CURRENCY MARKET WRAP 

As of Thu Oct 17th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.30%, 97.99
USDJPY, -0.17%, $108.68
EURUSD, +0.39%, $1.1076
GBPUSD, +0.26%, $1.2821
USDCAD, +0.03%, $1.3203
AUDUSD, +0.05%, $0.6757
NZDUSD, -0.10%, $0.6288

U.S. Retail Sales declined 0.3% month-over-month in September (consensus +0.3%) following an upwardly revised 0.6% increase (from +0.4%) in August. Excluding autos, retail sales declined 0.1% (consensus +0.2%) after increasing an upwardly revised 0.2% (from 0.0%) in August. Upward revisions for August cushioned some of the headline blow, yet the key takeaway from the report is that it highlights some relatively conservative consumer spending activity in September that will feed into the slowdown narrative building for the U.S. economy.

U.S. Treasuries finished the session on a higher note, leaving yields slightly lower. The 2-yr yield and the 10-yr yield both declined two basis points each to 1.59% and 1.75%, respectively. The U.S. Dollar Index declined 0.3% to 98.02.

In trade, China threatened unspecified countermeasures against the U.S. after the House of Representatives approved legislation to support pro-democracy protesters in Hong Kong. The Senate has yet to vote on the measures, but the situation could complicate the completion of the first phase of a trade deal with the U.S.

STOCK MARKET WRAP 

S&P500, -0.20%, 2,989.69
Nasdaq, -0.30%, 8,124.18
Nikkei Futures, +1.20%, 22,467.5

Wall Street finished little changed on Wednesday, as investors weighed negative macro news against another set of mostly positive earnings results. The positive reaction to today’s batch of earnings reports was limited to shares of companies that reported, namely Bank of America (BAC 30.18, +0.45, +1.5%), United Airlines (UAL 89.70, +1.82, +2.1%), and J.B. Hunt Transport Services (JBHT 115.65, +4.05, +3.6%), as opposed to Tuesday’s earnings-driven rally. Eight of the 11 S&P 500 sectors closed near their flat lines.

In other potential deals, General Motors (GM 36.65, +0.39, +1.1%) and the UAW reached a tentative agreement that could end the monthlong strike at GM. McKesson (MCK 144.84, +6.67, +4.8%), Cardinal Health (CAH 49.07, +1.17, +2.4%) and AmerisourceBergen (ABC 86.05, +2.85, +3.4%) began talks to settle opioid litigation for $18 billion, according to The Wall Street Journal.

Netflix soared more than 10% in extended trading Wednesday after the company released its earnings report for the third quarter. The company reported mixed results, with an earnings beat and a miss on domestic subscriber adds, while revenue slightly missed analysts’ expectations. Earnings per share: $1.47 vs. $1.04 expected. Revenue: $5.24 billion vs. $5.25 billion expected. Domestic paid subscriber additions: 517,000 vs. 802,000 expected. International paid subscriber additions: 6.26 million vs. 6.05 million expected.

CURRENCY MARKET WRAP 

As of Wed Oct 16th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.14%, 98.31
USDJPY, +0.38%, $108.81
EURUSD, +0.05%, $1.1034
GBPUSD, +1.21%, $1.2760
USDCAD, -0.21%, $1.3205
AUDUSD, -0.32%, $0.6753
NZDUSD, -0.06%, $0.6295

U.S. Empire State Manufacturing Survey for October, increased to 4.0 (consensus -1.0) from 2.0. Trade news continued to make headlines, although the muted reaction likely reflected some exhaustion to trade speculation. “People familiar with the matter” told Bloomberg News that China may struggle fulfilling part of its agreement to purchase $50 billion of U.S. agricultural goods unless Trump lifts retaliatory tariffs.

U.S. Treasuries finished near their session lows, leaving yields slightly higher. The 2-yr yield increased one basis point to 1.61%, and the 10-yr yield increased two basis points to 1.77%. The U.S. Dollar Index declined 0.14% to 98.31. WTI crude declined 1.4%, or $0.76, to $53.55/bbl.

