Wake Up Wall Street (SPY) (QQQ): Bank of England pivots before CPI
Here is what you need to know on Wednesday, October 12:
The Bank of England once again sent markets into a spin on Tuesday as it yet again seemed to perform a pivot. It expanded its bond-buying to inflation-linked gilts (linkers), but then the BOE Governor told pension funds to get themselves sorted before Friday as the central bank would exit the market then. Equities were steady and rallying before that bombshell and quickly reversed and closed down on the day. This morning then The Financial Times carried a report saying the BOE may extend its program before the Bank came out once again and denied the extension. The Bank did state that the program would end on October 14, but from the statement they omitted the year, so the cynic in me could say they left the door open again.
A total mess it was, and sterling was all over the place. After that diversion, attention turns to the US CPI on Thursday. Equity markets should recover in my view as investors square up in advance of the release. Already we see conflicting news from Pepsi (PEP) beating earnings but Intel (INTC) announcing job cuts. Both stocks are up premarket though.
The dollar is on the back foot against most except the yen. The Bank of Japan made comments but mentioned speed specifically, so perhaps this speed is not as concerning to them. The Dollar Index is flat at 113.23. Gold is trading at $1,668, and Oil (WTI) is higher at $89.71. Oil spiked on talk of a pipeline issue in Poland. Bitcoin is $19,100 and is one of the more stable assets recently.
European markets are higher: Eurostoxx +0.8%, FTSE +0.1% and Dax +0.2%.
US futures are also higher: S&P +0.6%, Dow +0.4% and Nasdaq +0.8%.
Wall Street top stories (SPY) (QQQ)
Pepsi (PEP) beats on top and bottom lines and raises forecasts.
Intel (INTC) plans large job cuts.
Delta (DAL) and Starbucks (SBUX) link loyalty programs.
AMC Entertainment (AMC) will use indirect subsidiary Odeon Finco to issue $400m senior secured notes.
Uber (UBER), Door Dash (DASH), Lyft (LYFT) and others may struggle with a proposal from US Labour Dept to reclassify gig workers as employees.
Philips (PHG) is down sharply on profit warnings. A big profit warning! 60% lower!
Brookfield Renewable (BEP) to buy nuclear power equipment maker Cameco (CCJ).
United Airlines (UAL) adds transatlantic fights in bet on recovery.
DiamondBack Energy (FANG) to buy Fire Bird Energy.
El Pollo Loco (LOCO) announces special dividend.
Microsoft (MSFT) and Mercedes announce a partnership to use Microsoft Cloud to improve production efficiency at global car plants.
Twitter (TWTR) to reexamine policies around permanently banning users, according to The Financial Times.
Upgrades and downgrades
Source: WSJ.com
Economic releases
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Author
Ivan Brian
FXStreet
Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.
