Stocks On Wall Street Retain Upward Bias, Yields Scale Higher

Barry Adams
20 Oct, 2022
New York City

Stocks on Wall Street advanced following a stronger-than-anticipated batch of corporate earnings. 

The S&P 500 index gained 0.9% to 3,728.21 and the Nasdaq Composite index advanced 1.3% to 10,814.40. 

Crude oil advanced but natural gas prices fell and extended one-week losses on the falling demand and exports. 

Crude oil edged up $1.12 to $86.67 and natural gas declined 17 cents to $5.29 a thermal unit. 

Treasury yields continued to climb as worries of rate-path overshadowed positive earnings from the latest batch of corporate earnings. 

The yield on 2-year Treasury notes increased to 4.60%, 10-year Treasury notes jumped to 4.16% and 30-year bonds increased to 4.16%. 

IBM reported better-than-expected results and lifted its revenue forecast. 

Tesla dropped 4.4% after the electric vehicle maker reported third quarter revenue increased 56% to $21.4 billion from $13.7 billion a year ago. 

Net income in the quarter doubled to $3.3 billion from $1.6 billion and diluted earnings per share rose to 95 cents from 48 cents a year ago.

 

Cautious European Markets 

Caution prevailed in European markets despite positive corporate results on the ongoing worries of elevated energy prices and aggressive rate hike worries. 

The DAX index edged down 0.3% to 12,706.18, the CAC-40 index increased 0.3% to 6,058.01 and the FTSE index was nearly unchanged at 6,919.29.

The euro edged up to 98.02 U.S. cents and the British pound held near $1.12.

Brent crude increased $2.04 to $94.40 a barrel and TTF natural gas rose 12.5% to 126.52 euros a MWh.

 

Record Current Account Deficit In Euro Zone 

The Euro zone's current account deficit shot up to a record high in August, according to the data released by the European Central Bank. 

Deficit increased to 26.323 billion euros in August from 19.960 billion euros in August, and swung from 17.089 billion euros a year ago. 

 

UK to Appoint Fifth Prime Minister In Six Years 

Political chaos in the U.K. also weighed on the market sentiment. 

Prime Minister Liz Truss announced her resignation and the UK will search for its fifth prime minister in the last six years. Prime Minister Truss survived in her position for about two months.  

Political infighting and mini-budget missteps sapped support for Truss'  leadership as post-Brexit turmoil reached a new high. 

 

Asian Markets Fall On Diverging Monetary Policy 

Benchmark indexes in Asia declined on the worries that the diverging monetary policies of the region with the U.S. may drive the region's currencies lower. 

Nikkei 225 Average declined 0.9% to 27,006.96, the Hang Seng index dropped 1.4% to 16,280.22 and the Sensex index increased 0.2% to 59,202.90. 

The yen dropped to 150 against the U.S. dollar, the lowest not seen since 1990 and the Japanese bond yield traded above the 0.25% limit set by the Bank of Japan. 

Stocks in Mumbai opened lower but major averages pared losses on the corporate earnings optimism. 

The rupee dropped to a new low and fell below 83 to a dollar after the reserve currency resumed its climb. 

The yuan also dropped to a 14-year low of 7.2205 on the rising U.S. Treasury bond yields.