anybody,” said Redler. “Healthy markets are led by tech, they’re led by banks and they’re led by small caps.”

Banks did rally as rates rose Thursday, with the SPDR S&P Bank ETF up 1.9 percent.

Redler said traders are watching to see if the S&P 500 holds the 2,670 level, a key support level. “I would probably think we digest above today’s lows. The next spot to get above is 2,717, yesterday’s highs, but I don’t think that will happen [Friday],” he said.

He said Thursday’s pull back “shook the tree a little bit. Now let the market prove that it can hang above 2,670 and show that it can get back to 2,717. Next week, you’ll have a lot of key earnings, like Google, Amazon, Facebook.”

There are 170 S&P 500 companies reporting earnings next week, with 66 on Thursday alone.

Top 5 Growth Stocks To Buy For 2018

Image source: Getty Images.

After decades of rather consistent growth, Magellan Midstream Partners (NYSE:MMP) seemed to hit the ceiling in 2016:

MMP EBITDA (TTM) data by YCharts.

Driving that decline is the company’s direct exposure to commodity prices, which were weak in 2016. That said, prices are on the mend, which, when combined with the slew of growth projects Magellan Midstream Partners has in the pipeline, positions the company for a stronger showing in 2017. In fact, it could be the company’s best year yet for adjusted EBITDA and distributable cash flow.

What went wrong in 2016

Magellan Midstream Partners entered 2016 expecting it to be a down year. After producing $1.172 billion in adjusted EBITDA and $942.9 million in distributable cash flow in 2015, the company’s initial 2016 guidance for adjusted EBITDA was $1.154 billion, while it saw distributable cash flow slipping to $900 million. However, the MLP steadily increased its guidance throughout the year thanks to stronger-than-expected performance. As a result, it now expects to produce $1.193 billion in adjusted EBITDA and $925 million of distributable cash flow. While that would push adjusted EBITDA to a new record, distributable cash flow would still fall short of 2015’s record level.

Top 5 Growth Stocks To Buy For 2018: Intuitive Surgical Inc.(ISRG)

Advisors’ Opinion:

  • [By Chris Lange]

    The stock posting the largest daily percentage gain in the S&P 500 ahead of the close Wednesday was Intuitive Surgical, Inc. (NASDAQ: ISRG) which rose about 8% to $469.73. The stocks 52-week range is $263.66 to $473.79. Volume was 3.2 million compared to the daily average volume of less than 1 million.

  • [By Chris Lange]

    The S&P 500 stock posting the largest daily percentage loss ahead of the close Monday was Intuitive Surgical, Inc. (NASDAQ: ISRG) which traded down over 6% at $369.95. The stocks 52-week range is $203.57 to $405.05. Volume was1.9 million versus the daily average of about half a million shares.

  • [By Joseph Hogue]

    Enter Intuitive Surgical (Nasdaq: ISRG) and Da Vinci, a robotic arm that allows surgeons to operate with just a single incision less than an inch in size.

  • [By Demitrios Kalogeropoulos]

    As for individual stocks, IBM (NYSE:IBM) and Intuitive Surgical (NASDAQ:ISRG) attracted heavy investor interest following their quarterly earnings releases.

  • [By Chris Lange]

    The stock posting the largest daily percentage gain in the S&P 500 ahead of the close Wednesday was Intuitive Surgical, Inc. (NASDAQ: ISRG) which rose over 6% to $423.76. The stocks 52-week range is $217.19 to $426.98. Volume was 1.7 million compared to its average volume of nearly 1 million.

