Traders Market Weekly: Bull or Bear Trap Ahead of the Fed?

Viewing 15 posts - 16 through 30 (of 50 total)
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  • #46298
    TradersCom
    Keymaster

    Chinese stocks and U.S. stocks with high exposure to Chinese market Smashed on Xi Jingping Power Grab

    JD com $JD 36.66, -5.49, -13.0%
    Pinduoduo $PDD 44.46, -14.51 -24.6%
    Las Vegas Sands $LVS 35.05, -4.02 -10.3%
    Starbucks $SBUX 83.76, -4.85 -5.5% Update

    #46299
    TradersCom
    Keymaster

    Bond Market Wrap

    U.S. Treasuries began the week with losses in most tenors while the 2-yr note outperformed, finishing with a modest gain. The higher start followed a busy night that saw a weak showing from equities listed in Hong Kong after China’s President Xi started his third term.

    Ihe U.K., Rishi Sunak will be the next prime minister while Chancellor Hunt will reportedly announce up to GBP20 bln in tax hikes on high earners next week. Separately, the Bank of England plans to hold eight $750 mln bond sales between November 1 and December 31.

    Treasuries recovered the bulk of their losses going into the afternoon, respecting a narrow range in late action, though the long bond remained behind, lifting its yield to a fresh high for the year.

    The U.S. Dollar Index slipped 0.1% to 111.96.

    2-yr: -3 bps to 4.48%
    3-yr: UNCH at 4.52%
    5-yr: +1 bp to 4.36%
    10-yr: +2 bps to 4.23%
    30-yr: +6 bps to 4.36%

    #46300
    TradersCom
    Keymaster

    Busy Day at Credit Suisse

    – Settles French legacy case
    – Chief Compliance Officer Rafael Lopez will leave, according to Bloomberg
    – Nearing deal to sell securitized-products group, according to WSJ

    4.75 ▲ +0.025 (▲+0.53%) today

    #46328
    Truman
    Participant

    Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note.

    —Equity Markets—

    Japan’s Nikkei: +1.0%
    Hong Kong’s Hang Seng: -0.1%
    China’s Shanghai Composite: UNCH
    India’s Sensex: -0.5%
    South Korea’s Kospi: -0.1%
    Australia’s ASX All Ordinaries: +0.2%

    #46329
    Truman
    Participant

    Japan’s cabinet office released its October economic report, noting that growth is picking up. The report upgraded the assessment of capital spending and lowered the view on imports.
    Hyundai is starting construction on a $5.5 bln electric vehicle plant in Georgia. Australia’s budget projects 3.25% growth in FY22/23, followed by a slowdown to 1.5% in FY23/24.
    Japan’s September BoJ Core CPI 2.0% yr/yr (expected 1.9%; last 1.9%)
    South Korea’s October Consumer Confidence 88.8 (last 91.4)
    Singapore’s September CPI 7.5% yr/yr, as expected (last 7.5%) and Core CPI 5.3% yr/yr (expected 5.2%; last 5.1%)
    Hong Kong’s September trade deficit $44.90 bln (last deficit of HKD13.30 bln). September Imports -7.8% m/m (last -16.3%) and Exports -9.1% m/m (last -14.3%)

    #46330
    Truman
    Participant

    Major European indices are mixed. Rishi Sunak officially became U.K.’s prime minister today.

    —Equity Markets—

    STOXX Europe 600: -0.1%
    Germany’s DAX: -0.9%
    U.K.’s FTSE 100: -0.8%
    France’s CAC 40: +0.2%
    Italy’s FTSE MIB: -0.4%
    Spain’s IBEX 35: +0.2%

    #46331
    Truman
    Participant

    Germany’s ifo Institute warned about a high risk of a winter recession in Germany in its October report.
    UBS and SAP reported better than expected results for Q3.
    The eurozone bank lending survey for Q3 noted a tightening of credit standards with additional tightening and falling demand expected in Q4.
    Germany’s October ifo Business Climate Index 84.3 (expected 83.3; last 84.4). October Current Assessment 94.1 (expected 92.4; last 94.5) and Business Expectations 75.6 (expected 75.0; last 75.3)
    U.K.’s October CBI Industrial Trends Orders -4 (expected -12; last -2)
    Spain’s September PPI 35.6% yr/yr (last 42.9%)

    #46332
    Truman
    Participant

    3M (MMM 115.28 -3.10 -2.62%): beats by $0.10, misses on revs; lowers FY22 EPS in-line, revs below consensus
    General Motors (GM 37.61 +1.89 +5.29%): beats by $0.37, reports revs in-line; guides FY22 EPS in-line
    UPS (UPS 173.99 +6.44 +3.84%): beats by $0.14, reports revs in-line; reaffirms FY22 revs guidance
    PulteGroup (PHM 37.50 -0.46 -1.21%): misses by $0.12, misses on revs
    General Electric (GE 76.49 +3.13 +4.27%): reports Q3 (Sep) results, beats on revs; guides FY22 EPS in-line
    Coca-Cola (KO 59.20 +1.63 +2.83%): beats by $0.05, beats on revs; issues guidance for FY22, sees organic revenue growth of 14-15%
    Amazon (AMZN 119.70 -0.12 -0.10%): reportedly freezes hiring in parts of web services division, according to NYPost
    Sherwin-Williams (SHW 224.00 +11.47 +5.40%): beats by $0.26, beats on revs; guides Q4 revs in-line, guides FY22 EPS in-line
    Adidas AG (ADDYY 51.35-0.40 -0.76%): ends partnership with Kanye West, according to Bloomberg
    Biogen (BIIB 279.36 +4.74 +1.73%): beats by $0.66, beats on revs; raises FY22 EPS mostly above consensus, revs in-line
    Corning (GLW 30.50 -1.83 -5.66%): reports EPS in-line, revs in-line; guides Q4 core EPS and core revs below consensus

