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| Halloween rally drives markets higher, after a scary October - as it happened | |
| (35 minutes later) | |
| Be gone, October! | |
| Wall Street has closed for the day, and the month, with a two-day rally. | |
| The Dow and the S&P 500 had both gained around 1% as the closing bell rang. The Nasdaq jumped by 2%, driven by the revival in FAANG stocks. | |
| Slightly worryingly, the rally did soften in the last few minutes (like a chocolate in the warm hand of a trick-or-treater). | |
| Dow closes up 240 points, Nasdaq closes in correction https://t.co/7qxovqoBsq | |
| And the monthly losses are still alarming. | |
| The S&P fell almost 7% in October, its worst month since 2011. The Dow shed 5%, its roughest month since January 2016. | |
| The Nasdaq had a real month to forget, down over 9% in its worst month since November 2008. | |
| Here’s an up-sum of today’s trading in London, from Fiona Cincotta of City Index: | Here’s an up-sum of today’s trading in London, from Fiona Cincotta of City Index: |
| The FTSE rallied for a third straight session on Wednesday despite a stronger pound, jumping 115 points after a dismal October. October is traditionally a difficult month for equities but the FTSE shedding 4.8% is a significantly larger drop than what we would normally expect. How the beginning of November pans out will be interesting. Of the geopolitical issues which have be weighing on the market, namely Brexit, the Italian standoff with Brussels over spending, the US – Sino trade war or the slowing global, none have been resolved and we also have the US mid-term elections thrown into the mix. | The FTSE rallied for a third straight session on Wednesday despite a stronger pound, jumping 115 points after a dismal October. October is traditionally a difficult month for equities but the FTSE shedding 4.8% is a significantly larger drop than what we would normally expect. How the beginning of November pans out will be interesting. Of the geopolitical issues which have be weighing on the market, namely Brexit, the Italian standoff with Brussels over spending, the US – Sino trade war or the slowing global, none have been resolved and we also have the US mid-term elections thrown into the mix. |
| Gains were broad based on the FTSE with Standard Chartered a notable riser following impressive results with profits surging 37% on last year. Standard Chartered reported a pre-tax profit of $1.06 billion, up from $774 million a year before and 9% ahead of estimates. By focusing on what is does best – Asia – the bank has managed to sharpen its competitive edge. Costs have been a concern in previous years, but the bank has shown its capabilities at reigning these in. | Gains were broad based on the FTSE with Standard Chartered a notable riser following impressive results with profits surging 37% on last year. Standard Chartered reported a pre-tax profit of $1.06 billion, up from $774 million a year before and 9% ahead of estimates. By focusing on what is does best – Asia – the bank has managed to sharpen its competitive edge. Costs have been a concern in previous years, but the bank has shown its capabilities at reigning these in. |
| Next fell following lacklustre results. The bellwether dropped close to 3% after results underwhelmed. The retailer confirmed that in store sales fell further in the third quarter, whilst overall sales grew by 2% thanks to a strong performance in online sales. | Next fell following lacklustre results. The bellwether dropped close to 3% after results underwhelmed. The retailer confirmed that in store sales fell further in the third quarter, whilst overall sales grew by 2% thanks to a strong performance in online sales. |
| Back in New York, tech shares are still on a tear - pushing the Nasdaq up by almost 3% today. | Back in New York, tech shares are still on a tear - pushing the Nasdaq up by almost 3% today. |
| By my maths, that still leaves the Nasdaq down 8% for the month. | By my maths, that still leaves the Nasdaq down 8% for the month. |
| Faangs rally on Halloween after frightful October. NSYE FANG Index still 8% down mtd. https://t.co/9jUk0BpuJD pic.twitter.com/A8H64esQ9f | Faangs rally on Halloween after frightful October. NSYE FANG Index still 8% down mtd. https://t.co/9jUk0BpuJD pic.twitter.com/A8H64esQ9f |
