Pre-market market trends
1. On October 14 (Friday) U.S. stock Before the market, the three major U.S. stock index futures rose and fell. As of press time, Dow futures rose 0.11%, S&P 500 index futures fell 0.01%, and Nasdaq futures fell 0.18%.
2. As of press time, Germany DAX index rose 0.94%, the UK FTSE 100 index rose 0.93%, France CAC40 index rose 1.43%, and the European Stoke 50 index rose 1.24%.
3. As of press time, WTI crude oil fell 1.58% to US$87.70 per barrel. Brent crude oil fell 1.46% to $93.19 per barrel.
Market news
"Horror Data" is released tonight. US retail sales data, that is, the September value of "terror data", will be released at 20:30 Beijing time tonight. Investment needs to be paid attention to. Currently, the market expectations are relatively neutral. In addition, under the influence of high inflation, the quality of retail sales data will directly affect the market's long-short sentiment, and retail sales data directly reflect changes in consumer spending, which plays an important guiding role in the economic outlook. If the data appears less than expected, concerns about economic recession will begin to spread. It is understood that last night, the globally striking US CPI data was released. The US CPI year-on-year and core CPI in September both exceeded expectations, and the core CPI returned to its 40-year high year-on-year. After the data was released, the market's expectations for Fed to raise interest rates again in November meetings continued to strengthen.
Nick Timiraos: The Federal Reserve is at risk of delaying the pace of rate hikes. Nick Timiraos, known as the "New Federal Reserve News Agency", said that the US September CPI data has "made sure" that the Fed's interest rate hike of 75 basis points on November 2. The inflation report also adds a risk — after 75 basis points next month, officials will delay slowing down the pace of rate hikes, or send signals that they may raise interest rates earlier next year to higher than previously expected by policy makers and investors. Note: The market currently expects the chance of the Federal Reserve raising interest rates by 100 basis points on November 2 to be 17%, and the current pricing of terminal interest rates is 4.91%, which means that the federal funds rate may break through the 4.75%-5.00% range in Q1 next year.
Waiting for British Prime Minister to speak in the evening. It is reported that British Chancellor Kwoten has resigned, and it is reported that his dismissal was due to a budget he proposed that triggered market turmoil. British Prime Minister Tras will speak at 9 p.m. Beijing time. Currently, the market expects the UK government to cancel some tax cuts. It is reported that Tras will announce that corporate tax will be raised from 19% to 25%. The report also pointed out that Tras plans to cancel the plan to freeze corporate income tax, but it is not clear whether she will revoke other measures in the mini budget.
Gas Russian: The Nordic Stream repair will take more than one year, and natural gas will be transported from Türkiye to Europe. Alexei Miller, CEO of Gazprom, said late Thursday that a large portion of the damaged Nord Stream pipeline may need to be replaced, while Russia plans to increase gas exports through Black Sea and Türkiye. Last month, the "North Stream 1" and "North Stream 2" natural gas pipelines that transport natural gas from Russia through the Baltic Sea seabed were both damaged and a large amount of natural gas leaked. An investigation into the incident is underway. Both pipelines extend over 1,000 kilometers (620 miles) on the seabed and are idle when they break. On Wednesday, Miller said it would take more than a year to repair the damaged Nord Stream pipeline. Earlier this week, Russian President Putin believed Türkiye was the best way to re-transport natural gas to EU after the Nord Stream gas pipeline leaked. He proposed to establish a natural gas hub in Türkiye.
ECB Management Committee Kazimir: Deposit interest rates must rise above neutral, but QT can wait until next year. ECB Management Committee Kazimir said that the ECB deposit rate must rise above neutral, but can wait until next year to start reducing the balance sheet. In addition, following the ECB's rate hike in September, it is appropriate to raise another 75 basis points in October, and further rate hikes may be needed.Earlier, policy makers received a preliminary timeline for shrinking their balance sheets, which the ECB will elaborate on in December or February, and a real quantitative tightening could begin in the second quarter of 2023, according to people familiar with the matter. It is understood that the ECB holds 3.3 trillion euros in its asset purchase plan. So far, the central bank has repeatedly stated that all the due cash in the plan will be reinvested for a longer period of time after the first rate hike.
Bank of America: US stocks’ “big reversal” is a bear market rebound, and there is still a long way to bottom out. U.S. stock markets and the economy will experience more pain before the Fed exits radical austerity policies. Against the backdrop of oversold, high cash levels and lack of credit, the U.S. stock market's major reversal on Thursday after inflation data was released was like a "bear market rebound." This is the latest development in a turbulent year, characterized by fears of a recession and the Fed's unwavering determination to control inflation. Bank of America believes this is a "good rebound", but U.S. stocks will not hit lows until 2023. They say there is still more economic and market pain to endure before the Fed makes concessions. Once the U.S. stock market falls to a low next year, the best reverse trading will be the investment portfolio of short USD and long 60% of the stocks and 40% of the bonds.
stocks news
bank stocks kick off the Q3 financial report season. JPMorgan Chase (JPM.US) Q3 total revenue was US$32.72 billion, exceeding market expectations of US$840 million; Q3 net profit was US$9.737 billion, a year-on-year decrease of 17%; Q3 diluted earnings per share was US$3.12, and the market generally expected to be US$2.89. Wells Fargo (WFC.US) had revenue of US$19.51 billion, market expectations of US$18.751 billion; net profit of US$3.53 billion, market expectations of US$4.113 billion; earnings per share of US$0.85, market expectations of US$1.08. Morgan Stanley (MS.US) had revenue of US$12.986 billion, and the market expected to be US$13.199 billion. Net profit was US$2.632 billion, with market expectations of US$2.584 billion; earnings per share was US$1.47, compared with US$1.98 in the same period last year, with market expectations of US$1.48. Citi (C.US) Q3 revenue was US$18.5 billion, market expectations were US$18.375 billion; net profit was US$3.5 billion, market expectations were US$2.963 billion; earnings per share was US$1.63, market expectations were US$1.5.
