Dow Jones futures were little changed in volatile trade Wednesday morning, while S&P 500 futures and Nasdaq futures pared losses, after the Bank of England abruptly announced plans to buy long-term British bonds. The 10-year Treasury yield, which had briefly topped 4%, initially tumbled. Stock futures and bond prices initially surged, faded and remain in flux.
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.
Early Wednesday, Tesla rival BYD (BYDDF) will hold a European launch event, as it continues a rapid global expansion. China EV startup Nio (NIO) will hold its own European event next week.
BoE Buys Bonds
The Bank of England announced Wednesday morning 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 briefly, but then came under renewed pressure. Gilt yields fell sharply, but then pared losses.
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 rose 0.1% vs. fair value following the Bank of England move, after initially turning positive and then retreating. S&P 500 futures dipped 0.1%. Nasdaq 100 futures gave up 0.5%, well off morning lows.
Futures are definitely volatile, swinging with Treasury yields.
The 10-year Treasury yield hit 4.005% earlier in the morning, then tumbled to at least 3.88% on the BoE move. The yield, which nearly came back to break-even, is now down 8 basis points to 3.9%.
Markets are now split between a November Fed rate hike of 50 basis points vs. 75 basis points, a shift over the last couple of days. Investors are now slightly leaning toward a year-end fed funds rate of 4%-4.25% vs. solid expectations for 4.25%-4.5% a few days ago.
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.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
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.
Five Best Chinese Stocks To Watch Now
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% 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 fell 3% in the premarket while Qualcomm and QRVO stock declined 3%. AVGO stock lost 2%.
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 53% early Wednesday.
Eli Lilly (LLY), which is working on a similar Alzheimer’s treatment, leapt 9%.
Tesla Vs. BYD: Which EV Giant Is The Better Buy?
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.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
YOU MAY ALSO LIKE:
Best Growth Stocks To Buy And Watch
IBD Digital: Unlock IBD’s Premium Stock Lists, Tools And Analysis Today
The 200-Day Average: The Last Line Of Support?
Time The Market With IBD’s ETF Market Strategy