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Market Update - 04/10/16

Tuesday, October 4, 2016

Disclaimer: This is an informal commentary by one of our Market Analysts. It should not be taken as investment advice and is made available only on that basis.
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US: The S&P closed -0.33%, +6bps from the London close, on volumes -48% vs. the 30 day average. U.S. equities closed lower with yesterday morning’s ISM number coming in modestly ahead of expectations printing 51.5 vs. survey estimates of 50.4. Bond yields rose with the 10 year yield rising 3bps to 1.63%. With the odds of a September rate hike now just shy of 60% the market seems to be placing marginally less weight on the ability of near term data points such as Fridays payrolls to change the Fed’s course of action. Fed speak was mixed with Bill Dudley urging caution in raising rates while Loretta Mester struck a more hawkish tone urging a hike in rates given better labour conditions.  Oil rose for the fourth day in a row, climbing 0.85% to a 3 month high. S&P composite volume was rather light down 30% from Friday to the lowest level since the Friday before labour day. Telcos, Industrials and Discretionary led the market higher. Real Estate the greatest laggard, followed by Utilities and Staples. 

Most Asian stocks rose, with Japanese shares rallying as the yen weakened, after data showing expansion in U.S. manufacturing boosted optimism over the health of the world’s largest economy.The MSCI Asia Pacific Index added 0.1% to 140.74. Japan’s Topix index rose 0.6% as the yen dropped for a sixth day against the dollar, declining 0.4% to 102.03.

Ericsson to announce 3,000-4,000 job cuts in Sweden today.

NN has announced that its wholly-owned reinsurance entity in Ireland, NN Re, has signed a portfolio transfer agreement with Canada Life International Re Limited.

AXA CEO says rumoured Generali takeover ‘makes no sense at all’

Ryanair September traffic +13%.

ABB to keep Power Grids unit, to buy back $3bn of stock.

Trump Foundation ordered to stop fundraising in New York

In Europe, Israel is closed today. In other regions, China is closed.

As SAB Miller leaves FTSE 100 today, tracker funds in UK will need to reinvest cash from the deal, becnchmarked off today’s close.

As Germany reopens after holiday yesterday, Deutsche Bank trades +2% at open. No new headlines.

Croda International replaces SAB in FTSE 100.

PIMCO , in a Bloomberg article says one-size-fits-all hedging tactics are undermining pension returns.

GBP trades lower again after yesterday’s fall on Brexit statements, trades at .8751 v EUR and 1.2765 v USD.

Europe trades better, Eurostoxx +60 BPs, UK leads, with FTSE 100 + 1.07% on boost to exporters on GBP move.