*The US stock market rose overall, with the three major stock indices rising by over 1%;
*The yield of medium and long-term US bonds has risen, with the two-year US bond standing at 5.1%;
*The United States is considering relaxing sanctions on Venezuela, and international oil prices have fallen by over 1%.
On Monday, US stocks rose across the board, as investors remained optimistic about the outlook for the financial reporting season. Digesting the latest statements from Federal Reserve officials, concerns about the Israeli-Palestinian conflict have eased. As of the close, the Dow rose 314.25 points, or 0.93%, to 33984.54 points, the Nasdaq rose 1.20%, to 13567.98 points, and the S&P 500 index rose 1.06%, to 4373.63 points. The Cboe panic index fell more than 10%, further away from last Friday's high of 20.8.
Market Overview
According to data from the Federal Reserve of New York, the manufacturing index for October in New York was at -4.60, still in a contraction range, but better than the market's expected -7.
Chicago Fed Chairman Gullsby stated on Monday that the recent slowdown in inflation is a trend, not a temporary phenomenon. There are many claims that inflation is on a downward trend compared to the past, which is exactly what we want, "he said, adding that he has not yet made up his mind to raise interest rates in November. He shares the views of many Federal Reserve officials and is now approaching the point of transitioning from discussing interest rate hikes to how long interest rates need to be kept at restricted levels.
Philadelphia Fed Chairman Huck stated that maintaining patience can help FOMC achieve a soft landing. Huck said that although he believes there is no need for further interest rate hikes, he agrees that interest rates need to remain high for a longer period of time. If inflation rebounds, I will not hesitate to support further interest rate hikes, as our determination to restore inflation to the target level will not change, "he added.
Several Federal Reserve officials will deliver speeches this week, and Powell will attend the New York Economic Club event on Thursday. Federal funds rate futures show that the likelihood of the Federal Reserve raising interest rates in November is less than 10%. The yield on US Treasury bonds has risen across the board, with the two-year bond rising to 5.10% and the benchmark 10-year bond rising nearly 8 basis points to 4.71%, as investors are digesting the latest changes in policy expectations.
Sam Bullard, senior economist at Wells Fargo, said he believes Powell will continue to patiently wait at the November meeting, while also stating that if labor market and inflation data do not cool, the Federal Reserve will continue to act and may raise interest rates at the December meeting.
This week, 11% of S&P 500 index companies will release results, including Johnson&Johnson, Bank of America, Netflix, and Tesla. Barclays analyst Ajay Rajadhyaksha said that focusing on the financial reporting season can bring optimism to investors in the short term. We expect bond/stock volatility in the short term. Bond volatility and Middle East tensions have dragged down risky assets, but should be offset by financial reports and dovish Fed rhetoric
In terms of individual stocks, Lululemon surged by over 10%, and this sportswear manufacturer will replace Activision Blizzard to enter the S&P 500 index.
Jiaxin Wealth Management rose 4.7%, with the latest financial report showing a better than expected profit decline. The growth in wealth management business revenue offset the slowdown in net interest income.
Apple fell 0.1%. Market tracking firm Counterpoint Research estimates that the sales of iPhone 15 decreased by 4.5% compared to iPhone 14 in the 17 days before its launch, indicating that the initial sales of new phones were weaker than last year. Other star tech stocks performed well, with Amazon up 2.1%, Microsoft up 1.5%, Google up 1.4%, and Tesla up 1.1%.
Pfizer rose 3.6%. Last week, the company lowered its sales forecast for COVID-19 vaccine and drugs.
The Chinese concept stocks were mixed, with JD up 2.2%, NetEase up 0.6%, and Alibaba up 0.4%. Baidu fell 0.2%, Pinduoduo fell 0.7%, and Xiaopeng Automobile and Ideal Automobile fell more than 2%.
International oil prices have weakened, with news suggesting that the United States is considering relaxing sanctions against Venezuela. The WTI crude oil near month contract fell 1.17% to $86.66 per barrel, while the Brent crude oil near month contract fell 1.36% to $89.65 per barrel.
The rise in the stock market dampened risk aversion, with the COMEX gold futures contract for October delivery on the New York Mercantile Exchange falling 0.33% to $1921.10 per ounce.