Written by Gary
US stocks rebounded for a second day today (SPY +1.2%), as investors snapped up beaten-down technology. Robust earnings boost equity markets after brutal month.
The Market in Perspective
|Here are the headlines moving the markets.|
Wall Street jumps as tech bounces back at end of blistering month
U.S. stocks rebounded for a second day on Wednesday, as investors snapped up beaten-down technology and internet favorites and strong company results lifted spirits after equities had been spooked this month.
Federal Reserve unveils proposal to ease regulations for larger banks
The Federal Reserve said on Wednesday it wants to ease regulations for U.S. lenders with less than $700 billion in assets, a way to lessen the burden on big commercial lenders that do not have volatile Wall Street businesses.
Birthday blues for bitcoin as investors face year-on-year loss
Bitcoin was heading toward a year-on-year loss on Wednesday, its 10th birthday, the first loss since last year’s bull market, when the original and biggest digital coin muscled its way to worldwide attention with months of frenzied buying.
Hyundai, Kia Motors to develop new solar charging tech for vehicles
Hyundai Motor Co and its affiliate Kia Motors Corp are planning to launch a solar charging technology for some Hyundai vehicles to meet global emission regulation targets, the South Korean automakers said on Wednesday.
Countering global protectionism, Pacific trade pact nears takeoff
A landmark 11-country deal that will slash tariffs across much of the Asia-Pacific region will come into force at the end of December, New Zealand said on Wednesday, a rare bright spot for global commerce as the U.S.-China trade war intensifies.
Robust earnings boost equity markets after brutal month
Robust corporate results helped world stock markets surge on Wednesday, bringing some relief to jittery investors after a brutal October sank equities with one of their worst drops since the financial crisis 10 years ago.
Musk shakes up SpaceX in race to make satellite launch window: sources
SpaceX Chief Executive Officer Elon Musk flew to the Seattle area in June for meetings with engineers leading a satellite launch project crucial to his space company’s growth.
GM offers buyouts to cut costs after strong quarterly profit
General Motors Co on Wednesday stepped up efforts to cut costs in response to tariff and market pressures, even as it reported third-quarter profit that blew past Wall Street expectations.
U.S. Supreme Court divided over Google privacy settlement
U.S. Supreme Court justices, in an internet privacy case involving Google, disagreed on Wednesday over whether to rein in a form of settlement in class action lawsuits that awards money to charities and other third parties instead of to people affected by the alleged wrongdoing.
Shocktober Is Over – Global Stocks Lose $8 Trillion, Most Since Lehman
Eight. Trillion. Dollars…
And it’s gone…
October’s Carnage at-a-glance…
S&P 17 down days most since 1970
Nasdaq 100 worst month since Oct 2008
S&P worst month since Feb 2009 (lowest monthly close since April)
FANG stocks crashed 21% in October – the biggest monthly drop on record
Semis plunged almost 15%, the biggest monthly drop since Nov 2008
“Most Shorted” stocks down 13.8% in October – worst month since Jan 2016 (or best for shorts)
S&P Financials dropped over 7% in October – worst m …
Kudlow Says More China Tariffs “Not Set In Stone”
With just 26 minutes left in what has been by some measures the worst month for stocks since the collapse of Lehman Brothers, Trump chief economic advisor Larry Kudlow appeared on CNBC to quiet investors anxieties about President Trump’s plans for the next round of China tariffs, in what we can only imagine was an attempt to shield ramping equities from any last-minute complications, as stocks have exhibited a concerning pattern in recent weeks of falling during the last two hours of the trading day.
In response to reports from earlier this week that Trump is planning to expand tariffs to cover all Chinese goods entering the US by the end of the year if no agreement between China and the US has been reached before then, Kudlow cautioned that “nothing has been set in stone”.
Kavanaugh Declines $600K GoFundMe While His Accuser Walks With Over $1 Million, Book Offers
Brett Kavanaugh – considered to be the poorest Supreme Court Justice on the bench, has declined nearly $600,000 that was donated to him through a GoFundMe campaign amid a firestorm of sexual misconduct charges during his confirmation process, according to Yahoo! News.
“because of judicial ethics restraints, Justice Kavanaugh and his family cannot accept or direct the funds,” reads an update to the GoFundMe campaign.
GE Locked Out Of Commercial Paper Market After Moody’s Downgrade
Yesterday we asked if, as a result of its ongoing operational troubles and recent downgrade by S&P, GE was facing another Commercial Paper “moment”, with a Moody’s downgrade now imminent. The reason is that GE has traditionally been one of the biggest issuers of Commercial Paper to fund daily operations, and used to be one of the biggest issuers of the debt: veteran readers may recall that during the financial crisis, GE’s loss of access to the frozen CP/Money Market nearly resulting in a terminal liquidity crisis at the industrial conglomerate.
Since then, GE’s reliance on commercial paper was material, and in the second quarter, GE had on average around $16.6 billion of the debt outstanding – a sizable portion of its total $116 billion in debt.
A warning shot came in early October, when S&P cut GE’s short-term grade to A-2, a level below the top tier. That’s a rating of commercial paper that some classic prime money market funds are reluctant to buy. In fact, prime money market funds historically had to have at least 97% of their securities rated at least A-1 from S&P and P-1 from Moody’s, but those rules were loosened amid this decade’s money market reform. Even so, as Bloomberg noted, many funds would be far less willing to buy securities with a split rating, i.e., where at least one rating is below A-1 or P-1.
And with fewer funds interested in buying GE paper, the company would be forced to pay higher rates to sell its commercial paper, according to Peter Crane, president of Crane Data, which tracks money market funds. “They’ll still be able to find buyers, but at a cost of course,” Crane said. It cost 2.34% for a top-tier corporation to borrow for 90 days, according to U.S. Federal Reserve data. Companies the next tier down, where one ratings firm has GE, paid 2.71%.
Fast forward to today when moments ago GE found it …
Market Extra: After a 673-point, 2-day surge for the Dow is the bottom in for the stock market?
It’s Wall Street’s version of an inquiry that might be fielded by a parent on a long road trip: are we there yet?
Trump Today: President blasts Paul Ryan in dispute over birthright citizenship days before midterm elections
President Donald Trump ripped House Speaker Paul Ryan for comments he made about birthright citizenship, as he claimed for the latest time that Republicans would do better at protecting people with pre-existing conditions and prepared to hold a rally in Florida.
The Tell: Why a 240-point rally for the Dow and stock-market rebound is ‘uninspiring’
Technical analyst Jeff deGraaf is unimpressed with the current attempt by stocks to punch higher after a sharp rally on Tuesday an apparent follow through in early Wednesday action.
Summary of Economic Releases this Week
Earnings Summary for Today
leading Stock Positions
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