| Good news: October is over, at least for traders in Europe. | Good news: October is over, at least for traders in Europe. |
| Better news: European stock markets have all ended today’s session higher, clawing back some of this month’s losses. | Better news: European stock markets have all ended today’s session higher, clawing back some of this month’s losses. |
| Here’s the closing prices: | Here’s the closing prices: |
| UK’s FTSE 100: UP 92 points or 1.3% at 7,128 | UK’s FTSE 100: UP 92 points or 1.3% at 7,128 |
| Germany’s DAX: UP 160 points or 1.4% at 11,447 | Germany’s DAX: UP 160 points or 1.4% at 11,447 |
| France’s CAC: UP 51 points of 2.3% at 5,093 | France’s CAC: UP 51 points of 2.3% at 5,093 |
| That still means European stocks have lost around 5% of their value this month. | That still means European stocks have lost around 5% of their value this month. |
| Could the worst be over? Possibly, but it’s worth noting that nothing has really changed. All the factors blamed for the sell-off - from US interest rate policy to the Italian budget row - are in place. | Could the worst be over? Possibly, but it’s worth noting that nothing has really changed. All the factors blamed for the sell-off - from US interest rate policy to the Italian budget row - are in place. |
| On the other hand, maybe there’s relief that the earnings season hasn’t been worse. | On the other hand, maybe there’s relief that the earnings season hasn’t been worse. |
| Neil Wilson of Markets.com has a good take: | Neil Wilson of Markets.com has a good take: |
| Earnings are not universally strong and outlooks have betrayed some murkiness. | Earnings are not universally strong and outlooks have betrayed some murkiness. |
| But, on the whole, we have more companies beating earnings estimates than missing, and more than the average. Fundamentals are still strong but there are questions about earnings growth from here. | But, on the whole, we have more companies beating earnings estimates than missing, and more than the average. Fundamentals are still strong but there are questions about earnings growth from here. |
| So, if the US-China trade war pushes prices up (inflationary), and US wage growth picks up (also inflationary), does the Federal Reserve keep hiking? Or does it hold off, to protect asset prices? | So, if the US-China trade war pushes prices up (inflationary), and US wage growth picks up (also inflationary), does the Federal Reserve keep hiking? Or does it hold off, to protect asset prices? |
| Wilson says: | Wilson says: |
| The stock market is telling the Fed to stop raising rates. Janet Yellen has come out to urge the Fed to keep to its course, but the signs are the equity market is highly susceptible to a more aggressive course of hiking. The Fed has been here before – the question is do we get 1998 Greenspan Fed that listens to the equity market, or 2007/08 Bernanke Fed? October was a horrid month despite the gains of the last two days. We could see seasonal factors support further gains into the year-end but the primary trend could remain bearish.” | The stock market is telling the Fed to stop raising rates. Janet Yellen has come out to urge the Fed to keep to its course, but the signs are the equity market is highly susceptible to a more aggressive course of hiking. The Fed has been here before – the question is do we get 1998 Greenspan Fed that listens to the equity market, or 2007/08 Bernanke Fed? October was a horrid month despite the gains of the last two days. We could see seasonal factors support further gains into the year-end but the primary trend could remain bearish.” |
| The Dow is holding onto its gains, now up 286 points (+1.15%) at 25,160 points. | The Dow is holding onto its gains, now up 286 points (+1.15%) at 25,160 points. |
| Wall Street traders are doing their best to end October on a positive note. Today’s decent results from GM, and strong ADP jobs figures, seem to be helping. | Wall Street traders are doing their best to end October on a positive note. Today’s decent results from GM, and strong ADP jobs figures, seem to be helping. |
| October’s volatility probably won’t spook the Federal Reserve out of raising US interest rates again in December. | October’s volatility probably won’t spook the Federal Reserve out of raising US interest rates again in December. |
