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US Market Wrap 18 October 2018

Posted by Billy Macris on 18-Oct-2018 11:28:02

US equities fell on Wednesday as the Federal Reserve released the September meeting minutes suggesting at the continuation of the tightening of monetary policy in the future. The Dow wobbled after the news falling 91 points before finishing -0.36%, the S&P 500 -0.03% and the Nasdaq -0.04%.

In reaction to the meeting minutes treasury yields traded higher as the yield on the US-10 year notes closed at 3.207% up 1.5% whilst the yield on the US-2 year notes closed at 2.895% up 1%. Weaker than expected housing data released in the US pushed the homebuilders down as the SPDR Homebuilders ETF XHB fell 1.91% - KB Home shares fell 2.84% and Lennar shares fell 2.31%. USD Housing Starts for September YoY fell to 1201k and Building Permits fell to 1241k.

Of the Dow stocks, IBM was the worst performer falling 7.6% after reporting disappointing earnings missing on revenue. Goldman Sachs and Morgan Stanley shares rose 3% and 2.7%, respectively following the hinting of higher interest rates from the meeting minutes - the Financial Select ETF XLF rose 1.01%. Home Depot shares declined 4.3% and Lowe’s shares declined 3.38% after Investment Bank Credit Suisse downgraded their price target for the stocks.

Oil prices declined after US stock piles rose by 6.5 million barrels. Brent crude dipped below $80 a barrel before closing at $80.05 down $1.36 or 1.7% whilst WTI crude fell $2.17 or -3% to close at $69.75 a barrel. We also saw the US dollar strengthen on the back of the release of the Fed’s meeting minutes as the dollar index traded higher +0.49% to 95.510.

Important Notice:

  • Australian Employment Data to be released at 11:30am (AEDT)

18.10.18 - ibm

Topics: +U.S. Market Wrap