Dow Jones futures pared losses in volatile trade 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 plunging pound
The 10-year Treasury yield, which had briefly topped 4%, fell solidly.
Meanwhile, Apple (AAPL) reportedly is reining in iPhone production. That iPhone report is weighing on Apple stock and iPhone chipmakers such as Taiwan Semiconductor (TSM), Broadcom (AVGO), Qualcomm (QCOM) and Qorvo (QRVO).
Biogen (BIIB) and Japanese partner Eisai reported their Alzheimer’s drug reduced cognitive decline in a late-stage trial. BIIB stock skyrocketed.
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 yields fell sharply.
The pound had plunged in recent days after new U.K. Prime Minister Liz Truss announced a deficit-financed borrowing package. British bond yields had soared, straining the global financial system.
Dow Jones Futures Today
Dow Jones futures fell 0.1% vs. fair value on the Bank of England move, swinging between slim gains and losses. S&P 500 futures declined 0.2%. Nasdaq 100 futures gave up 0.7%, but had been down well over 1%.
Futures are definitely volatile.
Apple stock is a member of the Dow Jones, S&P 500 and Nasdaq composite. Broadcom, Qorvo and QCOM stock are all on the S&P 500 and Nasdaq, along with TSLA stock.
The 10-year Treasury yield hit 4.005% earlier in the morning, but then tumbled 8 basis points to 3.9% on the BOE move.
Crude oil futures edged higher.
Stock Market Tuesday
The stock market Tuesday closed mixed, but after a strong open quickly reversed lower, with the S&P 500 index undercutting its bear market lows intraday.
The Dow Jones Industrial Average slipped 0.4% in Tuesday’s stock market trading. The S&P 500 index dipped 0.2%. The Nasdaq composite climbed 0.25%. The small-cap Russell 2000 rose 0.3%.
The 10-year Treasury yield jumped 9 basis points to 3.96%, a fresh 12-year high.
Apple iPhone Production
Apple has told suppliers to plan on 90 million iPhone handsets in the current fiscal year, Bloomberg reported. The Dow Jones tech titan had expected to make six million more handsets, but an expected demand boost didn’t materialize, the latest sign of weak consumer electronics spending.
Apple stock fell 3.5% before the open.
Shares rose 0.7% to 151.76 on Tuesday, a second straight slim gain. Shares are still below their 50-day and 200-day moving averages. But the relative strength line for AAPL stock is at a record high, according to MarketSmith analysis.
TSM stock, Broadcom, Qorvo and Qualcomm are all at or near 52-week lows. Taiwan Semi and QRVO stock fell 2% in the premarket while Qualcomm sank 1%. AVGO stock was not yet trading.
Biogen Alzheimer’s Drug
Biogen and Eisai late Tuesday reported that their drug lecanemab reduced cognitive and functional decline by 27% vs. a placebo in an 18-month phase 3 trial of 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, sharply limiting its use.
Biogen stock, after initially spiking in June 2021 on FDA approval, has trended lower for months.
BIIB stock surged 43% early Wednesday.
BYD Europe Launch Event
China EV and battery giant held a virtual event kicking off its big European expansion, releasing European pricing. BYD currently sells the Tang SUV in limited amounts in Norway. The automaker will expand to Germany and much of Europe, adding the Han sedan and Atto 3 small crossover to its options. With BYD looking to at least double 2023 sales to four million, it needs to gain a strong foothold in the world’s No. 2 EV market.
On Oct. 7, Nio will hold its own European event. It’ll showcase its 2022 models, the luxury ET7 sedan, the ES7 SUV and ET5, a Tesla Model 3 rival that will begin China deliveries on Sept. 30.
On Oct. 1, Nio will release September and third-quarter deliveries, but the startup expects record sales every month in the fourth quarter. BYD will likely release monthly and quarterly sales a day or two later. They both should be records yet again.
Tesla should release global third-quarter production and deliveries over the weekend. Tesla should report record deliveries, but China demand is a bit of a concern.
BYD stock fell 1.4% on Tuesday to 26.68, near four-month lows. Nio stock retreated 2.4% to 17.19, still in a bottoming base but falling further from its 200-day and 50-day lines.
Tesla stock climbed 2.5% to 282.94 on Tuesday, though it hit resistance at the 50-day line. TSLA stock has a 314.74 buy point from a short base within a long, deep consolidation.
Tesla fell modestly Wednesday as Citigroup cut Q3 delivery targets and said Q4 was at risk.
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