Traders Market Weekly: War Drums, Bond Routes, Magnificent Seven Earnings

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    Iran’s foreign minister Hossein Amirabdollahian warned Israel that Hezbollah might join the conflict, and that it could suffer “large earthquake” if it doesn’t stop its attacks on Gaza, according to ABC News.

    WTI crude oil futures are down 0.2% to $87.54/bbl and Brent Crude futures are down 0.3% to $90.60/bbl.

    The 2-yr note yield is up one basis point to 5.06% and the 10-yr note yield is up six basis points to 4.69%.


    The Empire State Manufacturing index fell to -4.6 in October (consensus -4.0%) from 1.9 in September.


    The S&P 500 futures are up 24 points and are trading 0.6% above fair value.
    The Nasdaq 100 futures are up 51 points and are trading 0.4% above fair value.
    The Dow Jones Industrial Average futures are up 219 points and are trading 0.6% above fair value.

    Treasury yields are climbing.

    The 2-yr note yield is up two basis points to 5.07% and the 10-yr note yield is up seven basis points to 4.70%.

    Elsewhere, the U.S. Dollar Index is down 0.3% to 106.36.



    Dow +183.56 at 33853.81, Nasdaq +94.64 at 13501.87, S&P +26.32 at 4354.10

    Stocks are moving higher alongside Treasury yields. The major indices sport gains ranging from 0.5% to 0.7%.

    Many stocks are participating in upside moves, helping to drive gains in eight of the 11 S&P 500 sectors. The consumer discretionary sector (+1.0%) leads the pack while the real estate sector (-0.3%) brings up the rear.

    The Invesco S&P 500 Equal Weight ETF (RSP) is up 0.5% and the market-cap weighted S&P 500 is up 0.6%.

    The 2-yr note yield is up five basis points to 5.10% and the 10-yr note yield is up nine basis points to 4.72%


    U.S. Treasuries trade on lows after widening their opening losses.

    Longer tenors at forefront of the initial selling, and they remain behind while the 2-yr note outperforms. The early weakness has sent yields on 10s and 30s back to their closing levels from Thursday while the 5-yr yield hovers between its Thursday high and its closing level from Friday, October 6.

    2-yr: +4 bps to 5.09%
    3-yr: +4 bps to 4.86%
    5-yr: +6 bps to 4.71%
    10-yr: +8 bps to 4.71%
    30-yr: +8 bps to 4.86%


    European stock markets closed higher to start the week with relief its not EOW

    Stoxx 600 +0.3%
    Italy #MIB +0.5%
    Spain #ibex35 +0.5%
    UK #FTSE 100 +0.5%
    France #CAC40 +0.3%
    Germany #DAX +0.3%

    Compares to #SPX up 1.1%, however European close Friday was before US selling kicked in


    Gold futures settled $7.20 lower (-0.4%) at $1,934.90/oz, giving back some of Friday’s $60 rally
    U.S. Dollar Index down about -0.3% to $106.31.


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

    Japan’s Nikkei: +1.2%,
    Hong Kong’s Hang Seng: +0.8%,
    China’s Shanghai Composite: +0.3%,
    India’s Sensex: +0.4%,
    South Korea’s Kospi: +1.0%,
    Australia’s ASX All Ordinaries: +0.4%.


    China is hosting its third Belt and Road forum in Beijing today and tomorrow.
    Developer Country Garden is on course to miss its $15 mln interest payment that is due today, triggering default.
    A unit of Evergrande is reportedly seeking restructuring on one of its yuan-denominated bonds.


    New Zealand’s Q3 CPI 1.8% qtr/qtr (expected 2.0%; last 1.1%); 5.6% yr/yr (expected 5.9%; last 6.0%)

    New Zealand reported cooler than expected CPI for Q3, boosting expectations for the Reserve Bank of New Zealand to hold its official cash rate steady at the next meeting.
    Westpac and ANZ now expect that the next hike will come in February instead of later this month.


    Japan’s August Tertiary Industry Activity Index -1.6 (last 0.6)

    Toyota is dealing with some interruptions after a fire at a body factory in Aichi.


    South Korea’s September Import Price Index -9.6% yr/yr (last -9.2%) and Export Price Index -8.9% yr/yr (last -7.9%)


    Major European indices trade just below their flat lines while the U.K.’s FTSE (+0.3%) outperforms thanks to strength in consumer names.

    STOXX Europe 600: -0.3%,
    Germany’s DAX: -0.5%,
    U.K.’s FTSE 100: +0.3%,
    France’s CAC 40: -0.3%,
    Italy’s FTSE MIB: -0.3%,
    Spain’s IBEX 35: -0.3%.


    Eurozone’s October ZEW Economic Sentiment 2.3 (expected -8.0; last -8.9)
    Germany’s October ZEW Economic Sentiment -1.1 (expected -9.3; last -11.4) and ZEW Current Conditions -79.9 (expected -80.8; last -79.4)

    European Central Bank policymaker Lane said that it would take some time before the governing council has confidence that inflation is slowing toward the 2.0% target.


    U.K.’s August Average Earnings Index + Bonus 8.1% yr/yr (expected 8.3%; last 8.5%)

    August earnings growth in the U.K. was shy of expectations, fueling speculation that the Bank of England has already reached its terminal rate.

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