A daily market update from FS Insight — what you need to know ahead of opening bell
“I feel sorry for the person who can’t get genuinely excited about his work. Not only will he never be satisfied, but he will never achieve anything worthwhile.” – Walter Chrysler
Overnight
10-year Treasury yield soars after jobs report blows past expectations CNBC
US dockworkers suspend ports strike until January after tentative agreement reached BBC
Israel stages massive Beirut strikes targeting Hezbollah leaders BBG
Spirit Airlines shares plunge on report of potential bankruptcy filing RT
EU votes to impose tariffs of up to 45% on China-made EVs BBG
U.S. services sector leaps forward, ISM survey suggests WSJ
Oil surges after Biden says U.S. discussing Israel attack on Iran facilities WSJ
Fed’s Goolsbee repeats rates must fall by ‘a lot’ over next year BBG
Japan PM Shigeru Ishiba asks ministers to craft economic relief package to cushion inflation impact CNBC
US office real estate market shows signs of bottoming after big discount sales RT
Mortgage activity begins to pick up with 30Y rate back near 6% BBG
US, Microsoft seize more than 100 websites used by Russian hackers SEM
Google starts placing ads that will be displayed within and alongside AI-generated search summaries BBG
Tesla’s top data executive is leaving days before robotaxi event BBG
NHTSA opens probe into more than 360,000 Ford SUVs over loss of braking RT
Google introduces new way to search by filming video BBC
Helene becomes deadliest mainland US hurricane since Katrina BBC
Singapore charges billionaire in gifts scandal involving ex-transport minister FT
New vaccine ‘could wipe out’ ovarian cancer BBC
Chart of the Day
| Overnight |
| S&P Futures -6
point(s) (-0.1%
) overnight range: -34 to +13 point(s) |
| APAC |
| Nikkei +1.97%
Topix +1.20% China SHCOMP +8.06% Hang Seng -1.47% Korea -1.22% Singapore -0.20% Australia +0.09% India -2.12% Taiwan +0.75% |
| Europe |
| Stoxx 50 -0.40%
Stoxx 600 -0.49% FTSE 100 +0.35% DAX -0.37% CAC 40 -0.59% Italy -0.49% IBEX +0.37% |
| FX |
| Dollar Index (DXY) +0.16%
to 101.84 EUR/USD -0.06% to 1.1038 GBP/USD -1.25% to 1.3102 USD/JPY -0.18% to 146.73 USD/CNY -0.11% to 7.0187 USD/CNH -0.13% to 7.0454 USD/CHF -0.07% to 0.8503 USD/CAD -0.28% to 1.3540 AUD/USD -0.58% to 0.6845 |
| UST Term Structure |
| 2Y-3
M Spread widened 2.2bps to -93.4bps
10Y-2 Y Spread widened 0.6bps to 14.2bps 30Y-10 Y Spread narrowed -0.4bps to 34.1bps |
| Yesterday's Recap |
| SPX +0.01%
SPX Eq Wt -0.11% NASDAQ 100 +0.15% NASDAQ Comp +0.08% Russell Midcap -0.00% R2k -0.09% R1k Value -0.05% R1k Growth +0.07% R2k Value -0.30% R2k Growth +0.11% FANG+ +0.54% Semis +1.44% Software +0.85% Biotech +0.12% Regional Banks -0.22% SPX GICS1 Sorted: Cons Staples -0.78% Cons Disc -0.78% Comm Srvcs -0.44% REITs -0.37% Materials -0.33% Healthcare -0.20% Indu -0.20% SPX +0.01% Utes +0.05% Fin +0.10% Tech +0.59% Energy +1.12% |
| USD HY OaS |
| All Sectors -1.1bps
to 354bps All Sectors ex-Energy -0.8bps 328bps Cons Disc -1.9bps 311bps Indu -0.3bps 255bps Tech -1.1bps 354bps Comm Srvcs -1.1bps 571bps Materials -0.6bps 322bps Energy -2.4bps 329bps Fin Snr -0.7bps 314bps Fin Sub +0.2bps 226bps Cons Staples -0.1bps 325bps Healthcare -0.7bps 374bps Utes -0.4bps 222bps * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 10/3 | 9:45 AM | Sep F S&P Srvcs PMI | 55.4 | 55.4 |
| 10/3 | 10:00 AM | Sep ISM Srvcs PMI | 51.7 | 51.5 |
| 10/3 | 10:00 AM | Aug F Durable Gds Orders | 0 | 0 |
| 10/4 | 8:30 AM | Sep AHE m/m | 0.3 | 0.4 |
| 10/4 | 8:30 AM | Sep Unemployment Rate | 4.2 | 4.2 |
| 10/4 | 8:30 AM | Sep Non-farm Payrolls | 150 | 142 |
| 10/8 | 6:00 AM | Sep Small Biz Optimisum | n/a | 91.2 |
| 10/8 | 8:30 AM | Aug Trade Balance | -72.5 | -78.791 |
| 10/9 | 2:00 PM | Sep 18 FOMC Minutes | n/a | 0 |
| 10/9 | 2:00 PM | Sep 18 FOMC Minutes | n/a | 0 |
MORNING INSIGHT
Good morning!
