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On September 15th, institutional analysts pointed out that the market expects the Bank of England to keep its base interest rate unchanged on Thursday, but at the same time slow its planned reduction of government bond holdings. This plan is attracting increasing attention as government bond yields continue to rise. The Bank of England cut its base rate from 4.25% to 4% last month, maintaining the pace of rate cuts since August 2024. At that time, as inflation retreated from its 2022 peak, the central bank began to gradually remove policy restrictions that had been curbing economic activity. Policymakers described this series of 25 basis point rate cuts every three months as "cautious and gradual." If this pace continues, policymakers should hold the base rate at 4.25% on Thursday. However, there are signs that they will not only keep interest rates unchanged this week, but may also hold rates steady at their November or December meetings.Russian Ministry of Defense: Russian Tu-22M3 bombers are patrolling the high seas area of the Barents Sea.Dow Jones: The Bank of England is expected to keep its key interest rate unchanged and reduce quantitative tightening. Investors expect the scale of quantitative tightening to be significantly reduced to 100 billion pounds. The decision to quantitative tightening has triggered rising bond yields and intensified criticism.RBC Capital Markets: Raised the S&P 500 price target for the end of 2025 to 6350 from 6250; set the price target for the second half of 2026 at 7100.Germanys wholesale price index fell by -0.6% month-on-month in August, compared with -0.1% in the previous month.

S&P 500 Retreats As Meta Nosedives 24%

Cory Russell

Oct 28, 2022 15:35

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The Tech Sector Is Continued Weak

The S&P 500 dropped as tech stocks kept falling approaching the 3805 support level. A dismal earnings report from Meta yesterday added to the strain on the IT sector's market mood. The Nasdaq, which has a strong tech component, fell 1.6% during today's trade.


Treasury rates kept falling, and the yield on 10-year Treasuries finally dropped below the crucial 4.00% mark. However, as traders concentrated on the sell-off in tech companies, lower Treasury rates did not enough help the S&P 500.


Investors should be aware that the S&P 500's recent good performance was mostly driven by top tech firms like Meta. Bulls of the S&P 500 should be unhappy with the latest market sell-off. Due to the market's increased concentration, it is unlikely that the S&P 500 will see sustained upward momentum as long as mega sized companies are under pressure.


Today's top gainer was Caterpillar, whose shares increased 8% as the company's profits and sales handily above analyst expectations.


The publication of Amazon's third-quarter report has caused the stock to decline by 19% in the post-market session, and it seems that the S&P 500 may face more pressure tomorrow. According to GAAP, Amazon reported sales of $127.1 billion and profits per share of $0.28.


Although the company's GAAP profits exceeded analyst expectations, they also included a pre-tax valuation gain of $1.1 billion from the investment in Rivian's common shares. According to the corporation, fourth-quarter sales will be between $140 billion and $148 billion, up 2-8% over the same period in 2021.


Amazon anticipates reporting operating income of $0 to $4.0 billion for the fourth quarter. The big sell-off in the post-market session is mostly caused by the inadequate guidance.


Traders should be aware that Apple will also report its earnings today, and those numbers might materially affect how the S&P 500 behaves.

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