2023.09.27 20:46
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S&P narrowly closed higher, Dow hit a four-month low, US bond yields returned to a decade-high, and US oil rose 4% during the session.

In August, durable goods orders in the United States exceeded expectations. FOMC committee member Kashkari expressed an open attitude towards the possibility of raising interest rates more than once. The vote on the temporary spending bill in the US Congress has become a source of concern. At midday, US stocks fell across the board, with only the Dow Jones closing lower. AI stocks showed significant gains, with Meta briefly falling by 4%. Bilibili and Pinduoduo saw gains of over 1%, while XPeng Motors rose nearly 3%. However, Faraday Future fell over 44%, reaching its lowest point since going public. US bond yields initially fell but then rose, with the 10-year yield reaching a 16-year high and the 30-year yield hitting a 12.5-year high. The market is concerned about the inventory levels at the Cushing oil delivery hub falling below the minimum operating level. Crude oil briefly rose above $94, reaching a one-year high. The US dollar has been hitting a ten-month high for several days, while the euro is at its lowest level in nearly nine months and the yen is at a one-year low. Offshore renminbi has fallen below 7.32 yuan. Gold has fallen below $1880, hitting a six-month low for the third consecutive day, while copper is hovering at a four-month low and nickel has reached a 14-month low.

On August 8th, the preliminary MoM growth rate of durable goods orders in the United States increased by 0.2%, surpassing the expected decline of 0.5% and the previous decline of 5.6%. This was mainly attributed to the growth in defense aircraft and machinery orders, indicating that investment during periods of economic uncertainty remains resilient.

This year, Kashkari, a member of the FOMC and President of the Minneapolis Fed, stated that he is open to the possibility of raising interest rates more than once, expressing uncertainty about whether rates are already high enough to curb inflation. However, he also mentioned the possibility of "showing mercy" in scenarios such as a government shutdown, predicting that interest rates will remain high until 2024.

On Tuesday, the U.S. Senate passed a short-term measure with bipartisan support in order to avoid a government shutdown on October 1st due to a budget shortfall. However, House Speaker McCarthy stated that he will not allow the House to vote on the temporary spending bill. The former Chairman of the S&P Sovereign Credit Rating Committee warned that the current state of the U.S. economy is weaker than it was when the U.S. AAA sovereign credit rating was revoked in 2011.

Minutes from the July meeting of the Bank of Japan showed that policymakers unanimously believed it was necessary to maintain an ultra-loose monetary environment. However, there were differing opinions on when the central bank could end negative interest rates, with some hawkish members suggesting an evaluation of whether the 2% inflation target can be sustained between January and March next year.

In the afternoon of September 27th, as U.S. bond yields stopped falling and rebounded to a more than ten-year high, and U.S. oil prices reached a one-year high, the initially high opening of the U.S. stock market turned into a collective decline during the midday session. The Dow Jones Industrial Average wiped out a gain of over 110 points and was the first to turn negative within an hour of opening.

The Dow Jones fell the deepest, dropping over 310 points or 0.9% throughout the day, while the S&P 500 and Nasdaq both fell the deepest by 0.8%. Despite the energy sector rising over 2% along with oil prices and leading the market, the Nasdaq briefly fell below the 13,000 mark. The Russell 2000 small-cap stocks almost erased a gain of 1.4%.

In the final moments of trading, the decline in U.S. stocks significantly narrowed, with the S&P and Nasdaq turning positive again. In the end, the Dow Jones fell for the sixth consecutive trading day, reaching its lowest point in nearly four months since June 1st. Yesterday, it fell nearly 400 points, marking the largest decline since March and the first close below the 200-day moving average since May. The S&P 500 is still close to its lowest point since June 7th, and yesterday it fell below 4,300 for the first time since June. The Nasdaq and Russell small-cap stocks are still hovering near their lows since May 31st.

The S&P 500 index rose by 0.98 points, or 0.02%, to close at 4,274.51 points. The Dow Jones fell by 68.61 points, or 0.20%, to close at 33,550.27 points. The Nasdaq rose by 29.24 points, or 0.22%, to close at 13,092.85 points. The Nasdaq 100 rose by 0.2%, and the Russell 2000 small-cap stock index rose by approximately 1%. The "fear index" VIX slightly retreated and approached 18, after rising above 20 yesterday. The S&P 500 and Nasdaq rebounded at the end of the day, with the Dow Jones hitting its lowest point in nearly four months.

