The Bank of Canada has kept interest rates unchanged at 5% as expected. It is widely believed that the European Central Bank on Thursday, as well as the Federal Reserve and the Bank of England next week, will not raise interest rates for the time being. The Governor of the Bank of Canada stated that there will be no discussion of interest rate cuts at present and that further rate hikes will be considered when necessary.
US new home sales in September increased by 12.3% MoM, reaching a record high of 759,000 households since February last year, far exceeding expectations and the previous value, indicating that the economy remains resilient despite the surge in mortgage loan rates. The market is awaiting the US third-quarter GDP and PCE inflation data on Thursday and Friday.
In October, German business morale rose for the first time in six months, but the overall sentiment remains low, and economists do not rule out the possibility of a second recession within a year. According to statistics from the European Central Bank, bank lending in the eurozone almost stagnated last month, intensifying concerns about an impending recession.
The S&amp;P 500 closed below 4,200 points for the first time since May, and the Nasdaq performed the worst in eight months, with Google experiencing its deepest decline in three and a half years.
On Wednesday, October 25th, the cloud revenue growth of Alphabet, the parent company of Google, in the third quarter report was lower than expected, leading to a decline in technology stocks and the S&amp;P Communication Services sector. In addition, the yield of US long-term bonds surged again, and US stocks only opened higher on the Dow Jones Industrial Average, followed by a collective decline.
The Dow Jones fell the most by 150 points and briefly fell below the 33,000 mark, but briefly rebounded before the midday break. Other major indices touched their daily lows in the late trading session, with the tech-heavy Nasdaq and Nasdaq 100 falling more than 2%.
Dragged down by heavyweight stock Google, the S&amp;P Communication Services sector fell nearly 6%, marking its worst single-day performance in a year, while Google, which fell more than 9%, experienced its largest decline since the outbreak of the COVID-19 pandemic in March 2020. Intel and Boeing dragged down the Dow Jones Industrial Average, with Microsoft leading the way.
At the close, the Dow Jones fell for the fifth day in six trading days, approaching its lowest level in four and a half months since May 31st; the S&amp;P 500 fell below 4,200 points for the first time since May, falling for the sixth day in seven days, reaching its lowest level since May 31st; the Nasdaq fell below 13,000 points and experienced its largest decline in eight months since February 21st, falling for the fifth day in seven days, reaching a five-month low since May 25th, approaching the key level of the 200-day moving average; the Russell 2000 small-cap index fell for the fifth day in six days, reaching its lowest level in 16 months since June last year:
<blockquote>
The S&amp;P 500 index fell 60.91 points, or 1.43%, to 4,186.77 points. The Dow Jones fell 105.45 points, or 0.32%, to 33,035.93 points. The Nasdaq fell 318.65 points, or 2.43%, to 12,821.22 points. The Nasdaq 100 fell 2.47%, marking its largest single-day decline since December last year, and the Russell 2000 small-cap index fell 1.67%. The &#34;fear index&#34; VIX rose 12% at one point and rose above 21.
</blockquote>
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/be012369-9d05-4b68-a4a0-6c6da95b6ce5.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/be012369-9d05-4b68-a4a0-6c6da95b6ce5.jpeg"/> The S&amp;P 500 fell below the 200-day moving average, while the energy, consumer staples, and utilities sectors rose.
Technology and communication service stocks perform poorly.
Most of the star technology stocks fell. Apple fell more than 1% to return to the lowest level in a month, Amazon fell 5.6% to a four-and-a-half-month low, Netflix fell 0.6% without reaching a six-week high, Tesla rose 1.7% and then fell nearly 2%, approaching a four-and-a-half-month low, Microsoft rose 4.7% and then closed up 3% to a three-month high, Google A fell 9.9% and then closed down 9.5% to a three-month low. Before the earnings report was released, &#34;Metaverse&#34; Meta fell more than 4% to a four-week low, with third-quarter revenue exceeding expectations and returning to a year-on-year growth rate of over 20%, rising 5% after hours.
