Market Brief: Worst Manufacturing PMI in a Decade Slams Risk Appetite


  • FX: The safe haven Swiss franc was the strongest major currency on the day, while the risk-sensitive Australian and New Zealand dollars were the weakest. AUD/USD dropped to its lowest level since March 2009, the depths of the Great Financial Crisis, before recovering a bit intraday.
  • Reports initially suggested that the EU was willing to consider a time-limited backstop on the Irish border, but an EU spokesperson subsequently denied the speculation.
  • US data: The September ISM Manufacturing PMI report came in at just 47.8, below both the 50.0 reading expected and last month’s 49.1 print; this represents a 10-year low in the key economic gauge. The details of the report weren’t any better, with employment falling to 46.3 and new export orders dropping to just 41.0.
  • Commodities: Gold gained nearly 1% on the day. Oil ticked lower.
 
  • US indices closed roughly -1% lower across the board after the weak Manufacturing PMI report.
  • All eleven major sectors fell on the day. Defensive Utilities (XLU) fell the least, while the manufacturing-heavy Industrial (XLI) sector fell by the most, over -2%.
  • Stocks on the move:
    • Online brokers including TD Ameritrade (AMTD, -26%) and E-Trade Financial (ETFC, -16%) were clobbered after rival Charles Schwab (SCHW, -9%) announced it would end commissions for online stock, ETF, and options trades.
    • Two of 2019’s biggest IPOs, Uber (UBER, -4%) and Lyft (LYFT, -4%) both hit fresh record lows today as selling pressure mounts.
    • Ford Motor Company (F) fell -3% after booking an impairment charge of $800-900M related to a sale of its assets to an Indian automaker.

*No high-impact macroeconomic events are scheduled for release in Wednesday’s Asian session.*


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