NEW YORK (Dow Jones) — The US stock exchanges started trading in the middle of the week, mostly with small price losses. Pressure is coming from the bond market, where interest rates are rising more noticeably after the recent setback. After the clear recovery on the previous two days, investors should pause and wait for further news, according to the trade.
Shortly after the starting bell, the Dow Jones index is trending 0.1 percent higher. The S&P 500 fell 0.2 percent. The Nasdaq Composite falls 0.3 percent.
More and more attention is being focused on the accounting season that is just beginning, which has already yielded some positive surprises in the past few days. However, these were overshadowed by persistently high inflation. The market therefore has little doubt that the US Federal Reserve will continue with its rigorous rate hikes. A rate hike of 75 basis points at the next Fed meeting in early November is currently priced in at 95 percent.
On the economic side, housing starts fell more sharply than expected in September. The increase in building permits fell slightly short of expectations. The US Federal Reserve will publish its “Beige Book” at a later date. Appearances by several Fed representatives are also on the agenda.
Strong customer growth spurs on Netflix
Netflix shares jumped 10.7 percent after the streaming service gained more customers in the third quarter, significantly exceeding its own expectations. Disney also benefits from this (+3%). The airline United Airlines (+5.4%) also impressed with its business figures. The number cards from Procter & Gamble (+3.1%) and Travelers (+2.1%) were also positively received. After a profit warning, however, Generac’s price fell by 17 percent.
Yields and dollar rise – gold under pressure
Yields are on the rise again in the US bond market. On the one hand, market participants refer to the weak data on housing starts. In addition, surprisingly high inflation in the UK has reminded investors that central banks in the major economies are likely to continue raising interest rates, comments Stephen Innes of SPI Asset Management.
The dollar strengthens in the wake of market interest rates. The dollar index rose 0.5 percent. The pound, meanwhile, comes under pressure on UK inflation data. Normally, high inflation would argue for higher interest rates to support the pound, says Matthew Ryan, Ebury’s chief market strategist. In the current situation, however, the rise in prices is fueling fears that the high cost of living could lead to a crisis and severely dampen consumption. And ING thinks the pound could depreciate even more. Because the fiscal policy turnaround away from an unopposed expansion of government spending to potentially drastic cuts could lead the country into an even deeper recession.
The firmer dollar and higher bond yields weigh on gold prices. Oil prices, on the other hand, are recovering somewhat from their recent losses after the industry association API surprisingly reported a decline in US oil inventories late on Tuesday. The players are now eagerly awaiting the official data from the state Energy Information Administration.
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INDEX last +/-% absolute +/-% YTD
DJIA 30,569.48 +0.1% 45.68 -15.9%
S&P 500 3,713.97 -0.2% -6.01 -22.1%
Nasdaq Comp. 10,738.25 -0.3% -34.15 -31.4%
Nasdaq-100 11,139.25 -0.1% -8.48 -31.8%
US Bonds
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 4.52 +8.5 4.44 379.4
5 years 4.31 +7.8 4.23 304.9
7 years 4.21 +8.1 4.13 276.7
10 years 4.09 +7.8 4.01 257.7
30 years 4.07 +4.5 4.03 217.3
FOREX last +/- % Wed, 8:31 am Tue, 5:02 pm % YTD
EUR/USD 0.9792 -0.7% 0.9837 0.9846 -13.9%
EUR/JPY 146.64 -0.4% 146.93 146.85 +12.0%
EUR/CHF 0.9817 +0.1% 0.9804 1.0050 -5.4%
EUR/GBP 0.8691 -0.2% 0.8705 0.8704 +3.4%
USD/JPY 149.73 +0.3% 149.35 149.13 +30.1%
GBP/USD 1.1265 -0.5% 1.1303 1.1314 -16.8%
USD/CNH (Offshore) 7.2645 +0.6% 7.2384 7.2267 +14.3%
Bitcoin
BTC/USD 19,209.86 -0.5% 19,266.20 19,417.58 -58.5%
ROHOEL last VT-Settlem. +/- % +/- USD % YTD
WTI/Nymex 83.54 82.82 +0.9% +0.72 +18.7%
Brent/ICE 90.61 90.03 +0.6% +0.58 +23.2%
GAS VT Settlem. +/- EUR
Dutch TTF 112.58 113.22 -0.6% -0.65 +72.7%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,635.87 1,652.30 -1.0% -16.43 -10.6%
Silver (Spot) 18.46 18.78 -1.7% -0.32 -20.8%
Platinum (Spot) 898.30 910.00 -1.3% -11.70 -7.4%
Copper Future 3.35 3.38 -1.0% -0.03 -24.4%
YTD relative to previous day’s close
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(END) Dow Jones Newswires
October 19, 2022 09:44 ET (13:44 GMT)
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