U.S. market looking new catalysts to grow
Monday’s trading session ended lower on Monday while real estate and discretionary sectors leading broad declines, as investors digested comments from Fed’s officials about plans for interest rate hikes and looked for next catalysts after last week’s big stock market rally.
The Dow Jones fell 211.16 points, or 0.63%, to 33,536.7, the S&P 500 lost 35.68 points, or 0.89%, to 3,957.25 and the Nasdaq Composite dropped 127.11 points, or 1.12%, to 11,196.22. Tech, meanwhile, was mostly lower, pressured by a more than 2% decline in Microsoft. Meta Platforms Inc bucked the trend, however, rising more than 1%.
Investors will focus on Fed officials are due to speak later this week along with a slew of data, including on retail sales and housing, and earnings reports from major retailers. On the bond markets, UST 10-Year rates were at 3.843%.
Most countries of G20 countries are expected to condemn Russia for its war in Ukraine at a meeting in Bali, according to draft statement. At the same time Russia’s Deputy Minister Grushko said Monday that Russia would not accept any preconditions for the peace talks, including the withdrawal of its troops from Ukraine. As Ukraine celebrated the liberation of Kherson, Russian troops have launched a new offensive in Donetsk with fighting continued around Bakhmut in the northern part of the Donetsk province. Russian stock market fluctuated around its highest levels in almost two months this morning. Both IMOEX are RTSI are currently down with IMOEX losing 1% to 2,222 and RTSI losing 0.78% to 1,161. Internet companies Yandex and Ozon Holdings were among the best performers, along with Sberbank and gas companies Gazprom and Novatek. Lukoil and Rosneft Oil retreated. Russian currency advanced against the US Dollar after closing previous two sessions unchanged with USDRUB down 0.26% to 60.29. Rouble was mostly flat against Euro and Yuan. The Balance of payments surplus has been becoming a significant support factor for the Russian currency, some analysts suggest. Russian bond yields were higher with 10-year benchmark rouble bonds gaining 0.55% to 10.045%. In other news, the Finance Ministry of Russia has published a plan, according to which it will keep the ratio of Russia’s national debt to GDP at the level not higher than 20% until 2030.
EU stocks opens mixed on Tuesday with the focus on economic data offering a view of the outlook for the region and the wider global economy. The DAX futures contract in Germany traded flat at 14,315 level, the FTSE 100 futures contract in the U.K. rose 0.15% to 7,386 points, while CAC 40 futures in France added 0.32% to 6,627.
The main European indices followed their U.S. peers sharply higher on Monday with hopes that the Federal Reserve will shortly slow its aggressive monetary tightening campaign as inflation showed signs of slowing. Meanwhile investors will be focused on inflation picture in Europe while French consumer price inflation is expected to rise 1.0% on the month in October, after falling 0.6% last month, while Spanish CPI is seen rising 0.4% on the month, after dropping 0.7% the prior month.
A largely firm open for SSA as rates rally and the dollar weakens. ANGOL (-.875) was a clear outperformer amid heavy supply more so on duration while NGERIA (-.125) also saw bouts of local selling, particularly along the belly; NGERIA (+.25) opens firmer while ANGOL is flat. KENINT (+.50) outperformed on Monday and leads at the open up half a point.
The bonds market closed on a relatively negative note. Average yields on the short & medium tier of the curve remained unchanged while the long end rose by 3bps. The Jan 2037s was the worst performer. There was Primary Auction for three tenors- 2029, 2032 & 2037 (N225bn offered and N269.15 sold)- stop rates cleared at 14.75%, 15.20% & 16.20% respectively. The NTB secondary market closed on a slightly positive note with average yields dropping by 1bps across the short to medium tier of the curve. Also, yields dropped marginally by 1bps on the long end of the curve as there was some buying interest. In the OMO secondary market, yields also dropped marginally by 1bps across the curve.