Traders Market Weekly: Expect the Unexpected

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    Dow (DOW 46.33, +2.52, +5.75%),
    Walgreens Boots Alliance (WBA 33.65, +1.71, +5.35%),
    3M (MMM 114.05, +5.10, +4.68%) are among today’s top performers.

    Big box giant Walmart (WMT 131.33, +0.16, +0.12%) is underperforming, albeit on modest gains.

    The DJIA is now up +2.50% week-to-date.


    A reversal in price action for Apple (AAPL 140.54, +2.09, +1.5%) and semiconductor stocks has been integral to the rebound effort, along with strength in the financial sector (+3.4%).

    Apple was down 2.9% at its intraday low and the PHLX Semiconductor Index was down 4.9% at its intraday low.
    Semiconductors are showing strength now following a better-than-expected earnings report and outlook from TSMC (TSM 67.01, +2.90, +4.5%).
    Chip equipment maker Applied Materials (AMAT 78.52, +2.51, +3.3%) for its part is trading higher after a fiscal Q4 warning that was attributed to the new export restrictions on semiconductor technology to China.

    All 11 S&P 500 sectors trade in positive territory with consumer discretionary (+0.3%) showing the slimmest gain. Energy (+4.0%) sits atop the leaderboard after WTI crude oil futures rose out of negative territory, up 2.0% to $89.02/bbl.


    Dow 30,038.72 827.87 2.83%
    S&P 500 3,669.91 92.88 2.60%
    Nasdaq 10,649.15 232.05 2.23%
    VIX 32.26 -1.31 -3.90%
    Gold 1,670.70 -6.80 -0.41%
    Oil 89.14 1.87 2.14%


    A day of celebration in the markets … and more for the playlist
    1967 was 1 of best year’s great music – as in hits from this group


    YEAH – the great RALLY continues +300 points on DOW … and we could see a “dying quail” pattern later
    but RETAIL SALES were flat & 8.2% inflation & National DEBT (which no one is addressing) are mitigating forces
    maybe STOCKS need to go up 8.2% to keep up with inflation (metals, bonds, and kyrptos are not good alternatives)


    Equity indices in the Asia-Pacific region ended the week on a higher note.

    Japan’s Nikkei: +3.3% (-0.1% for the week),
    Hong Kong’s Hang Seng: +1.2% (-6.5% for the week),
    China’s Shanghai Composite: +1.8% (+1.6% for the week),
    India’s Sensex: +1.2% (-0.5% for the week),
    South Korea’s Kospi: +2.3% (-0.9% for the week),
    Australia’s ASX All Ordinaries: +1.7% (-0.4% for the week).


    China’s September CPI 0.3% m/m (expected 0.4%; last -0.1%); 2.8% yr/yr, as expected (last 2.5%). September PPI 0.9% yr/yr (expected 1.0%; last 2.3%)
    South Korea’s September Unemployment Rate 2.8% (expected 2.5%). September Import Price Index 24.1% yr/yr (last 22.9%) and Export Price Index 15.2% yr/yr (last 13.0%)
    India’s September WPI Inflation 10.70% (expected 11.50%; last 12.41%)
    Singapore’s Q3 GDP 1.5% qtr/qtr (last -0.2%); 4.4% yr/yr (expected 3.4%; last 4.5%)
    New Zealand’s September Business NZ PMI 52.0 (expected 54.8)
    Japan may reportedly lift its cap on the lifespan of nuclear reactors.
    Bank of Japan Governor Kuroda said that CPI is expected below 2.0% in 2023 and that now is not the appropriate time to raise rates.
    China Securities Journal speculated that the yuan will not depreciate in the medium to long term and that authorities have room to stabilize markets.


    JPMorgan Chase (JPM 111.53, +2.16, +1.97%): beats by $0.27, beats on revs; Expect 4Q22 net interest income of ~$19B and FY2022 of ~$66B, market dependent
    Morgan Stanley (MS 77.45, -1.87, -2.36%): misses by $0.04, misses on revs
    Wells Fargo (WFC 42.92, +0.54, +1.27%): beats by $0.21, beats on revs
    UnitedHealth (UNH 514.73, +4.82, +0.95%): beats by $0.35, reports revs in-line; guides FY22 EPS in-line
    PNC (PNC 154.52, +3.05, +2.01%): beats by $0.09, beats on revs; issues downside guidance for Q4 (Dec)
    Boeing (BA 134.09, +1.69, +1.28%): United (UAL) aiming to purchase 100 widebody jets, according to Bloomberg
    Albertsons (ACI 27.90, -0.73, -2.55%): to be acquired by Kroger (KR); ACI shareholders to receive total consideration of $34.10/share; cash component of the $34.10 per share consideration will be reduced by the per share amount of the special cash dividend, which is expected to be approximately $6.85 per share
    McDonald’s (MCD 247.62, +0.87, +0.35%): raises quarterly dividend by 10% to $1.52 per share
    Beyond Meat (BYND 13.65, -1.13, -7.65%): lowers outlook; cuts workforce; targeting cash flow positive in 2H23; disclosed Philip E. Hardin notified the Company that he is stepping down as the Chief Financial Officer and Treasurer effective October 12, 2022 to pursue another opportunity
    Delta (DAL 31.23, +0.85, +2.80%): Cowen upgrades to Outperform from Market Perform


    Major European indices trade in the green.

