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(US) Market Trading Hours Summary: Falling rates and weakening dollar allow for continued stock momentum
Tue, 25 Oct 2022 10:42 AM EST
Summary
Investors digested a fresh batch of earnings reports and continued softening in the US economic data, allowing markets to rally further. Major indices were testing six-week highs while the US dollar index drifted towards the lowest level in about three weeks. Rates retreated notably on both sides of the Atlantic. Overall volumes were solid, helped in part by earnings season, while the VIX trended lower. Earnings standouts included KO, UPS, and GM, helped in large part by their continued ability to pass along and benefit from price increases.
Overnight:
- Changing of the guard and return of fiscal rectitude. Sunak will be appointed prime minister by King Charles III and replaces Liz Truss today and to form Govt. Pullback in UK Gilt yields seeming to suggest market approval of Sunak's appointment and hope of future financial stability
-Recession theme throughout Europe as both German IFO economists and Euro Zone bank lending survey warned of winter recession. JPMorgan and Goldman Sachs CEO's noted seeing recession risk across US and Europe. German IFO survey slightly beat estimates but sentiment still following weak European PMI's from yesterday.
US Session
-(BR) Brazil Oct FGV Consumer Confidence: 88.6 v 89.0 prior
-(MX) Mexico Aug IGAE Economic Activity Index (Monthly GDP) M/M: 1.0% v 0.0%e; Y/Y: 5.7% v 3.1%e
-(US) Oct Philadelphia Fed Non-Manufacturing Regional Index: -14.9 v +2.5 prior
-(US) AUG S&P/CASE-SHILLER HOUSE PRICE INDEX (20-CITY) M/M: -1.3% V -0.80%E; Y/Y: 13.08% V 14.05%E
-(US) AUG FHFA HOUSE PRICE INDEX M/M: -0.7% V -0.6%E
-(US) OCT RICHMOND FED MANUFACTURING INDEX: -10 V -5E; Volume of new orders: -22 v -11 prior
-(US) OCT CONSUMER CONFIDENCE: 102.5 V 106.0E
Europe and Asia
-(UK) OCT CBI INDUSTRIAL TRENDS TOTAL ORDERS: -4 V -12E
-(CN) China PBoC vows to keep CNY currency (yuan) basically stable at equilibrium level - press
-(UK) PM Sunak: Have accepted invitation to form UK govt; Economic stability at heart of agenda
-(HU) HUNGARY CENTRAL BANK (MNB) LEAVES BASE RATE UNCHANGED AT 13.00%; AS EXPECTED
-(SA) Saudi Oil Min Abdulaziz: We need to retain spare oil capacity; Having spare capacity pays off; Running out of spare capacity would have a great cost
-(BE) Belgium Oct Business Confidence: -15.5 v -11.8 prior
Corporate Headlines
-UPS EPS and Rev slight beats; cuts FY capex outlook
-GM affirms FY22 outlook; expect to double company Rev to $275-315B by 2030
-DFS Q3 30+ day delinquency rate for credit card loans was 2.11%, up 63 basis points year-over year and 35 basis points from the prior quarter
-GE cuts FY22 $2.40-2.80 v $2.69e (prior: lower end $2.80-3.50); Industrial FCF $4.5B (prior: lower end $5.5-6.5B); power division remains the drag
-MMM guides Q4 Rev $7.9-8.2B v $8.5Be; Consumer spending softening due to inflationary pressures
-PII EPS and Rev top estimates, raises FY rev outlook
-PHM Q3 Net new home orders 4.9K, -28% y/y
-VLO refining fundamentals remain strong as product demand through our system has surpassed 2019 levels
-RTX raises FY22 $4.70-4.80 v $4.65e, Trims Rev $67-67.3B v $67.1Be; Adj Segment Operating Profit Margin 9.8% v 9.1% y/y
-KO Q3 organic Rev +16%; Raises FY22 outlook
-BIIB beats and raises outlook
-ITW beats, organic rev +16%; raises outlook
-CCK Q3 shipments came in short of prior expectations resulting in inventory build
-JBLU trims FY22 capacity (ASM) 0-2% v 2019 (prior 0-3%); Guides Q4 Capex $420M; Sees generating solid Pretax margins in Q4
-GLW guides Q4 $0.41-0.47 v $0.56e, Rev $3.45-3.65B v $3.79Be ; thinks panel maker utilization reached the bottom in Sept
-PYPL Amazon Offers Venmo as a payment option for orders placed on Amazon.com and the Amazon mobile app
-STZ plans to convert common stock holding in Canopy Growth
-Dow Jones +0.5%
- S&P 500 +0.9%
- Nasdaq +1.3%
- Russell 2000 +2.2%
Treasuries:
- US 2-yr: -7.7bps at 4.421%
- 10-yr: -15.9bps at 4.075%
- 30-yr: -13.2bps at 4.231%
- 2-10 spread: -7bps at -33bps
Commodities:
- Crude oil $85.90, +1.6%
- Gold $1.661/oz, +0.4%
- Silver $19.30/oz, +0.6%
- Copper $3.408/oz, -0.7%
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