With 16 days left before the UK is scheduled to leave the European Union, a Brexit deal is in sight, but its important for investors to tread cautiously because of the inevitable resistance from the DUP and reports from “senior EU officials” that its “way too premature” to assume that a Brexit deal is imminent. Johnson will still have to win over parliament – including the Democratic Unionist party (DUP) and the hardline Tory Brexiters of the European Research Group (ERG) – on the basis that, under the deal, Northern Ireland will still legally be within the UK’s customs territory. Nonetheless sterling and many other major currencies traded sharply higher today on reports that EU and UK Brexit negotiators are close to a deal after Boris Johnson agreed to have a customs border down the Irish Sea.

STOCK MARKET WRAP 

S&P500, +1.00%, 2,995.68
Nasdaq, +1.24%, 8,148.71
Nikkei Futures, +1.86%, 22,497.5

The S&P 500 rose 1.0% on Tuesday, as JPMorgan Chase (JPM 119.96, +3.51, +3.0%), UnitedHealth (UNH 238.59, +18.00, +8.2%), and Johnson & Johnson (JNJ 132.84, +2.12, +1.6%) kicked off the third quarter reporting season with better-than-expected earnings results.

Most of today’s advance came in the early going. The S&P 500 opened just 0.3% higher, and it quickly pushed to session highs amid news that the EU and UK are nearing a draft Brexit deal and that General Motors (GM 36.26, +0.76, +2.1%) and the UAW could also reach a deal soon. Although nothing was finalized, the optimism helped solidify a risk-on mindset following today’s batch of better-than-feared earnings results.

Elsewhere, the Philadelphia Semiconductor Index (+2.2%) set a new all-time high on Tuesday. 29 of its 30 components finished higher, with NVIDIA (NVDA 196.37, +9.84, +5.3%) advancing the most after its price target was raised to $250 from $225 at Bank of America/Merrill Lynch.

CURRENCY MARKET WRAP 

As of Tue Oct 15th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.02%, 98.45
USDJPY, -0.06%, $108.40
EURUSD, -0.02%, $1.1026
GBPUSD, -0.06%, $1.2609
USDCAD, +0.18%, $1.3227
AUDUSD, -0.29%, $0.6775
NZDUSD, -0.38%, $0.6304

U.S., Canadian and Japanese banks were closed on Monday.

Last week featured a torrent of headlines related to trade negotiations between officials from China and the U.S., so it wasn’t too surprising that the market remained focused on what was and wasn’t accomplished during Friday’s talks. Overnight reports in Chinese media spoke about last week’s negotiations in conservative terms, prompting worries that the signing of the “phase one” deal will remain elusive. These worries weighed on equity futures in early-morning trade, but a recovery took place after Trump and Treasury Secretary Mnuchin reiterated that the partial deal will be finalised and signed in time for the Asia-Pacific Economic Cooperation summit in Chile in mid-November.

The Monetary Authority of Singapore (MAS) is reducing the pace of the Singapore dollar’s appreciation “slightly”, in line with market expectations amid subdued growth and low inflation. MAS said it would lower slightly the slope of the Singapore dollar’s policy band, known as the nominal effective exchange rate or S$NEER, a shallower easing than some had expected (hence SGD strengthened). The width and level at which the band was centred were left unchanged. The last time MAS eased policy was in April 2016 when it was set at 0% on cloudy growth and inflation outlook.

STOCK MARKET WRAP 

S&P500, -0.14%, 2,966.15
Nasdaq, -0.10%, 8,048.65
Nikkei Futures, -0.02%, 22,087.5

The major averages began the week on a quiet note. The S&P 500 shed 0.14% after spending the day in a ten-point range. Nine out of eleven sectors settled in the red, but only three sectors—materials (-0.8%), utilities (-0.7%), and consumer staples (-0.4%)—lost more than 0.2%. On the flip side, financials (+0.1%) and real estate (+0.1%) eked out slim gains.

