- US stocks finished mixed as participants digested a deluge of data and earnings releases with notable outperformance in the Nasdaq heading into key earnings and as Communications and Technology did the heavy lifting, while all other sectors were in the red with Utilities, Energy and Consumer Staples the worst hit. The focus remains largely on earnings with many mega-cap stocks reporting this week and there are also key US data points ahead including GDP, PCE and NFP although the latest releases in the form of US Consumer Confidence and JOLTS Job Openings painted a mixed picture.
- USD was flat and kept within a relatively narrow range with initial gains alongside firmer US Treasury yields in typical characteristics of the 'Trump trade' but then saw some weakness later in the session after a solid US 7yr auction lifted Treasuries into settlement. Furthermore, there was limited reaction to the mixed data in which JOLTS came in beneath all analyst expectations and Consumer Confidence surpassed the top end, while participants await the upcoming key releases and risk events including GDP, PCE, NFP, ISM Mfg, corporate earnings, followed by the US election and FOMC next week.
- Looking ahead, highlights include Australian Quarterly & Monthly CPI, Thailand Industrial Production, Japanese Household Confidence.
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LOOKING AHEAD
- Highlights include Australian Quarterly & Monthly CPI, Thailand Industrial Production, Japanese Household Confidence.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stocks finished mixed as participants digested a deluge of data and earnings releases with notable outperformance in the Nasdaq heading into key earnings and as Communications and Technology did the heavy lifting, while all other sectors were in the red with Utilities, Energy and Consumer Staples the worst hit. The focus remains largely on earnings with many mega-cap stocks reporting this week and there are also key US data points ahead including GDP, PCE and NFP although the latest releases in the form of US Consumer Confidence and JOLTS Job Openings painted a mixed picture.
- SPX +0.16% at 5,833, NDX +0.98% at 20,551, DJI -0.36% at 42,233, RUT -0.27% at 2,238.
- Click here for a detailed summary.
NOTABLE HEADLINES
- US Treasury Secretary Yellen said she has been hearing from banks that burdens of regulatory compliance have become quite extraordinary.
- US VP Harris's lead over former President Trump shrunk to 1 ppt at 44%-43% among registered voters, according to the Reuters/Ipsos poll.
- US judge dismissed a Republican lawsuit seeking changes to Pennsylvania procedures for military and overseas ballots.
DATA RECAP
- US Consumer Confidence (Oct) 108.7 vs. Exp. 99.5 (Prev. 98.7, Rev. 99.2)
- US JOLTS Job Openings (Sep) 7.443M vs. Exp. 8.0M (Prev. 8.04M, Rev. 7.861M)
- US CaseShiller 20 MM SA (Aug) 0.4% vs. Exp. 0.2% (Prev. 0.3%)
- US CaseShiller 20 YY NSA (Aug) 5.2% vs. Exp. 5.1% (Prev. 5.9%)
- US Monthly Home Price YY (Aug) 4.2% (Prev. 4.5%, Rev. 4.7%)
- US Adv Goods Trade Balance (Sep) -108.23B (Prev. -94.22B)
- US Wholesale Inventories Adv. (Sep) -0.1% (Prev. 0.1%, Rev. 0.2%)
- US Retail Inventories Ex-Auto Adv. (Sep) 0.1% (Prev. 0.5%)
FX
- USD was flat and kept to within a relatively narrow range with initial gains alongside firmer US Treasury yields in typical characteristics of the 'Trump trade' but then saw some weakness later in the session after a solid US 7yr auction lifted Treasuries into settlement. Furthermore, there was limited reaction to the mixed data in which JOLTS came in beneath all analyst expectations and Consumer Confidence surpassed the top end, while participants await the upcoming key releases and risk events including GDP, PCE, NFP, ISM Mfg, corporate earnings, followed by the US election and FOMC next week.
- EUR returned to flat territory against the dollar after recovering from a brief dip beneath the 1.0800 level amid light catalysts.
