This morning, the December S&P 500 futures (ESZ22) are down -0.2%%. On a fall in T-note yields and anticipation ahead of earnings announcements from mega-cap technology giants, stock indexes are neutral today. The yield on 10-year T-notes is now 4.177%, down -4.2 bp. This week, the quarterly financial results for the top five tech companies by revenue—Apple, Microsoft, Alphabet, Amazon.com, and Meta Platforms—will be announced.
After receiving upgrades from a number of brokerage companies today, AT&T and Avis Budget Group are now trading higher. On the other hand, after being downgraded, Williams-Sonoma and NXP Semiconductors are down more than 2%. Additionally, Tesla is down more than 5% after lowering the price of its vehicles by 5% in China in response to signals of waning demand.
Today, the Euro Stoxx 50 is up +1.56%. Today, advances in businesses related to media, tourism, and leisure propelled a rally in European stocks to a five-week high. Concerns over the energy crisis have also subsided, which is helping stocks after today’s decline in European natural gas prices to a 4-and-a-half-month low. Stock prices are helped by a drop in European government bond yields; the 10-year German bund yield is now 2.335%, down -8.3 basis points.
Today’s economic news from Europe was subpar and unfavorable to stocks. The Oct S&P Global manufacturing PMI for the Eurozone decreased by 1.8 points to 46.6, falling short of forecasts of 47.9 and contracting at the fastest rate in nearly two and a half years. Additionally, the Oct S&P Global composite PMI for the Eurozone declined -1.0 points to a 2-year low of 47.1, below the predicted 47.6.
Asian stock markets ended neutral today. Japan’s Nikkei Stock Index closed up +0.31%, while China’s Shanghai Composite closed down -2.02%.
Today, the Shanghai Composite in China hit a low not seen in 1-1/2 weeks and finished significantly lower. Today’s decline in Chinese markets coincided with the yuan’s decline to a 14-year low against the dollar. Following the week-long party conference, Chinese President Xi Jinping made a rush to fill his leadership ranks with supporters, fueling worries that China may move away from a market-driven economy and toward greater state control. Additionally, China aims to keep up its Covid Zero policy, which will hinder economic growth.
Original article posted here.