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And y’all great TEXANS keep an eye on the TROPICAL skies
as I’m still cleaning up fallen trees & limbs — after IAN roared thru SW VIRGINIA
Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note.
Japan’s Nikkei: -2.6%,
Hong Kong’s Hang Seng: -2.2%,
China’s Shanghai Composite: +0.2%,
India’s Sensex: -1.5%,
South Korea’s Kospi: -1.8%,
Australia’s ASX All Ordinaries: -0.4%.Japan’s August Current Account deficit JPY530 bln (expected deficit JPY470 bln; last deficit JPY630 bln). September Economy Watchers Current Index 48.4 (expected 47.9; last 45.5)
Australia’s August Building Approvals 28.1% m/m and Private House Approvals 4.1% m/m (last 0.8%). September NAB Business Survey 25 (last 22) and Business Confidence 5 (last 10). October Westpac Consumer Sentiment -0.9% m/m (last 3.9%).
New Zealand’s September Electronic Card Retail Sales 1.4% m/m (last 1.0%); 28.6% yr/yr (last 26.9%)
Japan’s Prime Minister Kishida said that he is not looking to shorten the tenure of Bank of Japan Governor Kuroda, adding that he supports the central bank’s policy despite its effect on the yen.
China reportedly plans to conduct mass coronavirus testing in Shanghai, fueling concerns about the potential for new lockdowns.
Australia’s Treasurer said that the budget, which will be released on October 25, will not forecast a recession.Major European indices trade in the red.
STOXX Europe 600: -0.7%,
Germany’s DAX: -0.6%,
U.K.’s FTSE 100: -0.8%,
France’s CAC 40: -0.3%,
Italy’s FTSE MIB: -1.2%,
Spain’s IBEX 35: -0.6%.U.K.’s August Average Earnings Index + Bonus 6.0% yr/yr (expected 5.9%; last 5.5%). August three-month employment change -109,000 (expected -155,000; last 40,000) and August Unemployment Rate 3.5% (expected 3.6%; last 3.6%). September Claimant Count 25,500 (expected 4,200; last 1,100)
Italy’s August Industrial Production 2.3% m/m (expected 0.2%; last 0.5%); 2.9% yr/yr (expected -0.4%; last -1.3%)
The U.K.’s Pension and Lifetime Savings Association called on the Bank of England to continue its emergency Gilt buying program until at least the end of the month.
The U.K.’s unemployment rate reached its lowest level since 1974 in the August reading.
Mercedes reported that its Q3 deliveries increased 21% yr/yr thanks to growth in all regions. A German trade union called for a worker strike at Amazon warehouses during this week’s sales event.KLA Corporation (KLAC 292.20, -7.14, -2.39%): will stop offering some supplies to Chinese customers, according to Reuters
Zoom (ZM 71.50, -2.22, -3.01%): downgraded to Equal Weight from Overweight at Morgan Stanley
Warner Music Group (WMG 23.00, +0.65, +2.91%): initiated with a Buy at Goldman
Leggett & Platt (LEG 32.00, -2.68, -7.73%): lowers its FY22 outlook due to an increasingly challenged global economic environment and consumer backdrop
American Airlines (AAL 12.31, +0.26, +2.16%): raises Q3 revenue guidance
Amgen (AMGN 238.00, +5.85, +2.5%): Morgan Stanley upgraded to Overweight from Equal Weight
Qorvo (QRVO 78.79, -3.17, -3.87%): Well Fargo downgraded to Equal Weight from OverweightBIG BOUNCE:
Dow 29555.81 +350.90 (1.20%)
Nasdaq 10578.99 +37.04 (0.35%)
SP 500 3632.84 +20.38 (0.56%)NYSE Adv 1801 Dec 1207 Vol 447.0 mln
Nasdaq Adv 2278 Dec 2051 Vol 2.90 blnFrom Dow Jones Industrial Average down 0.4%, yet the S&P 500 and Nasdaq Composite down 1.2% and 1.8%, respectively.
