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Biden to announce release of up to 15 million barrels of oil from Strategic Petroleum Reserve
US Pre-Mkt Oct 19
Nasdaq futures rise as better-than-expected Netflix results keep tech gains going
https://www.cnbc.com/2022/10/18/stock-market-futures-open-to-close-news.html
Oil prices rise as investors seek riskier assets and on China demand outlook
https://www.cnbc.com/2022/10/19/oil-prices-supply-opec-china-fuel-demand-inflation.html
Gold dips as steady U.S. dollar, looming rate hikes dim appeal
Pre-MKT Oct 19
Equities
Canada’s main stock index opened higher Tuesday, adding to the previous session’s advance. On Wall Street, key indexes were also up in early trading on the back of positive earnings from Goldman Sachs and Johnson & Johnson.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 275.83 points, or 1.48 per cent, at 18,896.85.
The Dow Jones Industrial Average rose 511.7 points, or 1.70 per cent, at the open to 30,697.52. The S&P 500 rose 68.3 points, or 1.86 per cent, at the open to 3,746.26, while the Nasdaq Composite rose 288.2 points, or 2.70 per cent, to 10,963.98 at the opening bell.
“Earnings remain the focus across corporate America while simmering concerns about the path of the Fed and the lack of a pivot from the hawkish stance takes a back seat for now,” Stephen Innes, managing partner with SPI Asset Management, said.
“Expectations are low for this earning season, with many challenges, the hawkish Fed notwithstanding.”
On Monday, sentiment got a lift from better-than-forecast results from Bank of America. Goldman Sachs reports on Tuesday morning. After the bell, markets will get results from Netflix.
Ahead of the start of trading, Goldman said profit applicable to common shareholders fell to US$2.96-billion, or US$8.25 per share, in the quarter ended Sept. 30, from US$5.28-billion, or US$14.93 per share, a year ago. Analysts had expected a profit of US$7.69 per share in the most recent quarter. Shares were up more than 4 per cent in early trading in New York.
“For Q3, Netflix said it hoped to start adding back subscribers, with hopes that they will see growth of 1 million, reversing the decline in Q2,” Michael Hewson, chief market analyst with CMC Markets U.K., said in a note. “For Q3 revenue forecasts were lower than expected at $7.84-billion, although it’s still a 4.7-per-cent increase on the same quarter a year ago.”
In this country, investors got September housing starts before the start of trading. Canada Mortgage and Housing Corp. says the seasonally adjusted annual rate of housing starts for September was 299,589 units, up 11 per cent from 270,397 in August. The increase came as the annual pace of urban starts rose 12 per cent to 276,142 in September.
Overseas, the pan-European STOXX 600 was up 1.13 per cent by midday. Britain’s FTSE 100 rose 1.28 per cent. Markets got a boost at the start of the week after Britain’s new finance minister reversed most of the tax cuts announced just weeks earlier, easing concerns about funding the measures.
Germany’s DAX added 1.79 per cent. France’s CAC 40 was up 1.53 per cent In Asia, Japan’s Nikkei ended up 1.42 per cent. Hong Kong’s Hang Seng rose 1.82 per cent.
Commodities
Crude prices wavered in early going, with a softer U.S. dollar being offset by continued concerns about demand in China amid measures to control the spread of COVID-19.
The day range on Brent was US$91.35 to US$92.66 in the early premarket period. The range on West Texas Intermediate was US$85 to US$86.51.
“It’s been another turbulent few weeks in oil markets from global growth concerns to super-sized OPEC+ output cuts and it seems they’re yet to fully settle down,” OANDA senior analyst Craig Erlam said.
“Brent has seen lows of US$82 and highs of US$98 so perhaps what we’re now seeing is it finding its feet somewhere in the middle. Whether that will satisfy the oil alliance only time will tell but there will be some relief that it’s not back in triple figures already, even if that is a result of the ever-worsening economic outlook.”
