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Japan’s Finance Minister Suzuki said that currency moves are being watched with close urgency as continued weakness in the yen drove it to its lowest level against the dollar since 1998.
The Bank of Korea raised its base rate by 50 bps to 3.00%, as expected.
Reserve Bank of Australia Assistant Governor Ellis said that one-year inflation expectations remain within the 2-3% range.
China’s September New Loans CNY2.47 trln (expected CNY1.80 trln; last CNY1.25 trln) and September total social financing CNY3.53 trln (expected CNY2.725 trln; last CNY2.43 trln)
Japan’s August Core Machinery Orders -5.8% m/m (expected -2.3%; last 5.3%); 9.7% yr/yr (expected 12.6%; last 12.8%). September Machine Tool Orders 4.3% yr/yr (last 10.7%). October Reuters Tankan Index 5 (last 10)
New Zealand’s August Visitor Arrivals -3.3% m/m (last 41.8%)Major European indices trade near their flat lines while Spain’s IBEX (-0.6%) lags.
—Equity Markets—
STOXX Europe 600: -0.6%
Germany’s DAX: -0.5%
U.K.’s FTSE 100: -1.0%
France’s CAC 40: -0.5%
Italy’s FTSE MIB: -1.2%
Spain’s IBEX 35: -1.4%FT reported that the Bank of England signaled willingness to extend its emergency bond buying scheme past Friday, but a follow-up report noted that the BoE reiterated its intention to end the program this week.
The 10-yr Gilt yield is up ten basis points at 4.54% while the pound is up nearly 1.0% against the dollar.
There is some speculation that British Prime Minister Truss will scrap some elements of her government’s budget.
Bank of France Governor Villeroy de Galhau said that recession fears should not derail the European Central Bank’s rate hike plans.
Eurozone’s August Industrial Production 1.5% m/m (expected 0.6%; last -2.3%); 2.5% yr/yr (expected 1.2%; last -2.5%)
U.K.’s August GDP -0.3% m/m (expected 0.0%; last 0.2%); 2.0% yr/yr (expected 2.4%; last 4.4%). August Construction Output 0.4% m/m (expected 0.5%; last 0.1%); 6.0% yr/yr (expected 5.6%; last 4.8%). August Industrial Production -1.8% m/m (expected -0.2%; last -1.1%); -5.2% yr/yr (expected 0.6%; last -3.2%). August Manufacturing Production -1.6% m/m (expected 0.2%; last -1.1%); -6.7% yr/yr (expected 0.8%; last -5.2%). August trade deficit GBP19.26 bln (expected deficit of GBP20.40 bln; last deficit of GBP17.59 bln)Intel (INTC 25.29 +0.25 +1.00%): is planning thousands of job cuts, according to Bloomberg
PepsiCo (PEP 167.50 +4.91 +3.02%): beats by $0.12, beats on revs; raises FY22 EPS above consensus
Norwegian Cruise Line (NCLH 12.06 +0.43 +3.70%): UBS upgrades to Buy from Neutral
Philips (PHG 13.67 -1.24 -8.32%): sees Q3 revs below consensus
Cameco (CCJ 22.80 -3.02 -11.70%): and Brookfield Renewable Partners (BEP) are forming a strategic partnership to acquire Westinghouse Electric Company, whose total EV is $7.875 bln; announces 29,615,000 common shares bought deal offering at $21.95/share for gross proceeds of approximately $650 mln
Diamondback Energy (FANG 140.40 +1.03 +0.74%): enters into definitive purchase agreement to acquire all leasehold interest and related assets of FireBird Energy in exchange for 5.86 million shares of Diamondback common stock and $775 mln of cash
Lyft (LYFT 11.78 +0.51 +4.53%): Gordon Haskett upgrades to Buy from HoldDow 29432.11 +190.89 (0.65%)
Nasdaq 10437.45 +11.41 (0.11%)
SP 500 3601.10 +12.19 (0.34%)
10-yr Note +1/32 3.93
NYSE Adv 1119 Dec 1786 Vol 251 mln
Nasdaq Adv 1771 Dec 2402 Vol 1.6 blnStrong: Consumer Staples, Health Care, Information Technology, Communication Services
Weak: Energy, Real Estate, Materials, UtilitiesMoving the Market
— PepsiCo (PEP) reporting better-than-expected earnings and guidance, setting a hopeful tone for the Q3 earnings reporting period
— S&P 500 testing, and finding support at, yesterday’s low (3568.45)
— Speculation that the Bank of England will provide more liquidity to the UK gilt market after Friday’s deadline
— Strong mega cap stocksPharmaceutical companies are outperforming the broader market today.
Pfizer (PFE 42.51, +0.59, +1.4%)
BioTech SE (BNTX 138.78, +9.29, +7.2%) trade up after confirming the FDA approved their COVID booster vaccine for children five to 11 years of age.
Moderna (MRNA 134.05, +13.35, +11.0%) is trading up on the FDA news but also news that Merck (MRK 91.91, +0.11, +0.1%) exercised an option for joint development and commercialization of investigational personalized cancer vaccine.Semiconductors lag following INTC news
The U.S. Dollar Index took a sharp turn lower recently from 113.57 to 113.24.
Semiconductors are having another weak session following reports that Intel (INTC 25.19, +0.18, +0.7%) plans to cut thousands of jobs because of PC market weakness, according to Bloomberg. Notably, the company trades up today in spite of the news. The PHLX Semiconductor Index is down 1.0%.
Belly Outperforms
U.S. Treasuries trade in mixed fashion with the long bond remaining behind while shorter tenors outperform slightly. Treasuries slipped from their starting levels during the first few minutes of action, hitting lows shortly after the release of the September PPI report, which showed hotter than expected headline inflation while core PPI growth matched expectations.
