Morning Reads
- Covid Holdouts in Asia Drop Border Restrictions
- Japan Intervenes to Prop Up the Sliding Yen
- Truss’s Economic Plan Sends UK Markets Into Meltdown
- Bank of England Says Paper Banknotes
- Bank of Ireland Returns to Full Private Ownership
- Central Banks Accept Pain Now, Fearing Worse Later
- The Era of Inflation Has Ended — for Asset Prices on Wall Street
- Growling Powell
- Some U.S. Firms Wait
- Bill Ackman Touts Immigration Over Rate Hikes in Inflation Fight
- New York is Still the Top Global Financial Center, Hong Kong Slips
- The Trouble With Butter
- FedEx to Raise Shipping Rates by 6.9% as It Combats Slowdown
- Pandemic Unemployment Fraud Estimate Rises to $45.6 Billion
- Boeing Reaches $200 Million Settlement
- Companies Fined
Futures
Options
PREMIUM
Real Quick
- S&P 500 futures are 1.2% below fair value; the Nasdaq 100 futures are 1.2% below fair value; and the DJIA futures are 1.1% below fair value
- Key factors driving the futures market:
- Rapid increase in Treasury yields
- Worries about a hard landing
- Steep drop in British pound (GBP/USD -1.6% to 1.1077) after UK government announces a fiscal stimulus plan (tax cuts and investment incentives) that will require deficit financing at a time of rising interest rates
- Goldman Sachs cuts S&P 500 year-end price target to 3,600 from 4,300; sees downside to 3,150 in the event of a hard landing
- Flash manufacturing and services PMIs for eurozone, Germany, and UK mostly reflect contraction (sub-50 readings) and an acceleration in the pace of contraction
- Costco (COST) down 2.8% despite reporting better-than-expected fiscal Q4 earnings results on 10.4% increase in adjusted comparable store sales
- Storm developing in Caribbean could form Hurricane Hermine and impact the Gulf of Mexico coast next week, according to Washington Post
- Hong Kong ends quarantine policy for travelers, according to The Wall Street Journal
- Brokerage research calls of note:
- Upgrades: APO, AVA, DPZ, FUBO, SPRO
- Downgrades: ALLY, DLR, EQIX, SAFE, STE
- WTI crude futures -3.6% to $80.47/bbl; nat gas futures +1.1% to $7.17/mmbtu; copper futures -3.8% to $3.34/lb
- 2-yr note yield +9 bps to 4.23% (hit 4.26% overnight) and 10-yr note yield +6 bps to 3.77% (hit 3.82% overnight)
- Today's economic data: Preliminary September IHS Markit Manufacturing and Services PMIs at 9:45 a.m. ET