Chip stocks fell sharply. The Philadelphia Semiconductor Index fell more than 4%, approaching 3200 points to a five-month low. Intel fell 5% to a two-month low, AMD fell 5.5% to a four-week low, NVIDIA fell 4.3% close to a one-month low, ARM fell 5.6% off a two-week high, Qualcomm fell more than 4% to a five-month low, ASML's European stocks fell 2% at one point, and US stocks fell nearly 3% approaching a low for the month.
AI concept stocks collectively pulled back. C3.ai fell 7.7%, Palantir Technologies fell more than 6% to a three-week low, SoundHound.ai fell more than 5%, BigBear.ai fell nearly 4%, all hitting a one-month low.
In terms of news, thanks to the reduction in operating costs, Microsoft's third-quarter EPS profit increased by 27% year-on-year, and Azure cloud revenue exceeded expectations with a year-on-year increase of 29%, ending a two-year slowdown in growth. Google's third-quarter cloud revenue growth slowed to 22% and was lower than expected, stating that AI and search assistants will be very important development opportunities in the next ten years. Apple raised the subscription price of its TV+ service by $3 to $9.99 per month and plans to fully upgrade the AirPods product line from next year. Amazon has launched AI-based image generation technology, and both Amazon and Intel will release their earnings reports after the market closes on Thursday.
At the same time, IBM fell 0.5% to a three-month low, and its earnings report exceeded expectations, causing a 2% increase after hours. Texas Instruments, a chip stock, fell 3.5% to a three-year low since September 2020, with third-quarter revenue and fourth-quarter profit guidance both below expectations.
Chinese concept stocks followed the decline of the US stock market. ETF KWEB fell 2.6%, CQQQ fell about 2%, the Nasdaq Golden Dragon China Index (HXC) fell more than 2%, falling below 6300 points and leaving a one-week high. In the first two days of this week, it had outperformed the US stock market.
Among the Nasdaq 100 constituent stocks, JD.com fell 0.5%, Baidu fell more than 3%, Pinduoduo fell nearly 1%. Among other individual stocks, Alibaba fell more than 2%, Tencent ADR fell 1.7%, Bilibili fell nearly 4%, NIO fell 6%, Xiaopeng Motors fell 8%, and Li Auto fell 2.5%.
In terms of news, the world's third-largest automaker, Stellantis, may acquire a 20% stake in Leap Motor, and Xiaopeng Motors plans to launch assisted driving technology in Europe next year.
Bank stocks fell for six consecutive days, but the decline narrowed significantly in the final trading session. The industry benchmark, the KBW Bank Index (BKX) of the Philadelphia Stock Exchange, fell 1.6% before closing down 0.3%, hitting a new five-and-a-half-month low. It reached its lowest level in three years since September 2020, surpassing the previous low set on May 4, 2020. The KBW Nasdaq Regional Bank Index (KRX) fell 2.7% before closing down 0.8%, hitting a four-and-a-half-month low. It reached its lowest level since November 2020 on May 11. The SPDR S&amp;P Regional Banking ETF (KRE) fell 2.7% before closing down 0.4%, hitting a five-month low. It reached its lowest level since October 2020 on May 4.
Other stocks with significant changes include:
<ul>
<li>
Boeing opened 2.5% higher but then fell more than 3%, ultimately closing down 2.5% to a ten-month low. Its third-quarter total revenue and commercial aircraft revenue exceeded expectations, but its loss per share of $3.26 narrowed compared to the previous year but fell short of expectations. It also reduced its annual delivery target for the cash cow 737 Max aircraft.
</li>
<li>
Snap, the parent company of Snapchat, jumped 20% after-hours on Tuesday but then fell more than 5% on Wednesday, erasing all gains since last Monday. Its third-quarter revenue and profit exceeded expectations, but it warned that some customers had paused their advertising activities after the start of the new round of Israeli-Palestinian conflict.
</li>
<li>
The United Auto Workers (UAW) union is reportedly reaching an agreement with Ford Motor Company, which may result in an actual pay increase of more than 30%. Ford, the target of the strike, fell 1.6% before turning up more than 1%, while General Motors fell 3% before turning up 1.6%. Stellantis rose nearly 1%.
</li>
</ul>
European stocks rose across the board, with only the Italian stock index closing down. The pan-European Stoxx 600 index rose 0.04%, rebounding from a five-day decline and breaking away from a nine-and-a-half-month low. Mining stocks rose nearly 1% and led for the second consecutive day, while retail stocks fell more than 1%. Deutsche Bank rose more than 8% to a monthly high. Its third-quarter net profit fell 8% YoY but exceeded expectations. The bank also plans to accelerate shareholder dividends and warned that the next round of layoffs will be larger.