The bounce off lows has been paced by the 5-yr note, which sits on its high, while the 10-yr note has also turned positive. Equities started the day on a slightly higher note with the S&P 500 (+0.2%) staying a step ahead of the Nasdaq (+0.1%).
2-yr: +1 bp to 4.31%
3-yr: -1 bp to 4.33%
5-yr: -2 bps to 4.15%
10-yr: UNCH at 3.94%
30-yr: +2 bps to 3.92%Dow 29,210.85 -28.34 -0.10%
S&P 500 3,577.03 -11.81 -0.33%
Nasdaq 10,417.10 -9.09 -0.09%
VIX 33.71 0.08 0.24%
Gold 1,681.10 -4.90 -0.29%
Oil 87.03 -2.32 -2.60%
Bitcoin-USD 19,143 +117 0.62%PPPLLLUUUNNGGGEEEE about 400 points at the open on 8.2% inflation
Followed by RALLY TIME with DOW up 500 points — as facts/figures are “SPUN” by both BEARS/BULLS – lol
SSN payments to increase 8.7% for seniors next year — which will increase national DEBT, etc.
GAS/OIL will continue to increase some in $4 range as some of capability will go for home heatingEquity indices in the Asia-Pacific region ended Thursday on a lower note.
—Equity Markets—
Japan’s Nikkei: -0.6%
Hong Kong’s Hang Seng: -1.9%
China’s Shanghai Composite: -0.3%
India’s Sensex: -0.7%
South Korea’s Kospi: -1.8%
Australia’s ASX All Ordinaries: -0.1%The approval rating of the Japanese government has dropped to 27.4%, the lowest level since last year’s election.
A Bank of Japan survey showed that 85.7% of respondents expect higher prices a year from now, down from 87.1% in last quarter’s report.
Taiwan Semiconductor Manufacturing Company announced that capital spending will be reduced by at least 10% for the fiscal year. China Securities Times reported that some municipalities have purchased properties or encouraged buying by state-owned enterprises to boost confidence in the property market.
Japan’s September PPI 0.7% m/m (expected 0.2%; last 0.4%); 9.7% yr/yr (expected 8.8%; last 9.4%). September Bank Lending 2.3% yr/yr (expected 2.0%; last 1.9%)
Australia’s October Inflation Expectations 5.4% (last 5.4%)
New Zealand’s September FPI 0.4% m/m (last 1.1%)Major European indices trade in the red.
—Equity Markets—
STOXX Europe 600: -1.0%
Germany’s DAX: -1.0%
U.K.’s FTSE 100: -1.3%
France’s CAC 40: -1.5%
Italy’s FTSE MIB: -0.9%
Spain’s IBEX 35: -0.5%Gilts are also on the rise, sending the U.K.’s 10-yr yield lower by 17 bps to 4.25%.
European Central Bank policymaker Holzmann said that he is in favor of a 75-bps rate hike at the October meeting, followed by a 50-bps increase in December.
British Prime Minister Truss is reportedly under pressure to allow for an increase to the corporate tax rate.
Germany’s September CPI 1.9% m/m, as expected (last 0.3%); 10.0% yr/yr, as expected (last 7.9%)
Swiss September PPI 0.2% m/m (last -0.1%); 5.4% yr/yr (last 5.5%)Walgreens Boots Alliance (WBA 33.43 +1.49 +4.66%): beats by $0.03, reports revs in-line; guides FY23 EPS in-line
Delta Air Lines (DAL 30.40 +1.19 +4.07%): misses by $0.02, beats on revs; guides Q4 EPS above consensus, revs in-line
BlackRock (BLK 534.30 +3.20 +0.60%): beats by $2.28, beats on revs
Taiwan Semiconductor Manufacturing (TSM 65.71 +1.60 +2.50%): beats by NT$0.44, reports revs in-line; guides Q4 revs above consensus; expects to cut capex by at least 10%
Applied Materials (AMAT 75.04 -0.97 -1.28%): Lowers guidance for OctQ due to new export regulations for US semiconductor technology sold in China; also expects JanQ to see similar impact
A.O. Smith (AOS 45.45 -3.68 -7.49%): reports prelim Q3 results below consensus; lowers FY22 guidance
Comcast (CMCSA 29.30 +0.61 +2.13%): Citigroup upgrades from Buy to Neutral
American Express (AXP 135.90 -0.32 -0.23%): Citigroup downgrades to Sell from NeutralEquity futures plummeted following the CPI report. The S&P 500 futures are down 64 points and are trading 1.8% below fair value. The Nasdaq 100 futures are down 285 points and are trading 2.6% below fair value. The Dow Jones Industrial Average futures are down 463 points and are trading 1.5% below fair value.
Bounced!
Dow 29752.57 +539.69 (1.85%)
Nasdaq 10507.54 +90.59 (0.87%)
SP 500 3626.67 +49.57 (1.39%)
10-yr Note -2/32 3.921
NYSE Adv 2151 Dec 858 Vol 513.0 mln
Nasdaq Adv 2801 Dec 1457 Vol 3.38 blnIndustry Watch
Strong: Energy, Financials, Materials, Information Technology
Weak: —Moving the Market
— Resilience to selling efforts following hotter-than-expected September CPI report, which stoked concerns about continued aggressive Fed moves
— Modest pullback in Treasury yields after a sharp rise on the heels of the CPI report
— Strength mega cap stocks, namely Apple and Microsoft
— S&P 500 finds support after falling below 3,500
— Semiconductors staging an impressive comeback from opening lows
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