Stock Averages and Crude Oil Attempt Rebound, Yields Inch Higher

  • Sep 27, 2022
  • Barry Adams
  • Stocks rebound on Wall Street and the U.S. dollar pauses its advance. Crude oil bounced from its nine-month low but Treasury yields flirted with new 15-year highs.

    Bargain hunters were out looking for stocks in early morning trading after major averages closed at their 2022 lows yesterday. 

    Tech stocks led the gainers on the hopes that the recent sell-off was overdone. 

    The S&P 500 index increased 1.2% to 3,697.26 and the Nasdaq Composite index added 1.6% to 10,959.26. 

    Tesla, Amazon, Apple, Microsoft and Visa gained between 1% and 3%. 

    Energy complex stocks also gained after crude oil rebounded 2%. 

    Exxon Mobil, Chevron, Hess Corp and Schlumberger added between 1% and 2%.   

    Crude oil gained $1.70 or 2.2% to $78.43 and natural gas decreased 15 cents to $6.75 a thermal unit. 

    The yield on 2-year Treasury notes edged down to 4.28%, 10-year Treasury notes declined to 3.91% and 30-year bonds fell to 3.77%.  

     

    Europe Battles Rising Inflation, Rates and Dollar

    In Europe, benchmark indexes advanced after investors searched for beaten down stocks in financials and energy sectors. 

    The DAX index increased 0.6% to 12,299.50, the CAC-40 index added 0.7% to 5,810.25 and the FTSE 100 index inched higher 0.1% to 7,028.24. 

    European markets lacked direction as investors worried that rapid rise in interest rates may dip the economy into a recession without killing the high inflation. 

    Natural gas prices rebounded in Amsterdam trading and the TTF gas price futures for the immediate month delivery increased as much as 12% before cooling to 8.5% gain to 188.34 euros a megawatt hour. 

    Brent crude oil also rebounded 2.9% from a nine-month low to $86.56 a barrel. 

    The U.S. dollar paused its year-long advance and the euro traded at 96.25 cents and the British pound edged up to $1.77. 

    The British pound is expected to test its parity with the U.S. dollar and the euro in the coming weeks as the island nation struggles with rising cost of energy imports, falling government revenues and rising sovereign borrowing. 

    Currency traders are anticipating the pound to drop as low as 93 U.S. cents if the Bank of England fails to intervene and lift interest rates in an emergency meeting. 

     

    Asian Markets Rebound from Extended Losses

    Asian markets closed higher in a cautious trading as indexes in Japan and China rebounded but in India and Australia edged lower. 

    The Nikkei 225 index increased  0.5% to 26,571.87, while the broader Topix closed 0.5% higher at 1,873.01.

    The Bank of Japan carried out an unscheduled operation to curb currency speculation and control the rapid decline in yen and Finance Minister Sunichi Suzuki cautioned currency traders to avoid speculative bets. 

    The People's Bank of China injected more liquidity to financial system and dampen the rising stress in dollar-renminbi trades.

    The central bank added $24.7 billion in the repo market ahead of the end of the quarter. 

    The Sensex index in India edged down for the fifth day in a row and fell 37.70 points or 0.07% to 57,107.52 and the Nifty index 8.90 points or 0.05% to 17,007.40.

    The Indian economy is one of the few bright spots in the world, most developed economies are heading to a recession and emerging markets are battling sharp currency devaluations. 

    A mix of global economic slowdown and elevated inflation has kept investors on edge in India, despite the encouraging domestic economic scenario.

    Moreover, India is expected to benefit as more companies look to relocate from China and diversify their manufacturing base. 

    The Shanghai Composite Index jumped 1.4% to 3,093.86, while Hong Kong's Hang Seng Index gained fractionally to close at 17,860.31.