- It seems it can either be Friday or we can have the stocks close green. Last Friday was the fifth straight Friday of losses. Every sector was red with Energy (-3.73%) and consumer discretionary (-3.71%) leading the downside. After the 5% peak to trough move in SPX on Thursday post the CPI, close of the week saw the indices washing out again and giving back all the gains. SPX closed 2.35% lower to end the week below the 3600 mark. Nasdaq 100 Index was down more than 3% and closed just below 10700.
- Friday also saw Q3 earnings start in earnest with JP Morgan, Wells Fargo, and Morgan Stanley reporting. Overall, the banks’ earnings were a mixed bag with consumer sides of the businesses doing well due to higher rates and loan balances while investment banking and trading revenues continue to suffer in the current environment.
- UK politics continue to command the international spotlight for now as PM Liz Truss sacked a long-time political ally (her finance minister), Kwasi Kwarteng after just 39 days on the job and backtracked another of her signature tax proposals to calm the dysfunctional UK currency and bond markets. With the BoE’s temporary bond-buying program out of action – for now the UK gilt market reaction will be closely watched and we can see the 30-year gilts push towards 5% and above.
- We don’t have any Tier 1 US economic data this week with the UK CPI (on Wednesday), EU CPI (on Wednesday) and China Q3 GDP and industrial production (on Tuesday) being the major data releases. On earnings side, we have Tesla, Netflix, rest of Banks and some of the major airlines as the important ones that will be closely watched.?
