Halloween rally drives markets higher, after a scary October - as it happened

Graeme Wearden

from on 2018-10-31 20:07 (#41YMT)

The slump of Red October is easing, as spooked investors snap up shares again

8.06pm GMT

Be gone, October!

Wall Street has closed for the day, and the month, with a two-day rally.

Dow closes up 240 points, Nasdaq closes in correction https://t.co/7qxovqoBsq

7.50pm GMT

7.46pm GMT

Here's an up-sum of today's trading in London, from Fiona Cincotta of City Index:

The FTSE rallied for a third straight session on Wednesday despite a stronger pound, jumping 115 points after a dismal October. October is traditionally a difficult month for equities but the FTSE shedding 4.8% is a significantly larger drop than what we would normally expect. How the beginning of November pans out will be interesting. Of the geopolitical issues which have be weighing on the market, namely Brexit, the Italian standoff with Brussels over spending, the US - Sino trade war or the slowing global, none have been resolved and we also have the US mid-term elections thrown into the mix.

Gains were broad based on the FTSE with Standard Chartered a notable riser following impressive results with profits surging 37% on last year. Standard Chartered reported a pre-tax profit of $1.06 billion, up from $774 million a year before and 9% ahead of estimates. By focusing on what is does best - Asia - the bank has managed to sharpen its competitive edge. Costs have been a concern in previous years, but the bank has shown its capabilities at reigning these in.

5.31pm GMT

Back in New York, tech shares are still on a tear - pushing the Nasdaq up by almost 3% today.

By my maths, that still leaves the Nasdaq down 8% for the month.

Faangs rally on Halloween after frightful October. NSYE FANG Index still 8% down mtd. https://t.co/9jUk0BpuJD pic.twitter.com/A8H64esQ9f

5.24pm GMT

5.16pm GMT

Good news: October is over, at least for traders in Europe.

Better news: European stock markets have all ended today's session higher, clawing back some of this month's losses.

Earnings are not universally strong and outlooks have betrayed some murkiness.

But, on the whole, we have more companies beating earnings estimates than missing, and more than the average. Fundamentals are still strong but there are questions about earnings growth from here.

The stock market is telling the Fed to stop raising rates. Janet Yellen has come out to urge the Fed to keep to its course, but the signs are the equity market is highly susceptible to a more aggressive course of hiking. The Fed has been here before - the question is do we get 1998 Greenspan Fed that listens to the equity market, or 2007/08 Bernanke Fed? October was a horrid month despite the gains of the last two days. We could see seasonal factors support further gains into the year-end but the primary trend could remain bearish."

3.50pm GMT

The Dow is holding onto its gains, now up 286 points (+1.15%) at 25,160 points.

Wall Street traders are doing their best to end October on a positive note. Today's decent results from GM, and strong ADP jobs figures, seem to be helping.

3.41pm GMT

October's volatility probably won't spook the Federal Reserve out of raising US interest rates again in December.

Capital Economics expect Fed chair Jay Powell will pave the way for a pre-Christmas hike, arguing:

Although the Fed is unlikely to make any policy changes at next week's meeting, we expect the statement to reiterate the FOMC's plan to continue gradually raising interest rates, with the next move coming in December.

With the latest data showing that activity has continued to expand at a rapid pace, hopes that the recent plunge in the stock market will prompt a 'Powell put' are likely to prove misplaced.

2.33pm GMT

The US dollar is also surging today, making gains against emerging market currencies such as the Brazilian real and the Turkish lira.

On a "risk-on" morning with 1-2% gains for US stock indices, #DXY $ index continues to strengthen & sets a high for the year.
Note also that this Oct, which hasn't been kind to #stocks, DXY is up for the 7th month in a row.
Another reflection of economic and policy divergence. pic.twitter.com/tIZAV11gQW

2.31pm GMT

Netflix up 8.7%
Facebook up 6.2%
Amazon up 5.8%
Alphabet up 4.4%
Apple up 2.6%

Best day for FAANG in nearly 3 years.@CNBC @SquawkStreet

2.27pm GMT

Last night, Facebook CEO Mark Zuckerberg hailed the company's 'Stories' product as a key future source of growth, and admitted Facebook has reached saturation point in "developed countries".

2.18pm GMT

Richard Dickie Hodges, Manager of Nomura Global Dynamic Bond fund, blames US interest rate rise fears for October's market slump.

Getting firmly into the Halloween spirit, he writes:

'The Federal Reserve remains the biggest, scariest vampire in the markets today. As it sucks the life-blood of investment markets with interest rate rises, the so-called "risk-free rate" becomes more attractive, the cost of funding risk rises and all risky assets must adjust to offer higher returns. In other words, they must sell off.

'But our Nosferatu is a complex villain - it cares deeply for its victim. As rates climb, it forces volatility into the stock markets, especially emerging markets with US dollar funding requirements that fear the higher greenback. It is this volatility that may cause the Fed to slow or pause the blood-letting in 2019.'

