As oil prices tumbled overnight, the bond market's fall this fall was moderated, and U.S. stocks got some respite for now. From the news side, the US non-farm employment data on Friday evening is undoubtedly the most important "big test" of the market this week, and investors may also start an undercurrent in advance of the day.
In terms of US stock futures, the three major stock index futures were generally under slight pressure before the market, falling by about 0.3%, and failed to further extend Wednesday's rebound. The focus of many market participants was no doubt still on the move in Treasury yields, with the day's generally positive U.S. jobless claims and trade account data helping maturity yields regain their footing after falling sharply overnight.
The number of Americans filing for unemployment benefits remained at historically low levels last week, according to new data released by the Labor Department on Thursday, underscoring the continued strength of the Labour market. U.S. initial jobless claims for the week ended September 30 came in at 207,000, slightly higher than the previous reading of 204,000 but below expectations of 210,000.
A resilient labor market continues to fuel consumer spending in the face of high inflation and interest rates. Demand for workers remains strong, and the "feverish" layoffs of earlier this year have largely begun to abate. The monthly nonfarm payrolls report, due on Friday, will provide more information on the labor market. Economists expect nonfarm payrolls growth to slow to 170,000 in September, but to remain healthy overall.
Trade data also released today showed that the U.S. trade deficit in August fell to its smallest deficit in nearly three years - $58.3 billion, reflecting a pullback in U.S. demand for foreign goods and an increase in overseas goods exports. Imports fell 0.7 percent, while exports rose 1.6 percent. Rapidly rising borrowing costs could further limit American consumers' purchases of goods from abroad.
After the release of the above two sets of data, the yield of each maturity of the US Treasury bond rose slightly during the day, at one point hitting a intra-day high of 4.773 percent. The yield curve inversion between the 2-year and 10-year Treasury notes narrowed to 29 basis points, the smallest inversion since March.
In the past few weeks, a sharp sell-off in U.S. Treasurys has sparked wild swings in U.S. stocks, with the Dow now completely erasing its gains for the year and stocks ranging from technology to real estate falling. Despite the overnight rally, caution remains strong on Wall Street.
Liz Young, head of investment strategy at SoFi, said, "I've been cautious all year. Obviously we got a little bit of a breather on Wednesday, but I think it was just a brief respite."
It is worth mentioning that PIMCO co-founder and "old debt king" Bill Gross has warned again in a recent report that he no longer considers bonds to be an attractive investment, and stocks are even worse. In any case, he does not recommend long-term investments at current levels. Gross noted that the rise in Treasury yields means stocks now look overvalued in terms of their expected earnings.
Company news
[VinFast's third-quarter net loss of $622.9 million on $342.7 million in revenue]
VinFast Auto, a Vietnamese electric car maker, reported revenue of $342.7 million in the third quarter, up 2.6 percent from the previous quarter. Net loss in the third quarter was $622.9m. A total of 10,027 units were delivered in the third quarter. VinFast says it is currently on track to meet its delivery guidance. VinFast plans to build production facilities worth $150 million to $200 million in India.
[Apple considers switching its default search engine from Google to DuckDuckGo]
According to people familiar with the matter, Apple is in talks with DuckDuckGo to replace Google with DuckDuckGo as the default search engine for the privacy mode of Apple's Safari browser. Details of those negotiations are expected to be released later this week.
[Ford: The US auto industry has laid off more than 1,300 people since the current strike]
Ford said Wednesday that it would cut another 400 jobs because of the strike, bringing the total number of layoffs since the strike began to about 1,330. Ford previously reported third-quarter sales that showed it sold more than 500,000 vehicles in the U.S. in the third quarter, driven by strong sales of hybrids, electric cars and trucks. Ford said overall sales rose 7.7 percent from a year earlier to 50,504 vehicles, bringing its year-to-date total to 1.51 million.
[Google released Pixel 8 series mobile phones using AI technology in parts such as cameras]
Google announced the Pixel 8 on Wednesday, starting at $699, and the Pixel 8 Pro at $999. Both phones are based on the Tensor G3 self-developed chip, which enables Google to use its own artificial intelligence (AI) and robotic learning resources in areas such as cameras. Both phones will be available for pre-order on October 4 and will ship/be available on October 12.
What to watch tonight (Beijing Time)
October 5th
22:40 2023 FOMC Voting Committee, Minneapolis Fed President Kashkari speaks.
23:30 2024 FOMC Voting Committee, Richmond Fed President Robert Barkin speaks on the economic outlook.
October 6th
2024 FOMC Committee member and San Francisco Fed President Bill Daley speaks at the Economic Club of New York.
00:15 Federal Reserve Governor Jeffrey Barr speaks.