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There is ongoing speculation that the Bank of England and the European Central Bank will shift down to 50-bp rate hikes. European Central Bank policymaker Knot said that underlying inflation trends are concerning but a recession in Q4 is not a foregone conclusion. However, ECB policymaker Kazimir said that the risk of a recession is on the rise.
Eurozone’s October Private Sector Loans 4.2% yr/yr (expected 4.5%; last 4.4%) and Loans to nonfinancials 8.9% yr/yr (last 8.9%)
U.K.’s November CBI Distributive Trades Survey -19 (expected 2; last 18)Williams-Sonoma (WSM 117.01, -5.41,, -4.4%): downgraded to Underweight from Equal Weight at Morgan Stanley
Anheuser-Busch InBev (BUD 58.97, +2.38, +4.2%): upgraded to Overweight from Underweight at JPMorgan
Las Vegas Sands (LVS 44.51, +1.34, +3.1%), Wynn Resort (WYNN 79.41, +4.48, +6.0%), and MGM Resorts (MGM 36.53, +0.80, +2.2%): Chinese government renewed casino licenses for Macau
Chevron (CVX 180.31, -3.39, -1.9%): U.S. government granted license to resume oil production in Venezuela, according to Bloomberg
Axsome Therapeutics (AXSM 64.30, +7.48, +13.2%): announces AXS-05 achieves primary endpoint in the ACCORD phase 3 Trial in Alzheimer’s Disease Agitation
Biogen (BIIB 293.99, -11.16, -3.7%): Another death was linked to Lecanemab, according to Science.Org
Apple (AAPL 145.50, -2.61, -1.8%): could lose 6 million iPhone Pro models from events at the Foxconn plant, according to Bloomberg.The S&P 500 futures are down 28 points and are trading 0.9% below fair value.
The Nasdaq 100 futures are down 77 points and are trading 1.0% below fair value.
The Dow Jones Industrial Average futures are down 180 points and are trading 0.6% below fair value.Equity indices in the Asia-Pacific region began the week on a mostly lower note. Investor sentiment was pressured by reports of tighter lockdown measures in China, which prompted protests in several cities.
Goldman Sachs speculated that China could lift its zero-covid policy before April, though Q2 is still projected as the most likely time for an exit. Japan is expected to fine three power companies on anti-trust grounds.U.S. Treasuries are on track for a modestly higher start in most tenors.
Treasury futures climbed last evening, emboldened by weakening sentiment in Asia stemming from the reimposition of lockdown measures in China. The tightening of coronavirus restrictions invited protests in several cities, including Beijing.
In Europe, there has been continued speculation that the Bank of England and the European Central Bank will shift down to 50-bp rate hikes going forward.
Treasury futures reached overnight highs shortly after 3:00 ET, followed by a pullback that erased the bulk of last night’s gains.
Yield Check:
2-yr: -2 bps to 4.46%
3-yr: UNCH at 4.23%
5-yr: UNCH at 3.87%
10-yr: -1 bp to 3.68%
30-yr: -2 bps to 3.72%Crude oil is on the defensive, falling to its lowest level in eleven months.
The U.S. Dollar Index is down 0.3% at 105.61, returning to its 200-day moving average (105.37).Earnings Monday
BMO
PDD Pinduoduo
HTHT H World Group Limited
AVXL Anavex Life Sciences
HTOO Fusion Fuel Green PLCAMC
ARWR Arrowhead Pharmaceuticals
AZEK Azek Company
YY Joyy
GLBS Globus MaritimeCopper continues to pull back since spat the 50wma and Kijun 4 weeks ago signaling a faltering recovery.
HG futures fell 1.2% another today to $3.61/lb.
$FCX 36.38 ▼ -0.77 (-2.07%) todayCOVID outbreak/lockdowns in China + the “R” word forecast for 2023 brought a cloudy day to the markets
Dow 33,849.46 -497.57 -1.45%
S&P 500 3,963.94 -62.18 -1.54%
Nasdaq 11,049.50 -176.86 -1.58%
VIX 22.20 1.70 8.29%
Gold 1,738.90 -15.10 -0.86%
Oil 76.86 0.58 0.76%Bond Wrap: U.S. Treasuries modestly lower note in most tenors
Inversion along the yield curve deepened slightly today, reflecting growth concerns
2-yr: -2 bps to 4.46%
3-yr: UNCH at 4.23%
5-yr: +3 bps to 3.90%
10-yr: +1 bp to 3.70%
30-yr: UNCH at 3.75%The market did not receive any top tier data today, but the remainder of the week will feature the release of the October report on Personal Income/Outlays and the latest Nonfarm Payrolls report.
