Oct 25, 2022
VOT Research Desk
Market Insights, Considerations & Analytics
After three major US benchmark indices recorded their second day of gains this morning, December S&P 500 futures (ESZ22) are trending up +0.03% as weak economic data suggested that the effects of the Fed’s aggressive policy aimed at cooling decades-high inflation are beginning to take root. Gains in the Telecoms, Healthcare, and Technology sectors were the primary drivers of the three major stock indexes in the United States
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S&P Global’s report showed that U.S. business activity was down for the fourth month in a row. This suggests that the Fed’s steep interest rate increases are working as intended, raising hopes that the central bank will start slowing down the rate of increase in the future. Additionally, officials at the Fed indicated that the pace of tightening would be discussed at the meeting in November.
It is evidence that the economy is slowing down and that the Fed’s actions are paying off.”To use a football analogy, they may be achieving their goal, and we may be approaching the fourth quarter of rate hikes,
01:54 In the meantime, U.S. rate futures have priced in a 2.8% chance of raising the rate by 50 basis points and a 97.2% chance of raising the rate by 75 basis points at the monetary policy meeting in November.
Currently, 74.7% of the S&P 500’s companies have reported their earnings, which are generally positive. At the same time, analysts anticipate S&P 500 companies’ third-quarter profits to increase by +3.0% year-over-year, as opposed to the +4.5% increase anticipated at the beginning of October.
Today, the U.S. CB Consumer Confidence data in a few hours is the focus of all attention. On average, economists anticipate that the CB Consumer Confidence Index will reach 106.5 in October, down from 108.0 previously.
Additionally, the U.S. S&P/CS HPI Composite – 20 n.s.a. is likely to be investors’ primary focus. data, which in July was at +16.1% y/y. The new figure is anticipated by economists to be +14.4% y/y.
Rates on 10-year bonds in the United States currently stand at 4.184%, a decrease of -1.14%.
As investors evaluate the banking sector’s quarterly earnings, the Euro Stoxx 50 futures are up +0.23% this morning, maintaining the upbeat mood of the previous session. Wall Street and Asia have provided a positive handover to European equity markets after major indexes closed in the green, buoyed by hopes that the Federal Reserve will ease its stance. The more than 4% increase in SAP Se (SAP.D.DX), a German business software manufacturer that reported faster-than-expected revenue growth in Q3, is another factor that has helped European stocks.
Today, the data for Germany Business Expectations, the Ifo Business Climate Index, and the Current Assessment were made public.
The German business expectations for October were 75.6, exceeding expectations of 75.0.
The Ifo Business Climate Index for Germany in October was reported at 84.3, exceeding expectations of 83.3.
The German Current Assessment for October came in at 94.1, exceeding expectations of 92.4.
Today’s settlement on Asian stock markets was mostly positive, following a recovery on Wall Street. The Shanghai Composite Index (SHCOMP) of China ended the day down -0.04%, while the Nikkei 225 Stock Index (NIK) of Japan ended up +1.02 percent.
Investors were shaken by President Xi Jinping’s growing power, and China’s yuan plunged to a nearly 15-year low as the Shanghai Composite closed today in the red. China’s new leadership under Xi Jinping has raised concerns that the state will take precedence over the private sector more and more.
In parallel, the Nikkei 225 Stock Index in Japan closed higher today on rising expectations that the Federal Reserve would slow down its rate of interest rate increases. Gains in the Transportation Equipment,
Electrical/Machinery, and Precision Instruments sectors fueled the index’s upward momentum. The implied volatility of Nikkei 225 options is taken into account by the Nikkei Volatility, which ended the day at 25.03, up 4.03 percent.
In contrast to expectations of +1.9% y/y, the Bank of Japan’s Core CPI has been reported at -2.0 percent y/y
After shareholder BDT Capital offered to purchase the shares it does not currently own for $6.25 per share, Pre-Market U.S. Stock Movers Weber Inc (WEBR) saw a jump of more than +21% in pre-market trading.
After announcing a $50 million strategic investment from Astellas Pharma to support the advancement of Taysha’s adeno-associated virus gene therapy programs, Taysha Gene Therapies Inc. (TSHA) saw a gain of approximately +40% in pre-market trading.
After announcing the I-GO, a compact urban delivery EV, Mullen Automotive Inc. (MULN) gained approximately +16% in pre-market trading, extending yesterday’s gains.
Following the release of preliminary Q3 revenue, ADTRAN Inc. (ADTN) saw a gain of more than 3% in pre-market trading.
After delivering, Zions Bancorporation (ZION) plunged more than -6% in pre-market trading.
