The US stock market on the 3rd rebounded sharply. A weak ISM manufacturing index in September eased concerns about excessive monetary policy tightening, pushing U.S. Treasury yields lower.
The dollar/yen exchange rate remained almost unchanged from the previous business day at the upper 144 yen level. After temporarily hovering around 145 yen from Tokyo time to European time, it slumped.
The S&P 500 index rose 2.6% to 3678.43 over the weekend, its biggest gain since July, with about 95% of stocks in the index gaining. The Dow Jones Industrial Average rose $765.38, or 2.7%, to $29,490.89. The Nasdaq Composite Index rose 2.3%.
The ISM manufacturing index fell more than expected in September to its lowest level in more than two years. The urgency to raise interest rates more aggressively has receded.
“The market is oversold and sentiment is extremely negative, so a rally could happen at any moment, even a sharp rally,” said Matt Maley, chief market strategist at Miller Tabak. pointed out. “But before we hit the final bottom in this bear market, we expect a further pullback. Equities have not yet fully priced in a recession.”
U.S. Treasuries soared. Yields on five-year bonds temporarily fell by 30 basis points (bp, 1 bp = 0.01%). As of 4:17 p.m. New York time, the yield on the 2017 bond fell 20 basis points to 3.89%. The 10-year bond yield fell 18 basis points to 3.65%.
Economist Ed Yardeni said the Fed should consider ending its tightening campaign after another rate hike in November. The stress on financial markets from big rate hikes, a strong dollar and quantitative tightening has reached a point where officials should make financial stability a top priority, he added. He is known for coining terms such as “bond vigilantes.”
In the foreign exchange market, the dollar generally fell. Asset prices such as bonds rose after the ISM manufacturing index fell short of market expectations. On the other hand, the rise in crude oil prices supported the currencies of resource-rich countries. Pound rises. UK Chancellor of the Exchequer Kwarteng has withdrawn a proposal to cut the top rate of income tax.
The Bloomberg Dollar Spot Index, which tracks the dollar’s movements against 10 major currencies, fell 0.5%. As of 4:18 pm New York time, the dollar was almost unchanged against the yen at 144.70 yen. In the morning, the dollar was temporarily sold to 144.16 yen. The euro rose 0.2% against the dollar to $0.9824 per euro. The pound rose 1.4% against the dollar to $1.1321.
The New York crude oil market rebounded. It rose more than 5%, its biggest high since July.By “OPEC Plus” consisting of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC major oil-producing countriesreduced productionconcerns over a tight supply situation have heightened against the backdrop of the possibility of
OPEC+ could discuss cutting output by more than 1 million barrels a day at its meeting on Wednesday, delegates said.
“The fact that OPEC is talking about cutting production by 1 million barrels a day while inventories are still pretty tight and that they are pushing their own production targets is a big deal,” said Rob Howarth, senior investment strategy strategist at U.S. Bank Wealth Management. The fact that it does not meet the requirements is a surprise to the market,” he said. “However, with oil prices dropping from over $120 to $80 now, they certainly see it as a test.”
West Texas Intermediate (WTI) futures for November delivery on the New York Mercantile Exchange (NYMEX) rose $4.14, or 5.2%, to $83.63 a barrel. London ICE North Sea Brent December delivery rose $3.72 to $88.86.
The New York gold market continued to rise. The decline in US Treasury yields has made gold relatively more attractive to invest as it does not generate interest. Concerns that global central bank tightening could lead to a recession and the view that bond yields may have peaked were also weighed in.
“Gold prices are holding out in an intensifying downtrend,” said Bart Melek, a commodities strategist at TD Securities. “As we enter October, the risk of surrender remains high for gold, with strong data continuing to point to a more aggressive trajectory for U.S. interest rates,” it said.
The spot price was 2.3% higher than the previous trading day as of 3:03 pm New York time. December gold futures on the New York Mercantile Exchange (COMEX) closed at just $1,702 an ounce, up $30, or 1.8%.
Original title:Stocks Rise From the Ashes in Best Day Since July: Markets Wrap(excerpt)
Treasuries Surge With European Rates Rally; Block Trades Active（抜粋）
Dollar Gauge Slips To One-Week Low as Yields Tumble: Inside G-10（抜粋）