- GBP mildly outperformed heading into the Budget announcement on Wednesday which is expected to be net expansionary and include tax rises.
- JPY ultimately softened on the day but with price action choppy in which USD/JPY traded both sides of the 153.00 level.
- SNB Chair Schlegel said the SNB now focuses on normalising of monetary policy and must ensure policy does not become too restrictive, while they remain willing to be active in foreign currency markets as necessary. Schlegel added that further rate reductions could be necessary in the coming quarters to maintain price stability.
- BoC Governor Macklem said if the economy evolves broadly in line with their forecast, they anticipate cutting the policy rate further to support demand and keep inflation on target.
FIXED INCOME
- T-notes ultimately settled flat despite a volatile session amid the Trump Trade, soft JOLTS and a strong 7yr auction.
COMMODITIES
- Oil prices were choppy and eventually settled more-or-less flat amid numerous Middle Eastern updates.
- Private Inventory Data (bbls): Crude -0.6mln (exp. +2.2mln), Cushing +0.3mln, Distillate -1.5mln (exp. -1.4mln), Gasoline -0.3mln (exp. +0.5mln).
- Saudi Aramco CEO said he thinks the market is currently balanced and sees supply of 104.5mln bbls this year and 106mln bbls next year.
GEOPOLITICAL
MIDDLE EAST
- Israeli PM Netanyahu will hold a discussion this evening with several ministers and senior officials in the defence establishment regarding the contacts for a political settlement to end the war in Lebanon, according to sources cited by Axios's Ravid.
- Israeli minister said the war with Hezbollah will be over by year-end.
- Israeli Chief of Staff said if Iran makes a mistake and launches missiles towards Israel, they will hit strongly the capabilities and places they excluded during the previous strike, according to Sky News Arabia. A separate report also noted that the IDF warned that if Iran attacks again, they will strike back very, very hard.
- Hezbollah named deputy head Naim Qassem as successor to slain chief Nasrallah, according to AFP. It was later reported that Israeli Defence Minister Gallant said regarding the election of Naim Qassem as Hezbollah chief that “The appointment is temporary and the countdown has begun".
- US has not seen enough progress made by Israel on points in the Austin-Blinken letter, according to a State Department spokesperson.
OTHER
- Russia launched ballistic and cruise missiles as part of nuclear drills, while all goals were achieved in the drills, according to IFX.
ASIA-PAC
NOTABLE HEADLINES
- China's legislative body is considering approving a fresh fiscal package which could be worth over CNY 10tln and would include proceeds worth CNY 6tln to address local governments debt risk and up to CNY 4tln to acquire idle land. The report added that CNY 10tln is to be raised through local government bonds and special treasuries, while China may announce a stronger fiscal package if Trump wins the November 5th election, according to Reuters citing sources.
- Chinese President Xi will implement various existing and incremental policies, while they should grasp all of the work in the next 2 months and strive to achieve goals and tasks of economic and social development for the whole year, according to Chinese state media.
- EU imposed duties on unfairly subsidised EVs from China while discussions on price undertakings continue with duties of 17% imposed on BYD, 18.8% on Geely and 35.3% on SAIC. Furthermore, Tesla will be assigned a duty of 7.8% and all other non-cooperating companies will have a duty of 35.3%.
- German Economy Ministry said negotiations with China are complex and have not yet led to a result.
- TSMC (2330 TT) cut off at least two chip clients over potential Huawei links, while the firms had reportedly placed orders to produce chips using 7NM process technology, according to Nikkei
EU/UK
NOTABLE HEADLINES
- UK Treasury confirmed national minimum wage will increase in April to GBP 12.21/hr from GBP 11.44/hr.
- Banks reportedly seek a meeting with the UK Treasury over car finance ruling with executives anxious about risks following a court decision on secret commissions on auto loans, according to FT.
- EU and UK have concluded negotiations on a future competition agreement, which will allow for direct cooperation in antitrust investigations.
