Wall Street extended a three-day winning streak as the US bond yields continued to slide, despite hotter-than-expected PPI. The Producer Price Index rose 0.5% in September from a month ago, higher than an expected 0.3%. The data rose 2.2% on a yearly basis, the highest since April, suggesting another sticky headline CPI due for release tonight. The stock markets initially fell following the data but rebounded after the FOMC meeting minutes showed board members agreed that policy should remain restrictive but needed to “proceed carefully” to balance overtightening with the inflation target. The US 10-year bond yield fell 10 basis points to a two-week low following the Fed minutes release.
The US dollar index fell for the sixth straight trading day due to falling bond yields, while gold benefited from a softened dollar the most. However, crude oil extended losses as geopolitical risk abated after Saudi Arab’s pledge to stabilize the oil markets.
Most Asian currencies were lower against the king dollar following a slide in the respective government bond yields. However, China’s effort for additional debt to support its infrastructure boosted the regional stock markets. Futures point to a higher open across the APAC. The Nikkei 225 futures were up 0.30%, the ASX 200 futures rose 0.16%, and Hang Seng Index futures were up 1.08%.
Price movers:
- 8 out of 11 sectors in the S&P 500 finished higher, with Real Estate and Utility leading gains, up 2 01% and 1.63%, respectively. The growth sectors, such as Technology and Communication Services, rose more than 1% as most mega-cap tech shares finished higher. Energy, Consumer Staples, and Healthcare underperformed, down 1.35%, 0.64%, and 0.43%, respectively.
- Birkenstock fell 11% on the debut day. The shoemaker set the IPO price at US$46 and started trading at US$41 per share, then closed at just under US$41. Birkenstock sold 10.75 million ordinary shares in the offering, raising US$495 million with a valuation of about US$8.64 billion.
- Gold rose for the fourth straight trading day as bond yields slid. Gold futures were up US$12 per ounce to 1,887, a two-week high, heading off key resistance of US$1,900. A softened USD and falling bond yields boosted gold.
- Crude oil extended losses amid Saudi’s pledge to stabilize the market. Oil prices fell more than 2% after Saudi Arabia vowed to stabilize oil markets and urged to prevent an escalation of the War in the Middle East.
ASX and NZX announcements/news:
- Meridian Energy Limited (ASX: MEX, NZX: MEL) will hold the annual shareholder meeting at 9:30 am New Zealand time today.
Today’s agenda:
- New Zealand FPI for September
- Japanese PPI for September
- China’s New Yuan Loans and M2 Money Supply for September
- US CPI & Unemployment Claims
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.