Dow Jones futures paired losses in volatile trade on Wednesday morning, along with S&P 500 futures and Nasdaq futures, after the Bank of England abruptly announced plans to buy long-term British bonds, supporting the falling pound.
The 10-year government yield, which had topped 4% for a short period, fell solidly.
Meanwhile, apple (AAPL) is reportedly reining in iPhone production. That iPhone report is weighing on Apple shares and iPhone chip makers that Taiwan Semiconductor (TSM), Broadcom (AVGO), Qualcomm (QCOM) and Qorvo (QRVO).
Biogenic (BIIB) and Japanese partner Eisai reported that their Alzheimer’s drug reduced cognitive decline in a late-stage study. The BIIB share soared.
Early Wednesday rival Tesla BID (BYDDF) will hold a European launch event as it continues rapid global expansion. China EV startup Nine (NIO) will hold its own European event next week.
BOE buys bonds
The Bank of England announced it will temporarily buy long-term British bonds, a major reversal for a central bank that had been tightening for months.
The British pound bounced, at least briefly. Gilt yield fell sharply.
The pound had plunged in recent days after Britain’s new Prime Minister Liz Truss announced a deficit-financed loan package. British bond yields had risen, straining the global financial system.
Dow Jones Futures today
Dow Jones futures fell 0.1% vs. fair value on the Bank of England movement, oscillating between small gains and losses. S&P 500 futures fell 0.2 percent. Nasdaq 100 futures gave up 0.7%, but had been down well over 1%.
Futures are definitely volatile.
The Apple share is a member of the Dow Jones, S&P 500 and Nasdaq composite. Broadcom, Qorvo and QCOM shares are all on the S&P 500 and Nasdaq, along with TSLA shares.
The 10-year Treasury yield hit 4.005% earlier in the morning, but then fell 8 basis points to 3.9% following the BOE move.
Crude oil futures rose higher.
Keep in mind that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular session.
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Stock market Tuesday
On Tuesday, the stock market closed mixed, but after a strong opening, it quickly turned lower, with the S&P 500 index undercutting its bear market lows during the day.
The Dow Jones Industrial Average fell 0.4% in Tuesday’s trading. The S&P 500 index fell 0.2 percent. The Nasdaq composite rose 0.25%. The small-cap Russell 2000 rose 0.3%.
The 10-year Treasury yield jumped 9 basis points to 3.96%, a new 12-year high.
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Apple iPhone production
Apple has asked suppliers to plan for 90 million iPhones in the current fiscal year, Bloomberg reported. The Dow Jones tech titan had expected to make six million more phones, but an expected increase in demand failed to materialize, the latest sign of weak consumer electronics.
Apple shares fell 3.5% before the open.
Shares rose 0.7% to 151.76 on Tuesday, another small gain in a row. Shares are still below the 50-day and 200-day moving averages. But the relative strength line for AAPL shares is at an all-time high, according to MarketSmith analysis.
TSM shares, Broadcom, Qorvo and Qualcomm are all at or near 52-week lows. Taiwan Semi and QRVO shares fell 2% in premarket trading while Qualcomm dipped 1%. The AVGO share was not yet traded.
Biogen Alzheimer’s drug
Biogen and Eisai reported late Tuesday that their drug lecanemab reduced cognitive and functional decline by 27% compared with a placebo in an 18-month phase 3 study in patients with early-stage Alzheimer’s.
Alzheimer’s drugs have been elusive. The FDA, in a controversial move, last year approved Biogen’s aducanumab for Alzheimer’s despite concerns over its efficacy. Medicare has limited coverage of aducanumab, which severely limits its use.
Biogen stock, after initially rising in June 2021 on FDA approval, has been trending lower for several months.
BIIB shares rose 43% early Wednesday.
Tesla vs. BYD: Which EV giant is the best buy?
BYD Europe launch event
The China EV and battery giant held a virtual event kicking off its major European expansion, releasing European prices. BYD is currently selling the Tang SUV in limited quantities in Norway. The automaker will expand to Germany and much of Europe, adding the Han sedan and Atto 3 small crossover to the options. With BYD wanting to at least double sales by 2023 to four million, it needs to gain a strong foothold in the world’s No. 2 EV market.
On October 7, Nio will hold its own European event. It will showcase its 2022 models, the ET7 luxury sedan, the ES7 SUV and the ET5, a Tesla Model 3 rival that will begin deliveries to China on September 30.
On 1 October, Nio releases deliveries in September and the third quarter, but the start-up expects record sales every month in the fourth quarter. BYD will likely release monthly and quarterly sales a day or two later. They will both be records again.
Tesla will release global production and deliveries in the third quarter during the weekend. Tesla should report record deliveries, but China’s demand is a bit of a concern.
BYD shares fell 1.4% on Tuesday to 26.68, near a four-month low. Nio shares retreated 2.4% to 17.19, still in a bottom base but falling further from the 200-day and 50-day lines.
Tesla shares climbed 2.5% to 282.94 on Tuesday, although it hit resistance at the 50-day line. TSLA stock has a buy point at 314.74 from a short base within a long, deep consolidation.
Tesla fell modestly on Wednesday as Citigroup cut its third-quarter delivery targets and said the fourth quarter was at risk.
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