美股盘后，2024年票委、旧金山联储主席戴利认为，美联储在今年剩余时间还将降息1-2次。市场预期11月不降息可能性从14.8%升至29.6%，城堡证券预计今年美联储只会再降息一次，共计25个基点。Source: Wall Street News Authors: Fang Jia Yao, Du Yu, Jiang Zihan
Waiting for CPI inflation, the September minutes of the Federal Reserve revealed a significant divergence on a large rate cut, with the 10-year U.S. Treasury auction demand falling sluggishly as yields rose above 4.08% to a ten-week high, and the U.S. dollar rose for eight consecutive days. U.S. stocks rose for two consecutive days, with the Dow and chip index up 1%, the China concept stock index fell 3.7% before closing down 1.3%, NIO and Xpeng reversed gains, and the FTSE A50 futures rose by up to 3.7%. Boeing hit a two-year low, Google and Tesla fell by over 1.4%. The Japanese yen hit a ten-week low below 149, offshore Renminbi fell over 200 points to break through 7.09 yuan, and oil prices fell by 3% but then significantly narrowed.
The summary of the September FOMC meeting of the Federal Reserve revealed a significant gap in the rate cut, with some policymakers believing there is a reason to cut the rate by only 25 basis points. Federal Reserve Vice Chairman Jefferson believes that the labor market is cooling orderly, while Dallas Fed President Logan is concerned about stubborn inflation, both continue to suppress market bets on a significant rate cut in November, as bond yields and the U.S. dollar rise together.
After the U.S. stock market closed, Mary Daly, 2024 voting committee member and former president of the San Francisco Fed, believes that the Fed will cut rates 1-2 more times in the remaining time this year. Market expectations of no rate cut in November have risen from 14.8% to 29.6%, with Castle Securities expecting the Fed to cut rates only once more this year, totaling 25 basis points.
The Governor of the Bank of France stated that the European Central Bank is likely to cut rates next week. Another committee member, Stunaras, said it is very likely that further loosening of policies will be implemented in 2025. Support the European Central Bank to cut rates by two more 25 basis points this year. Inflation may reach the target of 2% in the first half of 2025.
The three major U.S. stock indexes rose for two consecutive days and closed near the day's high, with the Dow up over 1%, leading the surge, while both the S&P 500 and Nasdaq hit historic highs. Healthcare, technology, and industrial sectors led the gains, with the financial sector showing decent gains ahead of the third-quarter reports. Utilities, communications, and real estate sectors lagged behind. After the U.S. Department of Justice stated its consideration of breaking up Google's business, Google Class A shares fell by 1.53%, while Chinese concept stocks continued to pull back but the late plunge significantly narrowed. Investors are waiting for the news conference to be held by the Chinese Ministry of Finance on October 12th, which will detail the strengthening of fiscal policies.
U.S. stock indexes rose across the board. The S&P 500 closed up 0.71% at 5792.04 points. The Dow Jones Industrial Average, closely related to the economic cycle, rose 431.63 points or 1.03% to 42512.00 points. The Nasdaq, dominated by technology stocks, rose 0.60% to 18291.62 points. The Nasdaq 100 rose 0.80%. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 tech sector stocks, rose 0.64%. The Russell 2000 small-cap stock index, more sensitive to the economic cycle, initially rose 0.8% and closed up 0.26%. The VIX fear index fell 2.71% to 20.87.
Most U.S. stock industry ETFs closed higher. Regional banks ETFs, global technology ETFs, banking ETFs, technology industry ETFs, semiconductor ETFs, and healthcare ETFs all rose by at least 1%. Financial ETFs, internet stocks ETFs, consumer discretionary ETFs, energy industry ETFs, and consumer goods ETFs all rose by at least 0.5%, while utilities ETFs fell by 0.86%.
Most of the 11 sectors of the S&P 500 index rose, with the healthcare sector up 1.02%, the technology sector up 1.01%, the industrial sector up 0.92%, the financial sector up 0.87%, consumer staples sector, consumer discretionary sector, and materials sector all up by more than 0.5%. The utilities sector fell by 0.89%, and the communication services sector fell by 0.55%.
"Big Tech" stocks mostly down. Apple closed up 1.67%. Amazon rose 1.34% and announced a series of logistics upgrades, with the number of robotic workers set to increase tenfold and prescription drug delivery to cover half of the U.S. Microsoft rose 0.66%. Nvidia initially rose over 1% then fell by 0.18%. Meta fell by 0.40%, with Zuckerberg announcing the launch of Meta AI in six countries including the UK and Brazil. Tesla fell by 1.41%, with Wall Street predicting high risks of disappointment from Tesla's Thursday event. Google A fell by 1.53%, and the U.S. Department of Justice is considering breaking up Google's business to weaken its monopoly in the search market, but there are still operational challenges.
