CURRENCY MARKET WRAP 

As of Tue Oct 3rd, Singapore Time zone UTC+8

U.S. Dollar Index, -0.13%, 99.02
USDJPY, -0.54%, $107.17
EURUSD, +0.26%, $1.0961
GBPUSD, +0.01%, $1.2304
USDCAD, +0.81%, $1.3327
AUDUSD, +0.07%, $0.6709
NZDUSD, +0.32%, $0.6266

U.S. Private-sector payrolls were estimated to have increased by 135,000 in September (consensus 140,000) while the prior month’s print was revised down to 157,000 from 195,000. Private-sector job growth averaged 145,000 in the third quarter, according to ADP, versus 214,000 in the third quarter of 2018.

The market will focus on today’s ISM Non-Manufacturing report which not only provides the best forecast for monthly Non-Farm payrolls figures due Friday, but also will show the state of the service sector which makes up more than 70% of the US economy.

WTI crude lost 1.8%, or $0.90, to $52.64/bbl to extend its recent decline amid bearish inventory data and growth concerns. These growth concerns also contributed to another advance in Treasuries, driving yields lower across the curve. The 2-yr yield declined eight basis points to 1.48%, and the 10-yr yield declined five basis points to 1.60%. The U.S. Dollar Index declined 0.13% to 99.02.

New York Fed President John Williams (FOMC voter) said he thinks monetary policy is “in the right place” at this time. Market participants, meanwhile, increased their expectations for a 25-basis points rate cut at the October FOMC meeting, according to the CME FedWatch Tool. This probability increased to 75.4% from 53.4% one week ago.

STOCK MARKET WRAP 

S&P500, -1.79%, 2,887.61
Nasdaq, -1.56%, 7,785.25
Nikkei Futures, -2.67%, 21,382.5

S&P 500 fell 1.79% on Wednesday, as growth concerns continued to force investors to reassess earnings prospects and premium valuations. The Dow Jones Industrial Average lost 1.9%, the Nasdaq Composite lost 1.56%, and the Russell 2000 lost 0.9%.

Although the market closed off its lows, it was still a disappointing day for the stock market. Notable laggards included Delta Air Lines (DAL 54.35, -2.66, -4.7%) after it raised its FY19 unit cost outlook to +2% from +1% and Exxon Mobil (XOM 67.15, -1.80, -2.6%) after an SEC filing revealed its results could come in lighter than expected due to lower oil prices.

CURRENCY MARKET WRAP

As of Tue Oct 2nd, Singapore Time zone UTC+8

U.S. Dollar Index, -0.23%, 99.15
USDJPY, -0.30%, $107.75
EURUSD, +0.32%, $1.0934
GBPUSD, +0.02%, $1.2292
USDCAD, -0.17%, $1.3218
AUDUSD, -0.63%, $0.6708
NZDUSD, -0.32%, $0.6243

U.S. Total construction spending increased 0.1% m/m in August (consensus +0.4%) following a downwardly revised unchanged reading (from +0.1%) for July.

Risk-Assets remained resilient in early trading, as investors brushed aside another set of weak manufacturing PMIs out of Japan (48.9 vs consensus 49.3) and the eurozone (41.7 vs consensus 41.4). Investors expecting the U.S. to remain resilient in the face of global weakness were disappointed after the ISM Manufacturing Index for September declined to 47.8% (consensus 50.2%) from 49.1% in August for its worst reading since June 2009.

RBA cuts rate by 25bps to 0.75 per cent (as expected). Lowe said the global appetite to save is high relative to the appetite to invest, this has prompted low interest rates globally, which is in turn affecting the global economy. The RBA governor said this issue was a task “for governments and businesses, not for central banks”

Growth concerns were made apparent across other capital markets, too. Demand for Treasuries increased, pulling yields down from early highs; oil prices ($53.60/bbl, -0.52, -1.0%) erased gains and finished lower again; and gold futures ($1488.70/ozt, +15.40, +1.1%) increased in value. The 2-yr yield declined six basis points to 1.56%, and the 10-yr yield declined three basis points to 1.64%. The 10-yr note yield hit 1.75% at its high after a weak 10-yr debt auction in Japan caused a sell-off in Japanese bonds that trickled over to sovereign debt in Europe and the U.S. The U.S. Dollar Index declined 0.23% to 99.15.