Bank stocks like Citigroup (C 70.24, +0.14, +0.2%), Goldman Sachs (GS 205.82, +1.14, +0.6%), JPMorgan Chase (JPM 116.45, +0.31, +0.3%), and Wells Fargo (WFC 49.27, +0.06, +0.1%) outperformed modestly leading up to the release of their Q3 results tomorrow morning.

CURRENCY MARKET WRAP 

As of Mon Oct 14th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.41%, 98.30
USDJPY, +0.42%, $108.42
EURUSD, +0.33%, $1.1042
GBPUSD, +1.66%, $1.2649
USDCAD, -0.71%, $1.3198
AUDUSD, +0.40%, $0.6789
NZDUSD, +0.30%, $0.6339

U.S. Import prices were up 0.2% m/m in September, fuel import prices were up 2.1%, and nonfuel import prices were down 0.1%. Export prices were down 0.2%, agricultural export prices were down 1.8%, and non-agricultural export prices were down 0.1%. The key takeaway from the report is that it shows a lack of inflation pressure for both import and export prices. The preliminary University of Michigan Consumer Sentiment Index for October checked in at 96.0 (consensus 89.9), up from the final reading of 93.2 for September. Real income expectations rose to their highest level in two decades. That’s a good portent for consumer spending activity.

The second day of trade talks between representatives from China and the U.S. started with considerable optimism, which President Trump made sure to highlight in a morning tweet. The first two hours of the session saw an aggressive rally that was paced by cyclical sectors, and briefly lifted the S&P 500 above its high from October 1. The benchmark index hit a session high shortly after the Federal Reserve confirmed what Fed Chairman, Jay Powell, signalled earlier this week.

Starting Tuesday, the Federal Reserve will begin purchasing Treasury bills at a pace of $60 bln per month. The purchases will continue into the second quarter of next year or longer. In addition to these purchases, the Fed will continue conducting regular overnight and term repurchase operations through at least January. The Fed noted that it is looking to return bank reserves to a level that was seen in early September. The program, which is aimed at steepening the yield curve by pressuring Treasury bill yields, was foreshadowed by the September FOMC Statement and Fed Chairman Powell’s remarks made on Monday and Tuesday.

Risk assets backed off its session high in midday trade, but received a midday boost after Bloomberg reported that a partial trade deal was reached at Friday’s meeting. The report, which made the rounds before Trump’s meeting with China’s Vice Premier Liu He, said that the deal calls for increased agricultural concessions from China in exchange for some tariff relief. Trump later said that a “very substantial phase 1 deal” has been reached that covers intellectual property, financial services, and agricultural purchases.

STOCK MARKET WRAP 

S&P500, +1.09%, 2,970.27
Nasdaq, +1.34%, 8,057.04
Nikkei Futures, +1.30%, 21,800.0

The major averages ended a bumpy week on a higher note. The S&P 500 gained 1.1% to end the week higher by 0.6% while the Nasdaq (+1.3%) outperformed, rising 0.9% for the week. Small caps had an even better showing today as the Russell 2000 rose 1.8%, climbing 0.8% for the week.

Even with the weak finish, eight sectors recorded gains. Cyclical sectors held the lead throughout the day with industrials (+2.0%), materials (+1.9%), technology (+1.5%), energy (+1.4%), and financials (+1.3%) ending ahead of the broader market. Conversely, rate-sensitive utilities (-0.4%), real estate (-0.3%), and consumer staples (-0.1%) underperformed as Treasury yields rose amid the improvement in risk tolerance.

CURRENCY MARKET WRAP 

As of Fri Oct 11th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.43%, 98.69
USDJPY, +0.37%, $107.86
EURUSD, +0.35%, $1.1009
GBPUSD, +1.85%, $1.2432
USDCAD, -0.33%, $1.3289
AUDUSD, +0.58%, $0.6764
NZDUSD, +0.52%, $0.6326

U.S. Total CPI was unchanged m/m in September (consensus +0.1%) while core CPI, which excludes food and energy, was up 0.1% (consensus +0.2%).