According to analysts, the US stock market is experiencing the "traditional seasonal weakness in September." The S&P 500 and Nasdaq have both experienced a cumulative decline of over 4% and 6% this month, marking their worst performance since December last year. The hawkish interest rate outlook from the Federal Reserve has put pressure on market sentiment. If the upcoming earnings season in mid-October exceeds expectations, it could serve as a catalyst to end the current market correction. The S&P 500 has seen three consecutive quarters of year-on-year decline in corporate profits.

Tech giants saw a narrowing decline in the late trading session. Meta, the "metaverse" company, initially fell 4% but closed with a 0.4% decline. Tesla fell 1.5%, while Google A rose 1.5%, both hovering around their lowest levels in a month. Apple fell nearly 1%, and Netflix fell 0.4%, both hitting their lowest levels in over four months. Microsoft rebounded by 0.2% at the end of the day, but it is still not far from its lowest point in over four months. Amazon erased its 1.5% decline to close flat, maintaining a three-month low.

Chip stocks collectively rebounded, with the Philadelphia Semiconductor Index rising by about 1% and moving away from its lowest point in four months. Intel rose over 2% and moved away from its one-month low, while AMD rose over 2% and moved away from its lowest point in four and a half months. Nvidia rose 1.3%, further distancing itself from its six-week low. Arm fell 1%, but it has fallen for two consecutive days and is approaching its lowest point since its listing last Friday. It had a six-day losing streak before that.

AI concept stocks showed significant gains. C3.ai rose over 3%, moving away from its lowest point in four and a half months. Palantir Technologies rose over 6%, moving away from its three-month low. SoundHound.ai rose over 12%, moving away from its lowest point in six months. BigBear.ai rose nearly 15%, moving away from its lowest point in nearly nine months.

In terms of news, Meta released its new Quest 3 VR headset with a starting price of $499, which will be powered by a more powerful chip provided by Qualcomm. OpenAI announced that ChatGPT can now browse the internet and is no longer limited to data before 2021. The "AI hardware" of the new era is brewing, and reports suggest that Altman, the founder of OpenAI, is teaming up with the former chief designer of Apple. Bridgewater's Dalio predicts that AI will disrupt our lives within a year.

Popular Chinese stocks followed the upward trend of the US stock market at the end of the day. The ETF KWEB rose by 0.5%, CQQQ almost erased its 0.4% decline, and the Nasdaq Golden Dragon China Index (HXC) rose by 0.8%, moving away from its two and a half month low.

Among the Nasdaq 100 constituents, JD.com narrowed its decline significantly to 0.3%, Baidu rose by 0.4%, and Pinduoduo rose by over 1%. In other stocks, Alibaba rose by 0.3%, Bilibili rose by over 1%, Tencent ADR rose by 0.7%, NIO rose by 0.6% and further moved away from its lowest point in nearly four months. XPeng announced the termination of its ideal car's ATM (at-the-market) equity offering and rose by 0.4%, moving away from its three-month low. Faraday Future fell more than 44% to a new low since its listing and plans to raise up to $90 million through an ATM offering of Class A common stock.

Bank stocks fell for the eighth day in nine days. The industry benchmark, the KBW Bank Index (BKX), fell 0.3% to a four-month low, hitting its lowest level since October 2020 on May 4. The KBW Nasdaq Regional Banking Index (KRX) fell 0.5% to a three-month low, hitting its lowest level since November 2020 on May 11. The SPDR S&P Regional Banking ETF (KRE) fell 0.5%, hitting its lowest level since October 2020 on May 4. UBS European and US stocks both fell nearly 3%, as the US intensified its investigation into their violation of sanctions.

Other stocks with significant changes include:

Chipmaker Micron Technology reported a second-quarter operating loss of over $1.2 billion, with weaker-than-expected guidance for the third quarter. After-hours, the stock briefly fell more than 2%.

Canada's leading yoga apparel brand, Lululemon, announced a partnership with interactive fitness platform Peloton, unveiling a five-year global digital content strategic cooperation agreement. Peloton's stock surged more than 32% after the US market closed.

