Futures Fall on Apple iPhone News, Yields Near 4%

Futures Off Lows On BOE Shocker; Yields fall after hitting 4%

Dow Jones futures fell in volatile trade on Wednesday morning, along with S&P 500 and Nasdaq futures, after the Bank of England abruptly announced plans to buy UK bonds at long term. The 10-year Treasury yield, which had briefly topped 4%, fell sharply. But a brief surge in stock futures and bond prices began to fade again.


Meanwhile, Apple (AAPL) would hold back iPhone production. This iPhone report weighs on Apple stocks and iPhone chipmakers such as Taiwan semiconductor (TSM), Broadcom (AVGO), Qualcomm (QCOM) and Qorvo (QRVO).

biogenic (BIIB) and its Japanese partner Eisai reported that their Alzheimer’s drug reduced cognitive decline in a late-stage trial. BIIB stock soared.

Early Wednesday, Tesla’s rival BYD (BYDDF) will hold a European launch event, as it continues its rapid global expansion. Electric start in China Nio (NIO) will host its own European event next week.

The BOE buys bonds

The Bank of England announced that it would temporarily buy long-term British bonds, a major reversal for a central bank that had been tightening for months.

The pound rebounded briefly, but then came under pressure. Yields on gilts fell sharply.

The pound had plunged in recent days after new British Prime Minister Liz Truss announced a deficit-financed borrowing package. UK bond yields had soared, straining the global financial system.

Dow Jones Futures Today

Dow Jones futures fell 0.4% from fair value on the Bank of England move, after initially turning positive. S&P 500 futures were down 0.6%. Nasdaq 100 futures fell 1.2%, heading back to session lows

Futures contracts are definitely volatile.

Apple stock is part of the Dow Jones, S&P 500 and Nasdaq composite. Broadcom, Qorvo and QCOM stocks are all on the S&P 500 and Nasdaq, as well as TSLA stocks.

The 10-year Treasury yield hit 4.005% earlier in the morning, then fell to at least 3.88% on the BOE’s move. But the yield came back to 3.94%, down just 4 basis points.

Crude oil futures rose slightly.

Remember that overnight action on futures contracts on Dow Jones and elsewhere does not necessarily translate into actual trading in the next regular trading session.

Join the experts at IBD as they analyze actionable stocks in the stock market rally on IBD Live

Stock market tuesday

The stock market closed mixed on Tuesday, but after a strong open, it quickly reversed lower as the S&P 500 index moved above its intraday bear market lows.

The Dow Jones Industrial Average slid 0.4% in trading on Tuesday. The S&P 500 index fell 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 new 12-year high.

Five best Chinese stocks to watch now

Apple iPhone production

Apple has asked its suppliers to forecast 90 million iPhone handsets in the current fiscal year, Bloomberg reported. Tech titan Dow Jones expected to manufacture an additional six million handsets, but the expected surge in demand failed to materialize, the latest sign of weak spending on consumer electronics.

Apple stock fell 4% ahead of the open.

Shares rose 0.7% to 151.76 on Tuesday, a second straight slim gain. Stocks are still below their 50- and 200-day moving averages. But the relative strength line for AAPL shares is at an all-time high, according to MarketSmith analysis.

TSM, Broadcom, Qorvo and Qualcomm stocks are all near or near 52-week lows. Taiwan Semi fell 4% in premarket while shares of Qualcomm and QRVO fell 3%. AVGO stock lost 2%.

Biogen Alzheimer’s drug

Biogen and Eisai reported late Tuesday that their drug lecanemab reduced cognitive and functional decline by 27% compared to a placebo in an 18-month Phase 3 trial in patients with early-stage Alzheimer’s disease.

Drugs for Alzheimer’s disease have been elusive. The FDA, in a controversial move, last year approved Biogen’s aducanumab for Alzheimer’s disease despite concerns about its effectiveness. Medicare has limited coverage of aducanumab, which severely limits its use.

Biogen stock, after initially peaking in June 2021 with FDA approval, has been trending lower for months.

BIIB stock jumped 48% early Wednesday.

Eli Lily (LLY), which is working on a similar treatment for Alzheimer’s disease, jumped 7%.

Tesla vs. BYD: Which electric giant is the best buy?

BYD Europe Launch Event

The Chinese electric vehicle and battery giant held a virtual event to kick off its big European expansion, releasing European pricing. BYD is currently selling the Tang SUV in limited quantities in Norway. The automaker will expand to Germany and much of Europe, adding the Han sedan and Atto 3 small crossover to its options. As BYD looks to at least double its sales in 2023 to four million, it needs to establish a firm foothold in the world’s second-largest electric vehicle market.

On October 7, Nio will host their own European event. It will showcase its 2022 models, the ET7 luxury sedan, ES7 SUV and ET5, a Tesla Model 3 rival that will begin deliveries in China on September 30.

On October 1, Nio will release September and Q3 shipments, but the startup expects record sales every month in Q4. BYD will likely release monthly and quarterly sales a day or two later. They should both be records again.

Tesla is expected to release third-quarter global production and shipments over the weekend. Tesla is expected to report record deliveries, but Chinese demand is a bit of a concern.

BYD stock fell 1.4% on Tuesday to 26.68, near four-month lows. Nio shares fell 2.4% to 17.19, still at a low base but falling further from its 200 and 50-day lines.

Tesla stock soared 2.5% to 282.94 on Tuesday, although it hit resistance at the 50-day line. TSLA stock has a buy point of 314.74 from a short base in a deep long consolidation.

Tesla fell slightly on Wednesday as Citigroup cut third-quarter delivery targets and said the fourth quarter was at risk.

Read The Big Picture every day to stay in tune with market direction and top stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.


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