NYSE MAC Desk
Market Update

Good morning,
 
Last week major indices ended the week lower for the third consecutive week with the S&P 500 down nearly 3% capping off the worst month since March of 2020 with the index closing lower by 9.3%. On the NYSE we saw the largest quarter-end closing auction in history with nearly 820ml shares trading. This pushed the S&P 500 lower by ~25pts in the final 10 minutes of the session adding to an already weak session. S&P futures are recouping a little bit more than that leg of the selloff currently trading ~1.2% above fair-value. Asian markets were mixed overnight but keep in mind China is closed this week for holiday. European markets were off >1% after the open but have recouped those losses and are trading back around unchanged levels. The turnaround has come as yields have been moving lower around the globe. In the UK PM Truss has back tracked a bit, scrapping plans for the tax cuts for the highest tax bracket. The 10yr Gilt is down nearly 30bps to ~3.85%. 10yr yields in Europe are down ~15bps while yields in the US are down 9-15bps across the curve. The US dollar index is a touch higher with Yen weakness being offset by GBP/Euro strength. The big story over the weekend centered around concerns related to the financial strength of Credit Suisse amidst a surge in CDS. The company has been in touch with investors and counterparties in an attempt to assuage concerns. The other big headline is that OPEC+ is considering an >1ml b/d production cut at its meeting this Wednesday. ICE Brent is up >4% to ~$88.75. Metals markets are mixed with Silver a standout up >4%. Wheat is up >1%. After the open final Markit PMI will be released followed by ISM Manufacturing and construction spending at 10:00. US auto sales will be released throughout the day and Fed Bostic and NY Fed Williams are both scheduled to speak.
 
 
Europe
STOXX Europe 600: -0.1%
Germany's DAX: UNCH
U.K.'s FTSE 100: -0.3%
France's CAC 40: -0.1%
Italy's FTSE MIB: +0.8%
Spain's IBEX 35: +0.5%
 
Asia
Japan's Nikkei: +1.0%
Hong Kong's Hang Seng: -0.8%
China's Shanghai Composite: closed for holiday
India's Sensex: -1.1%
South Korea's Kospi: closed for holiday
Australia's All Ordinaries: -0.3%
 
Other Asset Classes:
Government Yields

• US - 2yr -17bps to 4.11%, 5yr -18bps to 3.91%, 10yr -13bps to 3.67%, 30yr -10bps to 3.67%
• USD index: +$0.01 to $112.10
• Oil prices - ICE Brent: +5% to $89.45, WTI: +5.7% to $84, Nat Gas: -4.4% to $6.50
• Gold: +0.4% to $1,678, Silver: +5.5% to $20.10, Copper: -0.4% to $3.40
• Wheat: +1.1% to $9.32
• VIX: -0.34 to 31.28
• Bitcoin: -1% to ~19.3k

UK -

• PM Truss has back tracked a bit on her fiscal agenda scrapping plans for the 45% top tax rate- FT

Central Banks/Currencies:

• Some of the recent Fed commentary has started to sound a bit more balanced with officials highlighting risks of overtightening - Bloomberg
• Multiple press reports highlighting volatility in FX and fixed income markets which is adding to concerns that something in the system could break. - Bloomberg, CNBC
• During their last meeting BOJ officials discussed upside inflation risks a subtle shift in the central bank’s stance - Reuters

Energy/Commodities:

• OPEC+ is considering a >1ml b/d production cut at Wednesday’s meeting - Bloomberg

 Other News:

• There was a lot of press and chatter about the financial health of Credit Suisse over the weekend. The company was out speaking with investors and counterparties to calm fears - FT The Telegraph was also reporting that the BoE has been in contact with Swiss authorities
• Lula and Bolsonaro split votes in Brazil 48% to 44% with neither securing over 50% of the vote that sets up a runoff on October 30^th - Bloomberg There is a relief rally as there was some concern of social unrest if Lula secured the vote this weekend.  EWZ (~+4.5%)

China:

• China saw a 15% slump in cement production during the first 6 months of the year - FT

Economic Data:

• US
  • 9:45 Final Manufacturing PMI
  • 10:00 ISM Manufacturing
  • 10:00 Construction Spending
• Global
• Japan Manufacturing PMI (final): 50.8 prior 51.0
• Eurozone Manufacturing PMI (final): 48.4 prior 48.5
• Germany Manufacturing PMI (final): 47.8 prior 48.3