STOCK MARKET WRAP 

S&P500, -1.23%, 2,940.25
Nasdaq, -1.13%, 7,908.69
Nikkei Futures, -0.18%, 21,720.0

The stock market gave back more than 1% on Tuesday, as weak manufacturing data for September revived growth concerns that forced investors to reconsider valuations. Today’s 1.23% decline in the S&P 500 sent it below its 50-day moving average (2948) on a closing basis.

All 11 S&P 500 sectors finished lower, with the cyclical industrials (-2.4%), materials (-2.3%), energy (-2.3%), and financials (-2.1%) sectors bearing the brunt of the damage. Even the defensive-oriented, yet richly valued, consumer staples (-0.3%) and utilities (-0.3%) sectors finished lower. This was partly due to lingering doubts if the U.S. consumer would remain resilient, given the weakening employment conditions in the manufacturing sector.

Another notable story was Charles Schwab (SCHW 37.76, -4.07, -9.7%) announcing it will eliminate commissions for stocks, ETFs, and options listed on U.S. or Canadian exchanges. Shares of E*Trade (ETFC 36.51, -7.18, -16.4%) and TD Ameritrade (AMTD 34.64, -12.06, -25.8%), which derive more of their revenue from trading fees than Schwab, plunged accordingly.

CURRENCY MARKET WRAP

As of Tue Oct 1st, Singapore Time zone UTC+8

U.S. Dollar Index, +0.30%, 99.40
USDJPY, +0.11%, $108.07
EURUSD, -0.39%, $1.0899
GBPUSD, -0.02%, $1.2290
USDCAD, +0.05%, $1.3243
AUDUSD, -0.16%, $0.6751
NZDUSD, -0.42%, $0.6261

China’s official Manufacturing PMI did improve to 49.8 in September from 49.5 August, but the reading below 50.0 indicated the sector remained in contraction territory.  The Caixin/Markit factory PMI came in at 51.4 for September, above expectations of 50.2 by analysts in a Reuters poll. The Chicago PMI for September, meanwhile, fell back into contraction territory with a reading of 47.1 (consensus 50.8).

Growth concerns weren’t evident in the stock market, though, as it pushed higher following the release of the Chicago PMI. U.S. Treasuries did see some slight buying interest after the report, which helped bring yields down to their unchanged marks in a relatively tight-ranged session.

The 2-yr yield and the 10-yr yield finished unchanged at 1.62% and 1.68%, respectively. The U.S. Dollar Index increased 0.3% to 99.40. Gold futures, which had rallied alongside a stronger dollar this quarter, declined 2.2% (-$33.10) to $1473.30/ozt.

STOCK MARKET WRAP 

S&P500, +0.50%, 2,976.73
Nasdaq, +0.75%, 7,999.34
Nikkei Futures, +0.28%, 21,807.5

The S&P 500 (+0.5%), Dow Jones Industrial Average (+0.4%), and Nasdaq Composite (+0.75%) posted respectable gains, lifted by shares of Apple (AAPL 223.97, +5.15, +2.4%) after JP Morgan raised its price target to $265 from $243. The Russell 2000 increased 0.2%.

The S&P 500 utilities sector (+0.1%) struggled to match the benchmark index, while the financials (-0.1%) and energy (-0.8%) sectors finished in negative territory. Another decline in oil prices ($54.12/bbl, -1.78, -3.2%) weighed on the oil-sensitive energy stocks, as Saudi Arabia reportedly returned to normal oil output and Chinese data continued to show weakness in the country’s manufacturing sector.’

