29 Sep 2022

Last night, the three major U.S. stock indexes fluctuated higher. As of the close, the Dow rose 1.88%, the Nasdaq rose 2.05%, and the S&P rose 1.97%. The yield on the 10-year U.S. Treasury bond fell 5.422% to close at 3.733%, a difference of about -40 basis points compared with the yield on the two-year Treasury bond. Fear index VIX fell 7.42%. Brent crude closed up 4.14%. Spot gold closed up 1.87% at $1,660 an ounce. The dollar index remained high, closing at 112.72.

U.S. existing home contracted sales fell again at a monthly rate of -2% in August, as rising mortgage rates weighed on demand. The U.S. existing home contract sales index in August hit its lowest level since April 2020. The direction of mortgage rates — up or down — is a major driver of home buying, with ten-year high mortgage rates heavily impacting contracts. If mortgage rates slow and the economy continues to add jobs, home buying should also stabilize.

The Fed's Bostic said that the baseline is to raise interest rates by 75 basis points in November and 50 basis points in December, tending to reach a range of 4.25%-4.5% by the end of the year. The Fed took in a total of $2.367 trillion from 101 counterparties in its fixed-rate reverse repurchase operations, a record high. U.S. Treasury Secretary Janet Yellen told White House officials she was prepared to stay on as Treasury secretary long after the midterm elections, according to people familiar with the matter.

The United States announced an additional $1.1 billion in military aid to Ukraine, including 18 sets of Haimas. The European Commission announced the eighth round of sanctions against Russia, adding to the list of sanctions against Russian individuals and entities and a complete ban on the sale of Russian goods in the EU market. Traders cut the chances of the ECB raising interest rates by 75 basis points in October to 40 percent from 90 percent. ECB Governing Council member Kazaks said the next rate hike must be large, after which the pace can be slowed, supporting a 75 basis point hike at its October meeting.

In order to prevent the further spread of the financial crisis, the Bank of England announced the temporary purchase of long-term government bonds from September 28 to October 14 to restore order in the market, and the scale of each operation does not exceed 5 billion pounds. The U.K. 10- and 30-year yield curves inverted for the first time since 2008, with traders lowering bets on a peak in Bank of England interest rates, which are expected to be below 6 percent by May next year.

Apple fell 1.27%. It is reported that due to the decline in demand, Apple plans to abandon the iPhone production increase plan; Apple may establish a new Apple Car project team before the end of 22.

Microsoft rose 1.97% as UniPath will collaborate with Microsoft on a vision for the future of cloud automation.

Google rose 2.7%. The Google Pixel 7 is priced at $599, which is $200 cheaper than the iPhone 14.

Tesla rose 1.72%, and Q3 deliveries are expected to hit a new high; the United States approves plans for electric vehicle charging stations in 50 states.

Meta rose 5.36% and Netflix rose 9.29% after Atlantic Securities upgraded its rating to overweight, saying the company's latest ad-supported subscription service has great growth potential.

Boeing rose 4.65% to deliver the 100th aircraft in the 737-800 Boeing Converted Freighter (BCF) program.

Ford rose 2.72 percent, unveiling a redesigned version of the F-Series Super Duty pickup truck, which it intends to inject into electric vehicles. U.S. ride-hailing company Lyft rose 2.4 percent after suspending U.S. hiring until the end of the year amid economic uncertainty.

Sources from: Investing.com; Reuters.com

Louis Yap

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