Nikkei May Decline Amid Concerns About Energy Costs — Market Talk
1946 ET - Japanese stocks may decline as concerns about higher energy costs continue following overnight gains in crude oil prices. Nikkei futures are down 1.0% at 68375 on the SGX. The dollar is at 158.08 yen, compared with Y158.14 as of Thursday's Tokyo stock market close. Investors are focusing on updates on Hurricane Isaias, developments in the Iran conflict and their implications for oil prices. The Nikkei Stock Average fell 1.4% to 69042.11 on Thursday. ([email protected])1901 ET - U.K. retail footfall remained on a downward trend due to a challenging consumer context and ahead of the key shopping period, according to a report from the British Retail Consortium and Sensormatic. From Aug. 30 to Oct. 3, total footfall in the U.K. fell 2.9%, compared with a 1.7% decline in August, according to the data. Consumers appear increasingly worried about the economy, including the impact of inflation, household spending pressures, fuel costs and uncertainty ahead of U.K.'s Autumn Budget, the report says. The months ahead will be critical, as the Christmas shopping season unfolds, it adds. Retailers will try to find ways to attract shoppers to physical stores at a time when consumer confidence remains fragile, the report says. ([email protected])1306 ET - Starter homes are becoming harder to find nationwide, Realtor.com says, but where buyers look matters as much as what they can afford. Starter-priced listings have become scarcer since 2019, but the Midwest stands out for both inventory and neighborhood choice. The share of active listings priced in the starter-home tier fell from 38.1% in August 2019 to 36.2% in August 2026, even as the national starter-home price threshold rose 30.8%, from $260,000 to $340,000. Had the starter-home share held at its 2019 level, today's market would have more than 21,000 additional starter-priced homes available to buyers.Realtor.com defines a starter-priced home as one listed at or below 80% of its metro's median list price. ([email protected])1258 ET - More investors are engaging with cryptocurrencies in trading — although it appears to be investors selling into the risk-off slump that's hit crypto tokens. According to data from Coinglass, $74.5 billion in bitcoin has been traded over the past 24 hours, which is up 18.6% from the prior day. Many altcoins are seeing even bigger explosions in trading volumes — nearly $4 billion in NEAR has been traded over the past 24 hours, nearly double the previous day. But the higher volumes appear to be in part holders of long positions getting liquidated - with $221.7 million in bitcoin long positions liquidated over the past 24 hours, according to Coinglass. ([email protected])1234 ET - Miners of bitcoin were operating in negative territory earlier this year, but with bitcoin's surge in September they've become profitable again, says analysts with CryptoQuant in a note. The firm says that miners turned positive in late August, which happened when bitcoin crossed $76,000. Since turning positive, miners are no longer dumping bitcoin to stay afloat, but are able to accrue supplies once again. "Miners flipped from 'extremely underpaid' to 'fairly paid,' and no extreme outflows have followed," says the firm. But a rebuilding in the balances of miners has yet to begin in earnest, says CryptoQuant. Bitcoin falls 2.6% to $81,272. ([email protected])1227 ET - Housing costs could hypothetically return to "normal" within the next five years if mortgage rates drop to 6%, Redfin says, and home-price growth holds steady around 2.1%. Alternatively, housing costs could return to normal in just a slightly longer timeline--within about six years--if mortgage rates stay where they are today, about 7.5%, and home-price growth flattens. Redfin defines "normal" as the mortgage-payment-to-income ratio returning to August 2018 levels. At that time, the typical U.S. homebuyer needed to spend 30% of their household income on their monthly mortgage payment. If mortgage rates were to drop to the lowest bounds of Redfin's expectations--6%--and price growth were to flatten, housing costs could return to "normal" by February 2029. ([email protected])1205 ET - Major cryptocurrencies are lower with pressure from a strong U.S. dollar and higher oil prices translating to pressure on riskier assets like bitcoin and other cryptocurrencies. "Rising yields and oil explain the timing of the selloff, while profit-taking near the top of the range explains most of its size," says Colin Basco of Coinbase Institutional. Basco explains that the macro pressure may keep weighing on bitcoin in the short-term. "A move in the 10-year toward 5.5% would probably extend the consolidation period, [but] I still view retracements toward the 200-day moving average near $72K as accumulation opportunities," says Basco. Bitcoin falls 2.7% to $81,151, ethereum is down 4.9% to $2,448, and XRP slides 5% to $1.35. ([email protected])1129 ET - David Ellison sees multiple pathways to pay down the significant debt Skydance currently carries. "One is to grow the business," Ellison says in an interview with CNBC on Thursday. "We're going to be investing more in content than any of our peers." At the same time, Ellison says there are billions of dollars in cost synergies that will emerge throughout the integration process. Over the same period, free cash flow is expected to grow. "We are absolutely in a position where we can grow the business and delever simultaneously," Ellison says. ([email protected])1037 ET - Investment-grade bonds look attractive considering their current elevated yields, UBS Global Wealth Management strategists Matthew Carter and Jon Gordon say in a note. "High-quality bonds offer three potential benefits: income generation, portfolio diversification, and possible capital appreciation," they say. Nonetheless, investors should diversify their investment to manage risks, the strategists say. "Emerging market bonds, for example, can offer appealing yields and diversified return potential." ([email protected])0957 ET - The dollar index higher in morning trade, pairing with highs reached in Treasury yields putting pressure on grain futures and other commodities. A stronger dollar makes U.S. grain exports less competitive on the world market. "Outside markets are increasingly important — and mostly negative for grains," says Jim Wiesemeyer of Ag Bull in a note. Uncertainty stemming from wars in the Black Sea and Middle East add to inflation concerns. CBOT corn falls 0.7% in early trading, while soybeans slide 0.6% and wheat is up 0.1%. ([email protected])0955 ET - Hungary could be the next potential candidate in central and eastern Europe to adopt the euro, UniCredit's Eszter Gargyan says in a note. Hungary's new pro-EU government plans to meet the criteria for adopting the euro by 2030. Markets will be closely watching the government's medium-term fiscal plans as it has pledged to lower the deficit to enable euro adoption, she says. Romania is likely the next candidate after Hungary, she says. Euro adoption could reduce vulnerabilities related to Romania's twin deficits, although political instability could complicate necessary fiscal adjustments, she says. Political fragmentation and weak public support could hold back euro adoption in Poland while public support in the Czech Republic is also low. ([email protected])0948 ET - September was a very tough month for global fixed income, given the challenging performance for the asset class, MFS Investment Management's Benoit Anne says in a note. It was particularly tough for long-duration indexes--those most sensitive to the sharp spike back to triple-digit territory for the MOVE index, an indicator of rate volatility, says the head of market insights. Tax-exempt municipal bonds produced a minus 4.36% negative return for the month, their worst monthly performance since September 2008, he says. Given the substantial rise in U.S. rates, U.S. indexes underperformed, including the U.S. Treasury index which was down 2.24% for the month, he says. Euro indexes outperformed, with euro investment grade only down 1.33% for the month, Anne says. ([email protected])