CURRENCY MARKET WRAP 

As of Mon Sep 30th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.02%, 99.11
USDJPY, +0.10%, $107.94
EURUSD, +0.16%, $1.0939
GBPUSD, -0.28%, $1.2289
USDCAD, -0.17%, $1.3246
AUDUSD, +0.24%, $0.6765
NZDUSD, -0.05%, $0.6297

U.S. Personal income was up 0.4%, as expected, in August, while Personal Spending was up 0.1% (consensus +0.3%). The PCE Price Index was unchanged (consensus +0.1%), leaving it up 1.4% yr/yr for the fourth straight month, and the core PCE Price Index, which excludes food and energy, was up 0.1% (consensus +0.2%), leaving it up 1.8% yr/yr, versus up 1.7% in July. Real PCE was up only 0.1% in August, which will temper growth forecasts for Q3 GDP.

According to Bloomberg, there have been talks to limit U.S. investors’ portfolio flows to China and delist Chinese companies from U.S. stock exchanges. The news erased an early 0.3% gain in the S&P 500, which then fell as much as 1.1% amid a host of concerns, which included a re-escalation of tensions, possible Chinese retaliation, and trade talks on Oct. 10-11 not going as planned.

U.S. Treasuries finished the session slightly higher, pushing yields lower. The 2-yr yield declined three basis points to 1.62%, and the 10-yr yield declined one basis point to 1.68%. The U.S. Dollar Index was relatively unchanged at 99.11. WTI crude fell 0.9% (-$0.51) to $55.90/bbl, returning to levels before the drone attack on Saudi Arabia’s oil refineries two weeks ago.

STOCK MARKET WRAP 

S&P500, -0.53%, 2,961.79
Nasdaq, -1.13%, 7,939.63
Nikkei Futures, -0.23%, 21,810.0

U.S. stocks ended the week on a sour note following news that the White House is considering restricting U.S. investment in China. The ensuing weakness in technology stocks weighed heavily on the Nasdaq Composite (-1.13%), but stocks did close off session lows, leaving the S&P 500 (-0.53%) and Dow Jones Industrial Average (-0.3%) with modest losses. The Russell 2000 lost 0.8%.

Nine of the 11 S&P 500 sectors finished in the red, led lower by the trade-sensitive, and heavily-weighted, information technology sector (-1.3%). Semiconductor stocks like Micron (MU 43.21, -5.39, -11.1%) were especially weak, as well as Chinese stocks listed in the U.S. — Alibaba (BABA 165.98, -9.02, -5.2%), JD.com (JD 27.82, -1.76, -6.0%), and Baidu (BIDU 101.21, -3.86, -3.7%). Micron was already down big prior to the news, as investors reacted negatively to its soft gross margin guidance and a record inventory level. Micron suppliers Lam Research (LRCX 230.08, -12.75, -5.3%) and Applied Materials (AMAT 49.43, -2.72, -5.2%) underperformed. The Philadelphia Semiconductor Index dropped 2.4%.

Wells Fargo (WFC 50.71, +1.84, +3.8%) led the financials sector in gains after it announced Charles W. Scharf will be its next CEO, effective Oct. 21. Scharf was previously the CEO of BNY Mellon (BK 44.53, -2.10, -4.5%) and held executive positions at JPMorgan Chase, Citigroup, and Salomon Smith Barney prior to BNY Mellon.

CURRENCY MARKET WRAP 

As of Fri Sep 27th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.13%, 99.17
USDJPY, -0.02%, $107.75
EURUSD, -0.19%, $1.0922
GBPUSD, -0.18%, $1.2328
USDCAD, +0.01%, $1.3269
AUDUSD, +0.03%, $0.6753
NZDUSD, +0.40%, $0.6298

U.S. initial claims for the week ending September 21 increased by 3,000 to 213,000 (consensus 212,000). Continuing claims for the week ending September 14 decreased by 15,000 to 1.650 million. The advance report for international trade in goods showed a slight widening in the deficit to -$72.8 billion in August from -$72.5 billion.

