Oct 27, 2022
VOT Research Desk
Market Insights, Considerations & Analytics
After the S&P 500 and NASDAQ Composite benchmark indices ended their three-session winning streaks due to disappointing earnings and gloomy guidance from major tech companies, which weighed on risk appetite and fueled concerns of a global economic slowdown, December S&P 500 futures (ESZ22) are trending up +0.25% this morning. The Dow Jones Industrial Average ended in the green primarily due to gains in the Oil & Gas, Healthcare, and Basic Materials sectors, while losses in the Technology, Consumer Services, and Utilities sectors weighed heavily on the NASDAQ Composite and S&P 500 indexes.
Q4 outlook for the overall advertising business to continue to be impacted by difficult YoY comps and continuous headwinds within certain ad verticals and formats.
In September, there was a decline in sales of newly built homes in the United States, and mortgage rates reached their highest level in over two decades, indicating that economic conditions were improving.
At the same time, expectations that the Fed might consider reducing the size of its rate hikes following the meeting in November were raised by the Bank of Canada’s smaller-than-anticipated interest rate hike of 50 basis points to 3.75 percent. In the meantime, U.S. rate futures have priced in a 7.0% chance of a 50-basis-point increase and a 93% chance of a 75-basis-point increase at the monetary policy meeting in November.
Today, all eyes will be on the GDP preliminary data that will be released in a few hours. In comparison to the previous value of -0.6% q/q, economists anticipate a third-quarter GDP growth of +2.4% q/q.
Investors will likely also pay attention to the September Core Durable Goods Orders data from the United States, which showed a +0.2% m/m rate in August.The new figure, according to economists, should be +0.2% m/m.
The Initial Jobless Claims data for the United States will also be reported today. The United States 10-Year rate is currently at 4.059%, an increase of +1.10%, according to economists, up from the previous week’s figure of 214K.
The Euro Stoxx 50 futures are down -0.42% this morning as market participants process Credit Suisse’s significant quarterly loss ahead of a crucial European Central Bank policy-making meeting. The plans to raise 4 billion Swiss francs through the issuance of new shares were announced by Switzerland’s second-largest bank, which reported a loss of 4 billion Swiss francs that was worse than anticipated. In an effort to keep inflation in the Eurozone below its target of 2%, the ECB is expected to raise rates by 75 basis points simultaneously.
Today, data on the GfK consumer climate in Germany, the unemployment rate in Spain, business confidence in Italy, and consumer confidence in Italy were made public.
Expectations were met by the German November GfK Consumer Climate Index’s reading of -41.9.
In the third quarter, the unemployment rate in Spain was reported at 12.67 percent, exceeding expectations of 13.000 percent.
The Italian Business Confidence Index for October came in at 100.4, exceeding expectations of 100.0.
The Italian Consumer Confidence Index for October came in at 90.1, which was lower than the expected 93.8.
Today’s close on Asian stock markets was mixed.The Shanghai Composite Index (SHCOMP) in China and the Nikkei 225 Stock Index (NIK) in Japan both closed lower by -0.32%.
Due to weak earnings reports for the third quarter, China’s Shanghai Composite closed today in the red. According to the data released on Wednesday, Chinese industrial profit decreased by -2.3% year-over-year in September, pointing to slower economic growth. Additionally, in light of growing concerns regarding the political climate in China, the overall outlook for the economy therein remains uncertain.
At the same time, losses in the Chemical, Petroleum & Plastic, Railway & Bus, and Shipbuilding sectors caused the Nikkei 225 Stock Index in Japan to close lower today. The implied volatility of Nikkei 225 options is taken into account in the Nikkei Volatility, which ended the day down 1.80% to 23.44.
