What's moving markets today: October 2, 2019

By CNN Business

Updated 6:22 p.m. ET, October 2, 2019
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1:51 p.m. ET, October 2, 2019

NY Fed: QE could be used to fight the next recession

From CNN Business' Matt Egan

The Federal Reserve doesn't have much room to lower interest rates if the next recession strikes soon. That could mean a return of unorthodox steps such as the Fed's financial crisis bond-buying program, known as quantitative easing.

John Williams, the president of the New York Fed, said on Wednesday that he has "confidence" the central bank could effectively use QE again, should it be necessary.

The Fed turned to QE after it dropped interest rates to near-zero in 2008. The purchases of Treasuries and mortgage securities lifted the Fed's balance sheet above $4.5 trillion, compared with below $1 trillion in 2007.

Speaking at a University of San Diego event, Williams credited QE with keeping mortgage rates and corporate borrowing costs low as well as boosting financial conditions would lead to runaway inflation. That didn't pan out.

But some say QE did help deepen America's wealth inequality by boosting asset prices, which disproportionately benefits more affluent families.

But Williams doesn't sound concerned about the unintended consequences.

"When we did forward guidance and QE back in the day we didn't have a lot of experience," Williams said. "We've learned that some of the concerns about the costs and potential negative effects ended up being much smaller than some of the fears."

1:11 p.m. ET, October 2, 2019

The US economy will avoid recession, investor says

From CNN Business' Anneken Tappe

Even though US stocks are down sharply Wednesday, investors should remember the big picture, said Krishna Memani, vice chairman of investments at Invesco, on the CNN Business digital live show Markets Now.

He said the US economy is strong enough to avoid recession. The unemployment rate remains low and consumer spending is healthy, he said. And, he points out, the American consumer is the biggest contributor for GDP growth.

That said, given the weakness in recent economic data, "the Fed may cut rates again," Memani said.

The Invesco executive believes the downward trend in the data is bottoming out, and the effects of Fed's easing in recent months will improve things in the near term.

Assuming that economic data and growth stabilize, along with lower interest rates, "there's a good case for the markets to go higher," Memani said.

A trade deal would also be very good for the market, he added, as so far the trade war has "made a bad situation worse." And as for Friday's jobs numbers, "I think they'll come in around expectations," he said.

12:53 p.m. ET, October 2, 2019

It's not just one factor that's driving the market lower, trader says

From CNN Business' Anneken Tappe

US stock indexes are sharply lower Wednesday, but the poor performance can't just be blamed on one thing.

"I think there are a few things that have gotten us to this point," Jon Corpina, senior managing partner at Meridian Equity Partners, told Alison Kosic on the CNN Business digital live show Markets Now.

Prior to this week, risks like Brexit, US-China trade tariffs, the geopolitical situation around Iran, Saudi Arabia's oil production and the impeachment inquiry into President Donald Trump have been have been on investors' minds.

Tuesday's weaker-than-0expected manufacturing data was just "the last ingredient in the recipe" to get investors to understand that there many things that can move the market, Corpina said.

12:10 p.m. ET, October 2, 2019

Donald Trump says the market is falling because of impeachment. Experts say it's about manufacturing

From CNN Business' Anneken Tappe and Matt Egan

Stocks are deep into the red today, with the Dow shedding more than 500 points at its lowest point.

Analysts and market participants believe the weakness in the market is related to Tuesday's weaker-than-expected manufacturing report, which showed that the sector contracted for a second month in a row in September. The monthly index dropped to its lowest since June 2009.

But one person who doesn't agree is President Donald Trump, who said on Twitter that the impeachment inquiry was weighing on the market.

Stocks have widely shrugged off impeachment, because most market participants assume that the president won't be removed from office.

Today, "the primary driver of what we’re seeing the last few days is economic numbers," said Keith Lerner, chief market strategist at SunTrust.

The ongoing trade war with China and slowing global growth are also weighing on the market. It's hurting business executives' confidence, too.

"We really need to see at least a truce or not any further escalation. Otherwise that would be a big risk," Lerner said.

11:41 a.m. ET, October 2, 2019

Dow plummets more than 500 points

From CNN Business' Anneken Tappe

The Dow continues to drop, falling more than 500 points.

The index was last down nearly 2%, or 525 points.

The S&P 500 fell 1.9%, while the Nasdaq Composite is down 1.8%.

10:56 a.m. ET, October 2, 2019

Oil prices slip after inventories report

From CNN Business' Anneken Tappe

US oil prices slipped after the Energy Information Agency released weekly petroleum inventory data.

Crude stockpiles increased by 3.1 million barrels in the week ending September 27.

US oil futures fell 1.6% to $52.75 a barrel, while Brent crude, the international benchmark, dropped 1.5% to $57.99 a barrel.

10:40 a.m. ET, October 2, 2019

Dow falls more than 400 points

From CNN Business' Anneken Tappe

Stocks continue to slide this morning. The Dow declined by more than 400 points, or 1.6%.

The S&P 500 is down 1.6%, while the Nasdaq Composite is 1.5% lower.

11:15 a.m. ET, October 2, 2019

Mixed bag for Big Three's quarterly auto sales

From CNN Business' Paul R. La Monica

Americans still want to drive big trucks. Smaller sedans on the other hand? Maybe not so much.

Ford (F) reported an overall drop in its third quarter sales of nearly 5% Wednesday -- even though truck sales were up almost 9% from a year ago. Ford's Big 3 rival Fiat Chrysler (FCAU) said that third quarter sales were flat, despite a 15% surge in Ram sales.

General Motors, which is in the third week of a United Auto Workers strike that threatens to hurt its profits, actually fared the best during the past three months. GM (GM) said total deliveries from dealers rose 6.3% in the third quarter, with solid increases for the Chevrolet, Buick, Cadillac and GMC brands.

Still, investors weren't impressed. Concerns about a weakening US economy and the trade war with China weighed on the broader market -- and none of the auto stocks were spared. GM and Ford fell 4% while Fiat Chrysler's stock was down nearly 1.5%.

9:49 a.m. ET, October 2, 2019

Dow falls 300 points in first minutes of trading

From CNN Business' Anneken Tappe

It promises to be another day of sharp losses for US stocks.

Within the first minutes of trading, the Dow fell as much as 300 points and all three major indexes were down more than 1%.

Concerns about the health of America's economy, its manufacturing sector, and the effects of the US-China trade war are weighing on investors, and raise expectations that the Federal Reserve will step in to boost the economy once again this month.