The stock market rally, which looked shaky to start the week, staged a follow-through day on Thursday. Leading stocks had already been flashing buy signals. Treasury yields fell several basis points after surging over the past several weeks. Strong earnings from Taiwan Semiconductor (TSM), Delta Air Lines (DAL) and UnitedHealth (UNH) also fueled gains. JPMorgan Chase (JPM) and other banking giants beat earnings views as well. Tesla (TSLA) China sales surged in September, while the EV giant rolled out FSD Beta to more drivers.
X
Stock Market Rally Confirmed
The major indexes surged on Thursday, confirming a new rally attempt. Leading stocks had already flashed buy signals over several days. The 10-year Treasury yield retreated, but pared losses on Friday. Crude oil prices rose to long-term highs while copper futures surged.
Economy, Inflation Heat Up
The consumer price index rose 0.4% in September, above the expected 0.3% increase. Climbing food and energy prices pushed the annual CPI inflation rate to 5.4%, matching a 13-year high. The core CPI rose just 0.2%, with the annual rate holding at 4%. Core inflation was held down by declines in airline fares and prices for used cars and trucks, which may reverse in coming months. Meanwhile, rent inflation continues to gather steam, and that may have staying power. New claims for jobless benefits fell by 36,000 to a Covid-era low 293,000 in the week through Oct. 9. Retail sales also beat expectations, rising 0.7% overall in September and 0.8% excluding autos. Plus, August data saw modest upward revisions.
Minutes released Wednesday from the Federal Reserve’s Sept. 21-22 meeting indicated that a tapering of asset purchases could begin in mid-November or mid-December. Given the planned $15-billion drawdown per month, purchases would wrap in mid-June or mid-July.
Tesla China Sales Surge
The China Passenger Car Association reported strong September EV sales in China Tuesday, with Tesla (TSLA) posting booming local sales. Tesla wholesale sales were 56,006. That includes 52,153 local, retail sales and 3,853 vehicles for export. Local sales included 33,033 made-in-China Model Y crossovers. On a quarterly basis, Tesla China’s sales, including exports, totaled 133,218 in Q3, a 44% surge vs. Q2. The CPCA said September passenger car sales in China totaled 1.6 million, a 17% drop from last year. Meanwhile, Tesla FSD Beta was rolled out to at least 1,000 more FSD owners. Tesla stock rose sharply.
Bank Earnings Top Views
Major U.S. banks beat Wall Street analyst earnings and revenue estimates in Q3, driven largely by investment banking fees amid higher completed M&A transactions and strong IPO activity. Bank of America (BAC) earnings jumped 67% with revenue up 11%. Wells Fargo (WFC) reported EPS jumped 119% as revenue dipped. EPS of $1.17 a share more than doubled the year-earlier figure, in which it had unusual expenses. Revenue fell 2.4% to $18.83 billion. Morgan Stanley (MS) and Goldman Sachs (GS)…
Read More: Market Rally Takes Hold As Leading Stocks Shine; Tesla, Taiwan Semi