Chip stocks mostly up. The Philadelphia Semiconductor Index rose 1.06%, industry ETF SOXX rose 1.04%, Nvidia double long ETF fell by 0.51%. Taiwan Semiconductor ADR rose 0.59%, with a 39.6% year-on-year revenue increase in September. Broadcom rose 2.89%, Arm Holdings rose 3.36%, Intel rose 0.6%, ASML ADR rose 2.63%, KLA Corp rose 2.64%, Qualcomm rose 2.33%, while Micron Technology fell by 0.82% and AMD fell by 1.03%.
AI concept stocks mostly up. BullFrog AI fell by 2.7%, SoundHound AI, owned by Nvidia, fell by 1.07%, while Super Micro Computer rose by 4.28%. Serve Robotics rose by 4.55%, BigBear.ai rose by 1.99%, Snowflake rose by 5.42%, C3.ai rose by 6.75%, Dell Technologies rose by 0.34%, CrowdStrike rose by 1.82%, Oracle rose by 2.25% hitting an intra-day all-time high, and Palantir rose by 4.05%.
Chinese concept stocks fell back. After Nasdaq China Golden Dragon Index fell by 3.7%, it closed down by 1.29%, China Technology Index ETF (CQQQ) fell by 2.75%, China Internet Index ETF (KWEB) fell by 1.11%, FTSE China 3x Bull ETF (YINN) fell by 4.83%, FTSE China 3x Bear ETF (YANG) rose by 3.08%, 'China Dragon' ETF RONDHL CHINA ETF (DRAG) fell by 1.66%, Xtrackers Harvest CSI 50 (ASHS) fell by 6.97%, Deutche Bank Harvest SSE 300 Index ETF (ASHR) fell by 6.28%. However, FTSE A50 futures rose by a maximum of 3.7%.
In the popular China concept stocks, Netease fell by 5.67%, Mengniu Dairy ADR fell by 2.79%, Bilibili fell by 0.26%, Li Auto Inc. fell by 0.43%, Zeekr fell by 3.31%, Baidu fell by 1.84%, Alibaba fell by 1.63%, Tencent ADR fell by 1.36%, JD.com fell by 1.61%, New Oriental fell by 1.39%, PDD Holdings fell by 2.43%, while XPeng rose by 3.46%, NIO Inc. rose by 0.8%, Meituan ADR rose by 0.93%, Trip.com rose by 1.48%, and Fangdd Network rose by 6.02%.
In other key individual stocks: (1) Boeing fell by 3.41% to a two-year low due to failed strike negotiations and Boeing's withdrawal of the proposal to the union. (2) U.S. lithium mining company Arcadium Lithium rose by 30.9% as Rio Tinto plans to acquire it, causing Rio Tinto's U.S. stocks to fall over 4%.
European stock markets closed generally higher on Wednesday, with technology stocks leading the gains. The pan-European index recorded its best performance in two weeks, but German pharmaceutical company Bayer fell by nearly 7% as the U.S. Supreme Court agreed to review allegations of harm from exposure to chemicals in its Monsanto subsidiary products.
The STOXX 600 index in Europe rose by 0.66% to 520.05 points. The Eurozone STOXX 50 index rose by 0.68%. All sectors saw gains, with technology stocks leading by a 1.3% increase.
The German DAX 30 index rose by 1.00%. The French CAC 40 index rose by 0.52%. The Italian FTSE MIB index rose by 0.56%. The UK FTSE 100 index rose by 0.63%. The Spanish IBEX 35 index rose by 0.06%.
Demand was lackluster in the 10-year U.S. bond auction, with the benchmark bond yield rising to a ten-week high of over 4.08%, peaking nearly 5 basis points. The 2-year U.S. bond yield increased by 4 basis points to over 4%, reaching a seven-week high.
U.S. bonds: By the closing bell, the yield on the more policy-sensitive 2-year U.S. bond surged by 5.70 basis points to 4.0153%, trading in a range of 3.9374% to 4.0153% mid-day. The yield on the 10-year benchmark U.S. bond rose by 5.47 basis points to 4.0667%, reaching a ten-week high of 4.0765% after the 10-year bond auction results were announced (before the release of the Fed meeting minutes).
Eurozone Bonds: At the close, the yield on the German 10-year benchmark bond rose by 1.4 basis points to 2.257%. The yield on the 2-year German bond rose by 3.2 basis points. The yield on the 10-year UK bond fell by 0.4 basis points, while the 2-year UK bond yield fell by 0.5 basis points.
