The yield on the US 10-year note was 9 basis points higher to 4.71 per cent at 12.09pm in New York.
In a note, Morgan Stanley equity strategists said: “Our sense from speaking with investors is that a majority still believe a fourth-quarter rally is more likely than not. While that confidence level may have waned a bit this past week, many are still leaning more long than they would like to reduce the probability of missing out in a year in which narrow mega cap strength has driven benchmarks.”
Still, Morgan Stanley is cautious on the outlook for equities and continues to advise on a defensive strategy.
“The bottom line, the breakdown in various breadth measures, cautious factor leadership, the recent decline in earnings revisions and fading consumer confidence reduces the odds of a 4Q rally, in our view. We maintain our 3900 year end price target for the S&P 500 and believe the best way to position is a barbell of defensive growth and late cycle cyclicals.”
Today’s agenda
Local: RBA board meeting minutes at 11.30am
Overseas data: NZ third quarter CPI at 8.35am; Eurozone ZEW expectations October; US September retail sales at 11.30pm, September industrial production, August business inventories, October NAHB housing market index
Other top stories
Barrenjoey has ‘some sympathy’ for pubs billionaire in Endeavour fight Barrenjoey analysts say Endeavour’s pubs have been a “low-return business” since 2009, but the company needs only “strategic tweaks”.
Genesis’ Dacian dramas give Albemarle a peek at an alternate universe If Albemarle executives ever wonder what might have been at Liontown, they need only look to Dacian Gold, where minority holders have held a suitor to ransom.
ASIC chairman warns new crypto rules need more time Corporate regulator Joe Longo calls for patience and investor Mark Carnegie says crypto sector has “nobody to blame but ourselves” for new regulation.
To read more from The Australian Financial Review’s Cryptocurrency Summit, click here.
Market highlights
ASX futures up 38 points or 0.5% to 7085 at 3.06am AEDT
- AUD +0.7% to 63.40 US cents
- Bitcoin +4.7% to $US28,171 at 3.15am AEDT
- On Wall St at 12.15pm: Dow +1% S&P +1% Nasdaq +1%
- In New York: BHP +2.4% Rio +2.9% Atlassian +4.1%
- Tesla +0.7% Apple -0.6% Lululemon +10.4%
- Stoxx 50 +0.3% FTSE +0.4% CAC +0.3% DAX +0.3%
- Spot gold -0.6% to $US1921.41/oz at 12.08pm in New York
- Brent crude -1.2% to $US89.83 a barrel
- Iron ore +2.6% to $US117.25 a tonne
- 10-year yield: US 4.71% Australia 4.46% Germany 2.78%
- US prices as of 12.09pm in New York
United States
In a note, Marc Andreessen said there’s far too much negativity about technology. “It is time, once again, to raise the technology flag. It is time for us to be Techno-Optimists.”
Andreessen said that technology is one of the three pillars of growth; the other two being population growth and natural resource utilisation. However, he argues that “the only perpetual source of growth is technology”.
Lululemon Athletica’s stock jumped by more than 10 per cent to an almost two-year high to start the week.
The sportswear maker will replace Activision Blizzard in the S&P 500 index, effective before the market open on October 18, after Microsoft completed its blockbuster deal to acquire the videogame publisher, according to an S&P Dow Jones Indices statement late on Friday.
Among the 32 analysts covering Lululemon’s stock, the median price target is $US450 and their current recommendation is “buy”, LSEG data shows.
Ford Motor executive chairman Bill Ford called on autoworkers to come together to end a month long strike that he says could cost the company the ability to invest in the future.
In a rare speech during contract talks in the company’s hometown of Dearborn, Michigan, Ford said high labour costs could limit spending to develop new vehicles and invest in factories.
Ford has 57,000 UAW workers compared with 46,000 at GM and 43,000 at Stellantis.
Microsoft’s LinkedIn is cutting about 668 roles across its engineering, product, talent and finance teams. These are the second such cuts this year as fewer companies use the hiring platform and corporate social network.
Commodities
The Biden administration and the government of Venezuelan President Nicolás Maduro have agreed to a deal in which the US would ease sanctions on Venezuela’s oil industry, The Washington Post reported.
In addition, the authoritarian state would allow a competitive, internationally monitored presidential election next year, according to two people familiar with the breakthrough talks.
The sanctions relief is to be announced after Maduro’s government and Venezuela’s US-backed opposition sign an agreement to include commitments by the socialist government to allow a freer vote in 2024, the people said. They’re expected to do that during a meeting in Barbados on Tuesday with US officials in attendance.
Germany has fired up one of its mothballed coal plants to help meet energy needs as the region’s first cold spell takes hold, Bloomberg reported.
Part of a power plant in the eastern part of the country — LEAG’s Jänschwalde block F — was reactivated on Sunday, according to Germany’s second largest lignite miner LEAG. The facility, which has a capacity of 500 megawatts, was taken offline in 2018, before the government allowed it to reactivate last winter as well as during the upcoming months to ease potential power strains.