Impressive intraday reversal for WTI crude oil futures, which fell to $73.60/bbl,its lowest level in eleven months, earlier on growth concerns connected to China. By the close of the cash session, WTI crude oil futures rose 0.7% to $77.17/bbl, helped presumably by some short covering activity and speculation that OPEC+ could consider a production cut at next week’s meeting.
Crude oil retreated in reaction to the news from China,but rallied off that level amid speculation that OPEC+ will entertain the idea of a production cut at its next meeting.
The greenback faced pressure in early action but rallied as the day went on. The early weakness briefly pressured the U.S. Dollar Index past its 200-day moving average (105.37) to a level not seen since mid-August, but the index eventually climbed 0.7% to 106.67, climbing above Friday’s high (106.42).
Sarepta Therapeutics (SRPT) announces that the U.S. Food and Drug Administration has accepted the Company’s Biologics License Application seeking accelerated approval of SRP-9001 for the treatment of ambulant individuals with Duchenne muscular dystrophy
$SRPT 118.13▲ +3.56 (+3.11%) today Update
Duchenne muscular dystrophy, sometimes shortened to DMD or just Duchenne, is a rare genetic disease. It predominantly affects males, but, in rare cases, can also affect females. Duchenne causes the muscles in the body to become weak and damaged over time and is eventually fatal. The genetic change that causes Duchenne—a mutation in the DMD gene—happens before birth and can be inherited, or new mutations in the gene can occur spontaneously. Muscle weakness becomes increasingly noticeable between the ages of 3 and 5, and most patients use a wheelchair by the time they are 12. During adolescence, heart and breathing muscles weaken, leading to serious, life-threatening complications.
Duchenne affects approximately 1 in 3,500 to 5,000 males born worldwide.
https://www.sarepta.com/disease-areas/duchenne-muscular-dystrophy
Asia-Pacific stocks higher o/t Japan.
Japan’s #Nikkei: -0.5%,
Hong Kong’s #Hang Seng: +5.2%,
China’s #Shanghai Composite: +2.3%,
India’s #Sensex: +0.3%,
South Korea’s #Kospi: +1.0%,
Australia’s #ASX All Ordinaries: +0.3%.Japan’s October Retail Sales 4.3% yr/yr (expected 5.0%; last 4.8%). October Unemployment Rate 2.6% (expected 2.5%; last 2.6%) and October Jobs/Application Ratio 1.35 (expected 1.35; last 1.34)
Chinese equities rallied amid speculation that the government is looking to speed up coronavirus shots for the elderly and is aiming to avoid excessive restrictions.
China Securities Regulatory Commission said that the ban on share sales by developers will be lifted on Monday.
The Reserve Bank of New Zealand’s Shadow Board sees the official cash rate peaking at 5.00% in 2023 with a risk of “overcorrecting.”
Japan’s Finance Minister Suzuki said that a budget that directs 2.0% of GDP to defense spending is being prepared.
The South Korean government ordered drivers of cement trucks to return to work from a strike.
Taiwan’s domestic growth forecast for 2022 was cut to 3.06% from 3.76% while the outlook for 2023 was lowered to 2.75% from 3.05%.Major European indices trade near their flat lines while the U.K.’s FTSE (+0.7%) outperforms.
STOXX Europe 600: +0.2%,
Germany’s DAX: +0.2%,
U.K.’s FTSE 100: +0.7%,
France’s CAC 40: +0.2%,
Italy’s FTSE MIB: UNCH,
Spain’s IBEX 35: -0.1%.Eurozone’s November Business and Consumer Survey 93.7 (expected 93.5; last 92.7)
U.K.’s October Mortgage Lending GBP3.97 bln (expected GBP5.02 bln; last GBP5.88 bln) and net Lending to Individuals GBP4.70 bln (expected GBP6.70 bln; last GBP6.50 bln)
Italy’s September Industrial Sales -1.2% m/m (last 3.4%); 18.0% yr/yr (last 22.9%). October PPI -3.3% m/m (last 2.7%); 28.0% yr/yr (last 41.7%)
Spain’s November CPI -0.1% m/m (last 0.3%); 6.8% yr/yr (expected 7.4%; last 7.3%)
Swiss Q3 GDP 0.2% qtr/qtr (expected 0.3%; last 0.1%); 0.5% yr/yr (expected 1.0%; last 2.2%)
Spain’s November CPI and Italy’s October PPI showed a deceleration on a month-over-month basis ahead of tomorrow’s release of the November CPI report for the eurozone.
The Airbus CEO said that the supply chain environment is still “very complex.”
British Prime Minister Sunak said that the “golden era” of U.K. relations with China has come to an end.
Germany signed an agreement to purchase LNG from Qatar beginning in 2026.
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