13 Oct 2022

The three major U.S. stock indexes continued to fluctuate overnight. As of the close, the Dow fell 0.1%, the Nasdaq fell 0.09%, and the S&P fell 0.33%. The yield on the 10-year U.S. Treasury bond fell 1.291% to close at 3.898%, a difference of about -40 basis points compared with the yield on the two-year Treasury bond. The VIX, the fear index, fell 0.18%. Brent crude closed down 1.39%. Spot gold closed up 0.42% at $1,673.21 an ounce. The dollar index remained high, closing at 113.27.

In terms of energy, OPEC lowered its outlook for oil demand to justify its supply cuts: it lowered its forecast for global crude oil demand growth in 2022 by 460,000 barrels per day to 2.64 million barrels per day; it lowered its forecast for global crude oil demand growth in 2023 by 36 million barrels per day. 10,000 barrels per day to 2.34 million barrels per day, while lowering the global economic growth forecast to 2.7% in 2022 (from 3.1% previously) and 2.5% in 2023. The EIA Short-Term Energy Outlook report forecasts a broad cut in oil and gas price forecasts this year and next, and U.S. household spending on diesel heating will increase by more than 27 percent. In retaliation, the White House considered banning imports of Russian aluminum. An informal meeting of EU energy ministers has yet to agree on a gas price cap.

The Chancellor of the Exchequer authorised a £100bn increase in the Bank of England's asset purchase facility to £966bn to accommodate a temporary government bond purchase programme. ECB Governing Council member Nott said the ECB needs at least two major rate hikes. European Central Bank Governing Council member Holzman said that a slight economic recession will not prevent the European Central Bank from raising interest rates, raising interest rates by 100 basis points will be more than necessary, raising interest rates by 75 basis points in October, and raising interest rates by 50 basis points in December. neutral rate.

The US September PPI monthly rate was 0.4%, expected 0.20%, and the previous value was -0.10%. U.S. producer prices rose more-than-expected in September as the cost of services and goods rose strongly, suggesting inflation could remain uncomfortably high for some time and keeping the Federal Reserve on track to aggressively raise interest rates. The annualized drop in PPI was due to easing supply chain bottlenecks and a pullback in commodity prices, but this had minimal impact on consumer prices. Oil and gasoline prices may have bottomed out after OPEC+ decided to cut crude production last week. Two-thirds of PPI growth came from services such as travel and accommodation pricing, food retail, portfolio management and inpatient care. U.S. CPI, due on Thursday, is expected to rise again strongly, which could prompt Fed policymakers to raise benchmark interest rates by another 75 basis points next month.

Fed's Kashkari sees the Fed's current move to raise rates by 75 basis points at a time as very aggressive and said the central bank is working to bring inflation down to 2 percent. Asked about Russian oil exports, the U.S. deputy Treasury secretary said the U.S. is currently counting on an oil price cap and has no plans to impose secondary sanctions.

Fed minutes showed that participants believed it would be appropriate to slow the pace of rate hikes at some point while assessing the cumulative effects of policy adjustments; once policy reaches a sufficiently restrictive level, maintaining that level for a period of time would be appropriate. is appropriate. Unemployment could rise much more than workers forecast; rising wages could put more upward pressure on price inflation than expected, a wage-price spiral has not yet formed, but is a risk; inflation has not yet tightened policy react clearly.

Apple fell 0.46% and plans to launch a software update for Indian iPhone users from December, compatible with local 5G services in India; the iPad Pro 2022 with Apple M2 blessing is expected to be released this month.

Microsoft rose 0.15%, and reached a cooperation with Mercedes-Benz, which will use the Microsoft cloud platform to improve the production efficiency of more than 30 auto factories around the world.

Amazon rose 0.61% and will close warehouse robotics startup Canvas; against the backdrop of high inflation, retailers such as Amazon will start the holiday shopping season ahead of schedule.

Tesla rose 0.34%. According to official website data, the new Tesla Model S offers a long-range version and a Plaid version, and the domestic price of the Plaid is 1.03 million RMB.

Meta fell 0.81% to release a new VR headset Quest Pro, which will start shipping on October 25th for $1,500; it is reviewing its permanent mute user policy, which may make its content moderation more in line with Musk's vision for Twitter.

Pepsi rose 4.18%. In the third quarter, revenue and net profit increased by 8.8% and 21.4% year-on-year, respectively, which were better than expected. The 2022 fiscal year performance guidance was raised.

Philips fell 11.67%, expecting comparable revenue in the third quarter to fall by about 5% to 4.3 billion euros, and lowered its Q4 revenue guidance.

Intel Corp rose 1.16% as it plans to lay off thousands of jobs as the PC market slows, with sales and marketing likely to cut about 20% of its workforce.

Moderna rose 8.28% and will jointly develop cancer vaccine MRNA-4157/V940 with Merck. 

Uber rose 5.35%, Lyft rose 5.59%, and the two stocks fell more than 10% on the previous day. Mizuho said in a report that the Labor Department's proposal poses "limited" risks to Uber and Lyft.

BioNTech SE rose 5.53%, Pfizer rose 0.26%, and the FDA authorized Moderna and Pfizer-BioNTech's bivalent new crown vaccine as a booster shot for the younger age group.

Sources from: Investing.com; Reuters.com

Louis Yap

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