Leading cell programming platform Ginkgo Bioworks rose nearly 20% before closing up less than 3%. It reached an agreement with Pfizer to focus on exploring RNA-based drug candidates. Pfizer fell nearly 1%.

The Writers Guild of America ended its nearly 150-day strike, leading to a rise in media stocks. Paramount briefly rose 3.6%, Warner Bros. Discovery rose over 3%, and Comcast rose 1%. However, Disney slightly fell after midday. In addition to wage increases, the agreement also stipulates that artificial intelligence will not be able to write or rewrite literary materials, and materials generated by artificial intelligence will not be considered source materials.

Warehouse retailer Costco rose nearly 2% as its fourth-quarter revenue and earnings exceeded expectations. However, global average transaction volume declined by 4%, and same-store sales in its largest market, the United States, only grew by 0.2%, warning of weak trends in the sales of expensive non-essential items.

Western Oil Corporation rose nearly 4% to a one-week high. Bank of America listed it as a top pick and believed that its stock price could rise by another 30%. Berkshire Hathaway, owned by Warren Buffett, continued to buy Western Oil at low prices this year and now holds a quarter of its shares.

European stocks fell across the board. The pan-European Stoxx 600 index fell 0.18%, marking a five-day consecutive decline and a cumulative decline of about 3% during this period, hitting a six-month low since March 28. The German stock index fell for the third consecutive day, while the Spanish stock index fell 0.4% as Pedro Sanchez failed to win approval as prime minister in the first round of parliamentary voting.

US Treasury yields first fell and then rose, with the 10-year yield hitting a 16-year high and the 30-year yield reaching a 12.5-year high

US Treasury yields rebounded after falling during the US stock market session. The two-year yield, which is more sensitive to monetary policy, maintained an upward trend throughout the day, reaching a high of 8 basis points and approaching 5.16%, further approaching the highest level since 2006, when it broke through 5.20% last week.

The 10-year benchmark bond yield rebounded more than 15 basis points from its daily low and approached 4.65%, the first time it has risen above the 4.60% level since October 17, 2007. It has reached a 16-year high every day this week. The 30-year long bond yield rose 4 basis points from the previous day's close to 4.74%, reaching the highest level since February 2011 for several consecutive days.

US Treasury yields first fell and then rose, with the 10-year yield hitting a 16-year high

The seven-year Treasury yield rose 10 basis points to 4.70%, the first time it has risen above the 4.70% level since June 30, 1993. The 20-year yield rose 8 basis points to 4.94%, reaching a new high since late May 2020. The yield on the US 10-year Treasury Inflation-Protected Securities (TIPS), which measures real interest rates, rose by a maximum of 8 basis points to approach 2.30%, close to the highest level since January 2009.

The 10-year German bund yield, the benchmark for the eurozone, rose 4 basis points at the end of the day, approaching 2.85%, once again reaching the highest level since late 2011. The two-year yield rose nearly 2 basis points to 3.25%, approaching the half-year high reached on March 9, which was 3.36%. The yields on French, Italian, Spanish, and Greek bonds all rose by 4 to 7 basis points.

Some analysts believe that the rising prices of oil and European natural gas have intensified concerns about a new round of inflationary pressures. The European Central Bank's increased focus on reducing excess liquidity and other factors will increase pressure on the bond market in peripheral markets.

US oil rises 4% during the session, briefly surpassing $94, reaching a one-year high, Brent oil rises nearly 3% to a one-week high

As the market focuses on the tightening supply amid the peak of winter heating demand, oil prices rose by 2% again. WTI November futures closed up $3.29, or 3.64%, at $93.68 per barrel. Brent November futures rose $2.59, or 2.75%, to $96.55 per barrel.

US WTI crude oil rose by a maximum of $3.77 or 4.2%, briefly surpassing $94, reaching the highest level in 13 months since the end of August last year. The more actively traded Brent December futures rose by a maximum of $2.35 or 2.5%, attempting to approach $95 per barrel, the highest level in a week. Last week, US EIA crude oil inventories decreased by 2.17 million barrels, higher than the market's expected decrease of 0.9 million barrels and the previous decrease of 2.14 million barrels. Although gasoline inventories increased by 1.03 million barrels, the inventories in the delivery area of the US oil futures, Cushing, decreased by over 0.9 million barrels, reaching the lowest level since July last year, and approaching the minimum operating level.

