Traders Market Weekly: Markets Rupture with Soaring yields and Fund Outflows

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    Apple (AAPL 145.93, -5.83, -3.84%): ends plans for iPhone 14 production increase as demand declines, according to Bloomberg
    Netflix (NFLX 225.39, +1.03, +0.46%): upgraded to Overweight from Neutral at Atlantic Equities
    Biogen (BIIB 290.00, +92.21, +46.62%): reports Lecanemab confirmatory Phase 3 Clarity AD study met primary endpoint, showing highly statistically significant reduction of clinical decline in large global clinical study of 1,795 participants with early Alzheimer’s disease
    Lyft (LYFT 13.75, -0.41, -2.90%): slides on reports it is freezing all U.S. hiring through the end of 2022, according to NY Post
    Progress Software (PRGS 41.05, -0.52, -1.25%): beats by $0.03, beats on revs; guides NovQ EPS in-line, revs in-line, but mid-points are below consensus
    Thor Industries (THO 74.34, +2.59, +3.61%): beats by $1.26, beats on revs


    Equity futures pushed into positive territory recently.

    The S&P 500 futures are up 15 points and are trading 0.4% above fair value.
    The Nasdaq 100 futures are up 3 points and are trading roughly in-line with fair value.
    The Dow Jones Industrial Average futures are up 164 points and are trading 0.2% above fair value.


    August Advance report for International Trade in Goods showed a deficit of $87.3 billion versus the revised deficit of $90.2 billion (from $89.1 billion) in July.
    The Advance report for Retail Inventories rose 1.4% versus the increase of 1.1% in July.
    The Advance report for Wholesale Inventories rose 1.3% versus July’s revised increase of 0.6% (form 0.8%).


    Treasury note yields pulled back noticeably as equity futures pushed into positive territory.

    The 10-yr note yield, at 4.01% overnight, sits at 3.86% now.
    The 2-yr note yield is down 17 basis points to 4.14%.

    Selling briefly lifted the 10-yr yield above the 4.000% mark for the first time since April 2010, but futures bounced over the next few hours, accelerating their rebound after the Bank of England announced a plan to conduct temporary purchases of longer-dated gilts “to restore orderly market conditions.”

    The announcement gave a brief boost to the pound, but the move was retraced entirely, sending Sterling to a fresh session low.

    Reports from last evening indicate that Treasury Secretary Yellen will leave the administration after midterms.

    U.S. Treasury will sell $36 bln in 7-yr notes to follow weak offerings of 2- and 5-yr notes over the past two days. The U.S. Dollar Index is up 0.5% at 114.64, reaching a fresh high for the year.

    2-yr: -9 bps to 4.22%
    3-yr: -10 bps to 4.30%
    5-yr: -6 bps to 4.15%
    10-yr: -1 bp to 3.95%
    30-yr: +3 bps to 3.86%


    PRAYERS for all in path of the storm (esp. FLORIDA) …
    almost CAT 5 @ 155mph …. 500 miles wide (a monster like Katrina) … slow @ 5-10mph
    Georgia & Carolinas will also experience wind/flooding
    we’ll have 30-40mph winds even in SW VA on SUN/MON


    LANDFALL of eyewall — near Cape Corral & Ft. Myers area … storm surge up to 18 feet possible


    Dow 29,683.74 548.75 1.88%
    S&P 500 3,719.04 71.75 1.97%
    Nasdaq 11,051.64 222.13 2.05%
    GlobalDow 3,240.04 37.28 1.16%
    Gold 1,668.50 32.30 1.97%
    Oil 81.88 3.38 4.31%


    The Fed has burnt a few bridges so just on that, there needs to be a change


    Equity indices in the Asia-Pacific region ended Thursday on a mixed note.

    —Equity Markets—

    Japan’s Nikkei: +1.0%
    Hong Kong’s Hang Seng: -0.5%
    China’s Shanghai Composite: -0.1%
    India’s Sensex: -0.3%
    South Korea’s Kospi: +0.1%
    Australia’s ASX All Ordinaries: +1.5%


    Japan’s Prime Minister Kishida has reportedly promised to take steps to reduce the cost of power to consumers. South Korea’s President Yoon said that his government will deal appropriately with potential shocks to the South Korean economy. South Korea, Japan, and the U.S. will conduct joint military drills tomorrow.
    South Korea’s October Manufacturing BSI Index 73 (last 82)
    New Zealand’s September ANZ Business Confidence -36.7 (last -47.8) and September NBNZ Own Activity -1.8% (last -4.0%)


    Major European indices trade lower across the board.

    British Prime Minister Truss spoke in defense of her economic plan, saying she is willing to take “controversial” decisions to boost growth, while Chancellor Kwarteng pushed back against calls for his resignation.
    More European Central Bank policymakers have spoken in favor of a 75-bps rate hike. The Italian government lowered its growth forecast for 2023 to 0.6% from 2.4%.
    Eurozone’s September Business and Consumer Survey 93.7 (expected 95.0; last 97.3)
    Italy’s August PPI 2.8% m/m (last 5.0%); 40.1% yr/yr (last 36.9%)
    Spain’s September CPI -0.6% m/m (last 0.3%); 9.0% yr/yr (expected 10.0%; last 10.5%)


    Apple (AAPL 146.62, -3.22, -2.15%): downgraded to Neutral from Buy at BofA Securities; upgraded to Buy from Neutral at Rosenblatt
    CarMax (KMX 75.92, -10.50, -12.15%): misses by $0.61, misses on revs
    Vail Resorts (MTN 217.99, +7.70, +3.66%): beats by $0.18, beats on revs
    Jefferies (JEF 30.20, +0.47, +1.58%): beats by $0.05, beats on revs
    Amazon (AMZN 117.00, -1.01, -0.86%): announced pay increases for its U.S. front-line employees—a nearly $1 billion investment over the next year
    PG&E (PCG 12.56, -0.16, -1.26%): files application with California Public Utilities Commission to separate its non-nuclear generation assets into stand-alone subsidiary; also reaffirms FY22 non-GAAP core earnings guidance
    Bed Bath & Beyond (BBBY 6.20, -0.26, -4.0%): misses by $2.80, reports revs in-line; Net Sales declined 28%
    Reviewing overnight developments:


    The S&P 500 futures are down 46 points and are trading 1.3% below fair value.
    The Nasdaq 100 futures are down 189 points and are trading 1.6% below fair value.
    The Dow Jones Industrial Average futures are down 297 points and are trading 1.0% below fair value.


    For the week ending September 24, initial jobless claims decreased by 16,000 to 193,000 (consensus 213,000). That is the first drop below 200,000 since early May. Continuing jobless claims for the week ending September 17 decreased by 29,000 to 1.347 million.

    The key takeaway from the report is the same as last week: The low level of initial claims — a leading indicator — will register with the Fed as a basis to maintain an aggressive line with its rate hikes since it sees a softening in the labor market as a necessary ingredient for helping to bring inflation back down to its 2.0% target. To be sure, an initial claims reading below 200,000 is not at all consistent with a labor market softening in a manner that would placate Fed officials.


    The third estimate for Q2 GDP was largely as expected. Real GDP was unchanged from the second estimate at -0.6%, as expected, and the GDP Price Deflator was bumped up to 9.0% ( consensus 8.9%) from 8.9%.

    The key takeaway from this report is that it won’t register at all as a market mover since we are a day away from being done with the third quarter.

    The 10-yr note yield fell from earlier highs. It was at 3.86% earlier, now sitting at 3.79%.
    The 2-yr note yield remains near its high, up 11 basis points to 4.21%.

Viewing 15 posts - 31 through 45 (of 61 total)
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