Investing.com – Here are the top five things you need to know in financial markets on Tuesday, October 3:
1. Global Stock Markets Score Latest Record High
World shares hit their latest in a run of record highs, as optimism over the strength of the global economy prompted market players to take on riskier bets.
Meanwhile, European shares hovered around three-month highs in mid-morning trade, as a sell-off in Spanish stocks eased with Madrid seeking ways to respond to the Catalonia secessionist crisis.
On Wall Street, U.S. stocks pointed to a muted open, with the major benchmarks pausing for breath after posting fresh records in the last session.
2. Dollar Rally Stalls After Climbing to 6-Week Peak
The dollar lost some momentum after striking a one-and-a-half-month high on the back of growing optimism over the health of the U.S. economy and increasing expectations of a Federal Reserve rate hike in December.
The dollar index, which measures the greenback against a basket of six major currencies, was little changed at 93.48. It touched its highest since Aug. 17 at 93.78 earlier in the session.
Meanwhile, U.S. bond yields were on track for their third straight day of gains, with the benchmark 10-year Treasury yield at 2.362% after briefly touching a three-month high of 2.371% overnight.
The gains came after upbeat manufacturing data reinforced expectations that the Federal Reserve will increase U.S. interest rates in December for a third time this year.
3. Fed Governor Powell In Focus
With no major economic reports on today’s economic calendar, market players will pay close attention to comments from Fed Governor Jerome Powell at 8:30AM ET (1230GMT).
He is due to speak about regulatory reform at a financial regulation event jointly hosted by Reuters and George Washington University, in Washington DC. Audience questions expected.
His comments could take on extra importance after reports surfaced late last week that he had met with U.S. President Donald Trump to discuss his potential nomination as the next Fed chair when Yellen’s term ends in February.
Powell has previously reiterated that the Federal Reserve could afford to be a “little bit patient” on future rate hikes amid the slowdown inflation and a strong labor market.
Interest rate futures are now pricing in about an 80% chance of a December Fed rate hike according to Investing.com’s Fed Rate Monitor Tool.
4. Oil Steadies After Steep Losses
Crude oil prices steadied after falling sharply in the prior session, as investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products.
Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2030GMT), as traders continue to weigh what the impact of recent storm activity was on supply and demand.
U.S. West Texas Intermediate (WTI) crude futures were little changed at $50.50 a barrel, after tumbling $1.09, or 2.1%, in the prior session.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., dipped 13 cents, or about 0.2%, to $56.02 a barrel. The contract fell 67 cents, or 1.2%, a day earlier.
5. Tesla Slides as Model 3 Deliveries Disappoint
Shares of luxury electric vehicle maker Tesla Inc (NASDAQ:TSLA) looked set for a down day, as investors expressed concern over third-quarter production figures for its Model 3, which fell severely short of expectations.
The Palo Alto, California-based company delivered just 220 Model 3 sedans and produced 260 during the quarter.
That was well below Tesla CEO Elon Musk’s estimate in August, in which he outlined the company’s plan to produce 1,500 Model 3 cars in September and ramp up to 20,000 cars per month in December.
Overall, Tesla delivered 26,130 vehicles in the third quarter, up 4.5% from the same time last year.