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.