In addition, Turkey's main stock index fell 7.1%, marking the largest decline since February this year. Trading was temporarily halted twice during the day due to circuit breakers.
The yield on US long-term bonds jumped more than 12 basis points, approaching a recovery of the week's decline, and the 30-year yield rose above 5%.
Investors are evaluating the economic outlook as US bond yields collectively rise, with long-term bond yields surging more than 10 basis points.
The two-year US Treasury bond yield, which is more sensitive to monetary policy, rose the most, up 6 basis points to 5.13%, recovering nearly half of last Friday's decline. The 10-year benchmark bond yield rose 12 basis points to 4.96%, while the 30-year long-term bond yield rose over 13 basis points to approach 5.10%, returning above the 5% mark, and all are close to recovering from Monday's decline.
At the same time, the US Treasury Department auctioned $52 billion of 5-year Treasury bonds, with the bid-to-cover ratio of 2.36 indicating weak demand, which led to a decline in mid-term bond prices, and the 5-year Treasury bond yield rose above 4.90%.
US long-term bond yields jumped more than 12 basis points, with the 30-year yield returning above 5%.
European bond yields also followed suit, but concerns about economic recession kept them hovering around a one-week low.
The 10-year German bond yield, the benchmark for the eurozone, rose 6 basis points to 2.89% at the close, having risen to a high of 3.024% in early October, the highest since July 2011. The two-year yield rose 3 basis points, with the spread between the two-year and ten-year yields approaching its smallest level in half a year. The 10-year Italian bond yield, which is more heavily indebted than peripheral countries, also rose more than 6 basis points to 4.91%, and UK bond yields collectively rose more than 5 basis points.
<h2>Oil prices stop falling for three consecutive days and rise by 2%, Brent crude returns to $90, breaking free from a one-week low</h2>
International oil prices rebounded at the end of the day, ending a three-day decline. The two conflicting factors that have recently affected oil prices are the potential escalation of the Middle East conflict, which disrupts oil supplies, and concerns about demand due to pessimism about the European economy.
WTI December crude oil futures rose $1.65, or 1.97%, to $85.39 per barrel. Brent December crude oil futures rose $2.06, or 2.34%, to $90.13 per barrel.
US WTI crude oil initially fell the most in US stock trading, down $1.63 or 1.9%, hitting a low of $82, but rebounded during the afternoon session and rose above $85, breaking free from the two-week low. Brent crude also fell more than $1.30 or 1.6%, briefly falling below $87, but rebounded and rose above the $90 mark, breaking free from a one-and-a-half-week low.
Last week, US EIA crude oil inventories unexpectedly increased by 1.37 million barrels, while the expectation was a decrease of 550,000 barrels and the previous value was a decrease of nearly 4.5 million barrels, which initially widened the decline in oil prices.
Gasoline inventories also increased slightly by 150,000 barrels, expected to decrease by 100,000 barrels, and the previous value decreased by 2.37 million barrels.
After rising nearly 4%, the European benchmark TTF Dutch natural gas futures narrowed their gains, but hovered around 50 euros/megawatt-hour, while ICE UK natural gas narrowed its gains to 1.5% after rising 4%. The European Union has proposed setting methane emission limits for imported natural gas.
<h2>The US dollar reaches a weekly high, the yen falls below 150, close to a one-year low, and the offshore RMB hovers around 7.33, while Bitcoin maintains an 18-month high</h2>
The US dollar index, which measures against six major currencies, rose 0.2% to 106.50, reaching a weekly high. It had hit a one-month low of 105.35 on Monday and reached an 11-month high of 107.34 at the beginning of October. Some analysts believe that PMI data shows an increase in business activity in the United States in October, highlighting the relative economic resilience compared to the UK and the EU.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/c3ebd178-e283-4c56-b3e6-0c2f230cd084.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/c3ebd178-e283-4c56-b3e6-0c2f230cd084.jpeg"/> The US dollar reaches a weekly high, the yen falls below 150, close to a one-year low
