Sep 28, 8:16AM CDT
VOT Research Desk
Mid Morning U.S Stock Market Rundown
This morning, the December S&P 500 futures (ESZ22) are up +0.27%.When the Bank of England (BOE) unexpectedly increased quantitative easing (QE), Dec S&Ps recovered from a 1-3/4-year low in overnight trade, as stock indexes recovered their losses and global bond yields plummeted. Today’s 10-year T-note yield of 4.015 percent is down 7.3 basis points to 3.872 percent, down from a 14-year high. The 10-year UK gilt yield is now 4.122%, down 38.3 basis points from its 14-year high of 4.591 percent.
As Biogen announced that its Lecanemab drug, developed with Eisai Co., significantly slowed the progression of Alzheimer’s disease, health care stocks surged in pre-market trading to boost the market as a whole.
Apple fell more than -3% in overnight trading after a Bloomberg report stated that the company is reversing plans to increase production of its new iPhones this year after an anticipated surge in demand failed to materialize. U.S. stock indexes initially fell in overnight trading on weakness in chip stocks.
To “restore orderly market conditions,” the BOE announced today that it would begin purchasing long-dated government bonds on Wednesday. In order to achieve this result, the purchases will be made on whatever scale is necessary.”Global government bond markets experienced a rally as a result of the BOE’s rescue-action action today.
The U.S. advance goods trade balance deficit of -$87.3 billion in August was the smallest deficit in ten months, beating expectations of -$89.0 billion.
Wholesale inventories in the United States increased by +1.3% month-over-month in August, exceeding expectations of -0.4% month-over-month. Additionally, retail inventory growth in August exceeded expectations by +1.4% month over month. The economy suffers as a result of the accumulation of inventories because it suggests that production will need to slow down in order to meet demand.
Today, the Euro Stoxx 50 fell to a 1-3/4-year low, losing -1.12%.Following a Bloomberg report that stated Apple was abandoning plans to increase iPhone production due to concerns about demand, a decline in technology stocks sent the market lower. In addition, after Bloomberg reported that the European Union may be considering including shipping restrictions on Russian oil as part of its sanctions, weakness in European shipping stocks weighed on the market as a whole. After Citigroup stated that EPFR Global data show that European equity funds are on track for eight consecutive months of outflows totaling $98 billion, or 6% of assets under management, comparable to the 2011–12 Eurozone debt crisis, investors continue to flee European stocks.
According to ECB President Lagarde, we are not yet at the neutral rate and will continue to raise rates at subsequent ECB meetings.
Kazimir, a member of the ECB’s Governing Council, stated, “We will need to continue normalizing monetary policy because inflation is too high for too long.”A 75 bp increase “is a good candidate to continue and keep tightening,” despite the fact that ECB officials are dependent on data.