Due to ongoing concerns in the market about the US crude oil inventories at the Cushing storage center in Oklahoma falling below the minimum operating level, the futures premium for the monthly WTI rose to $2, the highest since July last year, reflecting the tight supply of spot goods and pushing up oil prices.

The European benchmark TTF Dutch natural gas futures fell by 0.5% at the close, after falling more than 7% yesterday and breaking below the 40 euro/megawatt-hour level, which was the highest in a month. ICE UK natural gas fell by about 2%, after falling more than 11% yesterday and hovering around the 100 pence/calorie level.

The US dollar has reached a ten-month high for several days, the euro has reached a nine-month low, the yen has reached a low for nearly a year, and the offshore renminbi has fallen below 7.32 yuan.

The US dollar index, which measures against six major currencies, rose by 0.6% and broke through 106.80, rising for five consecutive days, continuously refreshing the highest level since the end of November last year.

The US dollar index has risen for ten consecutive weeks, with a cumulative increase of 2.6% in September, which will achieve the best monthly performance since May; the cumulative increase in the third quarter is 3.3%, heading towards the largest quarterly increase since the third quarter of last year.

The euro fell by 0.7% against the US dollar and broke below the 1.05 level, falling for seven consecutive days to the lowest level in nearly nine months since early December last year. The pound fell by 0.3% and approached 1.21, falling for six consecutive days to the lowest level in six and a half months since mid-March. Some analysts believe that the Bank of England and the European Central Bank seem to have completed their rate hikes, but the Federal Reserve may still raise interest rates once before the end of the year, leading to different currency exchange rate trends.

The yen fell by 0.5% against the US dollar to 149.73, falling for four consecutive days to the lowest level in nearly a year since mid-October last year. Wall Street predicts that if the yen falls to 150, it will trigger central bank intervention. The offshore renminbi fell below 7.32 yuan during US stock market trading, down 165 points from the previous close, hitting a two-week low since September 11. The USD/CHF rose above the 0.92 level for the first time in six months.

Most mainstream cryptocurrencies fell. The largest cryptocurrency, Bitcoin, traded at $26,200, while the second-largest, Ethereum, rose above $1,590, but still lingered at a two-week low. In the third quarter, they fell by 14% and 18% respectively. Bitcoin traded at $26,200, hovering at a two-week low along with Ethereum.

Gold fell below $1,880, hitting a six-month low for the third consecutive day, while London copper hovered at a four-month low and nickel touched a 14-month low.

The strength of the US dollar and US bond yields for three consecutive days has put pressure on the price of gold. COMEX December gold futures fell 1.50% to $1,890.90 per ounce, breaking the psychological level of $1,900 and hitting a six-month low since mid-March. Silver futures fell 2%.

Spot gold fell the deepest, down $28 or 1.5%, falling below the $1,880 level for the first time since March 13, with a daily low approaching the $1,870 mark. It also hit a six-month low for the third consecutive day, after falling below $1,900 for the first time in five weeks during yesterday's trading.

Some analysts believe that gold has not yet been positioned as a safe-haven asset, and recent price fluctuations are still closely related to interest rate hikes. If Friday's PCE inflation is higher than expected, it will bring further downward pressure. Only when the market is concerned that the Federal Reserve's excessive tightening will cause a significant deterioration in the economy will it be positive for gold prices.

Most London industrial metals fell:

The "Copper Doctor," a barometer of the economy, rose slightly and returned above $8,100, still hovering near the lowest level in nearly four months since early June, limited by increased inventories and concerns about long-term global interest rate hikes suppressing demand.

London aluminum fell slightly but remained not far from a one-and-a-half-month high. London zinc fell 1.4% and fell for three consecutive days to a two-week low. London lead fell 1.6% to a one-month low. London tin fell 1.4% and fell below $26,000, returning to a new low in nearly a week.

London nickel rose 0.7% to $19,000, but touched a 14-month low since July last year during trading. It has fallen 38% this year, the largest decline among LME metals. Some analysts believe that after last year's epic short squeeze, the rise in supply from newly built factories in Asia has caused nickel prices to continue to decline.

In addition, domestic coke futures rose nearly 6% in the night session, coking coal rose by about 4%, and iron ore rose by over 1%.