Daily Comments

The strong U.S. showing yesterday spilled over and Asian markets were broadly higher. The Nikkei 225 jumped another +1.81% and the Shanghai Composite was up 0.40%. European markets found support. The DAX index gained +0.81%. 10-year bunds yield -0.161%. August Business Inventories printed at 0.6% vs. est. of 0.7%. September Retail Sales +0.7% (ex-vehicles +0.8%) were much stronger than the expected -0.1% estimate. Import Prices rose +0.4%, and Export Prices were up a modest +0.1%. The October Empire State Manufacturing Index missed at 19.8 vs. 25 consensus. Preliminary U of Mich. Consumer Sentiment hit its 2nd lowest since 2011, going from 72.8 to 71.4 (vs consensus of 73.1 expected). Current conditions gauge fell to 77.9 the weakest since April 2020. Baker-Hughes reported that the U.S. rig count for 10/09 at 711, up from 700. 10-year Notes yield 1.577%. The December US$ Index dipped -0.03% to 93.930. November Crude oil breached closed higher by +1.14% to $82.25. December Gold plunged -1.61% to $1,769.00. Bitcoin is now over $62,000. GS beat the street. Stock markets continued higher, although the RTY went red near the close.

China’s September PPI was up +10.7% year-on-year, but CPI was only up +0.7%. Asian markets were mostly higher. The Nikkei 225 powered up +1.46% but the Shanghai Composite edged down -0.10%. European markets posted solid gains. The DAX index added +1.4%. 10-year bunds yield -0.194%. Initial Claims for the week of 10/9 were lower than expected at 293K. This is the 1st time since March, 2020 that the print was less than 300k. The number of Americans receiving benefits is down 25M YoY. September top-line PPI rose +0.5% MoM (ex-food and energy was well below expectations, up only +0.2%), and a record +8.6% YoY (vs. +8.7% consensus). 10-year Notes yield 1.512%. The December US$ Index dipped -0.13% to 93.955. Inventory is at the highest since March, yet November Crude oil hit a multi-year high, gaining +1.12% to $81.31. December Gold was up +0.20% to $1,797.90. In the overnight, US stock index futures rallied higher on the back of solid bank earnings reports. On a 5-minute ES chart and it’s easy to see that bulls were in charge from the open, and bears never had a chance to breathe. Major indices closed near session highs posting strong gains.

China’s September imports rose +17.6% year-on-year (a miss) while exports rose +28.1% (a beat). Asian markets were mixed. The Nikkei 225 was down -0.32% but the Shanghai Composite rose +0.42%. European markets strengthened. The DAX index added 0.68%. 10-year bunds yield -0.133%. For the week of 10/9, the MBA Mortgage Applications Index edged up +0.2% (purchases strong, refinancings weak), well beyond the prior print of -6.9%. EIA Crude Inventories are 2.3M bbls. September CPI stayed “hot”, up +0.4% (but ex-food and energy +0.2%) vs. +0.3% expected. The YoY gain is +5.4%, equal to the highest level since July, 2008. The Treasury Statement indicated a Sep. deficit of -$130.1B. Minutes from the Fed’s FOMC meeting on 9/22 reveal the Fed could begin gradual tapering in mid-November. 10-year Notes yield 1.544%. The December US$ Index sank -0.52% to 94.030. November Crude oil lost -0.12% at $80.54. December Gold soared +1.97% to $1,793.90. JPM Q3 earnings beat top and bottom-line estimates, as did Blackrock, with shares higher in pre-market trading. Overnight, ES futures fell, yet prices recovered the remainder or the day.