2.06pm GMT

Halloween is a time for fangs, so it's appropriate that the FAANG stocks are rallying in New York.

With Facebook now up 6.8%, Netflix also up 6.8%, Amazon up 4% and Alphabet up over 3.1%, technology stocks are in demand.

1.56pm GMT

Microsoft is leading the Dow's rally, up 3%, followed by credit card firm VISA (+2.7%), industrial equipment firm Caterpillar (+2.4%) and Apple (+2.1%).

1.38pm GMT

There's a Happy Halloween spirit on the New York stock exchange, as the final trading day of a brutal October kicks off.

The Dow Jones industrial average has leapt by 251 points, or 1%, to 25,125. That's on top of Tuesday's 400-point leap, and might cheer spirits on Wall Street.

Stocks open higher, but Dow still on pace for 5% loss in October https://t.co/7qxovqoBsq pic.twitter.com/9cuxIZQbTb

1.29pm GMT

European markets are still sharply higher, as traders prepare for Wall Street to open....

1.25pm GMT

Global stock markets is up 0.6% already today, thanks to gains in Asia and Europe.

The MSCI All Country World Index has risen to 481.03 points, up from 478 last night.

1.07pm GMT

The US president reckons shares are going up again today...

Stock Market up more than 400 points yesterday. Today looks to be another good one. Companies earnings are great!

1.01pm GMT

Boom! The FTSE 100 just nudged a new three-week high after a strong morning's trading.

The unspooked celebrations continued on Wednesday, the markets wringing all they can from Donald Trump commenting on Tuesday that a 'great deal' with China is on its way, undoing some of the renewed trade war fears that had hit on Monday night.

With basically every major sector in the green - spare a thought for Next, languishing at the bottom of the index following its latest high street woes - the FTSE could jump more than 100 points as the day progressed.

12.38pm GMT

Another reason for optimism: Canada's economy expanded by 0.1% in August, a better performance than expected.

*CANADIAN ECONOMY EXPANDS 0.1% IN AUGUST VS. FORECAST UNCHANGED

*CANADIAN GROSS DOMESTIC PRODUCT GROWS 2.5% FROM YEAR AGO

12.29pm GMT

Newsflash: American companies took on staff at a healthy pace this month.

US firms created 227,000 new jobs this month, beating expectations of 189,000 fresh hires.

Private payrolls gain 227K in Oct, vs 189K estimate - ADP/Moody's https://t.co/0zxBkcqnus

12.06pm GMT

It's a little early for 2019 market predictions, but we'll make an exception for this one:

2019 market outlook. pic.twitter.com/DUbTT0cCyL

11.38am GMT

It's a Happy Halloween for carmaker General Motors, which has just smashed Wall Street expectations.

General Motors on Wednesday posted far stronger-than-expected quarterly profit and said its full-year earnings forecast would come in at the high end of its forecast due to strong demand in North America.

The Detroit automaker reported third-quarter net income of $2.53 billion, or $1.75 a share, compared with a loss last year of $2.98 billion, or $2.03 a share.

11.27am GMT

A quick catch-up on the markets:

11.06am GMT

The latest inflation data has given eurozone policymakers a Halloween headache.

Consumer prices across the single-currency bloc rose by 2.2% this month, the fastest rate since 2014, up from 2.1% in September

September 2018: euro area #unemployment at 8.1%, EU28 at 6.7% https://t.co/k7ai4RJDrn pic.twitter.com/QoKd9mFERy

10.41am GMT

It's a grim day for UK butchers chain Crawshaw Group.

The supplier of sausages, chops, joints and pies is falling into administration. This puts 600 jobs at risk across 54 stores, which could close unless a buyer can be found.

The Yorkshire-based company, which was founded in 1954, has been talking to investors over the past month but has failed to raise the funds it needed.

It expects to appoint administrators later on Wednesday who will then try to find buyers for the business and its assets. Crawshaw has 42 high street stores and 12 factory outlet stores across the Midlands and the north of England.

10.10am GMT

Full marks to the Bond Vigilante's team at M&G, who have produced some spooktacular charts today.

The first shows the remorseless march of US student debt, which has tripled over the last decade.

"US Federal Reserve (Fed) Chairman Jerome Powell recently warned about the ever-increasing amount of US student debt outstanding: "You do stand to see longer-term negative effects on people who can't pay off their student loans. It hurts their credit rating, it impacts the entire half of their economic life." Student debt also impacts the overall economy: as graduates seek to repay their loans, they are forced to make concessions to their financial consumption, leading to an ever-growing drag on the economy. They buy fewer goods and services and are delayed in joining the housing ladder, with many choosing (or having) to rent instead. On top of this, student debt sees the highest 90+ day delinquency rate of all US consumer credit."

"The long-end of the US Treasury market has often been described as a giant anaconda: it draws little attention as it sleeps most of the time, but the minute it wakes up, everybody around shakes. US 30-year bonds don't bite, but their moves can be as poisonous as they basically determine millions of mortgage rates, as well as the price that governments and companies around the world pay for debt.