| Capital Economics expect Fed chair Jay Powell will pave the way for a pre-Christmas hike, arguing: | Capital Economics expect Fed chair Jay Powell will pave the way for a pre-Christmas hike, arguing: |
| Although the Fed is unlikely to make any policy changes at next week’s meeting, we expect the statement to reiterate the FOMC’s plan to continue gradually raising interest rates, with the next move coming in December. | Although the Fed is unlikely to make any policy changes at next week’s meeting, we expect the statement to reiterate the FOMC’s plan to continue gradually raising interest rates, with the next move coming in December. |
| With the latest data showing that activity has continued to expand at a rapid pace, hopes that the recent plunge in the stock market will prompt a ‘Powell put’ are likely to prove misplaced. | With the latest data showing that activity has continued to expand at a rapid pace, hopes that the recent plunge in the stock market will prompt a ‘Powell put’ are likely to prove misplaced. |
| The US dollar is also surging today, making gains against emerging market currencies such as the Brazilian real and the Turkish lira. | The US dollar is also surging today, making gains against emerging market currencies such as the Brazilian real and the Turkish lira. |
| On a "risk-on" morning with 1-2% gains for US stock indices, #DXY $ index continues to strengthen & sets a high for the year. Note also that this Oct, which hasn't been kind to #stocks, DXY is up for the 7th month in a row.Another reflection of economic and policy divergence. pic.twitter.com/tIZAV11gQW | On a "risk-on" morning with 1-2% gains for US stock indices, #DXY $ index continues to strengthen & sets a high for the year. Note also that this Oct, which hasn't been kind to #stocks, DXY is up for the 7th month in a row.Another reflection of economic and policy divergence. pic.twitter.com/tIZAV11gQW |
| Netflix up 8.7%Facebook up 6.2%Amazon up 5.8%Alphabet up 4.4%Apple up 2.6%Best day for FAANG in nearly 3 years.@CNBC @SquawkStreet | Netflix up 8.7%Facebook up 6.2%Amazon up 5.8%Alphabet up 4.4%Apple up 2.6%Best day for FAANG in nearly 3 years.@CNBC @SquawkStreet |
| Last night, Facebook CEO Mark Zuckerberg hailed the company’s ‘Stories’ product as a key future source of growth, and admitted Facebook has reached saturation point in “developed countries”. | Last night, Facebook CEO Mark Zuckerberg hailed the company’s ‘Stories’ product as a key future source of growth, and admitted Facebook has reached saturation point in “developed countries”. |
| Facebook missed analyst forecasts for revenue growth (despite pulling in 33% more than a year ago), but smashed forecasts for earnings. | Facebook missed analyst forecasts for revenue growth (despite pulling in 33% more than a year ago), but smashed forecasts for earnings. |
| Wall Street is giving Facebook the thumbs-up today, with Royal Bank of Canada providing a list of five reasons to be bullish: | Wall Street is giving Facebook the thumbs-up today, with Royal Bank of Canada providing a list of five reasons to be bullish: |
| Richard Dickie Hodges, Manager of Nomura Global Dynamic Bond fund, blames US interest rate rise fears for October’s market slump. | Richard Dickie Hodges, Manager of Nomura Global Dynamic Bond fund, blames US interest rate rise fears for October’s market slump. |
| Getting firmly into the Halloween spirit, he writes: | Getting firmly into the Halloween spirit, he writes: |
| ‘The Federal Reserve remains the biggest, scariest vampire in the markets today. As it sucks the life-blood of investment markets with interest rate rises, the so-called “risk-free rate” becomes more attractive, the cost of funding risk rises and all risky assets must adjust to offer higher returns. In other words, they must sell off. | ‘The Federal Reserve remains the biggest, scariest vampire in the markets today. As it sucks the life-blood of investment markets with interest rate rises, the so-called “risk-free rate” becomes more attractive, the cost of funding risk rises and all risky assets must adjust to offer higher returns. In other words, they must sell off. |
| ‘But our Nosferatu is a complex villain – it cares deeply for its victim. As rates climb, it forces volatility into the stock markets, especially emerging markets with US dollar funding requirements that fear the higher greenback. It is this volatility that may cause the Fed to slow or pause the blood-letting in 2019.’ | ‘But our Nosferatu is a complex villain – it cares deeply for its victim. As rates climb, it forces volatility into the stock markets, especially emerging markets with US dollar funding requirements that fear the higher greenback. It is this volatility that may cause the Fed to slow or pause the blood-letting in 2019.’ |
