Analyst
European markets followed the bearish sentiment, with the European Stoxx 600 recording a decline of over 0.6%. We also see Germany's DAX hitting its lowest since January, down over 1.3%. We traded the recent downturn with the DE 30 extremely well. All eyes are on the European Central Bank's policy decision as it is projected to maintain interest rates after over a year of consistent hikes. It is likely that ECB President Christine Lagarde is sending signals that interest rates have peaked.
On the earnings front, we see very poor earnings reports from several European companies. Unilever saw a 2.7% dip as Q3 sales growth missed estimates. Automotive manufacturer Mercedes-Benz reported a 6% loss, affected by inflationary pressures and a drop in car prices. Standard Chartered also faced a 12% drop, with Q3 profits not meeting expectations due to China-related investments. US pharma giant Merck beat expectations with strong sales from cancer treatment Keytruda - just as we have predicted.
US equities face pressure due to disappointing earnings from companies like Alphabet, which had an extending a selloff on Wednesday due disappointing cloud figures. On the other hand we see Meta coming in with a positive earnings report but also warning about a potential earnings slowdown given economic uncertainties. Futures on Thursday indicated a continuation of these losses. We await the release of earnings from Amazon and Intel later today. We also look closely on how Amazon performed in Q3 as it will give more insight to the current state of consumer spending.
U.S. 10-year Treasury yield slightly rose to 4.96%. Concerns rise regarding Nasdaq's vulnerability despite or because of its 31% YTD rally, as investors weigh tech valuations against the backdrop of rising Treasury yields.
Later today, the US is poised for significant economic data releases, including initial jobless claims and GDP figures. Investors also keenly await Friday's release of the PCE price index.
In Asia, a mixed sentiment prevailed. Japan's Nikkei dropped significantly by 2.14%. China's index rose by 0.48%. Investors are closely monitoring China's economic direction after the government announced plans to issue supplementary bonds for disaster relief and infrastructure enhancement.
Commodity price are mixed, with oil prices declining and gold prices rising. WTI Crude oil is currently trading about 1% lower, at around $84/barrel. Gold on the other hand is trading at around $1,988/oz, up 0.4% from yesterday with safe haven demand remaining elevated. Also the USD pushed back near its 2023 peak.
Key events today:
EUR ECB Interest Rate Decision - 12:15 UTC+0
USD GDP Growth Rate, Durable Goods Orders, Initial Jobless Claims - 12:30 UTC+0
EUR ECB Press Conference - 12:45 UTC+0
EUR ECB President Lagarde Speech - 14:15 UTC+0
JPY Inflation Rate / CPI - 23:30 UTC+0
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