Market continues to focus on whether the US Congress can resolve the budget negotiation differences before October 1st to avoid a government shutdown. There are reports that the US government shutdown is almost certain, and moderate members of Congress are trying to shorten the shutdown time.
The PCE Personal Consumption Expenditures Price Index, which is the most favored inflation indicator by the Federal Reserve, will be released on Friday. It is expected that the core PCE index will increase by 0.2% MoM, unchanged from the previous value, and increase by 4% YoY, cooling down from the previous value of 4.2%, but still double the Federal Reserve's inflation target.
In the real estate market, the S&amp;P CoreLogic Case-Shiller Index shows that US house prices rose for the sixth consecutive month in August, leading to a rush to buy due to limited inventory. However, new home sales in August fell by 8.7% MoM, lower than expected, hitting a five-month low. High interest rates have deterred buyers.
At the same time, the US Conference Board Consumer Confidence Index for September unexpectedly fell to a four-month low of 103, reflecting consumers' expectations for the next six months' outlook dropping to 73.7, below the level of 80 consistent with an economic recession, due to the impact of economic and labor market deterioration.
This year, FOMC voting member and Minneapolis Fed President Kashkari said that there is a 60% chance of a soft landing in the US, supporting a 25 basis point rate hike before the end of the year. Jamie Dimon, CEO of JPMorgan Chase, the largest bank in the US by assets, also warned that the Federal Reserve may need to raise interest rates even higher to curb inflation, which has significantly suppressed market risk sentiment.
President Biden visited Michigan to boost morale for striking workers and support the UAW's demand for a 40% pay increase. Barclays warned that the strike by US auto workers will increase the upward risk of inflation.
US stocks hit a four-month low, with the Dow Jones Industrial Average closing below the 200-day moving average for the first time since May, and Amazon leading the decline in technology stocks, falling by 4%.
On Tuesday, September 26th, US bond yields remained at a more than ten-year high. Coupled with Moody's warning that a US government shutdown will have a negative impact on credit ratings, US stocks opened lower and continued to decline. Within the first half hour of trading, the tech sector, which is sensitive to interest rate hikes, led the decline, with the Nasdaq falling more than 1%.
The Dow Jones Industrial Average fell nearly 440 points or 1.3%, breaking through the key technical level of the 200-day moving average. The S&amp;P 500 Index fell 1.6%, falling below the 4,300 level for the first time since June 9th, with all 11 sectors declining, with telecommunications, consumer discretionary, and technology stocks leading the decline. The Nasdaq fell 1.8% and briefly approached the 13,000 level, and the Russell small-cap stocks also fell more than 1%.
In the end, major US stock indexes all fell more than 1% and closed near the daily lows, returning to a downward trend after several days. The Dow Jones Industrial Average hit its lowest level in nearly four months since June 6th and its largest single-day decline since March, and closed below the 200-day moving average for the first time since May. The S&amp;P 500 hit its lowest level since June 7th, while the Nasdaq and Russell small-cap stocks hit their lowest levels since May 31st. The small-cap stocks had just ended a six-day losing streak yesterday:
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The S&amp;P 500 Index fell 63.91 points, or 1.47%, to 4,273.53. The Dow Jones Industrial Average fell 388 points, or 1.14%, to 33,618.88.
The Nasdaq fell 207.71 points, or 1.57%, to close at 13,063.61. The Nasdaq 100 dropped 1.51%, while the Russell 2000 small-cap index fell 1.27%. The &#34;fear index&#34; VIX surged 12% and approached 19, reaching its highest level in four months.
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US stocks hit their lowest level in about four months, with the Dow Jones Industrial Average closing below its 200-day moving average for the first time since May.
All 11 sectors of the S&amp;P 500 suffered losses, with the utilities sector down 3%, consumer discretionary down 2%, information technology/tech down 1.8%, telecommunications services down 1.3%, and energy down 0.5%, the smallest decline.