In trade, Trump on Thursday hinted at progress in his high-stakes trade battle with China, saying talks with Beijing’s envoy had gone well. The new signs of comity were an abrupt improvement after a week in which Washington blitzed Beijing with aggressive policy measures and talks appeared headed for a dead end, just days before US duties on US$250 billion in Chinese imports are due to rise. Risk assets were bid, with investors buoyed by hopes that at least escalation might be averted even if an overarching resolution was beyond reach. Myron Brilliant, head of international affairs at the US Chamber of Commerce, told reporters on Thursday he had spoken with both sides and that an agreement on currency could emerge this week.

The 2-yr yield (1.53%) and the 10-yr yield (1.66%), which both rose seven basis points, initially started to sell off after yr/yr changes in consumer prices reflected a firming of consumer inflation. The U.S. Dollar Index fell 0.4% to 98.69. WTI crude rose 1.8% (+$0.94) to $53.57/bbl.

STOCK MARKET WRAP 

S&P500, +0.64%, 2,938.13
Nasdaq, +0.60%, 7,950.78
Nikkei Futures, +1.20%, 21,697.5

Wall Street ended Thursday on a positive note, as investors looked ahead to a supposed meeting between Trump and China’s Vice Premier, Liu He, today. A tweet from Trump in which he said he will meet with the Vice Premier at the White House on Friday quickly sent stocks higher and U.S. Treasuries even lower. Ten of the 11 S&P 500 sectors finished in positive territory, with the energy (+1.3%) and financial (+1.0%) sectors advancing the most. The utilities sector (-0.1%) was the lone holdout amid the higher Treasury yields.

Notable large-cap movers included Cisco Systems (CSCO 46.15, -0.69, -1.5%), Netflix (NFLX 280.48, +12.95, +4.8%), and Delta Air Lines (DAL 53.10, -0.82, -1.5%). Cisco was downgraded to Neutral from Buy at Goldman Sachs. Netflix brushed off two more analyst price cuts. Delta Air Lines guided Q4 EPS with a midpoint that was below expectations.

Outsized moves belonged to Bed Bath & Beyond (BBBY 12.09, +2.15, +21.6%) and PG&E (PCG 7.79, -3.19, -29.1%). Bed Bath & Beyond appointed former Target (TGT 110.57, +0.21, +0.2%) executive Mark Tritton as its President and CEO. In PG&E’s case, a bankruptcy judge decided to allow other parties to put forth a Chapter 11 restructuring plan for the company.

CURRENCY MARKET WRAP 

As of Thu Oct 10th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.02%, 99.11
USDJPY, +0.03%, $107.11
EURUSD, +0.28%, $1.0987
GBPUSD, -0.05%, $1.2213
USDCAD, +0.13%, $1.3342
AUDUSD, -0.23%, $0.6714
NZDUSD, -0.25%, $0.6282

U.S. Wholesale inventories increased 0.2% m/m in August (consensus +0.4%), on top of an unrevised 0.2% increase in July. Wholesale sales were flat in August after increasing 0.2% in July. It could prove difficult for wholesalers to gain pricing power given that inventory growth remains well ahead of sales growth on a yr/yr basis. August Job Openings and Labor Turnover Survey showed that job openings declined to 7.051 million from a revised 7.174 million in July (from 7.217 million).

In trade, China is still open to reaching a partial deal with the US, an official with direct knowledge of the talks said, signalling that Beijing is focused on limiting the damage to the world’s second-largest economy. The reported terms included China agreeing to buy more agricultural products from the U.S. in exchange for no further tariff increases on goods imported from China. Bloomberg received this information from an unnamed official with “direct knowledge of the talks,” and the Financial Times followed up with news that Beijing could increase its soybean purchases by 10 million tons annually.

