Market recap: Week of 2-6 Oct 2023

Rising insurance costs for EVs

The Guardian: Electric vehicle owners face soaring insurance costs as premiums for EVs surged by 72% in the past year, according to Confused.com. While car insurance prices have increased by 52.9% overall in the last 12 months, EV owners are hit harder, with claims costs 25% higher and longer repair times. These rising costs raise concerns for drivers making the switch to electric for environmental reasons.

Bank of Japan

Reuters: Bank of Japan Governor Kazuo Ueda highlights the distance to go before exiting ultra-loose monetary policy, citing potential impacts on BOJ's profits when interest rates rise. While interest rate payments to financial institutions could increase, higher-yielding bonds may boost interest income.However, the full extent of these effects remains uncertain. Rising interest rates and their impact on central bank profits are exemplified by the U.S. Fed's recent losses, surpassing $100 billion in September 2023. The primary goal of monetary policy, price stability, remains a priority for central banks despite financial considerations.

U.S. interest rates

CNN: Fed's Mester suggests possible rate hike, JPMorgan's Dimon anticipates further increases. Differing views on U.S. monetary policy: Mester hints at one more hike this year, while Dimon sees potential for a 1.5% rate rise to 7%.

Oil market

Yahoo Finance: Citi's Ed Morse: OPEC+ cuts fueled a prolonged oil bull run, but 4Q'23 may bring lower prices with more downside in 2024. Production rising outside OPEC+, including the US, Brazil, Canada, and Guyana, while Venezuelan and Iranian exports have increased.

Reserve Bank of Australia 

The Guardian: Reserve Bank of Australia (RBA) keeps cash rate steady at 4.1% for 4th month. New governor Michele Bullock warns of potential future rate hikes. Focus on global economy, household spending, inflation, and labour market. Household consumption outlook uncertain due to financial squeeze and housing price dynamics.

Treasury yield

Barron’s: Stocks plunge as Dow Jones Industrial Average erases year's gains, 10-year treasury yield hits 2007 high major indexes tumble amid Federal Reserve interest rate concerns. 10-year yield at 4.801%, highest since 2007. Strong job openings data contributes to market unease. 

Apple shares

Dailymail: Apple CEO Tim Cook sells 511,000 shares, after tax $41.5 million. Apple's stock, once at its peak of $195.83 in July, has slipped 13% since iPhone 15 released. Fellow directors O'Brien and Adams sell $11 million each. iOS 17.0.3 released with iPhone 15 fix.

U.S. Government shutdown

Reuters: Fitch cautions on possible U.S. government shutdown, but no impact expected on sovereign rating. Moody's warns of credit impact; S&P Global expects economic effect.

UK Climate policy

The Guardian: Rishi Sunak's climate policy shifts have impacted the UK's global business appeal, warns Mark Carney. Delayed net-zero goals and support for new oil drilling raise concerns. Global firms seek green power for relocation. 

Fed rate hikes

Bloomberg: JPMorgan's Eigen eyes possible 6% Treasury yields, maintains cash position. Anticipates Fed rate hike and potential 18-month hold for inflation control. Portfolio: 63% cash-like, 37% in short-dated, floating-rate investment-grade debt.