28 Oct 2022

Last night, US stocks opened higher and moved lower. As of the close, the S&P fell 0.61%, the Nasdaq fell 1.63%, and the Dow rose 0.61%. The U.S. 10-year Treasury yield fell 7 basis points to 3.939%. The VIX, the fear gauge, rose 0.4%. Crude oil prices closed up, with WTI crude up 3.92% to close at 88.27. Spot gold continued to rise 0.74% to $1,665.22 an ounce.

The U.S. real GDP in the third quarter was 2.6% quarter-on-quarter, higher than the expected 2.4%, a new high since the fourth quarter of 2021, and had recorded negative growth for two consecutive quarters. The analysis pointed out that GDP growth was mainly due to a narrowing of the trade deficit and federal government spending, while domestic private sector activity remained weak. Such a one-off event is difficult to repeat, with key economic sectors such as consumer spending and the housing market having weakened sharply this year.

U.S. durable goods orders rose less-than-expected in September, while new orders excluding transportation fell 0.5%, indicating weakening manufacturing confidence. Initial jobless claims were 217,000 last week, up 3,000 from the previous week. Under the influence of the Fed's continued interest rate hikes, the economy has cooled significantly.

After the market, Amazon released its earnings report, dragged down by the strong dollar, Amazon International, AWS and other businesses performed less than expected, with net sales of $127.1 billion in the third quarter, lower than analysts' expectations of $127.64 billion. Amazon expects net sales of $140-148 billion in the fourth quarter, lower than market expectations of $155.52 billion; operating profit is expected to be $0-4 billion in the fourth quarter, significantly lower than market expectations of $4.66 billion. Dragged down by performance, Amazon fell 20% after the market.

Meta plummeted 24%, the third quarter report was overall worse than expected, the loss of Metaverse business expanded, and expenses were expected to increase sharply.

Apple fell 3% and rose nearly 1% after the market. The third-quarter revenue hit a record high, but it lost double-digit growth due to the strong dollar.

Tesla rose 0.2% on news that Musk's acquisition of Twitter will be completed on Friday.

Microsoft fell 1.98%, with revenue of $50.122 billion in the third quarter, higher than market expectations of $49.6 billion, an increase of 11% year-on-year, but the weakest quarterly revenue growth since fiscal 2018; net profit was $17.556 billion, a year-on-year decrease 14%.

Sources from: Investing.com; Reuters.com

Louis Yap

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