VOT Research Desk
Nov 2,2022
Market Analytics and Considerations
Three significant stock indices in the United States were mostly weighted in the Consumer Services and Industrials sectors.
As U.S. job postings unexpectedly increased in September, a poll revealed that the jobs market in the country continued robust, putting an end to optimism that the Federal Reserve would start to slow the rate of increase of interest rates in December..
In a note, Jefferies stated, “Today’s data suggest that hopes for a Fed pivot may have been premature.”
In the meantime, higher interest rates slowed down demand for goods and eased pricing pressures on manufacturers, resulting in U.S. manufacturing activity expanding at its slowest pace in nearly two and a half years in October.
Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan, stated, “That is the concern for the market is we know the Fed wants to slow down the labor market, they want to slow down hiring so demand drops in the economy, which will help inflation.”
The U.S. Federal Reserve’s decision on interest rates is the topic of all attention right now. A further 75 basis point rate increase from the central bank is widely anticipated later in the session. Market participants will also be keeping a close eye on Powell’s statement because it could indicate a policy of lower interest rates starting in December.
Additionally, investors are likely to focus on the 208K ADP Nonfarm Employment Change data in September. The new number, according to economists, will be 195 thousand, and data on U.S. crude oil inventories will also be reported today. This number is expected to be +0.367 million, up from +2.588 million the week before. In the bond markets, the 10-year interest rate for the United States is at 4.040%, down 0.29 percent.
The Euro Stoxx 50 futures are up +0.14% this morning as investors dug down ahead of the critical Federal Reserve policy-setting meeting’s conclusion. Following the company’s announcement of a higher-than-anticipated profit and an improvement in its full-year profitability projection as a result of strong sales of the diabetic medicine Ozempic, Novo Nordisk’s (NOVOB.C.DX) stock increased by more than 4%.The Manufacturing PMI data for Spain, Italy, France, Germany, Germany’s Unemployment Change, and the Eurozone Manufacturing PMI were released today.
The manufacturing PMI for October in Spain was reported at 44.7, which was lower than the expectation of 47.5.
In October, the manufacturing PMI in Italy fell below expectations to 46.5.
The Manufacturing PMI for October in France came in at 47.2, below expectations of 47.4.
The German Manufacturing PMI for October came in at 45.1, which was lower than the expected 45.7. The German October Unemployment Change was reported at 8K, beating predictions of 15K even though the unemployment rate stayed steady at 5.5%.
In October, the Manufacturing PMI for the Eurozone fell below expectations to 46.4.
Today, Asian stock markets ended mixed ahead of a Federal Reserve decision on interest rates. The Nikkei 225 Stock Index (NIK) in Japan closed down -0.06%, while the Shanghai Composite Index (SHCOMP) in China closed up 1.15 percent.
Today, amid growing rumors that China will relax its strict zero-COVID policy, the Shanghai Composite closed higher, recovering from a 31-month low. In addition, there were rumors that China might open completely in March 2023.However, officials denied that the zero-COVID policy would be altered, and President Xi Jinping recently reaffirmed the nation’s commitment to maintaining the policy.
At the same time, losses in the Gas & Water, Non-Metal Minerals, and Power sectors caused Japan’s Nikkei Stock Index to close slightly lower today. Taking into account the implied volatility of Nikkei 225 options, the Nikkei Volatility closed down 3.97 percent and reached a new one-month low.
