_edited_edited.png)
(US) Market Trading Hours Summary: Markets opened mixed into key week of earnings
Mon, 24 Oct 2022 10:29 AM EST
Summary
US stock markets looked to build on Friday’s momentum while rates held below cycle highs. Sovereign bond yields dropped across Europe, led by the gilt markets, after it became clear Rishi Sunak would become the next PM. EU stock markets rose despite significant weakness in China. President Xi, as widely expected, tightened his grip further, eliminating all opposition and moderating voices, signaling to markets there won’t be any change in direction on economic, tech, or COVID policies. US-listed ADRs and multinationals with exposure to China saw significant selling pressure.
Overnight:
-European preliminary PMI's contracted across the board yet again, indicating further weakening across the continent (Contractions: UK (Manu, Serv, Comp), France (Manu), Germany (Manu, Serv, Comp); Euro Zone (Manu, Serv, Comp); Expansions: France (Serv, Comp))
-China and Hong Kong stocks led Asia decline following Pres Xi's third term reinstatement and release of delayed China data (Shanghai Composite -2.0%, Hang Seng -6.3%)
-On Sunday, Russian state press started to circulate reports citing 'credible sources in Ukraine and various other countries' that Ukraine is preparing a provocation using a 'dirty bomb' or 'low-yield nuclear weapon'; US and Russia Defense Ministers held second telephone call in three days; US Defense Sec Austin rejected any pretext for Russian escalation & reaffirmed the value of continued communication
-JPY off recent 32-year lows on suspected MOF intervention. USD/JPY retargets 150.0 following sharp drop on Friday amidst speculation of intervention by Japan. Officials have continued to decline comment on specific levels and whether on not intervention occurred.
US Session
-(US) Sept Chicago Fed National Activity Index: +0.10 v -0.10e
-(BR) Brazil Sept Current Account: -$5.7B v -$3.1Be; Foreign Direct Investment (FDI): $9.2B v $5.0Be
-(US) OCT PRELIMINARY S&P/MARKIT MANUFACTURING PMI: 49.9 V 51.0E (lowest since June 2020, 1st contraction in 27 months); Employment: 49.8 v 52.5 m/m (lowest since June 2020)
Europe and Asia
-(IL) Israel Oct 12-month CPI Forecast: 3.0% v 2.7% prior
-(RU) Russian govt spokesperson Peskov: West's lack of confidence does not mean that the threat of such 'dirty bomb' in Ukraine ceases to exist; The threat presents and this information was brought to the attention of Western defense ministers
-(UK) RESULT OF CONSERVATIVE PARTY MP VOTE: RISHI SUNAK ELECTED AS PM BY DEFAULT
Corporate Headlines
-BABA Chinese listed ADRs down 10% or more on back of Xi consolidation
-MYOV Sumitovant Biopharma, Sumitomo Pharma offer to acquire company at $27/shr (prior: bid was $22.75/share)
-TCDA TVALOR-CKD Phase 3 Trial of Veverimer did NOT meet primary endpoint
-VSTO prelim Q2 $1.71 v $1.71e, Rev $782M v $753Me, CFO Sudhanshu Priyadarshi to depart; Andrew Keegan named interim CFO, effective immediately
-TSLA said to have cut Model 3 and Model Y prices in China (its 1st ever price cuts in China) - US financial press
-MDT intends to separate its combined Patient Monitoring and Respiratory Interventions businesses via a distribution that is expected to be tax-free to Medtronic shareholders
-DORM cuts FY22 $4.70-4.90 v $5.11e (prior $5.00-5.20); Rev $1.65-1.69B v $1.63Be (prior $1.60-1.64B)
-TM said to be considering a reboot of its ~$38B EV strategy announced last year to better compete with rivals like Tesla; Reportedly halted some work on existing EV projects; Targets early 2023 to complete review - press
-HA Q1 and Q2 financial results should no longer be relied upon due to accounting error in unrealized losses; Intends to restate results as soon as possible - filing
-SCHN Despite current headwinds, we expect the long-term structural trends for recycled metal demand to remain positive
-Dow Jones +0.4%
- S&P 500 -0.1%
- Nasdaq -1.2%
- Russell 2000 -0.9%
Treasuries:
- US 2-yr: +3bps at 4.517%
- 10-yr: +4bps at 4.251%
- 30-yr: +8bps at 4.384%
- 2-10 spread: +5bps at -23bps
Commodities:
- Crude oil $85.02,-0.04%
- Gold $1,651/oz, -0.3%
- Silver $19.06/oz, -0.1%
- Copper $3.440/oz, -1.0%