11 Oct 2022

The three major U.S. stock indexes closed down in shock last night. As of the close, the Dow fell 0.32%, the Nasdaq fell 1.04%, and the S&P fell 0.75%. The U.S. Treasury bond market was closed on Monday, and the VIX, the fear index, rose 3.48%. Brent crude closed down 2.57%. Spot gold closed down 1.58% at $1,668.25 an ounce. The dollar index remained high, closing at 113.16.

Russian President Vladimir Putin convened a security meeting of the Russian Federation and said that the Russian Ministry of Defense used land-based, air-based and sea-based missiles on the same day to strike Ukrainian military targets. The Swedish Coast Guard said that according to the latest observations on the 9th, the remaining gas emissions of the "Nord Stream-2" natural gas pipeline have been further reduced, and the diameter of the emissions is now about 15 meters. In a phone call with Ukrainian President Volodymyr Zelensky, U.S. President Biden pledged to continue to provide Ukraine with the support it needs to defend itself, including advanced air defenses.

Fitch expects UK GDP to fall by 1% in 2023, compared with a 0.2% decline in September. In the past three months, Wall Street investment banks have cut their Q3 earnings forecasts for large U.S. companies by a total of $34 billion.

Fed Evans said inflationary pressures are becoming more widespread and restrictive monetary policy will be needed for a period after the end of the rate hike, which is expected to be slightly above 4.5% by early 2023, and the Fed needs to "prudently and judiciously" turn to Reasonable and restrictive policy interest rate range.

Fed Vice Chairman Brainard offered reasons for caution amid aggressive rate hikes by the Fed. Brainard said U.S. financial conditions were tightening rapidly and there were some tentative signs of rebalancing in the labor market. The Fed has indicated that it will raise interest rates and rates will be at restrictive levels, but the actual policy path will depend on the data, support the Fed to act in a data-dependent and prudent manner, the GDP rebound in the second half of the year is expected to be "limited", and the GDP growth is flat for the whole year of this year. .

According to CME's "Federal Reserve Watch": The probability of the Fed raising interest rates by 50 basis points to the range of 3.50%-3.75% in November is 21.6%, and the probability of raising interest rates by 75 basis points is 78.4%; the probability of a cumulative rate hike of 100 basis points by December The probability of a cumulative rate hike of 125 basis points is 57.9%, and the probability of a cumulative rate hike of 150 basis points is 28.3%.

Apple rose 0.24% and will launch the iPhone 15 series in the second half of next year. The A17 bionic chip will be manufactured by TSMC.

Amazon fell 0.78% and will invest more than 1 billion euros in the European electric car and truck industry over the next five years.

Tesla fell 0.05%. The China Passenger Transport Association expects Tesla China to deliver 83,135 vehicles in September, setting a new monthly delivery record.

Rivian, down 7.28%, decided to recall almost all vehicles it produced due to safety concerns caused by loose parts.

General Motors fell 3.96%. The retail sales in the Chinese market in the third quarter were about 630,000 units, and its new energy vehicles performed well.

Toyota Motor fell 0.73%. In September, its new car sales in China reached 172,800 units, up 50.3% year-on-year. Its terminal sales in China reached 101,069 units, down 16.8% year-on-year.

Sources from: Investing.com; Reuters.com

Louis Yap

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