U.S. Treasuries finished the session on a lower note. The 2-yr yield increased four basis points to 1.46%, and the 10-yr yield increased five basis points to 1.59%. The U.S. Dollar Index finished little changed at 99.11. WTI crude declined 0.1% (-$0.03) to $52.63/bbl.

STOCK MARKET WRAP 

S&P500, +0.91%, 2,919.40
Nasdaq, +1.02%, 7,903.74
Nikkei Futures, -1.14%, 21,372.5

S&P 500 gained 0.91% on Wednesday after a report indicating China’s willingness to reach a partial trade deal seemingly improved investor sentiment.

Despite the caveat that structural trade issues were reportedly not in China’s interest to resolve this week, all 11 S&P 500 sectors were undeterred for most of the day. The information technology sector (+1.5%) led all sectors in gains, with the other ten groups rising between 0.3% (real estate) and 1.1% (energy).

CURRENCY MARKET WRAP

As of Wed Oct 9th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.12%, 99.09
USDJPY, -0.33%, $106.94
EURUSD, -0.10%, $1.0960
GBPUSD, -0.59%, $1.2220
USDCAD, -0.09%, $1.3321
AUDUSD, -0.05%, $0.6729
NZDUSD, +0.11%, $0.6297

U.S. Producer Price Index for final demand declined 0.3% m/m in September (consensus +0.1%), as did the index for final demand less food and energy (consensus +0.2%). Price declines were broad based, and not just energy-related, which is indicative of an environment characterised by weaker demand.

The U.S. Commerce Department placed 28 more Chinese firms on its Entity List for their role in fostering violations of human rights against a Muslim minority in China. Beijing’s foreign ministry spokesman denied the allegations and warned about possible retaliation, with a report suggesting China could even leave this week’s discussions one day early. Selling pressure in risk assets appeared to level off after China’s Global Times reported that China remains sincere in reaching a comprehensive deal and intends on proceeding “calmly”, more reprieve came after after Fed Chair Powell said the Fed plans on expanding its balance sheet, but quickly faded into the close on news that the U.S. will impose visa bans on Chinese officials linked to the human rights abuses.

With regards to Powell’s announcement of more easing, “I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis.” – Powell Cites. Goldman assumes a roughly $15bn/month rate of permanent OMOs, enough to support trend growth of the balance sheet plus some additional padding over the first two years to increase the size of the balance sheet by $150bn, restoring the reserve buffer and eliminating the current need for temporary OMOs. That strategy would result in balance sheet growth of roughly $180bn/year and net UST purchases by the Fed of roughly $375bn/year over the next couple of years.

U.S. Treasuries ended a volatile session on a higher note amid growth concerns and an unexpected decline in producer prices for September. The 2-yr yield declined four basis points to 1.42%, and the 10-yr yield declined two basis points to 1.54%. The U.S. Dollar Index increased 0.12% to 99.09. WTI crude declined 0.3%, or $0.13, to $52.66/bbl.

STOCK MARKET WRAP 

S&P500, -1.56%, 2,893.06
Nasdaq, -1.67%, 7,823.78
Nikkei Futures, -0.11%, 21,357.5

S&P 500 fell 1.56% on Tuesday following a series of trade developments that exacerbated concerns about upcoming trade talks and global growth prospects. All 11 S&P 500 sectors finished lower in a risk-off session. Nine sectors lost at least 1.0%, including a 2.0% drop in the financials sector. The real estate sector (-0.5%) declined the least.

Many of the China-sensitive semiconductor stocks, including Ambarella (AMBA 51.79, -5.43, -9.5%), underperformed as many of these companies derive a sizable portion of their revenue from China. The Philadelphia Semiconductor Index dropped 3.1% on Tuesday.