We are watching the VIX to get a sense when the “iffy October” period might end, both VIX falling below 17 and VIX term structure “uninverting.” Also, we expect a positive response from markets to the stronger-than-expected numbers in today’s September jobs report.
Click HERE for more.
TECHNICAL
- Short-term consolidation likely complete by end of week.
- Consumer Discretionary has broken out vs. Consumer Staples which signals “Risk-on”.
- Software ETF (IGV 0.85% ) should be watched carefully for signs of a coming breakout.
Click HERE for more.
CRYPTO
In our view, this week’s negative catalysts have now been priced in, and we believe the risk outlook now skews to the upside. CME annualized basis dropping below 6% marks a potential tradable market bottom.
Click HERE for more.
First News
The fast-fashion retail giant Shein burst onto the scene several years ago, capturing the hearts, minds, and wallets of younger consumers with its wide range of trendy clothing selling at barely believable prices – many items selling for under $10. This so-called “fast fashion” was meant to be quickly (and cheaply) produced, and just as quickly discarded when it either fell apart or the next fad emerged – whichever came first. Gen Z customers might have found it fun, but environmental advocates criticized fast fashion for the environmental impact of all those discarded clothes. Luxury brands, already angry at Shein’s alleged plagiarizing of their designs and theft of their intellectual property, were quick to chime in, touting their products as higher quality, meant to last – and therefore, more environmentally responsible. Likely to their chagrin, a study by the University of Leeds suggests that high-priced luxury clothing does not tend to be more durable than fast-fashion analogs.
Amidst plans for an IPO – the company has reportedly filed to go public in London after meeting resistance for a US listing – Shein has quickly become a lightning rod for criticism. Advocacy groups denounced the company and its suppliers over purportedly unethical labor practices, while news outlets reported on claims that its clothes were made with dangerous or toxic materials.
Governments around the world have taken notice. The Biden administration on September 23 announced it would close an import loophole from which Shein benefited – the so-called “de minimis exemption,” which exempts packages from abroad with a declared value of less than $800 from duties and certain paperwork requirements. The White House, with bipartisan support, cited concerns that it was also making it easier for Chinese e-commerce companies like Shein to avoid complying with “U.S. trade laws, health and safety requirements, intellectual property rights, [and] consumer protection rules.” Just two days later, Italy’s Competition Authority (Autorità Garante della Concorrenza e del Mercato) announced that it had opened an investigation into whether Shein was making misleading claims about the sustainability of its business practices.
There are few shuttered reactors that can be feasibly restarted in the way Holtec and Microsoft/Constellation are hoping to do. For building new plants and bringing them online, shuttered coal plants, as well as operational coal plants slated for closure, could serve as the site for new nuclear reactors. These come with the advantage of already having transmission and infrastructure in place, resulting in significant cost savings of as much as 35%. The Department of Energy lists 27 shuttered coal plants and 29 coal plants slated for closure within the next five years that could potentially be repurposed in this way. (VRG, FT, WSJ, CNBC)
