North American News
US equity close: So much for the strong Q4 start
- Ugly day in stocks
Closing changes for the main US markets:
- S&P 500 down 104 points to 3639 or -2.9%
- Nasdaq Comp -3.8%
- Russell 2000 -3.2%
- DJIA -2.1%
- Toronto TSX Comp -2.35%
On the week:
- S&P 500 +1.4%
- Nasdaq Comp +0.5%
- Russell 2000 +1.9%
- Toronto TSX Comp +0.4%
US September non-farm payrolls +263K vs +250K expected
- September 2022 US employment data from the non-farm payrolls report
- Prior was +315K
- Estimates ranged from +127K to +375K
- Unemployment rate 3.5% vs 3.7% expected
- Prior unemployment rate 3.7%
- Participation rate 62.3% vs 62.4% prior (was 63.4% pre-pandemic)
- U6 underemployment rate 6.7% vs 7.0% prior
- Average hourly earnings +0.3% m/m vs +0.3% expected (prior +0.3%)
- Average hourly earnings +5.0% y/y vs +5.1% expected (prior 5.2%)
- Average weekly hours 34.5 vs 34.5 expected
- Change in private payrolls 288K vs +265K expected
- Change in manufacturing payrolls +22K vs +19K expected
- Household survey +204K vs +440K prior
Atlanta Fed GDPNow estimate for 3Q growth rises to 2.9% from 2.7%
- Uptick after US jobs data today
In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2022 is 2.9 percent on October 7, up from 2.7 percent on October 5. After this morning’s employment situation report by the US Bureau of Labor Statistics and the wholesale trade report from the US Census Bureau, the nowcasts of third-quarter real personal consumption expenditures growth and third-quarter real gross private domestic investment growth increased from 1.1 percent and -3.6 percent, respectively, to 1.3 percent and -3.4 percent, respectively.
Commodities
Gold plunges below $1700 after upbeat US NFP, next CPI
- The gold price tumbled below the $1700 figure, in the aftermath of the US jobs report.
- US Nonfarm Payrolls exceeded estimates at 263K, further Fed hikes coming.
- US Treasury bond yields pushed to the upside, staying above 3.80%.
Gold price dropped after the US Labor Department reported employment figures, which exceeded estimations, justifying the Fed’s need for further tightening, bolstering the greenback. Therefore, XAU/USD is trading at around $1690, below its opening price.
Before the US Nonfarm Payrolls report was released, the yellow metal meandered around $1710. However, once the headline crossed newswires, gold’s initial reaction slid towards the $1700 region, but the initial move dissipated. Nevertheless, at the time of typing, it extended its losses below $1700 in a volatile reaction.
US Data reported by the US Bureau of Labor Statistics (BLS) increased by 263K, smashing estimations of 250K, while the Unemployment Rate ticked lower to 3.5%, from 3.7% expectations. Even though it is a lower reading than August’s figures, it was above estimates, which would further cement the case for e Federal Reserve rate hike.
In the meantime, money market futures have priced in a 92% chance of a Fed 75 bps rate hake, up from 85.5%, before the US Nonfarm Payrolls report.
US Treasury bond yields pushed to the upside, with the US 10-year Treasury bond yield advancing three bps, at 3.865%, while the US Dollar Index, a gauge of the buck’s value vs. six currencies, is up 0.28%, at 112.565.
United States CFTC Gold NC Net Positions rose from previous $52.1K to $88.4K
Oil climbs more than $4 on a terrible tape
- Stocks down, US dollar up? No problem
The trade in the first half of the year was to sell stocks and buy oil.
That’s shaping up to be the trade of Q4 as well. WTI crude oil are up 5% today and briefly touched $93.00, which is the highest since August 30. It’s also come on a day with a strong US dollar and a brutal decline in equities. Energy could be a big problem for the global economy next year. There are people talking about the potential for a second wave of inflation on renewed strength in oil and gas.
Baker Hughes oil rigs down -2 to 602 in the current week
- The Baker Hughes rig count data for the current week
The weekly Baker Hughes rig count is showing:
- Oil rigs -2 to 602
- Gas rigs -1 to 158
- Total rigs -3 to 762
EU News
European equity close: A good week ends on a sour note
- Closing changes in Europe
- Stoxx 600 -1.2%
- FTSE 100 -0.1%
- German DAX -1.5%
- Italy MIB -1.1%
- French CAC -1.1%
- Spain IBEX -0.8%
On the week:
- Stoxx 600 +1.1%
- FTSE 100 +1.4%
- German DAX +1.1%
- Italy MIB +1.5%
- French CAC +1.8%
Other News
Scholz: Everyone knows that energy bailout packages are necessary and coming everywhere
- Scholz pushes back
Scholz is taking heat for his government’s €200 billion subsidy program for energy prices and its potential beggar-thy-neighbour effects. He said “I am sure that everyone knows that such measures are necessary and will have to be taken everywhere.”
The problem is that some countries can’t afford it; or they won’t be able to afford it over time. The ECB is slowly pulling the rug out from underneath the European bond market and there are going to be some hard lessons and choices.
Fed’s Williams: The economy has shown extraordinary strength post-pandemic
- Comments from New York Fed President John Williams
- The economy is slowing somewhat
- Inflation is very high and the Fed is a long way from where it needs to be
- Housing is moderating, this is not a surprise
- Sees a notable drop in inflation on the way
- High inflation is a global issue
- Supply chain disruptions are easing quickly
Cryptocurrency News
FTX joins hands with Visa to launch crypto debit cards in 40 countries by the end of 2022
- The Visa-powered debit cards are being targeted at the Latin American, European and Asian markets.
- Visa now has over 70 crypto partnerships despite the ongoing bear market trend.
- Following the news of the debit card launch, FTX’s token FTT shot up to mark an intra-day high of 8%
Cryptocurrency adoption has reached many of the biggest mainstream organizations and TradFi companies, but the expansion does not seem to be coming to an end despite the present market conditions. Banking on this demand, Visa is making headway across the world, with the latest move reaching 40 countries.
FTX & Visa
The cryptocurrency exchange FTX announced its partnership with Visa, the world’s second-largest global electronic fund transfer organization, to launch crypto debit cards. These cards will be rolled out with a particular focus on the Latin American, Europe and Asia markets.
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