Markets Grapple with Rising Yields: Volatility Persists as 10-Year Treasury Nears 5%

MARKET WRAP

Market Wrap: Stocks, Bonds, Commodities

• On Thursday, U.S. stocks remained under pressure as the 10-year Treasury yield approached the psychologically-significant level of 5%.

• S&P 500: -36 points (-0.85%) to 4,278

• Nasdaq 100: -126 points (-0.85%) to 14,783

• Dow Jones Industrial Average: -250 points (-0.75%) to 33,414

• U.S. 10-year Treasury Yield: +7.3 basis points to 4.988%.

• In a speech at the Economic Club of New York, Federal Reserve Chairman Jerome Powell mentioned that inflation is still too high. He stated he does not believe rates are too high, adding extra drag on market sentiment.

• Worst-performing stock sectors: Automobiles & Components (-8.08%), Real Estate (-2.36%), Diversified Financials (-1.61%).

• Tesla (TSLA): -9.30% due to disappointing quarterly results.

• Netflix (NFLX): +16.05% after reporting strong subscriber growth.

• Las Vegas Sands (LVS): +2.87% as quarterly sales exceeded expectations.

• AT&T (T): +6.56% on higher-than-expected quarterly free cash flow.

• VMware (VMW): -9.59%, Broadcom (AVGO): -2.16%. Chinese authorities might delay the approval of their proposed merger.

• U.S. economic data: Initial jobless claims down to 198,000 (vs 212,000 expected), Philadelphia Fed manufacturing index improved to -9.0 in October (vs -7.0 expected).

• The Conference Board leading index dropped 0.7% in September (vs -0.3% expected), and existing home sales slipped 2.0% to the lowest level since 2010 (vs -3.5% expected).

• European stocks also under pressure: DAX 40: -0.33%, CAC 40: -0.64%, FTSE 100: -1.17%.

• U.S. WTI crude futures gained $2.30 to $90.58 a barrel.

• Gold price bounced a further $25 to $1,973 an ounce.

MARKET WRAP: FOREX

• U.S. dollar eased against other major currencies. The dollar index declined to 106.23.

• EUR/USD: +47 pips to 1.0583. France's business confidence index dipped to 98 in October (as expected).

• USD/JPY: -11 pips to 149.82.

• GBP/USD: Little changed at 1.2142.

• AUD/USD: -7 pips to 0.6329. Australia's data showed the jobless rate dropped to 3.6% in September (vs 3.7% expected).

• USD/CHF: -75 pips to 0.8915.

• USD/CAD: Relatively flat at 1.3720. In Canada, the producer price index increased 0.6% on year in September (vs +0.4% expected).

• Bitcoin traded higher at $28,750.

MORNING TRADING

• In Asian trading hours, USD/JPY was little changed at 149.85. Japan's data showed the core inflation rate slowed to 2.8% on year in September (as expected, vs 3.1% in August).

• EUR/USD: Steady at 1.0580.

• GBP/USD: Broadly flat at 1.2140.

• Gold advanced to $1,979.

• Bitcoin climbed to $29,000.

EXPECTED TODAY

• Germany's producer prices index decline is expected to widen to 14.1% on year in September.

• U.K. retail sales are estimated to drop 0.2% on month in September.

• Canada's retail sales are expected to drop 0.3% on month in August.

EUR/USD GBP/USD USD/JPY Dow Jones (CME)

Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.