In U.S. politics, the whistleblower complaint that kicked off Trump’s Ukraine controversy was released yesterday. In it, the whistleblower alleges that Trump abused his office to solicit assistance from a foreign country in the 2020 election and that White House officials participated in a cover-up to keep the Ukraine call from being made public. Trump said: “I want to know who’s the person, who’s the person who gave the whistleblower the information? Because that’s close to a spy. You know what we used to do in the old days when we were smart?”

U.S. Treasuries finished higher, pushing yields lower in a curve-flattening trade. The 2-yr yield declined two basis points to 1.65%, and the 10-yr yield declined five basis points to 1.69%. The U.S. Dollar Index held firm, increasing 0.13% to 99.17.

STOCK MARKET WRAP 

S&P500, -0.24%, 2,977.62
Nasdaq, -0.58%, 8,030.66
Nikkei Futures, +0.67%, 21,945.0

S&P 500 lost 0.24% on Thursday in an indecisive session. Economic data continued to depict a decent U.S. economy, but a headline-heavy day helped keep some buyers sidelined. The communication services sector (-0.8%) was another laggard, largely due to weakness in Facebook (FB 180.11, -2.69, -1.5%) after reports indicated the Department of Justice will open an antitrust case into the company. Amazon (AMZN 1739.84, -28.49, -1.6%), which is a component of the consumer discretionary sector (-0.6%), also showed relative weakness.

Peloton (PTON 25.76, -3.24, -11.2%) had a disappointing first day of trading. Shares opened at $27.00 after pricing in at $29.00 and gradually retreated throughout the day. On the other hand, investors (or speculators) jumped back into Beyond Meat (BYND 154.34, +16.02, +11.6%) on news that it teamed up with McDonald’s (MCD 212.60, -0.03, unch) for a 12-week test at 28 locations in Canada.

CURRENCY MARKET WRAP 

As of Thu Sep 26th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.63%, 98.96
USDJPY, +0.60%, $107.71
EURUSD, -0.62%, $1.0952
GBPUSD, -1.05%, $1.2358
USDCAD, -0.11%, $1.3256
AUDUSD, -0.70%, $0.6755
NZDUSD, -0.79%, $0.6273

U.S. annual pace of new home sales for August (713,000) exceeded the consensus of 659,000 and was one of the highest readings since October 2007. The strength underscores the impact of low mortgage rates on buyer demand, as the higher-priced West region saw the biggest increase among all regions.

Dollar, Stocks and Treasury yields were bid despite a formal impeachment inquiry into Trump. While the markets fell at the onset, they quickly realized that the chance of Trump getting removed from office is extremely slim. Investors also liked what they saw in the reconstructed transcript of the Trump-Ukraine phone call. Trump had originally promised a full unredacted transcript of the call but instead, the White House released a “memorandum of telephone conversation” that was “not a verbatim transcript” but rather “notes and recollections of Situation room Duty officers.” The transcript shows Trump asking Ukraine to investigate Biden and the DNC server, there was no mention of a quid pro quo that would lead to a criminal inquiry.

In trade, Trump said a deal to end a nearly 15-month trade war with China could happen sooner than people think and that the Chinese were making big agricultural purchases from the United States, including of beef and pork. He said China was trying to be nice to him and added to reporters: “I was nice to them.”

Safe-haven assets like gold ($1513.10/ozt, -$27.60, -1.8%) and U.S. Treasuries began to sell off, with some curve-steeping activity contributing to the gains in the S&P 500 financials sector (+0.7%). Trade-sensitive areas like the information technology (+1.2%) and consumer discretionary (+1.0%) sectors gained traction after Trump said a trade deal with China could “come sooner than you think.” The 2-yr yield increased six basis points to 1.67%, and the 10-yr yield increased ten basis points to 1.73%. The U.S. Dollar Index rose 0.63% to 98.96 amid weakness in the euro and British pound. WTI crude lost 1.3%, or $0.76, to $56.56/bbl, extending its recent pullback as inventories unexpectedly increased, according to the weekly report from the EIA.