CURRENCY MARKET WRAP 

As of Tue Oct 8th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.20%, 98.98
USDJPY, +0.46%, $107.25
EURUSD, -0.11%, $1.0971
GBPUSD, -0.39%, $1.2287
USDCAD, -0.02%, $1.3304
AUDUSD, -0.47%, $0.6733
NZDUSD, -0.40%, $0.6291

Risk Assets retreated following a Bloomberg report that suggested China was not interested in a complete trade deal at this time, then stabalized after NEC Director Larry Kudlow said comments out of Beijing have been more positive. Throw in some conflicting tweets from a Fox Business reporter, and it was enough to inject more gyrations and confusion into the market.

U.S. Treasuries finished firmly lower, driving yields higher across the curve. The 2-yr yield increased seven basis points to 1.46%, and the 10-yr yield increased four basis points to 1.55%. The U.S. Dollar Index increased 0.2% to 98.98. WTI crude gave up an intraday gain to finish unchanged at $52.79/bbl.

Turkish warplanes have reportedly begun bombing Kurdish positions in Syria, a day after the U.S. announced it was pulling troops from the region. The bombings started late on Monday, with Turkish Air Force jets targeting the Semelka Border Crossing at the Iraq border in northeast Syria, local media reported. Turkey has two main goals in northeast Syria: to drive the Kurdish YPG militia which it deems a security threat away from its border, and to create a space inside Syria where 2 million Syria refugees currently hosted in Turkey can be settled. It had been pushing the United States to jointly establish a “safe zone” extending 20 miles (32 km) into Syrian territory, but repeatedly warned it could take unilateral military action after accusing Washington of dragging its feet. President Tayyip Erdogan has recently talked about pushing even deeper into Syria, beyond the proposed “safe zone” region to the cities of Raqqa and Deir al-Zor, in order to allow still more refugees to return to Syria.

STOCK MARKET WRAP 

S&P500, -0.45%, 2,938.79
Nasdaq, -0.33%, 7,956.29
Nikkei Futures, +0.22%, 21,482.5

S&P 500 declined 0.45% on Monday in a session replete with trade speculation and indecision. Ten of the 11 S&P 500 sectors finished lower amid relatively light trading volume. The energy sector (-0.9%) was today’s laggard, while the communication services sector (+0.04%) finished fractionally higher.

In corporate news, Silicon Motion (SIMO 38.30, +2.45, +6.8%) raised its Q3 revenue guidance, signaling that healthy demand for Apple’s (AAPL 227.06, +0.05, unch) iPhone 11 is funneling through the supply chain. Silicon Motion was one of the few gainers in the Philadelphia Semiconductor Index (-0.7%).

Elsewhere, PG&E (PCG 11.50, +0.63, +5.8%) outperformed following a report that indicated wildfire claims will be capped at $13.5 billion. Uber (UBER 30.37, +0.70, +2.4%) was upgraded to Buy from Neutral at Citigroup on improving risk vs reward. Labor talks between General Motors (GM 34.75, -0.16, -0.5%) and the UAW were said to have taken a “turn for the worse” over the weekend.

CURRENCY MARKET WRAP 

As of Mon Oct 7th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.05%, 98.81
USDJPY, +0.02%, $106.94
EURUSD, +0.11%, $1.0978
GBPUSD, +0.03%, $1.2333
USDCAD, -0.16%, $1.3316
AUDUSD, +0.40%, $0.6769
NZDUSD, +0.25%, $0.6318

U.S. trade deficit for August widened to $54.9 billion (consensus -$54.4 billion) from -$54.0 billion in July, as exports were $0.5 billion more than July exports while imports were $1.3 billion more than July imports. Trade continues to drag on GDP growth, evidenced by the average third quarter real trade deficit being 0.8% above the second quarter average.

U.S. economy added 136,000 jobs to non-farm payrolls in September, which was slightly below expectations (consensus 150,000) but also better than expected when accounting for the upward revisions in August and July. The unemployment rate hit a 50-year low at 3.5% (consensus 3.7%), while average hourly earnings were unchanged (consensus 0.3%).

Some pointed to no wage growth as a disappointment, but the modest jobs growth helped subdue this week’s general growth concerns. Powell also repeated his view that the U.S. economy is “in a good place.” The general sense of relief in the market helped the S&P 500 close above its 50-day moving average (2942).

