Europe – DAX back in a downswing

The equities bloodbath continues with the Dax’s 4.06% drop leading European indices down again yesterday.

Germany’s import price index improved somewhat – 0.3% MoM in September, consumer confidence fell by a better-than-expected point to 94, retail sales deepened their contraction in Portugal, and Italy’s trade surplus contracted slightly in August.

Americas – 31% GDP growth expected in Q3

US indices had another bad day yesterday, the NASDAQ losing 3.73% with other benchmarks close behind. On the other hand, the US Department of Commerce stated yesterday that Q3 will see record economic growth thanks to over $3 tn in federal relief spending.

The Chicago Mercantile Exchange (CME) yesterday reported a 15.4% drop YoY in revenues this past quarter and an 8% drop from Q2 due to reduced contracts activities. Mortgage applications this past week improved – expanding by 1.7% on last week’s 0.6% contraction, and wholesale inventories decreased by 0.1% in September based on a preliminary reading from the US Census Board.

Asia – China bulldozes on

Still unaffected by the rest of the pandemic-driven globe, Chinese indices are all up this morning, the A50 up 1.35. The Hang Seng is down 0.6% and the Nikkei a third.

The Yen has dismissed the Bank of Japan’s overnight decision to maintain the present -0.1% interest rate as October consumer confidence adds a point to 33.6. Retail trade, on the other hand, disappointed with an 8.7% contraction in September – nearly 5 times the month before.

The Aussie added 0.8% overnight after the NAD reported a 5-point improvement in business confidence – still in negative territory, while the NZD weakened on deteriorating business confidence – albeit amidst a better-than-expected 4.7% increase in October’s activity outlook.

Commodities – Oil level thanks to weather

WTI Crude bounced off its 4-month support level at $37 a barrel after the EIA confirmed the previous day’s API build with a 4.32mB increase of its own. Support is provided by 2/3 of Mexican Gulf output now shut down in the face of Hurricane Zeta.

Corporate – the earnings/equities mismatch

US earnings yesterday showed little relation between results and share movement, including eBay (-0.56%) whose revenues soared by 25% in Q3 to $2.6 bn with earnings up 250% to 88c per share – insufficient to prevent a 5.73 drop in share prices after hours. Visa (-4.48%) revealed a 17% drop in revenues to $5.1 bn.

Ford shares added 2.78% and another 14% after hours (!) despite the ongoing equities slaughter and a mere 1% increase in revenues to $37.5 bn but a 5-fold increase in EPS to 60c. Pinterest added 30% after hours on a 58% increase in revenues to $443 mn and a 16c loss per share – better than the 23c loss last year. Amgen (-3.17%) continued down after hours and reporting a 12% gain YoY in revenues to $6.4 bn.

In Europe, French pharma company Sanofi (-0.15%) yesterday increased revenue in Q3 by 5.7% to €9,48 bn. Nokia (-2%) missed expectations reporting a 5c EPS. Credit Suisse (-2%) reported a 38% drop in profits. And Volkswagen (-3%) reported a 3.4% drop in revenues to €59.4 bn and a 29% drop in earnings. Airbus (-3,48%) revenues plunged by 27% YoY to €11.2 bn.

Today’s earnings reports include Comcast, Baxter Int’l, Lloyds, Shell, Textron, Ralph Lauren, APPLE, Facebook, Western Union, Twitter, Yum! Brands, American Tower, Dupont, Dr Pepper, Alexion, Fresenius, Repsol, Orkla, Starbucks, Stryker and Amazon.

JPMorgan will hold a shareholders meeting.

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