STOCK MARKET WRAP 

S&P500, +0.62%, 2,984.87
Nasdaq, +1.05%, 8,077.38
Nikkei Futures, +0.24%, 21,992.5

S&P 500 gained 0.62% on Wednesday, as upbeat trade news and strong economic data and earnings helped investors brush aside impeachment concerns.The Dow Jones Transportation Average (+1.0%) and Philadelphia Semiconductor Index (+1.8%) finished with noticeable gains as the broader market steadily increased throughout the day. The defensive-oriented health care (-0.5%), real estate (-0.1%), and utilities (-0.1%) sectors were the lone S&P 500 sectors to finish in negative territory.

Nike (NKE 90.81, +3.63, +4.2%) and Cintas (CTAS 266.62, +14.48, +5.7%) padded the advance after both beat top and bottom-line estimates, with Cintas issuing upside FY20 EPS guidance. Philip Morris International (PM 75.28, +3.72, +5.2%) outperformed after it ended merger talks with Altria (MO 40.56, -0.17, -0.4%) as scrutiny of Juul/vaping intensified. Altria owns a stake in Juul.

CURRENCY MARKET WRAP 

As of Wed Sep 25th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.22%, 98.39
USDJPY, -0.37%, $107.17
EURUSD, +0.19%, $1.1014
GBPUSD, +0.44%, $1.2486
USDCAD, -0.18%, $1.3239
AUDUSD, +0.35%, $0.6798
NZDUSD, +0.37%, $0.6316

U.S. Conference Board’s Consumer Confidence Index for September dropped to 125.1 consensus 134.0) from a downwardly revised 134.2 (from 135.1) in August. It reflects burgeoning anxiety among consumers about the impact of tariffs and trade tension. That hasn’t translated into a retrenchment in consumer spending yet. If confidence continues to wane, though, the market will start to assume it is going to show up in weaker levels of discretionary spending activity, which would be bad for growth prospects.

In Trump’s UN speech, he took shots at China, accusing the nation of breaking promises to the international community to “adopt promised reforms.” Trump also took a shot at Venezuela’s Nicolás Maduro in his speech, calling him a “dictator” and a “Cuban puppet.” He called Iran’s regime one of the “greatest security threats facing peace-loving nations” and urged nations not to “subsidize Iran’s bloodlust.” He railed against the World Trade Organization for failing to compel China to liberalize its economy and called for “drastic change” to the international trade system. The second-largest economy in the world, he said, should not be allowed to declare itself a developing country at the expense of others.

The major averages moved well into negative territory by midday, after reports surfaced that House Speaker Nancy Pelosi was planning to formally announce an impeachment inquiry on Trump at 5:30 p.m. ET. Trump said he will release a full unredacted transcript of his conversation with Ukraine’s President Volodymyr Zelensky.

U.S. Treasuries resumed their recent advance amid the political uncertainty and concerns about trade and growth. The 2-yr yield declined six basis points to 1.61%, and the 10-yr yield declined seven basis points to 1.64%. Interestingly, the 10-yr yield is now down 27 basis points from its high on Sept. 13. The U.S. Dollar Index fell 0.22% to 98.39.

STOCK MARKET WRAP 

S&P500, -0.84%, 2,966.61
Nasdaq, -1.46%, 7,993.63
Nikkei Futures, -0.49%, 21,797.5

U.S. stocks fell on Tuesday, as investors shunned risk following a decline in consumer confidence, a hard-lined speech from Trump, and growing calls for the president’s impeachment.

