Finance Update – The Reddening of Equities

Europe – DAX dives

The UN yesterday pronounced a 49% drop YoY in global foreign direct investments for the first half of this year, according to Reuters.

And now, with most European nations closing down for Covid 2.0, indices were led off a cliff yesterday by the DAX’s 3.71% drop. Least affected – Switzerland’s SMI with a 0.38% loss.

The Euro is up a tad after Germany reported a 1-point increase in October’s business climate – this despite falling business climate and expectations.

Americas – DOW drops

With Justice Amy Barrett sworn in, US equities also had a bad day yesterday, the DOW losing 2.29% and the Russel-2000 another 2.21%. Chief amongst concerns is a post-election end to cheap money that has so far inflated markets – whether through Democratic policy or Republican bankruptcy.

The Dallas Fed yesterday upped its manufacturing index for October by 7 points to 19.8 while Chicago reported a 0.27 pointThe unit of price change for bonds (1%), futures (0.01%), shares ($1) and mortgage fees (1% of the p... activity index for the month before.

And the WTO yesterday approved the EU’s levying of $4 bn worth of tariffs on US goods in retaliation for illegal subsidies to Boeing.

Asia – Chinese eco-growth hits 2.1%

Asian benchmarks followed the rest of the world red-ward excepting the Shenzhen Composite, which managed to add 0.64% throughout the session.

The yuan curtailed its rise temporarily yesterday after a Reuters poll revealed the Chinese economy would grow by a 44-year low of 2.1% before rebounding sharply in 2021.

The NZD is up slightly this morning after New Zealand’s September trade surplusA trade balance that is positive as a result of income (exports on the national level) being greater... expanded to $1.71 bn YoY – this despite a monthly $1 bn deficitA trade balance that is negative as a result of cost (imports, on the national level) being greater ....

Commodities – Another storm threatens rigs

Oil yesterday bounced off a 3-week low at 38.25 yesterday after Mexican Gulf rigs were shut down in anticipation of Hurricane Zeta – the 27th storm of the season, so far.

Corporate – Pfizer reports

Rolls Royce yesterday lost 7.22% after announcing factory cuts and employee benefit reductions, according to the Financial Times, and plans to ask shareholders for a £2 bn influx.

HSBC closed down 0.64% for the session before surprising to the upside this morning with a 35% drop in quarterly profits and an 11% drop in revenues to $11 bn. EPS halved to 16c per share. Germany’s SAP also lost 18% after announcing a 4% drop in revenue and an 18% drop in profits.

Meanwhile, Hasbro added 6% after announcing an earnings surprise 20c per share to the upside and at $1.88 – 4c up from last year. And Santander remained level after producing a 9.6% YoY drop in revenues to €11.09 bn.

Today’s calendar includes earnings from Raytheon, Eli Lilly, Caterpillar, 3M, Nokia, Invesco, Pfizer, Oneok and akamai.

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