- Equity Markets:The Dow Jones index hit an all-time high yesterday while bond yields fell as lawmakers ended the US government shutdown after 43 days, paving the way for the release of crucial economic data that will help shape the Federal Reserve’s policy outlook. The S&P500 rose +0.06% but the Nasdaq dropped -0.26%. Europe rose +0.71%. In the US, six sectors were in positive territory with 59% of stocks ended higher. Health Care (+1.36%) and Financials (+0.90%) were best, while Energy (-1.42%) and Communication Services (-1.18%) were weakest. Advanced Micro Devices Inc. rose (9.00%) after the chipmaker forecasted faster sales growth over the next five years, fuelled by robust demand for its data centre products. In Europe, nine of eleven sectors were in positive territory with 68% of stocks ending higher. Utilities (+1.61%) and Materials (+1.19%) were best, while Energy (-0.74%) and Communication Services (-0.07%) were worst. LVMH shares climbed to their highest level since March, rising as much as 2.26%, after HSBC analysts increased their price target for the French luxury group to the highest among those tracked by Bloomberg, citing expectations of greater cost efficiency and portfolio streamlining.
- Macro:In macro news yesterday, in the US, MBA mortgage applications index increased by 0.6% in the week ending November 7, following a 1.9% decline in the previous week. From the ECB, Schnabel believes interest rates are in a ‘good place’ but see inflation risks ‘tilted a little bit to the upside’. From the Fed, Collins supports keeping interest rates unchanged to curb inflation, with Bostic echoing this sentiment, stating that inflation remains the greater risk to the economy. Perli mentioned it won’t be long before the Fed starts buying assets, as rising overnight funding costs indicate that bank reserves are no longer plentiful.
- Economic releases today include Eurozone Industrial Production and Ireland CPI, while in the US we have Initial Jobless Claims and CPI releases.
- Stocks:Grafton Group: (Overweight TP £12.05, c.31% Upside): Commentary on in line set of 10 month results. Flutter: (Overweight TP $293 27% Upside): Details on Q3 results and FanDuel Predicts Launch Aviva (Neutral TP 665p -2.1% Downside): Details on a mixed set of Q3 and 9 month set of results.
- Debt: Treasuries remain north of 4% and we saw a tepid 10 year Auction last night, with 30 year supply slated for today.
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