Wake Up Wall Street (SPY) (QQQ): With carnage everywhere, is it time to take shelter in 4% government debt?
Here is what you need to know on Friday, September 23:
Equity markets continue their turmoil on Friday as any hope of a rally to end the week is dashed. Bond yields have accelerated as the 2-year breaches 4%. In Europe, yields are also higher as the UK embarks on an expensive tax cut package. This has boosted the dollar further as the cost of this package hits sterling sentiment. European equities moved lower mid-morning as yields moved higher. Investors now have a real alternative to equities with short-term yields at 4%.
This is likely to accelerate ETF and equity market outflows over the coming weeks. Take shelter in US government debt at 4% for a year and wait out the storm, many are surely thinking. This is certainly happening right now. Goldman Sachs of course will catch some headlines as they slash their forecast for the S&P 500 by about 15% for year-end. Retail traders have yet to run for the exits in total, but certainly the trend is likely to accelerate.
The dollar began cautiously after the BOJ intervention but soon regained its throne and rose across the board as sterling in particular fell. The dollar index is up to 112 now. Oil is lower at $80 as fears of a global recession continue. Oil is also under pressure from the strong dollar. Gold too is lower at $1,656 as yields rise and the yellow metal offers zero yield by comparison. Finally, Bitcoin is holding at $19,000.
European markets are lower: Eurostoxx, FTSE, and Dax are all 2% lower.
US futures are also lower: Nasdaq -1.2% and Dow and S7P -1%.
Wall Street top news (QQQ) (SPY)
UK cuts taxes across a huge range of sectors. Yields spike, GBP falls.
Costco (COST) revenues up but in nominal terms mostly it seems. Earnings ahead but margins lower and so stock lower.
Royal Caribbean (RCL) down 4% on note offering.
ARKK: Cathie Wood to step away from ETFs PRNT and IZRL. Perhaps focusing more on ARKK?
Ford (F) begins the construction of EV factory.
Raytheon (RTX) is up as it gets a hypersonic missile contract from DOD.
FedEx (FDX) says it will increase shipping rates and cut costs.
Qualcomm (QCOM) fell despite a positive-sounding update regarding automotive orders.
DocuSign (DOCU) gets new CEO from Google.
AstraZeneca (AZN) update from partner drug Ionis Pharma looks negative, not advancing to Stage 3.
Boeing (BA) to pay $200 million to settle SEC charges relating to 737 Max.
Upgrades and downgrades
Source: WSJ.com
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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.
