Daily Comments

In Japan, Tokyo’s inflation grew at its lowest rate in a year (+2.8% in September). The Nikkei 225 lost -0.05%. The Shanghai Composite was closed for a holiday. EZ CPI was +4.3% vs. +4.5% exp., lowest since Oct 2021. European markets gained. The DAX Index added +0.41%. 10-year bunds yield 2.845%. Aug Personal Income rose +0.4%, Personal Income Expenditures were up +0.4%, and the PCE Price Index added +0.4% (slightly cooler than the +0.5% expected). In advance data, the Aug Intl Trade in Goods deficit narrowed to $-84.3B, Retail Inventories jumped +1.1%, and Wholesale Inventories fell -0.1%. Sep Chicago PMI fell to 44.1 vs. 47.9 exp., and final UMich Consumer Sent. rose to 68.1 vs. 67.7 exp. (1-yr inflation expectations went from 3.1 to 3.2). 10-Year Notes yield 4.581%. The Dec US$ Index slid -0.05% to 105.880. Nov Crude Oil fell -1.0% to $90.79. Dec Gold dipped -0.74% to $1,864.80. UAW strikes are intensifying, and the U.S. govt. is preparing for a shutdown. The Fed’s Williams said rates are at/near peak, but won’t retreat soon. Stock indices were higher overnight, but gains evaporated after the open. After further choppy trade, the ES ended red, down -3.6% in Q3.

In another sign of the continuing turmoil in the Chinese property market, shares of embattled real estate firm Evergrande were suspended in Hong Kong. The Nikkei 225 tumbled -1.54%, the Shanghai Composite managed a +0.10% gain. European markets were green. The DAX Index added +0.70%. 10-year bunds yield 2.931%. For 09/23 Initial Claims remained ultra-low at 204K, and below consensus of 211K. Final Q2 GDP came in unchanged at +2.1% (vs. +2.2% est.), but Personal Consumption Expenditures (PCE) drastically plunged from +1.7% prior to +0.8%. August Pending Home Sales plunged -7.1% MoM vs. -1.0% exp. After tax corp. profits fell -7.8%, w/inventory & consumption adjustments falling -4.1%. 10-Year Note yields faded 10 bps off 16-yr highs, ending at 4.578%. The Dec US$ Index pulled back -0.46% to 105.875. Nov Crude Oil nearly hit $95 overnight, but ended lower by -2.1% to $91.71. Dec Gold faded -0.63% to $1,878.90. The UAW plans to expand strikes. Oil, T-yields, and the USD$, remain escalated, stressing the consumer and business. 55% of S&P 500 stocks are at a 1-mo low. The ES started quietly but found early support to end stronger.

China industrial profits fell in August, but at a slower pace than in prior months this year. Steep early losses evaporated, and Asian markets closed modestly higher. The Nikkei 225 bounced +0.18% and the Shanghai Composite added +0.16%. European markets were red. The DAX Index lost -0.25%. 10-year bunds yield 2.844%. For 09/23 the MBA Mortgage Apps Index slid -1.3% (+5.4% prior), and EIA Crude Inventories fell -2.2M/bbls. August Durable Goods Orders were surprisingly strong, rising +0.2% (ex-transportation +0.4%) vs. -0.5% exp. However, July was revised downwards from -5.2% to -5.6%. 10-Year Note yields surged to cycle highs, ending at 4.615%. The December US$ Index gained +0.45% to 106.405. November Crude Oil soared +3.63% to $93.67. December Gold plunged -1.45% to $1,892.20. The FTC and 17 states sued Amazon for anti-trust violations. The VIX hit a 3-mo high, crude oil ramped on inventory data, hitting a fresh cycle high. A govt. shutdown appears likely. The Hollywood writer’s strike ended, but not the UAW’s. Treasury yields, the USD$ index and crude oil prices are soaring. Stocks initially choked, but a late and wild rally sent the ES back above even.