Bank of America customers have been net buyers of US stocks for the eighth consecutive week, but retail investors dominate the inflows, while &#34;smart money&#34; such as hedge funds and institutional clients are selling. In September, the S&amp;P 500 has fallen more than 4%, on track for its second consecutive monthly decline, while the Nasdaq has fallen more than 6%, both on track for their worst performance since December last year. The Dow, which is dominated by blue-chip stocks, has fallen 2%, and the hawkish interest rate outlook from the Federal Reserve continues to weigh on risk sentiment.
Tech giants are all falling. &#34;Metaverse&#34; company Meta fell 0.6%, Tesla fell more than 2% and then 1%, Google Class A fell about 2%, all returning to a one-month low; Apple fell 2.3%, Netflix fell 1.4%, Microsoft fell 1.7%, all hitting a four-month low; Amazon fell 4% to a three-month low.
Chip stocks fell across the board, with the Philadelphia Semiconductor Index falling 1.8% to a four-month low. Intel fell 1.3% to a one-month low, AMD fell 1.5% to a four-and-a-half-month low, Nvidia rose 1.4% before falling 0.7%, ending a two-day rally and retesting a six-week low; Arm fell 1.7%, approaching the all-time low set last Friday, after a six-day decline.
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The market value of the seven largest tech stocks has collectively fallen by $1 trillion from their peak in July.
AI concept stocks continue to decline. C3.ai fell 3% to a four-and-a-half-month low, Palantir Technologies fell 1.8% to a three-month low, SoundHound.ai fell 8.6% to a six-month low, and BigBear.ai fell 4.5% to a nearly nine-month low.
In terms of news, Microsoft is developing a low-cost AI model to mimic the quality of OpenAI models. The Federal Trade Commission (FTC) and attorneys general from 17 states have sued Amazon, accusing it of lowering quality, raising prices, and monopolizing competition against shoppers. European trade officials have stated that Tesla and other European automakers importing cars from China will face investigations into unfair subsidies.
OpenAI is seeking to sell its existing shares, with a valuation of up to $90 billion, which is about three times the valuation at the beginning of this year.
Popular Chinese concept stocks continue to decline in the US stock market, and the decline expands in the late trading session. ETF KWEB fell 1.4%, CQQQ fell about 1%, the Nasdaq Golden Dragon China Index (HXC) fell 0.9%, approaching the two-and-a-half-month low set last week.
Among the Nasdaq 100 constituents, JD.com fell 2.5%, Baidu fell 0.8%, and Pinduoduo fell nearly 3%. In other stocks, Alibaba fell 1.5%, Bilibili fell more than 1% and closed down 0.4% after falling 1%, Tencent ADR fell 1.6%, NIO turned up nearly 1% to break away from the four-month low, Li Auto fell 1.6% to refresh the three-month low, and XPeng fell 2.6%. In terms of news, Alibaba plans to spin off Cainiao for independent listing on the main board of the Hong Kong Stock Exchange, and Alibaba Cloud launches one-stop large-scale model development services in overseas markets.
Bank stocks fell for the seventh day in the past eight days. The industry benchmark Philadelphia Stock Exchange KBW Bank Index (BKX) fell 1.6% to return to a three-month low, which was the lowest since October 2020 on May 4. The KBW Nasdaq Regional Bank Index (KRX) fell 1.5%, approaching the three-month low set last Friday, and hit the lowest level since November 2020 on May 11; the SPDR S&amp;P Regional Banking ETF (KRE) fell 1.6%, hitting the lowest level since October 2020 on May 4. The &#34;Big Four&#34; banks in the United States all fell more than 1%, with Citigroup and Wells Fargo falling 2%.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/8aac0e39-5339-4301-b898-21453e77220b.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/8aac0e39-5339-4301-b898-21453e77220b.jpeg"/> The US banking index fell more than 1% to a three-month low
In addition, online grocery store Instacart fell 1.65% to $29.89, marking its first closing below the IPO price of $30 since its US IPO on September 19.