Stocks opened higher, lifting the S&P 500 up as much as 0.5% and back above the 3000 level, amid news that China was purchasing more U.S. soybeans and Treasury Secretary Mnuchin confirming trade talks will resume in two weeks. None of these developments was particularly surprising. That advance proved short-lived as stocks began an orderly retreat following a weaker-than-expected consumer confidence report for September and Trump’s speech at the UN General Assembly.

The S&P 500 energy sector (-1.6%) led the sectors in losses as oil prices ($57.32, -1.30, -2.3%) weakened. The communication services sector (-1.3%) and the trade-sensitive Philadelphia Semiconductor Index (-1.7%) showed relative weakness after a strong start. The defensive-oriented utilities (+1.0%) and consumer staples (+0.2%) sectors were the lone sectors to finish in positive territory.

Notable laggards included FAANG components Facebook (FB 181.28, -5.54, -3.0%), Amazon (AMZN 1741.61, -43.69, -2.5%), and Netflix (NFLX 254.59, -11.33, -4.3%). An earnings miss from AutoZone (AZO 1096.63, -50.63, -4.4%) weighed on the stock.

CURRENCY MARKET WRAP 

As of Tue Sep 23rd, Singapore Time zone UTC+8

U.S. Dollar Index, +0.15%, 98.64
USDJPY, -0.06%, $107.60
EURUSD, -0.22%, $1.0994
GBPUSD, -0.29%, $1.2434
USDCAD, -0.06%, $1.3261
AUDUSD, +0.07%, $0.6773
NZDUSD, +0.49%, $0.6297

Manufacturing activity in the Eurozone contracted at its fastest pace in nearly 7 years with the index falling to 45.6 (consensus 47.6) from 47.0. The slowdown was led by Germany, where the PMI manufacturing index fell to 41.4 (consensus 44.6), the lowest level in more than a decade. German officials remain reluctant to increase the budget, but the longer they wait the worse the situation may become. It’s clear that monetary policy has run out of gas and fiscal tools are needed to jump-start the economy.

The U.S. Treasury market reflected some lingering growth concerns as increased demand pushed yields lower. The 2-yr yield declined three basis points to 1.67%, and the 10-yr yield declined six basis points to 1.71%. The U.S. Dollar Index increased 0.15% to 98.64. WTI crude rose 1.0%, or $0.60, to $58.64/bbl.

STOCK MARKET WRAP 

S&P500, -0.01%, 2,991.77
Nasdaq, -0.06%, 8,112.46
Nikkei Futures, +0.01%, 21,905.0

Apple (AAPL 218.72, +0.99, +0.5%) and most stocks within the Philadelphia Semiconductor Index (+1.0%) showed relative strength throughout the day. The semiconductor space bounced back from Friday’s decline following reports indicating that officials from the U.S. and China described last week’s trade talks as “productive” and “constructive,” respectively.

In corporate news, American Express (AXP 118.25, +1.45, +1.2%) announced a 120 million share repurchase program and increased its quarterly dividend 10%. Lululemon athletica (LULU 195.18, +5.88, +3.1) rose 3% after the stock was initiated with an Overweight rating at Piper Jaffray.

CURRENCY MARKET WRAP 

As of Mon Sep 23rd, Singapore Time zone UTC+8

U.S. Dollar Index, +0.24%, 98.51
USDJPY, -0.43%, $107.56
EURUSD, -0.21%, $1.1018
GBPUSD, -0.38%, $1.2479
USDCAD, -0.01%, $1.3261
AUDUSD, -0.34%, $0.6769
NZDUSD, -0.70%, $0.6259

There were no notable U.S. economic prints on Friday.

In trade, the combination on Friday of tough words from Trump and the cancellation of a planned trip by Chinese agriculture officials to two farm states seemed to cast a cloud over prospects for a trade deal and a risk-off in New York session. But both sides moved on Saturday to indicate that the negotiations continue. China’s state-run Xinhua news agency said on Saturday that fairly senior negotiators had “conducted constructive discussions” in Washington in recent days and had “agreed to continue to maintain communication.” The tone of the Xinhua statement was matched by a separate statement from the United States trade representative in Washington. “These discussions were productive, and the United States looks forward to welcoming a delegation from China for principal-level meetings in October,” the statement said.

