Stocks fall, Chinese yuan crosses 7.2 against the dollar
US 10-year Treasury yield breaks 4% for first time since 2010
CNBC Pro: Credit Suisse Says It’s Time to Buy Two Green Hydrogen Stocks – Giving Over 200% Upside
Credit Suisse says it’s time to enter the green hydrogen sector, with a range of catalysts set to power the clean energy powerhouse.
“Green hydrogen is a growth market – we are increasing our 2030 market estimates by [over] 4x,” the bank said, predicting that green hydrogen production will increase by around 40 times by 2030.
It cites two stocks to play the boom – and offers upside of more than 200%.
CNBC Pro subscribers can read more here.
— Weizhen Tan
Chinese yuan at weakest since 2008, dollar index strengthens
The offshore and onshore Chinese yuan breached 7.2 against the dollar, holding its weakest levels since early 2008.
The US dollar index also gained 0.33%, trading at 114.47.
Consumer inflation in Japan may ease in 2023: BOJ meeting minutes
Consumer inflation excluding fresh food is likely to increase this year, but the rate of increase will then slow on energy prices, the minutes from the Bank of Japan’s July meeting state.
A few members also said that inflation, excluding fresh food and energy, is unlikely to reach 2% within the forecast period. The CPI reading was 1.6% in August.
“These members expressed that, unless commodity prices continued to rise, the CPI inflation rate was expected to decline from fiscal year 2023 onwards,” the minutes said.
On the yen, a BOJ board member said downward pressure on the currency could ease if a slowdown in the global economy led to a drop in inflation and interest rates worldwide.
Another member said the yen could even rise if the global economy faces shocks.
— Abigail Of
CNBC Pro: Asset manager reveals what’s next for stocks – and shares how he trades the market
Neil Veitch, chief investment officer at Edinburgh-based SVM Asset Management, says he expects the macro landscape to remain “quite difficult” for the rest of the year.
Speaking to CNBC Pro Talks last week, Veitch mentioned the key drivers that could help the stock market become “more constructive” and shared his views on growth versus value.
CNBC subscribers can read more here.
— Zavier Ong
Earnings issues, potential recession means more sales could be in store
The Dow and S&P 500 have fallen for six straight days, with many of them seeing broad selling typical of so-called “washout days.”
It can sometimes be a contrarian buy signal on Wall Street, but many investment experts are skeptical that the sell-off is over. One reason is that profit expectations for next year still show solid growth, which would be unlikely in the event of a recession.
“We know that if we start to see a turnaround in 2-year yields … and if we start to see a turnaround in the dollar, that gives us the opportunity to jump out of these extremely oversold conditions,” said Andrew Smith, chief investment strategist for Delos Capital Advisors in Dallas. “But I have a hard time coming to terms with the fact that the earnings story is going to be as good as we expect.”
In addition, the dramatic moves in the bond and currency markets mean “something broke” and it might be smart to wait for the information to shake out, Smith said.
On the positive side, Smith pointed to a strong labor market and signs of continued spending on travel as a sign that the U.S. economy may be able to avoid a major recession.
-Jesse Pound
US 10-year yield nears key level of 4%
The 10-year government yield falls closer to 4%, a level it has not reached since 2010.
The US 10-year is the benchmark interest rate that sets the course for mortgage interest rates and other consumer and business loans. It has edged higher this week as British gilt makes a higher run and on expectations of an aggressive Federal Reserve.
The yield was 3.96% in afternoon trade. The 10-year yield reversed an earlier decline and rose about basis points. (One basis point corresponds to 0.01 percentage point)
“It’s definitely been impressive, and I just think that nobody is willing yet to step in and catch the falling knife,” said Ben Jeffery of BMO. He added that a lack of liquidity has also pushed up yields, which are moving in the opposite direction.
Jeffery said yields also moved higher ahead of the 1pm auction of 5-year notes.
He said the 10-year tested the 4% level in 2010. “The last time we were sustainable above 4% was 2008. There’s another technical level at 4.10%, and then there’s not much to note until 4, 25%,” he said.
— Patty Dumb