| Halloween is a time for fangs, so it’s appropriate that the FAANG stocks are rallying in New York. | Halloween is a time for fangs, so it’s appropriate that the FAANG stocks are rallying in New York. |
| With Facebook now up 6.8%, Netflix also up 6.8%, Amazon up 4% and Alphabet up over 3.1%, technology stocks are in demand. | With Facebook now up 6.8%, Netflix also up 6.8%, Amazon up 4% and Alphabet up over 3.1%, technology stocks are in demand. |
| But this treat comes after a very tricky October, which saw tech stocks slump by around 10% during the month. | But this treat comes after a very tricky October, which saw tech stocks slump by around 10% during the month. |
| Microsoft is leading the Dow’s rally, up 3%, followed by credit card firm VISA (+2.7%), industrial equipment firm Caterpillar (+2.4%) and Apple (+2.1%). | Microsoft is leading the Dow’s rally, up 3%, followed by credit card firm VISA (+2.7%), industrial equipment firm Caterpillar (+2.4%) and Apple (+2.1%). |
| There’s a Happy Halloween spirit on the New York stock exchange, as the final trading day of a brutal October kicks off. | There’s a Happy Halloween spirit on the New York stock exchange, as the final trading day of a brutal October kicks off. |
| The Dow Jones industrial average has leapt by 251 points, or 1%, to 25,125. That’s on top of Tuesday’s 400-point leap, and might cheer spirits on Wall Street. | The Dow Jones industrial average has leapt by 251 points, or 1%, to 25,125. That’s on top of Tuesday’s 400-point leap, and might cheer spirits on Wall Street. |
| But it won’t fix October’s bad losses on its own. | But it won’t fix October’s bad losses on its own. |
| Stocks open higher, but Dow still on pace for 5% loss in October https://t.co/7qxovqoBsq pic.twitter.com/9cuxIZQbTb | Stocks open higher, but Dow still on pace for 5% loss in October https://t.co/7qxovqoBsq pic.twitter.com/9cuxIZQbTb |
| The Nasdaq index has surged by 1.6%, as technology stocks rally. | The Nasdaq index has surged by 1.6%, as technology stocks rally. |
| Facebook shares have jumped by 5%, as investors show they like last night’s results from the social network giant. | Facebook shares have jumped by 5%, as investors show they like last night’s results from the social network giant. |
| General Motors have surged by 6%, after beating profit and revenue estimates today. | General Motors have surged by 6%, after beating profit and revenue estimates today. |
| European markets are still sharply higher, as traders prepare for Wall Street to open.... | European markets are still sharply higher, as traders prepare for Wall Street to open.... |
| Global stock markets is up 0.6% already today, thanks to gains in Asia and Europe. | Global stock markets is up 0.6% already today, thanks to gains in Asia and Europe. |
| The MSCI All Country World Index has risen to 481.03 points, up from 478 last night. | The MSCI All Country World Index has risen to 481.03 points, up from 478 last night. |
| But October has still been a pretty horrific month for stocks. The ACWI ended September at 524 points, meaning it has lost over 8% this month. | But October has still been a pretty horrific month for stocks. The ACWI ended September at 524 points, meaning it has lost over 8% this month. |
| In points terms, this looks like the biggest destruction of value since the financial crisis of 2008. | In points terms, this looks like the biggest destruction of value since the financial crisis of 2008. |
| In percentage terms, it looks like the worst month since May 2012 (when the ACWI fell from 328 points to 297, down 9.4%). | In percentage terms, it looks like the worst month since May 2012 (when the ACWI fell from 328 points to 297, down 9.4%). |
| The US president reckons shares are going up again today... | The US president reckons shares are going up again today... |
| Stock Market up more than 400 points yesterday. Today looks to be another good one. Companies earnings are great! | Stock Market up more than 400 points yesterday. Today looks to be another good one. Companies earnings are great! |