EQUITIES 4 minutes to read

NY Open: Halloween dishing up equity market treats

Summary:  Facebook’s jump in earnings per share and better margin forecasts for 2019 helped improve sentiment for Amazon and Alphabet.

It’s Halloween, and Wall Street traders are trick-or-treating dressed as bulls. Facebook’s (FB: Nasdaq) jump in earnings per share and better margin forecasts for 2019 helped improve sentiment for Amazon (AMZN: Nasdaq) and Alphabet (GOOGL: Nasdaq), and put global indices in a happy mood. Wall Street opened with a bang, powered by a 1.6% surge in the Nasdaq. 

Unfortunately, this morning’s rally still leaves the major indices awash in losses for the month.

USD dollar bulls are smiling. It has been a good month. The greenback posted gains against all the G-10 major currencies except the Japanese yen, which squeaked out a tiny increase. The dollar added to its overnight rally in New York trading. Prices were supported by the better than expected ADP employment data (227,000 versus a forecasted 189,000) which bolsters hopes for a big gain in nonfarm employment which is released on Friday.

A large part of the US dollar strength today can be attributed to month-end portfolio rebalancing demand. The steep plunge in US equity indices in October suggests good-sized US dollar buying for the 16:00 GMT fix. The evidence of those flows can be seen in EURUSD which hasn’t received any support from the higher than expected Core CPI data or the weaker than forecast Chicago PMI result (58.4 versus a forecasted 60.5)

The month-end portfolio demand overshadowed the Canada August GDP data which rose 0.1%.  The better-than-expected result, which was the seventh consecutive increase, led to a brief drop in USDCAD. The GDP result increases the odds that the Bank of Canada raises interest rates again in December. Prices dropped to 1.3109, a minor intraday support line then quickly rebounded to session highs of 1.3137.  
USDCAD (daily, source: Saxo Bank)

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)