Crude drew some support early Tuesday from a softer U.S. dollar. The U.S. dollar index, which weighs the greenback against a group of world currencies, fell to its lowest since Oct. 6. A weaker dollar makes crude less expensive for buyers holding other currencies.
Elsewhere, traders continue to watch developments in China, where the government continues with measures aimed at curbing the spread of COVID-19.
Later Tuesday, markets will get the first of two weekly U.S. crude inventory reports with the release of fresh numbers from the American Petroleum Institute. More officials figures follow Wednesday morning from the U.S. Energy Information Administration.
Analysts polled by Reuters are expect to see a weekly increase in crude inventories of about 1.6 million barrels for the week of ended Oct. 14.
Gold prices, meanwhile, were up, also supported by a weaker U.S. dollar.
Spot gold rose 0.2 per cent to US$1,653.31 per ounce by early Tuesday morning.
U.S. gold futures were down 0.3 per cent at US$1,658.50.
Currencies
The Canadian dollar was lower while its U.S. counterpart took a breather against a basket of world currencies.
The day range on the loonie was 72.69 US cents to 73.22 US cents in the predawn period.
“The CAD is under-performing on the session,” Shaun Osborne, chief FX strategist with Scotibank, said.
Traders will get fresh housing starts figures early Tuesday morning from Canada Mortgage and Housing Corp.
On world markets, the U.S. dollar index, which measures the greenback against six major peers, including sterling, the euro and the yen, was down 0.1% at 111.99, after hitting its lowest level since Oct. 6, according to figures from Reuters.
Britain’s pound, meanwhile, paused after rallying about 2 per cent on Monday on the U.K. fiscal turnaround. The pound was last down 0.1 per cent against the U.S. dollar at US$1.1340.
The euro was last up 0.1 per cent at US$0.9855.
Iamgold Corp. has signed a deal to sell its 95 per cent interest in Rosebel Gold Mines N.V. to Chinese company Zijin Mining Group Co. Ltd. for US$360-million in cash.Under the terms of the agreement, Iamgold will also be released from about US$41-million in obligations for certain equipment leases. Rosebel owns the Rosebel gold mine in Suriname and a 70 per cent participating interest in the Saramacca Mine, also located in the South American country. –The Canadian Press
Economic news
(8:15 a.m. ET) Canadian housing starts for September.
(8:30 a.m. ET) Canada’s international securities transactions for August.
(9:15 a.m. ET) U.S. industrial production for September.
(10 a.m. ET) U.S. NAHB Housing Market Index for October.
UK inflation moves back up to 40-year high as Brits battle cost-of-living crisis
LONDON — The consumer price index rose 10.1% in September, according to estimates published Wednesday by the Office for National Statistics, just exceeding a consensus forecast among economists polled by Reuters.
Reuters estimated an increase of 10% for September. The figure for September matches the 40-year high British inflation reached in July.
The rate rose in the year to September 2022 as the country’s cost-of-living crisis continues to hammer households and businesses ahead of a tough winter. Inflation unexpectedly dipped to 9.9% in August, down from 10.1% in July, on the back of a fuel price decline.
Increasing food, transport and energy prices were the biggest contributing factors to inflation, the ONS said. Food was up 14.6% year-on-year, transport was up 10.9% compared to last year, while the price of furniture and household goods rose 10.8%.
Sterling fell against the dollar following the news, trading at $1.1289, down from $1.1330.
The inflation data comes just as the Bank plans to sell off some of its government bonds, known as gilts, from Nov. 1.
Xi warns against foreign interference in Taiwan, says China will ‘never promise to renounce’ force
BEIJING — Chinese President Xi Jinping said China reserves the option of “taking all measures necessary” against “interference by outside forces” on the issue of Taiwan.
In a wide-ranging speech Sunday, Xi spoke firmly about China’s resolve for reunification with the self-governed island, which Beijing considers part of its territory.
He was speaking at the opening ceremony of the ruling Communist Party of China’s 20th National Congress, held once every five years.