    STOXX Europe 600: +1.4% (+0.7% week-to-date),
    Germany’s DAX: +1.4% (+2.0% week-to-date),
    U.K.’s FTSE 100: +1.4% (-0.7% week-to-date),
    France’s CAC 40: +1.7% (+1.9% week-to-date),
    Italy’s FTSE MIB: +1.5% (+1.0% week-to-date),
    Spain’s IBEX 35: +1.6% (+0.4% week-to-date).


    Eurozone’s August trade deficit EUR50.90 bln (last deficit of EUR33.90 bln)
    Germany’s September WPI 1.6% m/m (last 0.1%); 19.9% yr/yr (last 18.9%)
    France’s September CPI -0.6% m/m (expected -0.5%; last 0.5%); 5.6% yr/yr, as expected (last 5.9%)
    Spain’s September CPI -0.7% m/m (expected -0.6%; last 0.3%); 8.9% yr/yr (expected 9.0%; last 10.5%)
    The U.K.’s 10-yr Gilt yield is down another 23 bps to 3.96% amid reports that British Prime Minister Truss will reverse her decision, allowing for the increase to the corporate tax rate.
    In addition, Chancellor Kwarteng has been dismissed after just 38 days in office.
    The Bank of England’s emergency buying scheme is set to end today. Germany’s economy ministry expects that a recession began in Q3 and will last for three quarters.


    The S&P 500 futures are down 3 points and are trading roughly in-line fair value.
    The Nasdaq 100 futures are down 34 points and are trading 0.3% below fair value.
    The Dow Jones Industrial Average futures are up 9 points and are trading 0.1% above fair value.

    The equity futures market has been shifty this morning, rallying initially to press reports suggesting British Prime Minister Truss will scale back her fiscal stimulus plan at a press conference today at 9:00 a.m. ET. On a related note, it has been confirmed that Finance Minister Kwarteng has been dismissed after just 38 days in office.

    The futures for the major indices have subsequently pulled back, however, as questions about the credibility/sustainability of yesterday’s rally abound.

    Dow components JPMorgan Chase (JPM) and UnitedHealth (UNH) posted better-than-expected results, but Morgan Stanley (MS) disappointed. Separately, Albertsons (ACI) is going to acquired by Kroger (KR) for $34.10/share in cash.

    Treasury yields are pulling back this morning. The 2-yr note yield is down two basis points to 4.42% and the 10-yr note yield is down six basis points to 3.88%.


    Total retail sales were unchanged month-over-month in September (consensus +0.2%) following an upwardly revised 0.4% increase (from 0.3%) in August. Excluding autos, retail sales were up 0.1% month-over-month (consensus 0.0%) following an upwardly revised 0.1% decline (from -0.3%) in August.

    The key takeaway from the report is that it is not adjusted for inflation, so the lackluster numbers for September suggest consumers were pulling back on spending activity in the face of high inflation.


    The September Import-Export Price Index brought some better inflation news.

    Import prices were down 1.2% month-over-month and down 0.4% excluding fuel. Export prices were down 0.8% month-over-month and down 0.9% excluding agricultural products. This report, though, has been largely overshadowed by the fresh memory of yesterday’s disappointing CPI report.

    Treasury yields remain near their lows ahead of the open.

    The 2-yr note yield is down four basis points to 4.41% and the 10-yr note yield is down eight basis points to 3.85%.


    August Business Inventories rose 0.8% (consensus 0.9%) following a revised increase of 0.5% in July (from 0.6%).

    The preliminary University of Michigan Consumer Sentiment reading came in at 59.8 (consensus 58.6) after the prior reading of 58.6. In the same period a year ago, the index stood at 71.7.

    The key takeaway from the report is that inflation expectations for the year ahead and five-year period increased from September, creating some uncertainty about the strength of consumer spending activity in coming months.

    • This reply was modified 3 months, 3 weeks ago by Truman.

    The stock market gave back all of its opening gains and continues to crack lower

    The 10-yr UK gilt yield, which was at 3.94% a short time ago, is up six basis points to 4.27%. This occurred following Prime Minister Truss giving a press conference where she confirmed the government’s plan to cut corporate taxes. The British pound came off its overnight high at the same time (GBP/USD -1.3% to 1.1188).

    Treasury yields are also climbing with the 10-yr note yield up three basis points to 3.98% and the 2-yr note yield up one basis point to 4.46%.

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