Traders Market Weekly: Political Risks and Central Banks

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    IPO preview:

    Immune therapeutics developer Alopexx (NASDAQ:ALPX) is expected to start trading on October 19.

    The quiet period ends on Loop Media (NYSE:LPTV) on October 17. Watch Context Therapeutics (CNTX) and FRNT Financial (OTCPK:FRFLF) with IPO lockups hitting next week for blocks of shares.


    Paris Motor Show:

    The Paris Motor Show will open with a number of brands hoping to create some buzz. Renault’s (OTCPK:RNSDF) Alpine brand will show off the lightweight A110 R and a concept vehicle called the Alpenglow. Meanwhile, Renault’s budget brands will reveal the all-electric Manifesto off-road vehicle.

    Chinese automaker BYD Company (OTCPK:BYDDF) will display the Atto compact full-electric crossover, the Tang midsize crossover and the Han midsize sedan in hopes of creating engagement for the brand in Europe. Another Chinese automaker, Great Wall Motor Company (OTCPK:GWLLF), is anticipated to show its Funky Cat compact EV model and detail plans for European expansion for Ora and the Wey brand.

    Stellantis (NYSE:STLA) will have a big presence in Paris with the public debit of the Peugeot fastback 408. The model is said to be designed for efficiency and intelligent electrification, with two 180 hp and 225 hp rechargeable hybrid engines. The Jeep brand will introduce the all-new fully electric Jeep Avenger in Paris and showcase other all-electric models. Premium Stellantis brand DS Automobiles will feature the DS 7 with its 360 hp plug-in hybrid performance package.

    Mercedes-Benz (OTCPK:MBGAF) is not planning on having a stand at the show, but will reveal the EQE SUV at the Rodin Museum in Paris during the weeek. Independent German electric vehicle manufacturer Next.e.GO Mobile SE will be presenting its new vehicle lineup, which includes the 2022 urban BEV e.wave X as well as a new urban delivery EV.

    One of the mostly highly-anticipated vehicles to be displayed in Paris will be the Fisker (NYSE:FSR) Ocean midsize SUV that is set for mass production in November. The EV startup will display a production-intent top trim Fisker Ocean Extreme and is expected to issue new details on Ocean pricing, performance, and features. Finally, a sleeper at the auto show could be Vietnamese automaker Vinfast with its VF9 electric SUV. The reveal will be ahead of a planned launch in Europe and the U.S. Of note, Vinfast parent Vingroup is reportedly still considering an IPO in the U.S.


    Shareholders with iRobot (NASDAQ:IRBT) will vote on the acquisition offer from Amazon (AMZN) on October 17.


    Adobe (ADBE) will host a meeting on October 18 with financial analysts and investors at Adobe MAX. The company’s executive team will provide update on the long-term market opportunity, strategy and innovation roadmap.


    Barron’s mentions:

    Deckers Outdoor (DECK) is called out this week by the publication as a stock that has more attraction than just the Ugg business. While the shoe seller is at risk of pulling back on guidance for double-digit revenue growth due to sector-wide demand and inventory issues, Deckers is called a long-term winner with multiple brands performing well. In particular, Hoka is noted to now be the number two brand in the specialty running category behind industry leader Brooks. Hoka is growing so quickly that some estimate have it accounting for half of Deckers’ sales by 2025. On a valuation basis, Deckers trades with an earnings multiple of 16.5X vs. the five-year average of 18.6X.


    October 17 Big Shareholder votes:

    Shareholders with iRobot $IRBT will vote on acquisition offer from Amazon $AMZN
    Shareholders with Ping Identity $PING will vote on the $2.8B buyout deal from Thoma Bravo.


