In US economic data, the S&P Global manufacturing purchasing managers index (PMI) fell from 52 to 50.4 in October (survey: 49.9). The ISM manufacturing PMI fell from 50.9 to 50.2 in October (survey: 50). Construction spending rose by 0.2% in September (survey: – 0.5%). Chain store sales in the past week were up by 9.7% on a year ago compared with a 8.2% rise in the prior week. The JOLTs job openings index rose from 10.28 million to 10.717m in September (survey: 10m).
European sharemarkets were firmer on Tuesday on hopes that US Federal Reserve will soon start to scale down interest rate hikes. InEurope, earnings season has been better than expected. But the major worry is whether economies will move into recession. Out of the 163 STOXX 600 companies that have reported results so far, 58.3% exceeded analyst estimates, Refintiv data showed. In a typical quarter, 53% companies beat estimates. Miners rose by 3.4% while retailers rose by 2.2%. The continent-wide FTSEurofirst 300 index rose by 0.6% to fresh 6-week highs. And the UK FTSE 100 index rose by 1.3%.
US sharemarkets fell on Tuesday in response to stronger-thanexpected economic data. Job openings rose in September, as did construction, although manufacturing activity slowed in October. ‘Mega cap’ technology stocks fell with Amazon down 5.5%. Shares in Uber rose 12.0% after giving an upbeat fourth-quarter profit view. Shares in Pfizer rose 3.1% after it raised sales estimates. But Eli Lilly fell 2.6% after trimming its profit forecast. The Dow Jones index lost 80 points or 0.2%. The S&P 500 index fell by 0.4% and the Nasdaq index fell by 97 points or 0.9%.
US treasuries were mixed on Tuesday ahead of the Federal Reserve rate decision. US 10-year yields fell by around 3 points to 4.05%. But US 2-year yields rose by around 4 points to 4.55%.
Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$0.9950 to US$0.9850 and was near US$0.9875 at the US close. The Aussie dollar fell from highs near US64.65 cents to lows near US63.80 cents and was near US63.95 cents at the US close. The Japanese yen held between 147 yen per US dollar and JPY148.40 and was near JPY148.20 at US close.
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Global oil prices rose by around 2% on Tuesday on optimism that China will reduce Covid-19 restrictions. On social media there were reports that influential economist Hao Hong, said a “Reopening Committee” has been formed by Politburo Standing Member Wang Huning. The Brent crude oil price rose by US$1.84 or 2.0% to US$94.65 a barrel. The December contract expired on Monday at US$94.83 a barrel, down 1%. And the US Nymex crude oil price rose by US$1.84 or 2.1% to US$88.37 a barrel.
Base metal prices rose on Tuesday by as much as 8.3% with nickel up the most. But other metals rose 0.5-1.9%.
The gold futures price rose by US$9.00 an ounce or 0.5% to US$1,649.70 an ounce. Spot gold was trading near US$1,650 an ounce at the US close. Iron ore futures rose by US$2.25 or 2.9% to US$80.03. Before the latest monthly rollover of the futures contract, iron ore had traded at US92.43 a tonne.
Originally published by CommSec