7 Sep 2022

The three major U.S. stock indexes closed down collectively last night. As of the close, the Dow closed down 0.55%, the Nasdaq closed down 0.74%, and the S&P closed down 0.41%. The yield on the 10-year U.S. Treasury bond rose 4.948% to close at 3.351, about -16 basis points compared with the yield on the two-year Treasury bond. The fear index VIX closed up 3.54%. Brent crude closed down 2.44%. Spot gold closed down 0.48% at $1,701.86 an ounce. The dollar index remained high, closing at 110.24.

The three major stock indexes opened higher and lower. Morgan Stanley's chief U.S. equity strategist and Wall Street's "big bear" Mike Wilson is even more pessimistic about the earnings outlook for U.S. companies. Even without a recession, U.S. companies would see a 3% drop in revenue in 2023, the analyst said. U.S. stocks are set to fall to new lows as investor optimism over better-than-expected second-quarter earnings from U.S. companies fades, with the S&P 500 expected to fall to at least 3,400, about 13% below current levels; in the event of a recession , it will fall to 3000 points.

The American Farm Federation said U.S. crop production could fall by a third compared with last year. In the past 101 weeks, droughts have devoured 40 percent of the U.S., USDA meteorologists said. U.S. corn production is likely to fall to its lowest level since 2012, with the hard red winter wheat harvest set to be the lowest since 1963, according to analysts at Rabobank, which collects commodity market data. California's rice harvest is only half the size of a normal year.

The California power grid declared a level-1 emergency on Tuesday afternoon local time, and the agency believes the energy shortage will last from 4 p.m. to 9 p.m. local time. Janus Henderson U.S. Venture Fund analyst Noah Barrett said that yesterday's decision by OPEC+ to cut production by 100,000 barrels per day was a bit surprising. It had little impact on the global supply balance, but it showed that OPEC+ is closely watching oil demand and trying to control it. supply to maintain the bottom line of oil prices. Previously, several countries, notably the United States, had called on OPEC+ to increase supply. Looking ahead, global demand indicators can be expected to drive continued volatility in oil prices.

U.S. Deputy Treasury Secretary Adeyemo said in an interview that the U.S. will set an initial “guide price” for Russia’s oil price caps at $44 a barrel, which was previously Russia’s own estimate of the cost of oil per barrel. As for how long the Russian oil price cap will remain in place, the specific guide price will be jointly decided by the coalition of countries participating in the plan.

Apple fell 0.82% after Brazil banned the sale of iPhones because Apple did not come with a charger. Apple will appeal this.

Microsoft fell 1.1%, saying that .NET 7 will be the fastest version ever.

Google fell 1.1%. Google will provide third-party payment systems to eligible non-game developers in many countries.

Amazon fell 1.1%. Amazon may enter the Japanese prescription drug market in 2023 and cooperate with pharmacies to sell drugs online.

Tesla rose 1.56% after Twitter users said Tesla China expects to deliver more than 100,000 electric vehicles in September.

Meta fell 1.11% after Meta's Instagram was fined $400 million in Ireland for mishandling children's data.

Sources from: Investing.com; Reuters.com

Louis Yap

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