The 30-year Treasury yield has remained within the support and resistance level shown for over 30 years, rallying 6% over the period and giving investors a long bull run. Does the recent breach through this level mean that the anaconda is beginning to stir?"

"With US unemployment at rock-bottom levels and the stock market at near record highs, the Fed has begun hiking rates in an attempt to engineer a soft landing: it wants to slow the economy enough to avoid an overheating, but not so much that it causes a recession.

How many times over the past 70 years has the Fed successfully managed to do this and return unemployment (green line) back up to its natural level (blue line) without a recession ensuing (vertical bars)? You'll be scared after counting""

9.31am GMT

The slump in Red October has dragged many global stock markets into negative territory for this year.

Here's a selection of the best and worst performers in 2018:

The markets are racing ahead following a very good session last night in the US where the S&P, Nasdaq and Dow Jones all posted gains in excess of 1.5%.

"It's now the turn of European and Asian stocks to join the rally with the FTSE 100 shooting up 1.5% in early trading on Wednesday and Japan's Nikkei 225 index jumping 2.2%.

9.19am GMT

Michael Hewson, chief market analyst at CMC Markets, says markets may be turning the corner, after a rough October:

Asia markets managed to close out the month of October and post their second consecutive day of gains in what has been a pretty poor month for equity markets in general.

This rebound could well be down to some end of month position adjusting, however there have been some indications in the past few days that we might be starting to see a bit of a short term base, with most of the bad news already priced in to some extent.

9.16am GMT

American's can't get enough of Halloween, so Wall Street is eager to join today's rally.

Here's the pre-market calls from CMC Markets:

9.09am GMT

The FTSE 100 is continuing to push higher. It's now up 115 points, or 1.6% to 7150.

Nearly every sector is up, led by manufacturers, energy firms, tech stocks and banks:

8.45am GMT

Despite today's Halloween rally, global markets are still on track for their worst month since the financial crisis.

Figures calculated earlier this week showed that $8 trillion had been wiped off global stocks in October.

Smart money is running for the hill and this was the message which October brought for the global equity market. Global stocks lost over $8 trillion in October, a headline which suits the best on the Halloween day.

8.39am GMT

Investors are refusing to be spooked on Halloween, says Connor Campbell of SpreadEX:

With October containing as much red as the goriest of slasher flicks, the markets oddly chose to rebound on what would have been an entirely calendar-appropriate day to continue the month's trading horrors.

Building on Tuesday's gains, the FTSE shot up 1.3% after the bell, allowing the index to cross 7100 for the first time in 3 weeks. It benefited from the market-wide shift in sentiment, which itself came despite further evidence that the trade war is hurting the Chinese economy, as the country suffered a slide in manufacturing activity.

8.39am GMT

Overnight, China got the shivers, as manufacturing activity fell and the yuan was fixed at a new 10-year low to the dollar.

8.33am GMT

Today's rally is welcome, but it's not enough to wipe out this month's losses.

October has been particularly bad for US investors, with the main indices falling sharply.

After Tuesday's comeback, the Dow is down 5.9 percent this month, still its worst performance since August 2015. The S&P 500 is off by 7.9 percent in October, on track for its worst month since May 2010. On Monday, the S&P 500 closed in correction territory, down 10.2 percent from its record.

"Obviously we're in a correction phase of the stock market and I think investors have to realize that," said Bruce Bittles, chief investment strategist at Baird.

8.26am GMT

European stocks are all jumping - fortunately not with fright.

8.14am GMT

Weeeee! The FTSE 100 is flying faster than a rocket.

The blue-chip index has gained 88 points, or 1.2%, to 7124, clawing back some of this month's losses.

7.56am GMT

Good morning, and welcome to our rolling coverage of the financial markets, the world economy, the eurozone and business.

October has well and truly lived up to its chilling reputation, with stock markets around the globe suffering one of their worst months in recent memory. It's been a wild ride for investors and there is no guarantee it's over yet.

Markets may have recovered their early losses and some indices may even be in the green for the week but volatility has not eased and that's a concern.

European Opening Calls:#FTSE 7099 +0.89%#DAX 11402 +1.02%#CAC 5031 +1.06%#MIB 19218 +1.15%#IBEX 8900 +1.07%

#FTSE100 called +65pts at 7100 after a bullish breakout from a 3-week falling channel, extending the current rebound rally pic.twitter.com/36YwTdeaV8

The stand-off between the Italian government and the EU continues. Italy's economy grew 0.8% in the third-quarter on an annual basis, which was below the forecast of 0.9%.

Matteo Salvini, Italy's joint deputy prime minister claimed the underwhelming update is a reason the government needs to increase spending, and in turn increase the budget deficit. The Italian situation could spark another round of the eurozone debt crisis, and given that the country has the third-largest government bond market in the world, the fallout could be enormous.

Source	RSS or Atom Feed
Feed Location	http://feeds.theguardian.com/theguardian/business/economics/rss
Feed Title
Feed Link	http://feeds.theguardian.com/