The euro against the US dollar fell another 0.2% and remained below the 1.06 level, erasing last Friday's gains. The pound fell 0.3% and approached 1.21, hovering at a three-week low. The yen against the US dollar fell below the 150 level, approaching the one-year low set in early October. The offshore RMB once fell below 7.33 yuan, down 173 points from the previous day's close, erasing this week's gains.
Mainstream cryptocurrencies have risen for three consecutive days. The largest cryptocurrency, Bitcoin, rose nearly 3% to $34,700, breaking through the $35,000 mark for the first time since May last year on Tuesday. The second-largest cryptocurrency, Ethereum, rose more than 1% and broke through $1,790, reaching a two-month high.
<h2>Gold stops falling for two consecutive days and rises above $1,980, while London copper, aluminum, and zinc all hit a two-week high during the session</h2>
The rise in the US dollar and US bond yields for two consecutive days has put pressure on precious metals. Silver futures fell 0.5%, but COMEX December gold futures rose 0.44% to $1,994.90 per ounce.
Spot gold also expanded its gains to 0.8% after the US stock market noon, reaching a daily high of more than $16 and breaking through the $1,980 mark, stopping the two-day decline and approaching the five-month high set during last Friday's session when it attempted to break through $2,000.
Some analysts believe that geopolitical tensions and disappointing economic data in Europe have driven safe-haven buying of gold, while US data has raised expectations that the Federal Reserve will maintain high interest rates for a longer period of time, and may even raise interest rates again this year, which is not favorable for gold prices.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/eba75ac1-727e-4e0c-bffe-d1ca62260ab4.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/eba75ac1-727e-4e0c-bffe-d1ca62260ab4.jpeg"/> Gold stops falling for two consecutive days and rises above $1,980
Most London industrial metals closed higher:
<blockquote>
The economic barometer &#34;Dr. Copper&#34; fell by 0.2% but remained above the psychological level of $8,000, having briefly risen above $8,100 to a two-week high. On Monday, it had fallen to an 11-month low of $7,856.
London aluminum rose by over 1% and broke through $2,200, while London zinc rose by 1.6%, both reaching a two-week high. London lead fell by over 1% and dropped below $2,100 to a one-week low. London nickel closed slightly higher, further distancing itself from a two-year low, while London tin rose by 0.5% to a one-week high.
Some analysts believe that China's latest fiscal stimulus measures have boosted the outlook for metal demand. However, concerns about higher long-term interest rates in Europe and the United States, as well as the weakness in global manufacturing, remain the main risks for industrial metals. These factors not only weigh on industrial metal consumption but also dampen investor sentiment due to the strength of the US dollar. In addition, London lead inventories have further increased to the highest level since March 2021, while London nickel inventories have dropped to the lowest level since early September.
</blockquote>

GOOGL

GOOG

The S&P 500 index fell more than 1%, closing below 4,200 points for the first time since May, reaching its lowest level since the end of May. The chip index and NVIDIA both fell more than 4%, while Intel and AMD fell 5%. Meta fell more than 4% in the earnings report, but rose 5% after-hours due to positive news. The Chinese concept index fell more than 2%, NIO fell 6%, and XPeng fell 8%. The price of US long-term bonds plummeted, with the 30-year yield rising above 5%. The US dollar reached its highest level in a week, and the Japanese yen fell below 150, approaching a one-year low. Offshore renminbi hovered around 7.33 yuan, and Bitcoin maintained its 18-month high. However, commodities rose across the board, with oil prices stopping a three-day decline and rising 2%. Brent crude returned to $90, breaking away from its lowest level in over a week, and gold stopped a two-day decline and rose above $1,980. London copper, aluminum, and zinc all hit a two-week high during trading.

Wallstreetcn

Alphabet

Alphabet - C

The Nasdaq plummeted 2.4%, marking its worst performance in eight months. Google's stock fell over 9%, its worst in three and a half years. Meanwhile, long-term bond yields surged more than 10 basis points.