“We will continue to strive for peaceful reunification with the greatest sincerity and the utmost effort,” Xi said in Chinese, according to an official translation. “But, we will never promise to renounce the use of force. And we reserve the option of taking all measures necessary.”
“This is directed solely at interference by outside forces and a few separatists seeking Taiwan independence,” he said, emphasizing that resolving the Taiwan question is a matter for the Chinese to resolve.
China’s Xi Jinping grabs more power, pushing Asia closer to war
A messianic ruler, already considered the world’s most influential figure, is about to get absolute power over the planet’s most-populous state.
What happens next will be remembered for generations. Chances are, Chinese President Xi Jinping will lead China into war.
The drama begins at the Communist Party’s 20th National Congress, which starts Sunday. At the Congress’s first plenum, which convenes immediately after the Congress ends, the members of the new Politburo Standing Committee will be revealed as they walk from behind a curtain. Everyone expects Xi to lead the pack as ruler for the next five years. Moreover, most think he will be able to exercise essentially unrestrained power during this term.
What will Xi do with such power? Among other things, he wants to redraw the map of the world, with force if necessary. During his decade-long tenure as supremo, China has stepped up efforts to take territory from neighbors, especially India, Taiwan, Japan and the Philippines.
His ambitions extend far beyond China’s neighborhood, however. Xi is a revolutionary. He speaks in benign-sounding phrases, such as “a community of shared future for mankind.”
His words, however, cloak breathtaking ambition. As subordinates make clear, Xi has been promoting the imperial-era notion that Chinese rulers not only had the Mandate of Heaven over tianxia — “All Under Heaven” — but they also had an obligation to rule the world.
“The Chinese have always held that the world is united and all under heaven are one family,” Xi Jinping declared in his 2017 New Year’s Message.
But why stop with Planet Earth? In 2018, Chinese officials talked about the moon and Mars as sovereign Chinese territory.
https://www.foxnews.com/opinion/china-xi-jinping-grabs-more-power-pushing-asia-closer-war
Economic Calendar: Oct 17 – Oct 21
Monday October 17
China trade surplus
Japan tertiary industry index and industrial production
(8:30 a.m. ET) Canadian construction investment for August.
(8:30 a.m. ET) Canada’s new motor vehicle sales for August. Estimate is a year-over-year decline of 12.0 per cent.
(8:30 a.m. ET) U.S. Empire State Manufacturing Survey for October.
(10:30 a.m. ET) Bank of Canada’s Outlook Survey and Survey of Consumer Expectations for Q3 is released.
(4 p.m. ET) Bank of Canada Senior Governor Carolyn Rogers speaks at the 25th anniversary event for Toronto Centre.
Earnings include: Bank of America; Bank of NY Mellon; Charles Schwab Corp. and Rio Tinto.
==
Tuesday October 18
China GDP, industrial production, retail sales and fixed asset investment
(8:15 a.m. ET) Canadian housing starts for September. The Street is expecting an annualized rate decline of 1.4 per cent.
(8:30 a.m. ET) Canada’s international securities transactions for August.
(9:15 a.m. ET) U.S. industrial production for September. Consensus is a rise of 0.1 per cent from August with capacity utilization remaining at 80.0 per cent.
(10 a.m. ET) U.S. NAHB Housing Market Index for October.
Earnings include: BHP Group Ltd. ADR; Goldman Sachs Group Inc.; Intuitive Surgical Inc.; Johnson & Johnson; Netflix Inc.; Roche Holding Ltd. ADR; Truist Financial Corp.
==
Wednesday October 19
Euro zone CPI
(8:30 a.m. ET) Canada’s CPI for September. Consensus is flat month-over-month and up 6.8 per cent year-over-year.
(8:30 a.m. ET) Canadian industrial product and raw materials price indexes for September. Estimates are month-over-month declines of 1.2 per cent and 4.3 per cent, respectively.
(8:30 a.m. ET) U.S. housing starts for September. Consensus is an annualized rate decline of 6.3 per cent.
(8:30 a.m. ET) U.S. building permits for September. The Street is expecting a 0.5-per-cent increase on an annualized rate basis.