U.S. Treasuries finished little changed despite the bullish bias in equities. The 2-yr yield increased one basis point to 1.39%, while the 10-yr yield declined basis points to 1.52%. The U.S. Dollar Index finished little changed at 99.81. WTI crude rose 0.6%, or $0.30, to $52.78/bbl.

STOCK MARKET WRAP 

S&P500, +1.42%, 2,952.01
Nasdaq, +1.40%, 7,982.47
Nikkei Futures, +0.24%, 21,320.0

S&P 500 rose 1.42% on Friday, with buying momentum picking up after the release of the Employment Situation Report for September and continuing throughout the day. It was a broad-based rally, led by shares of financial and technology companies, although trading volume was lighter than usual.

All 11 S&P 500 sectors finished higher. Eight sectors finished up at least 1.0%, including noticeable gains in the financials (+1.9%) and information technology (+1.7%) sectors. Apple (AAPL 227.01, +6.19, +2.8%) carried the tech sector higher after the Nikkei Asian Review reported the company asked suppliers to increase production for the iPhone 11 by up to 10%.

HP (HPQ 16.64, -1.76, -9.6%) was left out of today’s rally. The company announced it will reduce its global headcount by 7,000 to 9,000 employees as part of a restructuring plan. HP also authorized a $5 billion share repurchase program and raised its dividend by 10%.

CURRENCY MARKET WRAP

As of Fri Oct 4th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.12%, 98.91
USDJPY, -0.29%, $106.86
EURUSD, +0.13%, $1.0974
GBPUSD, +0.30%, $1.2339
USDCAD, +0.08%, $1.3334
AUDUSD, +0.60%, $0.6745
NZDUSD, +0.49%, $0.6300

U.S. ISM Non-Manufacturing Index for September fell to 52.6% (consensus 55.4%) from 56.4% in August. The key takeaway from the report is that it shows a slowdown in non-manufacturing growth. Accordingly, it is fanning concerns that the manufacturing recession, and trade uncertainty, are having a broader effect on the consumer-oriented services sector.

The 2-yr yield dropped ten basis points to 1.38%, and the 10-yr yield dropped seven basis points to 1.53%. The U.S. Dollar Index declined 0.12% to 98.91. WTI crude lost 0.5%, or $0.20, to $52.4/bbl.

The yield on the fed-funds sensitive 2-yr note fell to its lowest level since September 2017, as expectations for additional rate cuts continued to increase. According to the CME FedWatch Tool, the probability for a 25-basis points cut at the October FOMC meeting is about 90%, and a further quarter-point cut in December is over 50%. Both are up considerably from last week.

STOCK MARKET WRAP 

S&P500, +0.80%, 2,910.63
Nasdaq, +1.12%, 7,872.27
Nikkei Futures, -1.74%, 21,332.5

The S&P 500 dropped as much as 1.1% on Thursday after the ISM Non-Manufacturing Index for September came in weaker than expected, but the market quickly bounced back while rate-cut expectations increased. The benchmark index ended the day up 0.8%, finishing near session highs to recoup some losses from a two-day drop.

All 11 S&P 500 sectors rallied off their lows and finished in the green. The energy (+1.3%), information technology (+1.2%), and real estate (+1.2%) sectors outperformed, as did the Philadelphia Semiconductor Index (+1.7%). The financials sector (+0.2%) squeezed out a last-minute gain, even as Treasury yields continued to decline.

Corporate news included Facebook (FB 179.38, +4.78, +2.7%) announcing a camera-first messaging app, named Threads, for its Instagram platform. Shares of Snap (SNAP 14.30, -0.50) fell 3.4% in response. PepsiCo (PEP 137.93, +3.99, +3.0%) reported positive earnings results. Constellation Brands (STZ 194.26, -12.53, -6.1%) did, too, but shares still declined. Tesla (TSLA 233.03, -10.10, -4.2%) reported record Q3 deliveries but missed estimates.