  • [By Lisa Levin] Gainers
    vTv Therapeutics Inc. (NASDAQ: VTVT) shares surged 115 percent to $2.56.
    Seadrill Limited (NYSE: SDRL) gained 77 percent to $0.3935. On Tuesday, a U.S. court approved the company's plan to exit Chapter 11 bankruptcy that includes raising around $1 billion in new debt and equity through a rights offering which will be led by its biggest shareholder.
    DropCar, Inc. (NASDAQ: DCAR) shares climbed 21.4 percent to $2.3301 after the company issued a preliminary Q1 update on its enterprise automotive business. The company disclosed that Q1 B2B automotive volumes rose 163 percent year-over-year.
    Teligent, Inc. (NASDAQ: TLGT) shares jumped 19.7 percent to $3.615 following the FDA approval of Clobetasol Propionate Cream USP, 0.05%.
    IZEA, Inc. (NASDAQ: IZEA) surged 19.1 percent to $2.62. IZEA posted a Q4 net loss of $743,000 on sales of $6.8 million.
    SunPower Corporation (NASDAQ: SPWR) shares gained 15.2 percent to $9.6180. SunPower announced plans to acquire SolarWorld Americas.
    LexinFintech Holdings Ltd. (NASDAQ: LX) climbed 10.2 percent to $15.20.
    CounterPath Corporation (NASDAQ: CPAH) shares rose 8.8 percent to $3.0033.
    Semiconductor Manufacturing International Corporation (NYSE: SMI) gained 8.2 percent to $6.685 after falling 0.80 percent on Tuesday.
    Energy XXI Gulf Coast, Inc. (NASDAQ: EGC) shares climbed 7.2 percent to $5.93.
    Textron Inc. (NYSE: TXT) shares rose 6.7 percent to $63.96 after the company reported stronger-than-expected earnings for its first quarter.
    Sibanye Gold Limited (NYSE: SBGL) gained 6.5 percent to $3.59 after dropping 4.53 percent on Tuesday.
    Calithera Biosciences, Inc. (NASDAQ: CALA) rose 6.3 percent to $6.75 after the company disclosed that the FDA has granted Fast Track designation to CB-839 in combination with cabozantinib for treatment of patients with advanced renal cell carcinoma.
    CSX Corporation (NASDAQ: CSX) gained 6.1 percent to $60.01 after reporting upbeat quarterly earnings

Top 5 Growth Stocks To Buy For 2018: TrueBlue Inc.(TBI)

Advisors’ Opinion:

  • [By Logan Wallace]

    Trueblue (NYSE: TBI) is one of 23 public companies in the “Help supply services” industry, but how does it contrast to its rivals? We will compare Trueblue to similar businesses based on the strength of its analyst recommendations, institutional ownership, valuation, profitability, dividends, earnings and risk.

Top 5 Growth Stocks To Buy For 2018: Buffalo Wild Wings Inc.(BWLD)

Advisors’ Opinion:


    Meanwhile, over on Real Money, Cramer looks at the heated battle at Buffalo Wild Wings  (BWLD) and says activism still lives. Get his insight strategies with a free trial subscription to Real Money.

  • [By Rich Duprey]

    Is Netflix (NASDAQ: NFLX) original programming likeThe Crown more interesting to watch than the Golden State Warriors’ bid to run away with the NBA championship? Could be, as the movie streaming giant continues to add to its subscriber base while sports bars like Buffalo Wild Wings (NASDAQ:BWLD) lose customers quarter after quarter.

  • [By Hilary Kramer]

     We welcome host of Fox Business Network’s Making Money with Charles Payne to this year’s contest. When he’s not on air, the rags-to-riches financial guru is editing his free weekly newsletter, Charles Payne’s Smart Talk, as well as his new newsletter, Charles Payne’sSmart Investing, which allows individuals insights into picks that were formerly only available to institutions.

    Payne is going with the owner, operator and franchiser of a wildly popular sports and wings bar for this year’s pick: Buffalo Wild Wings (BWLD).

    With commodities prices in the dumps, BWLD stands to benefit as Americans have more cash lining their pockets thanks to lower gas prices. That’s cash, Charles reasons, that Buffalo Wild Wings will be able to claim a chunk of. Not to mention the fact that if chicken prices remain subdued, it’ll mean a beefier bottom line.

  • [By Ben Levisohn]

    Buffalo Wild Wings (BWLD) has dropped 3% to $157.51 after its earnings fell short of the Street consensus.