(2 p.m. ET) U.S. Beige Book is released.
Earnings include: Abbott Laboratories; IBM; Kinder Morgan Inc.; Procter & Gamble Co.; Tesla Inc.
==
Thursday October 20
Japan trade surplus
Germany PPI
(8:30 a.m. ET) Canadian household and mortgage credit for August.
(8:30 a.m. ET) U.S. initial jobless claims for week of Oct. 15. Estimate is 235,000, up 7,000 from the previous week.
(10 a.m. ET) U.S. existing home sales for September. The Street is estimating an annualized rate decline of 2.2 per cent.
(10 a.m. ET) U.S. leading indicator for September. Estimate is a decline of 0.3 per cent from August.
Earnings include: AT&T Inc.; Blackstone Group Inc.; CSX Corp.; Danaher Corp.; Dow Inc.; Freeport-McMoRan Inc.; Mullen Group Ltd.; Nucor Corp.; Philip Morris International Inc.; Union Pacific Corp.
==
Friday October 21
Japan CPI
Euro zone consumer confidence
(8:30 a.m. ET) Canadian retail sales for August. The Street is projecting an increase of 0.1 per cent from July.
(8:30 a.m. ET) Canada’s new housing price index for September. Estimate is flat month-over-month.
(8:30 a.m. ET) Canadian wholesale trade for September.
Earnings include: American Express Co.; Schlumberger NV; Verizon Communications Inc.
Before the Bell: Oct 14
Equities
Wall Street futures turned higher early Friday after the previous session’s rally as traders await results from some of the biggest U.S. banks. Major European markets were positive in early trading. TSX futures were steady.
In the early premarket period, futures tied to the three key U.S. indexes traded above break even. On Thursday, markets saw a volatile session with stocks initially selling off in the wake of a hotter-than-expected reading on U.S. inflation, only to later turn sharply higher. The Nasdaq, Dow and S&P 500 all ended the session up more than 2 per cent. Canada’s S&P/TSX Composite Index, which fell as much as 1.8 per cent in early trading, finished the day up 2.2 per cent.
“[Thursday’s] market reversal was a head-scratcher,” OANDA senior analyst Ed Moya said. “Despite a hot inflation report, U.S. equities turned positive as some investors are convinced core inflation will soon start trending lower.”
“[The] rally probably got a boost from short covering as well, but given the path for rates is higher, this market reversal won’t last long,” Mr. Moya said.
Friday’s analyst upgrades and downgrades
Friday morning, traders will get results from some of the biggest U.S. lenders, including JPMorgan, Citigroup and Morgan Stanley. All are slated to report before the start of trading.
U.S. investors will also get September retail sales. Expectations are for a modest rise of 0.2 per cent.
In this country, Canada’s housing market will be in focus with the release September home sales from the Canadian Real Estate Association. Sales are seen falling 32 per cent from year-earlier levels with prices down an average 6 per cent.
Canadian markets also get August factory sales figures. Early estimates from Statistics Canada suggest a 1.8-per-cent decline is likely, largely the result of a drop in prices led by petroleum products, RBC chief currency strategist Adam Cole said.
Overseas, the pan-European STOXX 600 was up 1.01 per cent in morning trading. Britain’s FTSE 100 rained 0.89 per cent. The Associated Press reports that Britain’s Treasury chief is dashing back to London for urgent talks with Prime Minister Liz Truss amid growing expectation that they will scale back unfunded tax cuts to calm financial markets.
Germany’s DAX and France’s CAC 40 advanced 0.76 per cent and 0.79 per cent, respectively.
In Asia, Japan’s Nikkei jumped 3.25 per cent. Hong Kong’s Hang Seng closed up 1.21 per cent.
Commodities
Crude prices were relatively steady but looked set for a weekly decline as tighter supply helps offset global recession concerns.
The day range on Brent was US$93.75 to US$95.11 in the premarket period. The range on West Texas Intermediate was US$88.39 to US$89.73.
