Oil Release
The US plans to release 15 million barrels from emergency reserves, and may consider significantly more this winter. President Joe Biden will announce the plan Wednesday, as high gas prices pose a risk for Democrats in next month’s midterm elections. It’s the final tranche of oil from a program the White House began in the spring, and it plans to replenish the emergency stockpile when West Texas Intermediate crude prices are at or below $67 to $72 per barrel.
Netflix Beats
Netflix added 2.41 million customers in the third quarter, growing in all regions of the world and exceeding Wall Street expectations. The earnings beat fueled a rally in tech stocks, easing investor concerns about growth in one of the hardest hit sectors this year. Shares of Netflix rose as much as 16% in extended trading, though the stock remains down 60% this year through the close Tuesday.
Mixed Open
Asian stocks are set for a mixed open after US equities posted their first back-to-back gains in two weeks. Upbeat company results, cheaper valuations and UK policy reversals have helped buoy risk sentiment, and a Bank of America survey of fund managers shows full capitulation, opening the way for equities to bottom in the first half of 2023. United Airlines said it sees Covid recovery trends overcoming recessionary pressures.
Where does Bitcoin go from here after losing about 70% of its value? This week, our MLIV Pulse survey focuses on crypto. Please click here to share your views.
Apple Revamps
Apple launched a redesigned entry-level iPad and new Pro models. The company also introduced a cheaper Apple TV with 4K support. Goldman’s banking partnership with the company has been extended through the end of the decade. The bank touted a new savings account that embeds a high-yield savings account directly into the Apple Wallet and said the firm’s tie-up with the iPhone maker is “very, very strong.”
Hong Kong Revival
Hong Kong leader John Lee on Wednesday will lay out his vision for the city’s revival as an international financial hub during his maiden policy address, which is likely to include measures to ease property taxes and visa restrictions. The city has suffered from a brain drain, and its economy is projected to contract this year for the third time since 2019.
What we’ve been reading
- Xi’s mentions of “security” eclipse “economy”
- Remote work frees millions of hours to sleep
- Twitter locks staff stock accounts
- Look to Japan, not Italy, for the next meltdown
- Bill Gross criticizes “total return” bond funds
- How the NBA is winning fans in Japan
- 26-year-old becomes a billionaire managing virtual stars
- BYD’s red carpet treatment
And finally, here’s what Garfield’s interested in this morning
Equities are perking up again as US earnings season starts, but there’s another driver that’s likely playing a more substantial role. Even as Fed hawks spread their wings after the latest hotter-than-expected inflation print, rates traders show signs of cooling off in their bets on how high interest rates across the developed world will get. The average for one-year forward swaps on central bank benchmarks have been rising relentlessly for much of this year. They have plateaued recently, accompanied by signs that global equities could be finding a bottom.
If the Reserve Bank of Australia’s pivot to a slower pace of hikes proves an isolated case, then rate expectations would likely revive again and send stocks lower. But any evidence of the sort of broader shift away from peak aggression has the potential to unleash a wave of equities buying should the trillions sitting on the sidelines decide the worst of the current wave of monetary tightening is behind us.