European stocks fell across the board except for the UK stock index. The pan-European Stoxx 600 index fell 0.59%, falling for the fourth consecutive day to the lowest level in nearly three months since July 7, with technology stocks leading the decline by 2% and automotive stocks falling more than 1%. The Italian and German stock indexes performed the worst, falling by about 1%, and the Italian banking index fell nearly 2%. The UK stock market, which has many exporters, was boosted by the pound hitting a six-month low and closed slightly higher.
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<h2>The two-year US Treasury yield fell in the late trading session, while the long-term yield reached a new high in more than a decade, and European bond yields remained high</h2>
The US bond yields fell slightly at the beginning of the US stock market and rose again after noon. The two-year yield, which is more sensitive to monetary policy, rose by a maximum of 2.6 basis points and approached 5.16%, closer to the highest level since 2006 set last week. The US stock market fell slightly to 5.13% in the late trading session.
The yield on 10-year government bonds also rose by more than 2 basis points to 4.57%, reaching the highest level since October 18, 2007. The yield on 30-year long-term bonds rose by 4 basis points to 4.70%, reaching the highest level since February 2011.
The benchmark 10-year German bond yield in the eurozone rose by 1 basis point to 2.81% at the end of the day, reaching the highest level in twelve years since late 2011. The 2-year yield fell to 3.23% at the end of the day, after reaching 3.36% last Thursday, the highest level in six months since March 9. The 30-year yield crossed the psychological level of 3%, hovering at the highest level since October 2011.
The yield on 10-year Italian bonds, which measure the risk sentiment, rose by more than 4 basis points to 4.70%, reaching the highest level since October last year. The spread between Italian and German bond yields exceeded 190 basis points, the widest in four and a half months since mid-May. The long-term UK bond yield rose slightly, while the 2-year yield fell slightly, approaching a new low of over three months since June 13.
Some analysts believe that against the backdrop of weak growth prospects, the Italian Prime Minister plans to announce the latest budget plan, which may raise the budget deficit target for 2024 to 4.1% to 4.3% of GDP. At the same time, the rise in oil and European natural gas prices has intensified concerns about a new round of inflationary pressures. The European Central Bank's increased focus on reducing excess liquidity and other factors will increase pressure on peripheral bond markets.
<h2>Oil prices rebound from two-week lows, US oil back above $90, European natural gas ends five-day rally</h2>
International oil prices rebounded during US stock trading, moving away from two-week lows. WTI November crude oil futures closed up $0.71, or 0.79%, at $90.39 per barrel. Brent November futures closed up $0.67, or 0.72%, at $93.96 per barrel.
US WTI oil briefly fell below $89 and approached $88, with the deepest decline of $1.48 or 1.7%, before rebounding and returning above the psychological level of $90. The more actively traded Brent December futures briefly approached $90 or the deepest decline of 1.6%, before rebounding and returning above $92. The November futures, which are about to expire, rebounded and rose above $94, after previously falling below the two key levels of $93 and $92.
In the third quarter, US oil prices rose by more than 26%, while Brent crude prices rose by about 24%, both on track to achieve the largest increase since the first quarter of 2022. Moreover, both oil prices are expected to see cumulative increases in each month of the third quarter. This is mainly due to the prospect of supply shortages outweighing concerns about economic uncertainty and oil demand during a period of high interest rates. However, some analysts are concerned that a potential US government shutdown may hinder Brent crude from reaching $100.
Due to the bleak outlook for demand, European natural gas prices ended a five-day rally, with the TTF Dutch natural gas futures falling more than 7% at the close, dropping below the 40 euro/megawatt-hour level, losing the one-month high. ICE UK natural gas fell more than 11% to the 100 pence/therm level.
