DJ MORNING BULLETIN: October 19, 2022

As a prelude to the announcement of inflation figures in the eurozone and the United Kingdom, stocks continued to rise on Wednesday, October 19, 2022. Thus, the eurostoxx 50 opens at 3,463.83 points (+0.64%), the CAC 40 at 6,067.00 points (+0.44%), the DAX 40 at 12,765.61 points (+0.92%), the FTSE 100 at 6,936.74 points (+0.24%), the SMI at 10,498.71 points (+1.64%), the AEX at 642.48 points (+0.24%), the BEL 20 at 3,484.01 points (+0.87%), the IBEX 35 at 7,611.30 points (+0.72%), the DJIA at 30,523.80 points (+1.12%), the Nasdaq at 10,772.40 points (+0.90%), the S&P 500 at 3,719.98 points (+1.14%) and the Nikkei 225 at 27,310.40 points (+0.90%), the S&P 500 at 3,719.98 points (+1.14%) and the Nikkei 225 at 27,310.40 points (+0.90%) 31 points +0.57% (class at 7:25am).

On the exchange side, the change compared to the close in New York indicates that EUR/USD opened at 0.9839 (-0.21%), EUR/JPY at 146.86 (-0.19%) and USD/JPY at 149.28 (+0.03%).

On Tuesday evening, Virbac refined several of its annual objectives, after recording a fall of 0.2% at constant scope and exchange rates in its turnover in the third quarter. For 2022, the veterinary laboratory thus expects a ratio of “current operating income before amortization of assets resulting from acquisitions” of between 14% and 15% at constant exchange rates. Last month, he said he was targeting a ratio of around 15% at constant exchange rates. For its part, Mercialys reported increased revenues in the third quarter, driven, according to the mall operator, by “a sustainable level of rent for merchants and a retail mix focused on accessibility for visitors”, in the current inflationary context.
European equity markets are expected to open in the green on Wednesday, while investors await inflation figures in the eurozone and the United Kingdom. At 7:35, the CAC 40 futures contract gained 36 points, or 0.6%, according to data from the IG Markets broker. The DAX 40 contract gained 65 points, or 0.5%, and the FTSE 100 contract increased by 28 points, or 0.4%.
Economists expect inflation to accelerate again in the eurozone, as in the United Kingdom, in September. According to a poll conducted by the Wall Street Journal, inflation should have peaked at 10% in these two regions last month.
Investors' attention will also focus on quarterly corporate results, as the pace of releases begins to accelerate. In Europe, the figures of the food giant Nestlé and the semiconductor equipment manufacturer ASML are being scrutinized, while in the United States, the results of consumer goods manufacturer Procter & Gamble, the technology group IBM and the electric car manufacturer Tesla will also be closely studied by investors. The accounts published in recent days by companies were generally well received by the market, allowing Wall Street to start a second consecutive session of increases on Tuesday. The Dow Jones Index (DJIA) added 1.1%, driven by Goldman Sachs after results that exceeded the bank's expectations. The broader S&P 500 index also rose by 1.1% and the Nasdaq gained 0.9%. Thus, investors will also be watching the Federal Reserve's (Fed) Beige Book on Wednesday, a preparatory document for the institution's next monetary policy meeting scheduled for November 1 and 2.
Asian stock markets traded in a mixed order on Wednesday. At the end of the session, the Nikkei index on the Tokyo Stock Exchange gained 0.5%, while the Hang Seng fell 1.5% in Hong Kong and the Shanghai Composite lost 0.8%.

U.S. Treasury bond yields were little changed on Tuesday, although the 10-year bond rate deviated from its highest level since October 2008 as investors welcomed the British government's fiscal U-turn.
British bond yields, on the other hand, were temporarily supported by the Bank of England (BOE), which denied that it had decided to postpone the start date of its quantitative tightening (QT) program.

The euro fell against the dollar on Wednesday morning. The volatility of the past two weeks seems to have subsided a bit since Monday, comments Minh Trang of Silicon Valley Bank. “It also appears that the climate is more favourable to risk, we can see that the dollar is hesitating a bit,” adds the trader. While there are still two Fed meetings left in 2022, “it seems that much of the uncertainty has disappeared for this year and, as a result, it seems that the market may not change much over the next two months,” he points out.

Oil futures rose Wednesday morning, regaining some of the ground lost the day before, despite continued concerns about weakening demand amid a global economic downturn. In addition, the United States will draw an additional 15 million barrels from its strategic reserves and is considering authorizing new drains this winter, according to government officials. These 15 million barrels are part of the 180 million barrels that Washington authorized to be sold in March, in order to bring down crude prices, which had soared just after Russia invaded Ukraine. US President Joe Biden is expected to address the nation on Wednesday about gas prices. At 7:25 a.m., the December North Sea Brent contract earned 34 cents at $90.37 per barrel, while the November contract for light sweet crude (WTI) listed on Nymex was trading at 73 cents at $83.55 per barrel.