Notably, the S&P 500 broke down to a new low for the year (3,568.45) shortly after the open, yet selling pressure abated at roughly the same time the U.S. Dollar Index rolled over. It was then that buyers re-emerged to help pare today’s losses, and what began as a down day, has evolved into a trend-up day with broad-based participation in the rebound effort.The losses came on top of yesterday’s losses and were driven by concerns related to the growth outlook and financial stability risks.
The latter came to light with the Bank of England (BoE) intervening again in the UK gilt market after a nasty selloff yesterday that completely undid the gains registered after the BoE announced its emergency gilt purchase operation on September 28. Today, the BoE said it is going to buy index-linked gilts from October 11 until October 14 to mitigate dysfunction in the market and prevent “fire-sale” dynamics.
That news helped stop the bleeding in gilts and provided a boost for the British pound (GBP/USD +0.9% to 1.1156) that is weighing on the U.S. Dollar Index (-0.5% to 112.54) along with strength in the euro today (EUR/USD +0.6% to 0.9759).
The slowdown concerns stemmed from reports that China is imposing new restrictions in some Chinese cities because of rising COVID cases. Also, the IMF lowered its 2022 global growth forecast to 2.7% from 2.9% and said “The worst is yet to come.”
It has also helped that Treasury yields have come down noticeably from their overnight highs as well, particularly the 10-yr note yield, which kissed 4.00%. It has since backed down to 3.89% while the 2-yr note yield, which hit 4.34%, sits at 4.28%.
The 2-yr note yield has not reacted at all really to Cleveland Fed President Mester (FOMC voter) saying in a speech that monetary policy is moving into restrictive territory and needs to stay there for some time or to her position that she thinks the bigger risk at this point, given current economic conditions and the outlook, is tightening too little and allowing very high inflation to persist and become embedded in the economy.
Those remarks took a little energy away from the stock market’s rebound run, but it nonetheless regrouped, and the major indices are sitting near their best levels of the day.
Nine out of 11 S&P 500 sectors are in positive territory.
The information technology sector (-0.3%) was briefly in positive territory after being down as much as 2.0%. The Philadelphia Semiconductor Index, meanwhile, is down 1.3% now after being down as much as 3.4% at its worst level of the day.
Today’s best-performing sectors are the defensive-oriented consumer staples (+1.7%) and health care (+1.5%) sectors.
The Dow Jones Industrial Average has been the star performer in today’s trade, outperforming from the start with the help of Amgen (AMGN 246.07, +13.92, +6.0%), which was upgraded by Morgan Stanley to Overweight from Equal-Weight.
Before today’s open, it was reported that the September NFIB Small Business Optimism Index rose to 92.1 from 91.8 in August.
There was no other U.S. economic data of note today.
Dow 29,239.19 36.31 0.12%
S&P 500 3,588.84 -23.55 -0.65%
Nasdaq 10,426.19 -115.91 -1.10%
GlobalDow 3,188.03 -25.62 -0.80%
Gold 1,673.60 -1.60 -0.10%
Oil 88.54 -2.59 -2.84%Bond Wrap:
Earlier on 10-yr Treasury note hit 4.00% overnight
30-yr yield a level not seen since late 2013Closes:
2-yr: UNCH at 4.30%
3-yr: +1 bp to 4.34%
5-yr: +3 bps to 4.17%
10-yr: +6 bps to 3.94%
30-yr: +6 bps to 3.90%COME ON WALL STREET — let’s get out of the RED ZONE & score some TDs … as #46 would say “CMON MAN” 😉
Indeed the FED must “LEND A HAND” & we’ll be better in the “LONG RUN” as the new 2022 hit album shares 🙂hopefully the DARK side of the FORCE will be held at bay in the dangerous world conflicts & struggles we face today
and that more PEACEFUL times will prevail in the future as the RASCALS reflected decades ago
(Felix Cav = one of world’s best MOOG synthesizer) 🙂
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