The main news of the stock market on October 19, 2022

Posted by:Alex Belov Posted on:Oct 20,2022

What’s interesting there?

▪️S&P 500 Index (^GSPC) returned to values ​​below 3,700,

▪️The dollar index rose by 0.9%,

▪️VIX by 1.15%,

▪️and the yield on American ten-years jumped by 3.2%. By the way – already 4.15. This is a lot. Let me remind you that the interest rate is now 3.25%. And this means that the market is laying down a further serious increase in the rate.

▪️In France, ten-years added 4.1%, in Germany 4.2%, in Italy 2.8%, and in the UK the yield fell by 1%.

▪️Exceeded analyst expectations: International Business Machines Corporation (IBM), Baker Hughes Company (BKR), Nasdaq, Inc. (NDAQ), United Airlines Holdings, Inc. (UAL) and The Procter & Gamble Company (PG).

▪️Reported worse than expected: Alcoa Corporation (AA), Tesla, Inc. (TSLA).

According to FactSet Research, 69% of the time EPS was better than expected. Over the past 5 years, an average of 77% of companies reported better than expected. Profit reported by companies on average exceeded analyst estimates by 0.1%, which is below the five-year average of 8.7%.

What to expect next?

Retail investors remain bearish, according to SqueezeMetrics. Chief Strategist B. Riley said that some investors keep a close eye on levels like 3600 or 3700 in the S&P and exit stocks whenever the index reaches those levels.

JPMorgan decided not to beat around the bush, advising investors to cut back on stocks due to the growing risk of misguided policies by the US Federal Reserve and some other central banks. Whether the words of the chief strategist will be heeded is another question.

By the way, the situation when UST falls so much is rather unique. This doesn’t happen very often in world history.

And it is no coincidence that officials from the Fed, the Treasury and the White House turn to economists and find out whether the US stock market is able to withstand shocks similar to those sold on British markets. It is this fact that suggests that the pressure on the Fed to not raise rates so much and tighten monetary policy will increase.

And it is quite possible that ahead we will see some softening of rhetoric. Particularly Powell. Let’s see. No one is allowed to destroy the economy.

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Alex Belov

Developers by Analyst, investor

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