    #46333
    Truman
    Participant

    Dow +166.05 at 31667.70, Nasdaq +164.52 at 11116.99, S&P +36.11 at 3833.52

    The stock market opened on a decidedly upbeat note as Treasury yields continue to drop from overnight highs. The S&P 500 is comfortably above the 3,800 level.

    The 10-yr note yield, at 4.23% overnight, is down 15 basis points to 4.07%. The 2-yr note yield, at 4.51% overnight, is down nine basis points to 4.40%.

    The 10-yr gilt is reacting favorably to the new UK Prime Minister Sunak pledging to fix prior mistakes. The 10-yr gilt yield is down 16 basis points to 3.58%. The U.S. Dollar Index is also making big moves, down 1.0% to 110.91 with GBP/USD +1.8% to 1.1470.

    Mega cap stocks are boosting index level performance. The Vanguard Mega Cap Growth ETF (MGK) is up 1.2% versus a 0.7% gain in the S&P 500.

    All 11 S&P 500 sectors trade in positive territory, led by real estate (+2.1%) and consumer discretionary (+1.6%). Meanwhile, energy (+0.2%) shows the slimmest gain despite rising oil prices. WTI crude oil futures are up 1.1% to $85.58/bbl.

    #46334
    Truman
    Participant

    The Conference Board’s Consumer Confidence Index fell to 102.5 in October (consensus 105.5) from a downwardly revised 107.8 (from 108.0) in September. In the same period a year ago, the Consumer Confidence Index stood at 111.6.

    The key takeaway from the report is that consumers’ concerns about inflation picked up again in October on the back of rising gas and food prices.

    The Present Situation Index declined to 138.9 from 150.2.
    The Expectations Index dropped to 78.1 from 79.5.
    One-year inflation expectations rose to 7.0% from 6.8%.

    #46335
    Truman
    Participant

    The early advance has pressured the 10-yr yield to its session high from last Tuesday while the 2-yr yield has returned to levels last seen on October 13.

    2-yr: -6 bps to 4.42%
    3-yr: -12 bps to 4.40%
    5-yr: -14 bps to 4.22%
    10-yr: -16 bps to 4.08%
    30-yr: -13 bps to 4.23%

    #46382

    Dow 31,836.74 337.12 1.07%
    S&P 500 3,859.11 61.77 1.63%
    Nasdaq 11,199.12 246.50 2.25%
    VIX 28.45 -1.40 -4.69%
    Gold 1,657.70 3.60 0.22%
    Oil 84.94 0.36 0.43%

    #46434
    Truman
    Participant

    Equity indices in the Asia-Pacific region ended the midweek session on a higher note while markets in India were closed for Diwali.

    —Equity Markets—

    Japan’s Nikkei: +0.7%
    Hong Kong’s Hang Seng: +1.0%
    China’s Shanghai Composite: +0.8%
    India’s Sensex: CLOSED
    South Korea’s Kospi: +0.7%
    Australia’s ASX All Ordinaries: +0.2%

    #46435
    Truman
    Participant

    Japan is reportedly launching a JPY100 bln startup fund.
    Separately, the country is planning to end its gasoline subsidy program that began in June.
    Australia’s inflation was up 7.3% in Q3, increasing at its fastest pace in 32 years.
    ANZ Bank expects that the Reserve Bank of Australia’s terminal cash rate will be at 3.85%, up 125 bps from the current level.
    South Korea’s November Manufacturing BSI Index 75 (last 73)
    Japan’s September Corporate Services Price Index 2.1% yr/yr, as expected (last 2.0%). September Leading Index 101.3 (last 98.9) and Coincident Indicator 1.7% m/m (last 1.6%)
    Singapore’s September Industrial Production 0.0% m/m (expected 1.1%; last 1.6%); 0.9% yr/yr (expected 1.3%; last 0.4%)
    Australia’s Q3 CPI 1.8% qtr/qtr (expected 1.6%; last 1.8%); 7.3% yr/yr (expected 7.0%; last 6.1%)
    New Zealand’s October ANZ Business Confidence -42.7 (last -36.7)

    #46436
    Truman
    Participant

    Major European indices mostly trade in the red.

    —Equity Markets—

    STOXX Europe 600: -0.4%
    Germany’s DAX: UNCH
    U.K.’s FTSE 100: -0.6%
    France’s CAC 40: -0.4%
    Italy’s FTSE MIB: -0.5%
    Spain’s IBEX 35: -0.2%

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