Here is what you need to know.
Global stock markets posted their worst quarter in four years. Weakness began with China’s “Black Monday” in late August and persisted over the next three months. Of the majors, China’s Shanghai Composite crashed 28.6%, Germany’s DAX tumbled 12.2% and Britain’s FTSE fell 7.7%. Here in the US, the Dow is down 8.9% with one full trading day to go.
The eurozone is back in deflation. Consumer prices slipped 0.1% year-over-year in September, missing the flat reading that was anticipated. The number was largely impacted by the weakness in energy prices. The more closely followed core reading showed prices were up 0.9% YoY in September, matching the August reading. The euro is down 0.3% at 1.1214.
China loosened mortgage requirements. China has reduced the minimum downpayment for first-time homebuyers from 30% to 25% as it looks to jumpstart its slowing economy. Reuters says the changes impact citizens in cities without home-buying restrictions. A statement from the People’s Bank of China and the China Banking Regulatory Commission said Wednesday’s announcement is intended to “support reasonable consumption of housing.” The Chinese yuan is X at X per dollar, its strongest in three weeks.
Japanese data disappointed. Retail sales and industrial production figures both fell short of estimates. August retail sales gained 0.8% YoY, but missed the 1.1% growth that was expected. The reading marked the slowest pace of expansion since March. Meanwhile, industrial production sank 0.5% YoY, missing the 1% gain that was anticipated. “Industries that mainly contributed to the decrease were general-purpose, production and business oriented machinery, electrical machinery and transport equipment, in that order,” Japan’s Ministry of Economy, Trade and Industry said. The Japanese yen is weaker by 0.5% at 120.28 per dollar.
Tesla introduced the Model X. The crossover SUV is here after a three-year wait. According to CEO Elon Musk, the Model X has achieved a 5-star safety rating in “every category.” Features include seating for seven, “falcon-wing” doors and the so-called “Ludicrous Mode,” which takes the Model X from 0 to 60 in 3.2 seconds. The Model X starts at $US132,000.
Ferrari is IPOing. CNBC reports an initial public offering announcement could be made as early as this week. CNBC cites anonymous sources suggesting a $US1 billion offering could occur sometime in mid-October. Fiat-Chrysler is the automaker’s parent company.
Stock markets around the globe are higher. Japan’s Nikkei (+2.7%) paced the overnight gains in Asia and France’s CAC (+2.7%) leads the way up in Europe. S&P 500 futures are higher by 23.75 points at 1898.25.
US economic data is moderate. ADP Employment Change crosses the wires at 8:15 a.m. ET and Chicago PMI is due out at 9:45 a.m. ET. US crude oil inventories will be released at 10:30 a.m. ET. The US 10-year yield is up 5 basis points at 2.10%.
There’s a lot of Fed speak. New York Fed President William Dudley kicks things off at 8:35 a.m. ET with his speech before the Securities Industry and Financial Markets Association’s Liquidity Forum. Next, Fed Chair Janet Yellen and St. Louis Fed President James Bullard are scheduled to deliver opening remarks at the Federal Reserve’s annual community banking conference in St. Louis at 3 p.m. ET. Federal Reserve Governor Lael Brainard will speak at the conference at 8 p.m. ET.
Earnings flow is light. Actuant and Paychex are scheduled to report ahead of the opening bell.
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