U.S. PPI m/m inline at 0.2%. Core PPI m/m inline at 0.2%. Japanese Core Machinery Orders m/m at 6.8% vs expected -3.9%. Risk aversion fears escalated on Wednesday as markets plunged, Yen remained strongly bid against the Dollar. USDJPY down -0.76%, $112.09.
Euro up 0.37%, $1.1533. U.K. GDP m/m at 0.0% vs expected 0.1%. Manufacturing Production m/m at -0.2% vs expected 0.1%. In Brexit, Barnier claimed that near the 85% of the Brexit deal has been agreed, although adding that they still need to agree on the Irish border issue. Furthermore, he said that the EU found many points of convergence with UK PM May’s Chequers plan. Sterling up 0.46%, $1.3205. Hurricane Michael made landfall in the Florida Panhandle as a Category 4 storm. The storm has disrupted crude production in the Gulf of Mexico, but oil prices fell notably on Wednesday nonetheless, retreating from the four-year high hit earlier this month. WTI crude dropped 2.5% to $73.09/bbl. USDCAD up 0.82%, $1.3053.
S&P 500 down -3.29%, 2,785.68. Nasdaq down -4.44%, 7,044.50. Nikkei down -3.24%, 22,757.00.
Stocks tumbled on Wednesday as bond yields held steady at multi-year highs and amid continued concerns about economic and earnings growth prospects. FANG names, which have been key leadership stocks for this bull market, got pummelled on Wednesday; Netflix (NFLX 325.89, -29.82) lost -8.4%, Amazon (AMZN 1755.25, -115.07) lost -6.2%, Facebook (FB 151.38, -6.52) lost -4.1%, Apple (AAPL 216.36, -10.51) lost -4.6%, and Alphabet (GOOG 1081.22, -57.60) lost -5.1%.
Interestingly, the equity sell off did not lead to higher demand for “risk-free” U.S. Treasuries. In fact, bonds declined with stocks on Wednesday, with investors presumably opting to go to cash instead. The benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, advanced two basis points to 3.23%, closing near a seven-year high
