Stocks start in October with a big rally


New York
CNN Business

Stocks in October began treating more than scams to investors. The market rebounded to start the fourth quarter, despite the growth Concerns about the financial health of the European banking giant Credit Suisse Weak economic data.

The daw It rose nearly 765 points, or 2.7%. This was its biggest gain since mid-July. The Nasdaq And the Standard & Poor’s 500 A profit of 2.3% and 2.6%, respectively. Stocks ended September (and the third quarter) with a thunderous sound on Friday.

In a sign of just how volatile the market can be, all but one of the 30 stocks in the Dow ended the day higher on Monday — after they all closed lower on Friday. (Johnson & Johnson

(JNJ)
He was the only redneck on Monday.)

Investors are increasingly concerned inflation And how the Fed can raise interest rates to control price hikes in the end Push the economy into recession.

Inventories are still sharply lower this year. and the CNN Business Fear and Greed Index, which measures seven indicators of investor sentiment, still showed extreme levels of fear. But Monday’s market rebound could be a “bad news is good news” rebound.

Fears of increased tension at Credit Suisse

(CS)
The Fed may slow the rate hike. Bond market investors seem to be betting on that, too. The yield on the standard 10-year US Treasury bond, Which briefly topped 4% last weekIt has fallen in recent days and fell again on Monday to around 3.66%.

Inflation, of course, is still a concern. But if the Fed and other central banks now have to fear how a troubled European bank could lead to further financial contagion, this may not be the best time to continue raising interest rates by historic amounts.

Just a week ago, traders were seeking more than 70% odds that the Federal Reserve would raise interest rates by three-quarters of a percentage point for the fourth time in a row at its November 2 meeting. right Now Chances of a rate hike of this magnitude To about 50%, the probability of a modest increase increases by half a point.

Recent US manufacturing data may also give reason for the Federal Reserve to reconsider how much to raise interest rates.

The Institute for Supply Management, a nonprofit economic association, reported that its influential manufacturing index fell from August and was below Wall Street expectations. It could be a sign that the Fed’s rate hike is already having the needed effect to slow the economy and reduce inflation.

“The economy is slowing — a fact that is increasingly evident in the manufacturing sector. The good news is that there are welcome signs that prices are stabilizing,” said Jim Beard, chief investment officer at Planet Moran Financial Advisors, in a report released Monday.

A sharp rise in oil prices, while unpleasant news for consumers, lifted energy stocks on Monday as well.

chevron

(CVX)
It was the highest-performing stock in the Dow, and the energy sector was the best-performing S&P 500. Suggested reports That the OPEC + bloc of oil producers Consider cutting production To try to reverse the recent big drop in crude oil prices.

Investors may also be solace in the fact that the British pound, which recently earned It fell to a record low against the US dollarrebounded after the new UK government Abandon a controversial plan to cut taxes for the richest Britons.

Strong Sterling May Calm Fears Bond yields rise The rising costs of credit in the UK.

In corporate news, Tesla

(TSLA)
It was one of the few stocks that did not participate in Monday’s rally. Shares of electric car giant Elon Musk fell nearly 9%, making the company the worst performer in the S&P 500, after it reported Third quarter delivery and disappointing production numbers during the Weekend.

Meanwhile, Tesla rival General Motors

(GM)
It rose after reporting stronger-than-expected sales in the third quarter.

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