(US) Market Close Summary: Broad selloff accelerates into close amid rates and trade worries as earnings season approaches
Wed, 10 Oct 2018 16:46 PM EST
US Session
-WTO Director General Azevedo: not sure if U.S.-China talks going far
-(US) MBA Mortgage Applications w/e Oct 5th: -1.7% v 0.0% prior
-(US) National Hurricane Center (NHC): potentially catastrophic Category 4 Hurricane Michael strengthens further; maximum sustained winds of 145 mph v 140 mph prior
-(US) Treasury to issue new rules requiring all foreign investors in certain deals involving critical technology to submit to national security reviews or face fines as high as the value of their proposed transactions from Nov 10th — press
-(US) SEPT PPI FINAL DEMAND M/M: 0.2% V 0.2%E; Y/Y: 2.6% V 2.7%E
-(US) AUG FINAL WHOLESALE INVENTORIES M/M: 1.0% V 0.8%E
— (US) Atlanta Fed raises Q3 GDP forecast to 4.2% from 4.1% prior
— *(US) TREASURY'S $36B 3-YEAR NOTE AUCTION DRAWS: 2.989%; BID-TO-COVER RATIO: 2.56 V 2.68 PRIOR AND 2.84 OVER THE LAST 12 AUCTIONS
— (US) Association of American Railroads weekly rail traffic report for week ending Oct 6th: 554.2K, +1.2% y/y
— (US) Fed's Evans (non-voter, dove): The US economy is doing quite well on employment and inflation at the moment; Extremely pleased where inflation is at the moment
— *(US) TREASURY'S $23B 10-YEAR NOTE REOPENING DRAWS 3.225%; BID-TO-COVER RATIO: 2.39 V 2.58 PRIOR AND 2.54 OVER LAST EIGHT REOPENINGS
— (US) USPS raises postal stamp price to $0.55 from $0.50 in 2019
Europe
-(UK) EU Brexit Negotiator Barnier: Decisive progress needed on Brexit
-(UK) BOE to ask UK lenders about loans, funding and derivatives 4 times a day in the event of a 'no-deal' Brexit — financial press
-(UK) UK Labour Party spokesman: Should take earlier reports of 30 to 40 Labour Lawmakers ready to back Brexit Deal with 'a pinch of salt'
— (UK) Northern Ireland DUP Leader Foster: Any border in Irish Sea will impede access; Brexit proposal not offering best of both worlds
Corporate Headlines:
-IMPV taken private by Thoma Bravo for $2.1B
-CPB Third Point takes stake
-AET/CVS receives DOJ approval with divestments
-ESL to be acquired by TransDigm for $4B
-FAST slips after earnings
-Luxury group falls after MS downgrade and European earnings
-Hurricane names GNRC HD LOW lift as Hurricane Michael intensifies
— SHLD said to be nearing bankruptcy
— SAVE lifts off on raised quarterly guidance
— Mitek reportedly rejects takeover approach from ASG Technologies backed by Elliott
— James Murdoch reportedly favored candidate to take Elon Musk's place as Tesla Chairman
— Altria reportedly in discussions to acquire stake in Canada cannabis co Aphria
Summary:
Stocks saw a broad market selloff which accelerated into the close. The S&P broke its 100-day moving average, the NASDAQ Composite slipped under its 200-day for its biggest one-day drop since the Brexit vote, and the Dow saw its worst day since Feb. Much of the pressure appeared to be technical and perhaps seasonal in nature, but the Chinese Yuan has held near the recent lows from this summer. Rates have also held higher, and worries around emerging markets and trade wars lingered and likely weighed on sentiment. The 10-year notes sale saw its highest yield since 2011 as demand fell to its lowest since February. Defensive flows were evidenced by relative strength in utilities and some traditionally defensive sectors like pharma and portions of consumer staples. The VIX reached the 20 handle for the first time since April 11th. WTI gave back over 2% ahead of weekly inventory readings and Hurricane Michael's landfall in the Gulf.
Markets:
— Dow Jones -3.2%
— S&P500 -3.3%
— Nasdaq -4.1%
— Russell 2000 -2.9%
-After Market Movers-
— CRSP FDA has lifted clinical hold on CTX001 Investigational NDA for treatment of Sickle Cell Disease; +11.6% afterhours
— SQ CFO Sarah Friar to step down to become CEO of Nextdoor; to remain in current position into December; -4.0% afterhours
— FLR Reports prelim Q3 Rev $4.6B v $4.99Be, new awards $9B; -6.6% afterhours
