- Iran’s Ghalibaf: Progress can only be achieved once the seven conditions have been agreed upon
- Trump: Iran war will be over very soon. Senator warns of ‘insane’ US plans
- ECB sources report: Policymakers see a December rate hike followed by a pause
- Lagarde: Growth should be underpinned in the near term
- ECB rate decision: No change in rates
- US initial jobless claims 194K vs 199K expected
- US September PCE core inflation +0.5% m/m vs +0.3% expected
- US GDP Advance for the 3rd quarter 3.4% vs 3.2% estimate
Markets:
- WTI crude oil down 46-0cetns to $102.32
- US 10-year yields down 6.3 bps to 4.98%
- GBP leads, AUD lags
- Gold down $44 to $4022
- S&P 500 down 0.3%, Nasdaq down 1.4%
The ECB decision to hold rates wasn’t a surprise but the commentary overall had a hawkish bent, as Lagarde highlighted some flow-through from energy inflation. That was trumped by the usual ‘ECB sources’ reporting that flagged a December hike but said they would pause after that. The euro bounced around but ultimately reversed earlier losses to finish modestly higher.
On the Iran front, a US Senator on the foreign relations committee warned of ‘insane’ war plans that are being drawn up to attack civilian infrastructure. That reversed some oil selling along with various other reports about attacks, compounded by Iran attacks on ships near Hormuz and Houthie attacks on Saudi facilities.
In the stock market, the big loser was Alphabet, down 12.5% after earnings on signs that AI is eating into search. Despite that, the Nasdaq was only down 1.3% and the S&P 500 down just 0.3%. One big boost came from Eli Lilly, which rose 6.5% to a record after strong weight-loss results. Advancers also substantially outnumbered decliners and the Russell 2000 rose 0.7%, perhaps as the market determines that the FOMC was less-hawkish than expected.
After hours through, it was brutal earnings reaction for Intel and Amazon, both down double digits on the earnings headlines. That’s led to a decline in futures.
RIP Patrick Stewart
This article was written by Adam Button at investinglive.com.