The U.S. dollar index rose more than 0.3%, hovering near an eight-week high. Non-U.S. currencies generally declined, with the New Zealand dollar and Japanese yen leading the decline. The yen fell by 0.75% to 149.31, hitting the lowest level since the week and July, while the offshore yuan fell by 190 points, nearing 7.10. Bitcoin fell by nearly 3%, dropping below $61,000.
The U.S. dollar: The DXY U.S. dollar index rose by 0.33% to 102.891 points, with an intraday trading range of 102.459-102.935 points.
Bloomberg's U.S. Dollar Index rose by 0.41% to 1244.41 points, with an intraday trading range of 1238.95-1244.49 points.
Non-US currencies generally fell: the euro fell 0.37% against the US dollar, the British pound fell 0.25% against the US dollar, and the US dollar rose 0.40% against the Swiss franc; among commodity currency pairs, the Australian dollar fell 0.37% against the US dollar, the New Zealand dollar fell 1.23%, hitting the lowest point since mid-August, and the Reserve Bank of New Zealand cut interest rates by 50 basis points to 4.75%, as expected. The US dollar rose 0.47% against the Canadian dollar. Traders bet heavily on a 50-basis-point rate cut by the Bank of Canada in October, causing the Canadian dollar to fall for the sixth consecutive day to its lowest level in eight weeks and marking the longest continuous decline in three months.
Japanese Yen: The Japanese yen fell 0.75% against the US dollar to 149.31 yen, with an intraday trading range of 149.36-148.01 yen. Eiji Maeda, former chief economist of the Bank of Japan, revealed that Japan's newly appointed Prime Minister Fumio Kishida will not prevent the Bank of Japan from raising interest rates, with the most likely timing for a rate hike being January next year. The possibility of a rate hike at the October 31st meeting is almost zero.
Offshore Chinese Yuan (CNH): The offshore Chinese yuan fell 190 points against the US dollar to 7.0927 yuan in the closing session, with overall trading ranging from 7.0985 to 7.0537 yuan.
Most cryptocurrencies fell: The largest market cap leader Bitcoin fell 2.92% to $60,575.00 in the closing session, trading between $60,440.00 and $62,720.00 during the day. The second-largest Ethereum fell 3.31% to $2,365.00 in the closing session, trading between $2,357.00 and $2,480.00 during the day.
Increased US oil supplies offset Middle East tensions and hurricane risks, leading to a second consecutive day of oil price declines. However, the decline was narrower compared to the previous day. After a 3% drop in early US stock trading on Wednesday, the decline significantly narrowed:
US Oil: WTI November crude oil futures closed down $0.33, or 0.45%, at $73.24 per barrel. US oil edged slightly higher in the Asian session, then accelerated its decline. In early US stock session, it dropped by nearly 2.8% to approach $71.50.
Crude Oil: Brent crude oil futures for December fell by $0.60, a decrease of 0.78%, to $76.58 per barrel. Brent crude oil followed the same trend as WTI crude oil, with the lowest point in early US stock trading session dropping over 2.6% to approach $75.10.
On the news front: The Energy Information Administration (EIA) reported that as of the week ending October 4th, US crude oil inventories increased by 5.81 million barrels, surpassing analysts' expectations of a 1.6 million barrel increase and the previous week's 3.889 million barrel increase. However, the sharp drop in gasoline inventories may be related to the impact of hurricanes. Analysts at Goldman Sachs stated that the Middle East situation remains unclear, with an estimated $10-20 per barrel increase in Brent oil price at its most severe.
Natural Gas: US natural gas futures for November fell by 2.67%, to $2.7330 per million British thermal units.
Expectations of further interest rate cuts by the Federal Reserve have strengthened the US dollar and bond yields, putting pressure on precious metals prices. Spot gold fell over 0.5% for the sixth consecutive day but remained above $2600. Spot silver fell over 0.5% for the third consecutive day, while London industrial metals fell across the board for the second consecutive day.
Gold: COMEX December gold futures fell by 0.55% to $2626.1 per ounce. Spot gold rose slightly during the Asian session, then fluctuated downwards. In the US stock midday session, it dropped over 0.6% to approach $2605, moving away from the historical high of $2685.42 on September 26th, ending the session down 0.55% at $2607.65 per ounce.
Silver: COMEX December silver futures fell by 0.52% to $30.73 per ounce. Spot silver rose nearly 0.4% during the European stock session to near $30.80, then dropped during early US stock trading, approaching $30.20 with a nearly 1.5% decline, and ended the session down 0.55% at $30.49 per ounce.
London industrial base metals all fell: "Dr. Copper", the economic benchmark, fell by $68 to $9675 per ton. London lead fell by 1.95%. London zinc fell by 2.30%. London aluminum fell by $30. London tin fell by $382. London nickel fell by 2.28%.
Editor/Lambor