<h2>The US dollar hits a ten-month high, while the euro and pound hit a six-month low, the yen hits an 11-month low, and the offshore renminbi rises above 7.31 yuan</h2>
The US dollar index, which measures against six major currencies, rose 0.2% during US stock trading and held above the 106 level, hitting a ten-month high since the end of November last year. It has been on a ten-week consecutive rise. It rose 2% in September, marking the best monthly performance since May; and it has risen 2.7% so far in the third quarter, heading towards the largest quarterly gain since last year.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/c6354114-3d2b-4d55-91ed-90225730ea26.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/c6354114-3d2b-4d55-91ed-90225730ea26.jpeg"/> The US dollar has risen for five consecutive days, hitting a ten-month high
The euro against the US dollar further fell below 1.06, hitting the lowest level in over six months since mid-March. The pound fell below 1.22 for the first time since March, hitting a six-month low. It has fallen 3.7% in September, marking the worst monthly performance in a year. Analysts believe that the prospect of stable interest rates in the UK and Europe, while the possibility of another rate hike by the Federal Reserve, is putting pressure on European currencies.
The yen against the US dollar fell below the 149 level, hitting the lowest level in 11 months since late October last year. The Japanese Finance Minister issued a warning for the second time in a day. Previously, Wall Street predicted that if the yen fell to 150, it would trigger intervention by the central bank. The offshore renminbi rose above 7.31 yuan during the trading session, but still remained at a two-week low.
Mainstream cryptocurrencies are generally falling. Bitcoin, the largest cryptocurrency by market capitalization, fell below $26,200, while the second-largest Ethereum fell below $1,590, both hovering at two-week lows. In the third quarter, they have fallen by 14% and 18% respectively.
<h2>Spot gold fell below $1,900 for the first time in five weeks during the trading session, while copper hit a nearly four-month low and nickel hit a more than one-year low</h2>
The strength of the US dollar and US bond yields for two consecutive days has put pressure on gold prices. COMEX December gold futures fell by 0.87% to $1,919.80 per ounce. Spot gold fell by nearly $17 or 0.9%, falling below the psychological level of $1,900 for the first time since August 23, hitting a five-week low.
According to analysts, gold has not yet been positioned as a safe-haven asset, and its recent movements are still closely related to interest rate hikes. If Friday's PCE inflation is higher than expected, it will bring further downward pressure. Only when the market is concerned about excessive tightening by the Federal Reserve leading to a significant deterioration in the economy, will it be positive for the price of gold.
Spot gold fell below $1900 for the first time in five weeks during intraday trading.
London industrial metals showed mixed performance. &#34;Dr. Copper,&#34; which fell nearly 1% yesterday, fell another 0.7% and dropped below $8100, hitting the lowest level in nearly four months since early June. This is due to concerns about increased inventories and the dampening effect of global interest rate hikes on demand.
London aluminum slightly rebounded, approaching a one-and-a-half-month high again. London zinc, which fell more than 1% yesterday, fell another 0.8% to a one-week low. London lead rose slightly, moving away from a three-week low. London nickel, which fell 1.5% yesterday, fell another 1.3% and dropped below $19,000, hitting the lowest level in over a year since July last year. London tin, which fell 1.4% yesterday, rebounded by 0.5% and rose above $26,000, moving away from a one-week low.

AMZN

Concerns over the US federal government shutdown and JPMorgan CEO's warning that the Federal Reserve needs to raise interest rates further to curb inflation have dampened market sentiment. US stocks fell for the fifth consecutive day, with the Dow Jones Industrial Average dropping nearly 400 points, marking the largest decline in six months and the first time in four months that it closed below the 200-day moving average. The S&P 500 fell below 4,300 points. Apple, Microsoft, and Netflix all hit four-month lows, while Instacart went public and experienced a first-week decline. US bank stocks fell 1.6%, reaching a three-month low, and Chinese concept stocks fell nearly 1%. Ideal Auto hit a three-month low, while XPeng fell over 2%, but NIO rebounded. The 10-year US Treasury yield continued to reach its highest level since 2007, and the 30-year yield reached its highest level since 2011. The US dollar reached a ten-month high, while the euro and pound sterling hit a six-month low and the yen fell below 149 to an 11-month low. Offshore renminbi rose above 7.31 yuan. Oil prices rebounded from a two-week low, with US oil rising above $90 and spot gold falling below $1,900 for the first time in five weeks.

US stocks hit a four-month low, with Amazon falling 4%, and US bond yields reaching their highest level in over a decade.