    Asia-Pacific Began Week Mixed

    Higher after #CCP
    #HongKong Hang Seng: +0.2%
    #China’s Shanghai Composite: +0.4%
    #India’s Sensex: +0.9%
    #South Korea’s Kospi: +0.3%

    Lower after Koruda, #Floods
    #Japan’s Nikkei: -1.2%
    #Australia’s ASX All Ordinaries: -1.4%


    Japan’s Finance Minister Suzuki said that the G-20 has a shared understanding over currency volatility and repeated that excessive speculative moves will be countered.
    The approval rating of Japan’s cabinet has dropped to 33.1%, according to ANN. Bank of Japan Governor Kuroda said that inflation is expected to continue accelerating into the end of 2022 but is expected to return below 2.0% in FY23/24.
    Policymakers at the Bank of Korea reportedly expect a terminal rate above 3.50%. China will reportedly delay the release of its Q3 growth figures.
    Japan’s August Industrial Production 3.4% m/m (expected 2.7%; last 2.7%) and Capacity Utilization 1.2% m/m (last 2.4%). August Tertiary Industry Activity Index 0.7% m/m (expected 0.3%; last -0.5%)
    South Korea’s September trade deficit $3.78 bln (last deficit of $3.70 bln). September Imports 18.6% yr/yr (last 18.6%) and Exports 2.7% yr/yr (last 2.8%)
    Singapore’s September trade surplus SGD5.75 bln (last surplus of SGD3.738 bln). September non-oil exports -4.0% m/m (expected -2.1%; last -3.9%); 3.1% yr/yr (expected 7.1%; last 11.4%)


    Major European indices trade in the green.

    —Equity Markets—

    STOXX Europe 600: +1.4%
    Germany’s DAX: +1.4%
    U.K.’s FTSE 100: +0.8%
    France’s CAC 40: +1.3%
    Italy’s FTSE MIB: +1.3%
    Spain’s IBEX 35: +1.9%


    The British pound is climbing against the dollar and Gilts are also on the rise after British Chancellor Hunt reversed most of the fiscal decisions made by Prime Minister Truss in an announcement that was originally scheduled for the end of October.
    There is also some speculation that Prime Minister Truss could be forced out.
    The European Commission is expected to continue discussing ways to deal with the energy crisis at a meeting on Tuesday.
    European Central Bank policymaker Kazaks said that a 75-bps rate hike should be made in October and followed by another “big” increase in December.
    Italy’s September CPI 0.3% m/m, as expected (last 0.8%); 8.9% yr/yr, as expected (last 8.4%)


    Dow +524.36 at 30161.22, Nasdaq +330.11 at 10651.35, S&P +92.68 at 3675.82

    The major averages pushed to new highs in the last half hour but pulled back some from those levels as Treasury yields inched higher. The Dow Jones Industrial Average lags its peers, up 1.8%.

    The 2-yr note yield, at 4.40% a short time ago, rose to 4.44% recently.
    The 10-yr note yield, at 3.92% a short time ago, rose to 3.97% recently.

    Market breadth reflects strong conviction on the buy side.

    Advancing issues lead declining issues by a 13-to-1 margin at the NYSE and a nearly 5-to-1 margin at the Nasdaq.


    Apple (AAPL 141.81, +3.43, +2.5%) after the company was named a top pick at Morgan Stanley, boost index level gains.

    The Vanguard Mega Cap Growth ETF (MGK) is up 3.1% versus a 2.3% gain in the S&P 500 and a 2.0% gain in the Invesco S&P 500 Equal Weight ETF (RSP).


    Energy complex futures are mixed this morning.

    WTI crude oil futures are up 0.3% to $85.77/bbl
    Natural gas futures are down 6.8% to $6.02/mmbtu.


    ^^^^ +1s for excellent insight for week ahead
    WALL STREET is in RALLY mode with DOW +500 & NASDAQ +300
    as we are oversold & and election in about 3 weeks – lol
    My better 1/2 and me have already voted by mail 😉
    and am registering BAMBI & members of the herd + our 2 pugs – lol 🙂


    WINTER is on the way … STRONG COLD FRONT coming to mid-west & east in days ahead

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