Key Market Insights October 4

9 min read

US Markets

Stocks were down on Friday as they finished the final day of Q3 with significant losses.

  • For the month of September, the Dow fell 8.8%, the S&P 500 lost 9.3%, and the Nasdaq slumped 10.5%.
  • This is the first time since 2009 that S&P 500 and Nasdaq have suffered three consecutive losing quarters. The Dow had not seen three negative quarters since 2015.
  • The current 10 Year U.S. Treasury yield is set at 3.82860%
Market Price Move
Dow Jones 28,725.51 -1.71%
S&P 500 3,585.62 -1.51%
Nasdaq 10,575.62 -1.51%
Russell 2000 1,664.72 -0.61%

 

Canadian Markets

Canadian banks are having one of their worst years as markets around them continue to crumble.

  • The traditionally strong industry, which allowed Canada to weather the impacts of numerous economic downturns better than the United States, has been disproportionately impacted because of the role of interest rates and inflation in the current downturn.
  • Despite the downturn, banks continue to raise dividends, which has made some analysts bullish about their prospects as an investment.
  • Bank of Montreal’s dividend is up 30% compared with this time last year. RBC (19%), Bank of Nova Scotia (14%), National Bank of Canada (29%), Canadian Imperial Bank of Commerce (14%), and Toronto-Dominion Bank (13%) have all raised their dividend payouts.
  • On average, Canadian banks pay dividends between 4-6% of their stock price, which is significantly above the market average of 2.9%.
  • Dividends also provide guaranteed income at a time when stock prices are declining.
Market Price Move
TSX 18,444.22 0.01%

 

European Markets

European markets rose last Friday but still had their worst month since June as investor sentiment soured following a strong performance in July.

  • The Stoxx 600 finished up 1.3% on Friday, led by construction stocks, which gained 2.4%, and media stocks, which rose 2.3%.
  • The Stoxx 600 lost 7.8% in September and 6% in Q3 2022.
  • Europe faces tough times ahead due to the current energy crisis, supply issues, and market volatility.
Market Price Move
Euro STOXX 50 3,318.20 1.19%
UK (FTSE 100) 6,893.81 0.18%
Germany (DAX) 12,114.36 1.16%
France (CAC 40) 5,762.34 1.51%

 

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Asian Markets

Shares in Asia were down on Friday but rose in China after unexpectedly strong factory activity data.

  • Nintendo lost 3% after finalizing a 10-for-1 stock split.
  • Softbank was down 2% after announcing plans to cut 30% of its staff working on the Vision Fund.
  • Toyota slipped 3% after criticism that the carmaker is not transitioning to electric vehicles fast enough.
Market Price Move
S&P Asia 50 3,851.33 -0.21%
Japan (Nikkei 225) 25,937.21 -1.83%
South Korea (KOSPI) 2,155.49 -0.71%
China (Hang Seng) 17,222.83 0.33%
India (SENSEX) 57,426.92 1.80%

 

Commodities

Oil prices were up last week for the first time in five weeks amid concerns about an OPEC+ meeting scheduled for Wednesday to discuss potential oil output cuts.

  • Oil had increased 1.5% early on Friday morning due to these concerns before falling to finish the day down after reports indicated the cuts may be smaller than expected.
  • Brent crude fell 0.3%, and U.S. West Texas Intermediate crude lost 0.6% on Friday.
  • Both Brent and U.S. WTI fell 23% in Q3 2022.
Market Price Move
Oil (NYSEARCA:OIL) 28.30 -2.21%
Gold (NYSEARCA:GLD) 154.67 0.01%
Silver (NYSEARCA:SLV) 17.50 0.75%
Corn (NYSEARCA:CORN) 27.04 1.01%
Lumber (NASDAQ:WOOD) 65.43 1.14%

 

Currency Exchange Rates

The U.S. Dollar was up on Friday as the EU recorded record-high inflation, and economic data from the U.S. was better than expected.

  • The U.S. Dollar was down last week for the first time in three weeks after significant gains by the British Pound and Japanese Yen.
  • The dollar had its best quarter in seven years in Q3 as the Federal Reserve’s aggressive approach to fighting inflation raised the dollar’s value.
  • Data released last Friday showed that the annual inflation rate in the Eurozone hit 10% in September.
Market Price Move
UK(GBP) £0.90 0.15%
Europe (EURO) €1.02 -0.13%
Canada (Canadian Dollar) $1.37 -0.61%
Japan (Yen) ¥144.76 0.01%

 

Cryptocurrency

Coinbase halted payments and withdrawals from U.S. bank accounts briefly on Sunday due to “technical issues,” sending cryptocurrency markets down.

  • Coinbase allowed the use of debit cards and Paypal to purchase coins but not to withdraw.
  • It is still unclear what caused the issues; accounts were impacted for a few hours on Sunday morning.
  • A separate incident that caused Solana’s network to go out was originally reported to be connected to the Coinbase error but was later revealed to be a separate issue.
Market Price Move
Bitcoin $19,199.30 -1.30%
Ethereum $1,293.85 -1.37%
Litecoin $52.51 -0.79%
Bitcoin Cash $115.94 -3.46%

 

Good trading,
Chris Svorcik

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