25 Oct 2022

Last night, the three major U.S. stock indexes fluctuated higher. As of the close, the Dow rose 1.34%, the Nasdaq rose 0.86%, and the S&P rose 1.19%. The yield on the 10-year U.S. Treasury bond rose 0.569% to close at 4.245%, a difference of about -26 basis points compared with the yield on the two-year Treasury bond. The VIX, the fear index, rose 0.54%. Brent crude closed up 1.84%. Spot gold closed down 0.48% at $1,649.59 an ounce. The dollar index remained high and closed at 112.

According to the British Independent Television (ITV): British Prime Minister candidate Mordaunt did not get enough votes to become the Prime Minister candidate, will withdraw from the race, and expressed his full support for Sunak, Sunak has become the only British Prime Minister candidate. The chairman of the "1922 Committee", Graham Brady, announced that Rishi Sunak has received enough votes to become the next leader of the British Conservative Party. MPs speak. After meeting King Charles, Sunak will officially become UK prime minister on Tuesday. BlackRock said it moved from underweight gilts to neutral as perceptions of Britain's fiscal credibility improved. A spokesman for former British Prime Minister Truss said it would be up to the new British Prime Minister Sunak to decide whether to announce the mid-term fiscal plan on October 31.

The initial value of the U.S. Markit Manufacturing PMI in October was 49.9, falling below the line of prosperity and decline, setting a new 28-month low. The U.S. economic downturn intensified significantly in October, while confidence in the outlook deteriorated sharply. The downturn was largely driven by a sharp drop in service sector activity, fueled by rising living costs and tighter financial conditions. While manufacturing output remains more resilient for now, demand for goods fell sharply in October, meaning current output can only be sustained by businesses digesting the previous backlog of orders. Clearly, this is not sustainable without a recovery in demand. So it's no surprise to see companies slashing input purchases in preparation for a drop in output in the coming months. One benefit of the decline in input purchases is that supply constraints have been further eased, which, combined with a stronger dollar, has helped ease price pressures in the manufacturing sector. Plus, there are clear signs that weaker demand is helping to moderate headline inflation, especially if interest rates continue to rise.

U.S. Treasury Secretary Yellen said that the U.S. Treasury bond market currently reflects increased uncertainty about the economic outlook, but with strong trading volumes and normal trading, the U.S. may face the material impact of financial stability risks, and the risk of a recession cannot be ruled out. Goldman Sachs said that in the case of a severe U.S. recession, the price of gold could rise to $2,250 an ounce; and in the case of an extremely hawkish Federal Reserve, the price of gold could fall to $1,500 an ounce. Vietnam's central bank raised interest rates by 100 basis points. According to data provided by Market ET, the size of Japan's intervention in the foreign exchange market on October 21 is estimated to be 5.4 trillion yen to 5.5 trillion yen. A U.S. military official said there was no indication Russia had decided to use nuclear weapons.

Bank of England Deputy Governor Ramsden said that now has entered a new era of unprecedented shocks, and believes that the Bank of England has sent a considerable number of signals to the market about quantitative tightening. And concerns that inflation is increasingly being fueled domestically has been a driver of the Bank of England's higher-than-usual rate hikes. Thousands of rail union members will strike on November 3, 5 and 7, UK rail union TSSA said.

Apple rose 1.48% and began to pay claims to App Store developers after reaching a $100 million settlement; Apple raised subscription prices for music and TV streaming services for the first time due to high cost pressures. Microsoft rose 2.12%, with Azure and Teams businesses likely to boost revenue growth.

Google rose 1.47%, as South Korea considers the likes of Netflix and Google to charge for internet access.

Tesla fell 1.49%, reducing the price of Model 3/Y sold in mainland China. After adjustment, the starting price of Model 3 models after subsidies is 265,900 yuan, and Model Y is 288,900 yuan; Q3 revenue in China increased year-on-year 64.8% to 5.131 billion US dollars, the Chinese market accounted for 23.9% of the total revenue, due to changes in the book value of Bitcoin, the company's loss on digital currency in the first nine months of this year reached 170 million US dollars.

Credit Suisse rose 0.42% after the company sold its 8.6% stake in Allfunds Group to raise about $327 million for restructuring expenses, and a French court approved Credit Suisse to pay 238 million euros ($233.81 million) to settle taxes in the country Fraud and money laundering cases.

Global express giant FedEx rose 1%, shutting down the Roxo unmanned delivery vehicle project.

Sources from: Investing.com; Reuters.com

Louis Yap

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