Treasuries spent the bulk of the day near their flat lines before rallying to highs in the afternoon. The 10-yr yield slipped two basis points to 1.76%. U.S. Dollar index +0.24%, 98.51.

STOCK MARKET WRAP 

S&P500, -0.49%, 2,992.03
Nasdaq, -0.80%, 8,117.67
Nikkei Futures, +0.18%, 21,910.0

The major averages briefly recovered from their lows in the afternoon but returned toward those lows before the close as cyclical sectors struggled. The top-weighted technology sector (-1.1%) was among the worst performers, widening its loss in the afternoon. Chipmakers got off to a weak start and remained under pressure into the close. The PHLX Semiconductor Index lost 1.8%, surrendering 2.7% for the week. Xilinx (XLNX 96.55, -7.07, -6.8%) lagged from the start after the company’s CFO resigned. Texas Instruments (TXN 126.67, -2.16, -1.7%) lost nearly 2.0% despite increasing its quarterly dividend.

On the upside, countercyclical sectors like health care (+0.6%) and utilities (+0.4%) spent the day in positive territory. The health care sector extended this week’s gain to 1.0%, drawing some encouragement from a report that the Senate will not endorse a plan put forth by House Speaker Pelosi to lower drug prices.

Friday’s trading volume was well above average due to quadruple witching. As a result, more than 2.5 billion shares changed hands at the NYSE floor.

CURRENCY MARKET WRAP 

As of Fri Sep 21st, Singapore Time zone UTC+8

U.S. Dollar Index, -0.22%, 98.34
USDJPY, -0.36%, $108.06
EURUSD, +0.13%, $1.1044
GBPUSD, +0.41%, $1.2523
USDCAD, -0.20%, $1.3260
AUDUSD, -0.54%, $0.6791
NZDUSD, -0.44%, $0.6294

In Repo land, NY Fed injected another $75 billion into money markets to improve liquidity in the overnight repo market. This was its third repurchase operation this week and another one is reportedly scheduled for today. Fed Chair Powell said the volatility in the overnight repo market has no implications for the economy or monetary policy.

In Trade, U.S. and China resumed in-person trade talks today, and the initial tone didn’t sound too constructive. China’s Global Times editor tweeted China is not as anxious to reach a deal as the U.S. expects it to be, while a personal adviser to President Trump, Michael Pillsbury, said the president is ready to escalate the trade war if a deal is not reached soon. Talks will resume today.

U.S. Treasuries finished slightly higher, pushing yields lower across the curve. The 2-yr yield and 10-yr yield both declined one basis point to 1.74% and 1.77%, respectively. The U.S. Dollar Index declined 0.22% to 98.34. WTI crude ticked up 0.1%, or $0.05, to $58.12/bbl.

STOCK MARKET WRAP 

S&P500, +0.01%, 3,006.79
Nasdaq, +0.07%, 8,182.88
Nikkei Futures, +0.77%, 21,967.5

S&P 500 closed unchanged on Thursday in a light volume session. Microsoft (MFST 141.07, +2.55, +1.8%) provided some support for the broader market, but relative weakness in the cyclical sectors dragged on a market that struggled to gain traction throughout the day.

Microsoft announced a $40 billion share repurchase program and raised its quarterly dividend 11%. Shares hit a new all-time high, bringing the company’s valuation closer to $1.1 trillion. U.S. Steel (X 11.06, -1.39, -11.2%) disappointed investors after guiding its Q3 EPS well below consensus, making it the third steel company in three days to issue downside guidance. Darden Restaurants (DRI 120.69, -6.44, -5.1%) lost 5% despite beating earnings estimates.