United Health (UNH.US) Q3 total revenue growth exceeded market expectations by about 12%, increasing EPS expectations for 2022. United Health's total revenue in the third quarter increased by 11.83% year-on-year to US$80.89 billion, and the market expects to be US$80.54 billion. UnitedHealth Q3 adjusted earnings per share (EPS) rose 28.1% year-on-year to $5.79, with market expectations of $5.44. Earnings per share rose 29.67% to $5.55 under GAAP guidelines. The company said that the proportion of health care in the third quarter was 81.6%, compared with 83.0% in the third quarter of 2021, mainly due to the decline of the impact of the new crown epidemic and the optimization of business portfolio. UnitedHealth said it raised its adjusted earnings per share expectations for 2022 to $21.85 to $22.05 (previous forecasts at the time of second-quarter earnings report were $21.40 to $21.90). In terms of market expectations, earnings per share in 2022 are expected to be US$21.89.
Two major retail giants in the United States Kroger (KR.US) and Albertson (ACI.US) are in merger negotiations to confirm the acquisition of Albertson for $34.10 per share. Crow is in merger negotiations with Alberson, the second largest grocer in the United States. If the two independent grocer giants merge, retailers may have the upper hand in negotiations with consumer goods producers such as Procter & Gamble (PG.US) and Unilever (UL.US) amid rising prices. If the deal is reached, the combined company's market value will reach around $47 billion, which will be one of the largest mergers in the retail industry in recent years. It is understood that the agreement may be reached as early as this week, but no final decision has been made yet, and negotiations may still be postponed or shaken. According to the latest news, Kroger confirmed the acquisition of Alberson for $34.10 per share.
Google (GOOG.US) is hit hard again? rumored that the EU plans to file antitrust charges against its advertising business next year.Google, a subsidiary of Alphabet, may face EU antitrust charges next year for its digital advertising business, which could put the company in the EU with a fourth fine of more than 1 billion euros, people familiar with the matter said Thursday. Last June, EU Commission launched an investigation into Google's advertising technology business, fearing that the US tech giant may gain an unfair advantage in front of competitors and advertisers. The company then sought a settlement, but the concessions were small and very preliminary, one of the people familiar with the matter said. The company could face a fourth 1 billion euro fine. Over the past decade, Google has accumulated more than 8 billion euros ($7.7 billion) in EU antitrust fines.
Apple (AAPL.US) will join hands with Goldman Sachs (GS.US) to launch the savings account function. Apple and Goldman Sachs will launch a savings account feature, which allows iPhone users to deposit Apple Card credit card rewards and additional funds from different bank accounts, without fees, minimum deposits or minimum balance requirements. Apple said the feature is expected to be launched in the next few months, and FDIC's insurance account will be managed by Goldman Sachs, the bank and lender behind Apple Card. It has not announced annual yields due to rapid interest rates. Apple is expanding its consumer finance service offerings, trying to expand iPhone use in banking, simple payments and credit capabilities. Meanwhile, Goldman Sachs is also vigorously developing its consumer business, partly through cooperation with Apple. Apple's "buy first, pay later" product will use some of Goldman Sachs' infrastructure, but Apple said it plans to handle credit decisions and issue loans on its own.
Amazon (AMZN.US) terminates multiple capital-intensive projects to continue to cut spending. Amazon (AMZN.US) is closing more virtual experience projects and continuing to cut the trend of cost-intensive projects. Amazon Explore products, known as the digital travel experience project, are reportedly the latest cut. The service was first launched during the pandemic, allowing customers to travel virtually in popular tourist destinations. In addition, the company recently confirmed that it would cancel the children's video device "Glow". As the tech giant reassesses its spending, as many as 6 projects may be closed in the near term. Just last week, the company decided to terminate its home delivery robot project. It is unclear how the layoffs will affect the company's total number of employees. In other areas, the company recently announced a plan to recruit 150,000 employees during the holiday season.
Important economic data and event predictions
Beijing time 20:30: Monthly rate of the United States import price index in September (%), Monthly rate of the United States retail sales in September (%).
Beijing time 22:00: The initial value of the US October University of Michigan Consumer Confidence Index.
The next day at 01:00 am Beijing time: The total number of drilling rigs in the United States (ports) in the United States as of October 14.
Beijing time 22:00: 2022 FOMC voter and Kansas Fed Chairman George delivered a speech on the outlook for the US economy.
Beijing time 22:30: Federal Reserve Director Lisa Cook speaks on the economic outlook.
The next day at 03:30 am Beijing time: US Commodity Futures Trading Commission (CFTCh) released its weekly position report.
