USDA Confirms Flash Sale of Soybeans to China for Second Day — Market Talk
0929 ET - The USDA has confirmed another flash sale of U.S. soybean exports to China, making it two days in a row that the agency has confirmed large volumes sold to China. The USDA says that 330,000 metric tons of soybeans were sold to China for delivery in the 2026/27 marketing year. The USDA also reported a flash sale of an additional 283,450 tons of soybeans for delivery to unknown destinations in 2026/27. CBOT soybeans fell 0.3% in pre-market trading, with prices under pressure due to farmers selling their harvested soybeans to grain elevators and other buyers, says Gary Sandlund of Futures International in a note. Corn rises 0.1% and wheat rises 0.4% pre-market. ([email protected])0915 ET - U.S. stock futures remain lower following hotter-than-expected readings on both producer prices and retail sales. September PPI was up 1.3% for the month versus the WSJ consensus of a 0.6% rise and retail sales climbed 0.8% compared to expectations of a 0.4% rise. Besides rate hike fears, futures are likely also reacting to worries about rising borrowing costs on the AI investment boom which sent AI stocks sharply lower Wednesday. Many are deepening losses in premarket trading. S&P futures are down 22 points. ([email protected])0912 ET - Treasury yields fall despite U.S. indicators showing resilient economy and sticky inflation. September PPI inflation accelerates to 1.3% from August's 0.5%, versus WSJ consensus of 0.6%. Retail sales beat expectations, rising 0.8%, although it slows from August's 1.3% pace. Weekly jobless claims edges higher after five consecutive declines, to 199,000 from 198,000. The numbers seem to support hawkish monetary policy, but Fed expectations are little changed, with a hold priced in for the next meeting. The WSJ Dollar Index falls 0.2%. The 10-year yield slips to 5.062% from 5.189% yesterday. The two-year falls to 4.742% from 4.800%. ([email protected]; @ptrevisani)0821 ET - Bitcoin has become more closely correlated to gold prices than U.S. stocks for the first time since late 2020, Block Scholes Thahbib Rahman says in a note. The 90-day rolling bitcoin-gold correlation sits at 51%, around highs reached in November 2020 when the Covid-19 pandemic led to fiscal and monetary stimulus, he says. The move higher started in June and accelerated in August after the U.S. Treasury announced increased buybacks of long-term debt to curtail yields, he says. In contrast, bitcoin's correlation to U.S. equities, which it has tracked more closely over the past few years, has begun to wobble. The 90-day correlation has fallen to 40% from 62% in February. Bitcoin falls 1.1% to $80,815, according to LSEG. ([email protected])0620 ET - EssilorLuxottica faces privacy concerns around the use of smart glasses, but the probability of an outright ban remains very low, UBS analysts write in a note to clients. A recent statement from the European Data Protection Board on smart eyewear suggests that European policymakers are primarily focused on establishing an appropriate regulatory framework for the use of these wearables, rather than questioning the category's right to exist, the analysts say. The statement, alongside measures taken by EssilorLuxottica and Meta, who develop these glasses, should help improve transparency around privacy concerns and strengthen confidence among regulators, consumers, and investors, the bank says. UBS confirms its buy rating on the stock. Shares trade 0.3% higher at 148.50 euros. ([email protected])0447 ET - AI credit risks are increasingly in focus after CoreWeave's bonds sold off, Saxo Markets's Charu Chanana says in a research note. Yields on the bonds of AI cloud provider CoreWeave surged, indicating demand for greater compensation for credit risk, she notes. AI infrastructure requires enormous investment in GPUs up front, as well as in data centers, networking and power systems, while revenues needed to justify these investments may take years to materialize, Chanana says. Although CoreWeave has pushed back concerns about its financial situation, "the repricing of CoreWeave's debt suggests investors are becoming less willing to finance AI infrastructure growth at any cost," she adds. ([email protected])0420 ET - A selloff in technology stocks exposed to artificial intelligence is gaining pace Thursday. A hot inflation reading in the U.S. raised fears that the Fed could hike interest rates and raise the cost of debt that many companies are taking on to finance AI. In Asia, South Korea's SK Hynix closed 11% lower, while Samsung Electronics shed 9.5%. In Europe, shares of Dutch semiconductor-equipment maker ASML Holding are down 5.6%. German chip maker Infineon Technologies stock loses 7.9%. In the U.S., Nvidia shares are down 1.7% premarket. Micron Technology sheds 4.4% and CoreWeave loses 5.6%. The E-mini Nasdaq 100 futures contract is down 1.2%, pointing to a weak opening for tech stocks in the U.S. ([email protected])0314 ET - The most recent quarter likely marks a trough in Pernod Ricard's revenue progress, with inventory effects and comparison bases offering a boost for the months ahead, Jefferies's Edward Mundy writes in a note to clients. The French spirits group, maker of Martell cognac and Jameson whisky among other labels, reported a 0.9% organic decline in net sales for the July-September quarter, a result that was better than expected. "The fiscal first quarter should mark the trough: Destocking is front-loaded and [comparatives] ease from the second quarter," Mundy notes. "As investor confidence increases on the end of the downgrade cycle, this should drive a re-rating." Jefferies has a buy rating and a 90-euro target on the Paris-listed stock; shares open 1.6% higher at 66.54 euros.([email protected]; @joshualeokirby)0253 ET - The concentration of the U.S. equity rally in a handful of technology companies poses a growing risk to broader markets, as weakness in artificial-intelligence-related stocks could trigger index losses, portfolio derisking and reduced investment in AI infrastructure, says Saxo Bank chief investment strategist Charu Chanana. However, an AI correction need not lead to a broader equity bear market. If corporate earnings remain resilient and economic growth holds up, investors could rotate into healthcare, selected financials and industrials, particularly companies with more attractive valuations, she adds. The key question is whether an AI-led correction triggers contagion or rotation, she says. Improving market breadth as tech stocks weaken would suggest capital is shifting among sectors, while sustained selling across industries could signal broader risk aversion, she adds.([email protected]; @ivy_jiahuihuang)0246 ET - Pernod Ricard's latest sales update looks pretty encouraging, analysts at JPMorgan tell investors in a note. The French distiller, maker of Absolut vodka and Captain Morgan rum, booked an organic 0.9% decline in net sales over its fiscal first quarter through September, a gentler drop than the 1.7% decline analysts had forecast. The company pointed to improving trends in the U.S. and a return to depletions growth in China and, despite double-digit declines in both markets, those signs look encouraging, JPM says. "We expect the shares to react positively to the beat and with a likely halo effect on the overall spirits sub-sector," the bank says. ([email protected]; @joshualeokirby)