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Rise and shine everyone.
US equities staged quite the rebound yesterday after opening lower on news from the Middle East. Energy was the leading sector yesterday with oil prices spiking. With pressure on yields, we saw a bid in bonds yesterday. The 2Y yield had the sharpest drop since August. Speaking of which, we have a 3Y Treasury Auction today at 1pm ET.
US Equities continue to trade higher this morning alongside, marginally higher yields at the shorter end after yesterday’s strong pullback. The Yield Curve flattens to -0.32%. Oil and Gold are pulling back from their recent highs of yesterday while Bitcoin has caught a bid, implying somewhat of a risk-on sentiment again. The US Dollar Index has broken slightly below 106. Pepsi reports this morning.
In other news, the IMF hikes US GDP growth Forecast from 1.8% to 2.1% while they cut the Eurozone GDP growth forecast from 0.9% to 0.7%. GLobal growth forecast remains at 3%.
Asia and Australia
Asian equities trading mostly higher Tuesday. Japan outperforming and will close on a five-day high, Australia's ASX higher for fourth consecutive session. Greater China mixed with mainland markets again struggling, Hong Kong higher. Kospi a few points lower but rest of the region higher. Taiwan remained closed.
China’s property market sees bad news again as the property developer, Country Garden sends out warnings that they may be set for their first ever default and restructuring.
News coming out of China however, that the government may add another $137B in fiscal stimulus to drive growth. This has given the market a lift and alongside that, Australian markets get a boost.
Europe, Middle East, Africa
European equity markets firmer, following stronger Asian trading this morning and US Equities yesterday.
The conflict remains contained for now in the Middle East, although stock markets took a hit. Middle East markets closed lower yesterday including Saudi Arabia, UAE and Egypt.
UK Retail sales slowed in September. An update from the British Retail Consortium (BRC) showed a slowdown in retail sales in September with total sales up 2.7% versus prior 4.1% in August.
UK food price inflation lowest since July 2022. In the four weeks to 1-Oct, annual grocery inflation at 11%, down from 12.2% in its September report.
The Americas
Dovish comments from the Fed are helping drive risk-on sentiment. Fed members discussed the surge in yields causing sufficient tightening such that further tightening may not be required from the Fed. This pushed yields lower yesterday. We have Waller, Daly and Kashkari speaking today.
Trian raises stake in Disney to $2.5B, to revive campaign for board seats
PepsiCo reports Q3 core EPS $2.25 vs FactSet $2.15. Revenue $23.45B vs FactSet $23.41B. FY Guidance: Maintains organic revenue growth +10%; Core constant currency EPS growth +13% vs prior guidance core constant currency EPS growth +12%. Expects the stronger USD to affect core EPS negatively by -2%.
Calendar
(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)
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