Both benchmarks were down about 4 per cent for the week, following two weeks of gains.
“The output cut from OPEC+ last week triggered a surge in prices but that has partially been offset by the increasingly dire forecasts for the economy which will naturally weigh on demand,” OANDA senior analyst Craig Erlam said.
“The alliance will no doubt be pleased with oil trading back in the $90-$100 range, the question is whether the U.S. will. Or if another coordinated SPR [strategic petroleum release] release could be on the cards.”
Crude prices were also supported by a steep drawdown in U.S. distillate stocks, though there has been a larger than expected surge in U.S. crude oil in storage, Reuters reported.
Gold prices edged higher, helped by a pullback in the U.S. dollar.
Spot gold rose 0.3 per cent to US$1,670.00 by early Friday morning. Prices were down more than 1 per cent so far in the week.
U.S. gold futures were flat at US$1,676.60.
Currencies
The Canadian dollar was slightly weaker while its U.S. counterpart held steady against a basket of world currencies.
The day range on the loonie was 72.50 US cents to 72.97 US cents.
Canadian investors get August wholesale and manufacturing sales early Friday.
On world markets, the U.S. dollar index was last up very slightly at 112.62, having fallen 0.6 per cent during the previous session despite expectations the Federal Reserve will deliver another outsized rate hike at its next meeting.
After making steep gains on Thursday, the pound was last down 0.27 per cent at US$1.1301, according to figures from Reuters.
The Australian dollar was up 0.42 per cent against the U.S. dollar at US$0.6322, coming off a two-and-a-half year low seen a day earlier.
In bonds, the yield on the 10-year note was slightly lower at 3.92 per cent in the predawn period.
Economic news
(830 am ET) Canada manufacturing sales for August.
(830 am ET) Canada wholesale trade for August.
(9 am ET) Canada existing home sales for September.
(9am ET) MLS Home Price Index for September.
(830 am ET) U.S. retail sales for September.
(830 am ET) U.S. import prices.
(10 am ET) U.S. business inventories for August.
(10 am ET) U.S. University of Michigan Consumer Sentiment for October.
With Reuters and The Canadian Press
JPMorgan Chase earnings are out – Here are the numbers
JPMorgan Chase reported third-quarter earnings before the opening bell Friday.
Here are the numbers:
Here’s what Wall Street expects:
JPMorgan, the biggest U.S. bank by assets, will be watched closely for clues on how banks are navigating a confusing environment.
On the one hand, unemployment levels remain low, meaning consumers and businesses have little difficulty repaying loans. Rising interest rates mean that banks’ core lending activity is becoming more profitable. And volatility in financial markets has been a boon to fixed income traders.
But investors have dumped bank shares lately, pushing JPMorgan and others to fresh 52-week lows this week, on concern that the Federal Reserve will inadvertently trigger a recession. Investment banking and mortgage lending revenue has fallen sharply, and firms could disclose write-downs amid the decline in financial assets.
On top of that, banks are expected to begin to boost reserves for loan losses as concerns of a recession increase; the six biggest U.S. banks by assets are expected to set aside a combined $4.5 billion in reserves, according to analysts.
That aligns with the cautious tone from CEO Jamie Dimon, who said this week that he saw a recession hitting the U.S. in the next six to nine months.
Last month, JPMorgan president Daniel Pinto warned that third-quarter investment banking revenue was headed for a decline of up to 50%, thanks to the collapse in IPO activity and debt and equity issuance. Helping offset that, trading revenue was headed for a 5% jump from a year earlier on strong fixed income activity, he said.
As a result, investors should expect a mishmash of conflicting trends in the quarter and a wider-than-usual range of outcomes among the six biggest U.S. institutions.
Shares of JPMorgan have dropped 31% this year through Thursday, worse than the 25% decline of the KBW Bank Index.
Morgan Stanley, Wells Fargo and Citigroup are also scheduled to report results Friday, followed by Bank of America on Monday and Goldman Sachs on Tuesday.
This story is developing. Please check back for updates.
