Yields on ten-year Treasuries broke the 5%-mark again briefly on Monday before tumbling overnight, putting pressure on stock markets with major indices around the globe trading mixed at the start of the week following heavy losses last week. The focus this week will be on quarterly earnings from Big Tech firms with Alphabet and Microsoft due to report on Tuesday. Later in the week, investors will shift their attention toward the US economy with third-quarter gross domestic product due on Thursday and personal consumption expenditures expected on Friday.
Yields on ten-year Treasuries were above 5% for a short while on Monday, the second time in less than a week. The yield on ten-year US government debt reached as high as 5.02% before tumbling rapidly overnight. Tuesday morning the yield was around 4.84% again. Treasury yields have skyrocketed in recent months, with the ten-year note adding more than 150 basis points since May.
In the Asia-Pacific region, stock markets were mostly making gains on Tuesday. In Tokyo, the Nikkei 225 was up 0.2% after the country’s Purchasing Managers’ Index (PMI) contracted for the first time since 2022. PMI was 49.9 in October, down from 52.1 a month earlier. In South Korea, the Kospi was up 0.9% and Australia’s S&P/ASX 200 gained 0.2%. Hong Kong's Hang Seng Index was the only major index in the region trading in the red on Tuesday, down 0.8%. In mainland China, the Shanghai Composite gained 0.2%.
In New York, the major stock indices were mixed with the indices on the Nasdaq faring the best on Monday. The Dow Jones Industrial fell 0.6% adding to its 1.6% losses from last week and reaching its lowest level since May. The S&P 500 was down 0.2%. The Nasdaq-100 gained 0.3% with traders focuses on the release of quarterly earnings by several tech companies this week.
In individual stocks, oil major Chevron announced it will purchase energy company Hess for USD 53 billion. The purchase comes after US rival Exxon announced its own acquisition plans for Pioneer Natural Resources, a top shale producer. While European counterparts have focused on the shift towards renewable energies, US energy companies have continued to invest heavily in fossil fuels and have used proceeds of high oil prices to acquire larger shares of the hydrocarbon energy market. Both Chevron and Hess shares ended Monday’s session in the red.
In other assets, Bitcoin spiked on Monday reaching its highest level versus the US dollar in more than a year on speculation about the prospects of US authorities approving a bitcoin exchange-traded fund. Bitcoin was trading at more than USD 34,000 on Tuesday morning.
Macroeconomic data out of Europe remained bleak to start the week. Consumer confidence in the euro area slipped 0.1 points in October when compared with the previous month, according to data released Monday. The Consumer Confidence Indicator came in at minus 17.9 points for the euro area. It was minus 18.7 points for the whole European Union, unchanged from last month. Both of those values are well below the indicator’s long-term average, underscoring the fragile state of the economy in Europe. The EuroStoxx 50 bounced back 0.4% on Monday after suffering a losing streak last week.
Corporate news in focus: Earnings and revenue figures from Logitech, Novartis, Sandoz, SIG, Orange, UniCredit, Puma, Barclays, Anglo American, General Electric, General Motors, Coca-Cola, Verizon, Microsoft, Snap, Visa, Alphabet, Halliburton.
Economic data in focus: Germany’s GfK Consumer Climate (08:00 CET), UK labour market data (08:00), French PMI (09:15), German PMI (09:30), UK PMI (10:30), US PMI (15:45), Richmond Fed Manufacturing Index (16:00).
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.