    Las Vegas Sands (LVS) has declined 1.1% to $58.60 despite beating earnings forecasts.

  • [By Peter Graham]

    A long term performance chart shows Dave & Busters Entertainment being a pretty steady performer up until June while potential peer, upscale gentlemen’s clubs and restaurant ownerRCI Hospitality Holdings, Inc (NASDAQ: RICK), took off last yearand Buffalo Wild Wings (NASDAQ: BWLD) has started to fall off:

Top 5 Growth Stocks To Buy For 2018: Nordstrom Inc.(JWN)

Advisors’ Opinion:

  • [By Chris Lange]

    Nordstrom, Inc. (NYSE: JWN) reported fiscal first-quarter financial results after markets closed Thursday. The company reported $0.43 in earnings per share (EPS) and $3.3 billion in revenue versus consensus estimates from Thomson Reuters that called for $0.27 in EPS and $3.34 billion in revenue. The same period from last year had $0.26 in EPS and $3.25 billion in revenue.

  • [By ]

    Cramer and the AAP team say today’s weakness is the opportunity they have been patiently waiting for. Their target? Nordstrom (JWN) . Find out what they’re telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts PLUS.

  • [By Timothy Green]

    For dividend investors wanting a solid yield, Nordstrom (NYSE:JWN), International Business Machines (NYSE:IBM), and Garmin (NASDAQ:GRMN) look like solid choices. None is risk-free, particularly Nordstrom, which is in an extremely competitive industry. But all three offer dividend yields above 3% and a least a few reasons to be optimistic about the company.

  • [By Douglas A. McIntyre]

    The mall was created by accident, in some ways. Downtown Bloomington, Minnesota, lost its two largest corporate residents in 1982, football’s Minnesota Vikings and baseball’s Minnesota Twins. Over 78 acres became available for development. After debates about what should happen to the land, local officials decided to give it to financiers who wanted to build America’s largest home for retailers. It opened in 1992, two years before Inc. (NASDAQ: AMZN) was founded. Early tenants included Macy’s Inc. (NYSE: M), the Sears division of Sears Holdings Corp. (NASDAQ: SHLD) and Nordstrom Inc. (NYSE: JWN). All three have been injured by the current downturn in traditional retail sales.

Top 5 Growth Stocks To Buy For 2018: MEDIFAST INC(MED)

Advisors’ Opinion:

  • [By Lisa Levin]

    In trading on Friday, non-cyclical consumer goods & services shares rose by just 0.3 percent. Meanwhile, top losers in the sector included Medifast Inc (NYSE: MED), down 5 percent, and Bridgford Foods Corporation (NASDAQ: BRID), down 6 percent.

  • [By Peter Graham]

    Although obesity is widespread, small cap dieting stocks havetended to causeinvestor portfolios to loose weight. A long term performance chart shows small cap weight loss or dieting stocks Weight Watchers International and Reliv International, Inc (NASDAQ: RELV) stillbelow or at breakeven for longer term investors whileMedifast Inc (NYSE: MED)has performed better and NutriSystem Inc (NASDAQ: NTRI) hasfinally begun to take offearly last year:

  • [By Peter Graham]

    A long term performance chart shows small cap weight loss or dieting stocks Weight Watchers International and Reliv International, Inc (NASDAQ: RELV) still underperforming whileNutriSystem Inc (NASDAQ: NTRI) and Medifast Inc (NYSE: MED) began taking off early last year:

  • [By Max Byerly]

    McCormick & Company, Incorporated (NYSE: MKC) and Medifast (NYSE:MED) are both consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

  • [By Lee Jackson]

    These companies also reported insider buying last week: Carrizo Oil and Gas Inc. (NASDAQ: CRZO), Medifast Inc. (NYSE: MED), Medley Capital Corp. (NYSE: MCC), Occidental Petroleum Corp. (NYSE: OXY) and Sothebys (NYSE: BID).