Dow Jones Futures Cut Losses on Bank of England Reversal; Apple Falls on iPhone Report, Biogen Rises on Alzheimer’s Drug

Dow Jones futures reduced losses in volatile trading Wednesday morning, along with S&P 500 futures and Nasdaq futures, after the Bank of England abruptly announced plans to buy long-term British bonds in support of the declining pound.


The yield on ten-year government bonds, which had briefly exceeded 4%, fell sharply.

Meanwhile, Apple (AAPL) is said to be keeping iPhone production in check. That iPhone report weighs in on Apple stocks and iPhone chip makers like Taiwan Semiconductor (TSM), Broadcom (AVGO), Qualcomm (QCOM), and Qorvo (QRVO).

Biogen (BIIB) and its Japanese partner Eisai reported that their Alzheimer’s drug reduced cognitive decline in a late-stage study. The BIIB share shot up.

Tesla rival BYD (BYDDF) will hold a European launch event early Wednesday as it continues rapid global expansion. China EV startup Nio (NIO) is holding its own European event next week.

BOE buys bonds

The Bank of England announced a temporary purchase of long-term British bonds, a major turning point for a central bank that had been tightening for months.

The British pound bounced, at least briefly. Gold yields fell sharply.

The pound had plunged in recent days after new British Prime Minister Liz Truss announced a deficit-funded loan package. British bond yields had soared, putting pressure on the global financial system.

Dow Jones Futures Today

Dow Jones futures fell 0.1% from fair value due to the Bank of England’s movement, fluctuating between small gains and losses. S&P 500 futures fell 0.2%. Nasdaq 100 futures were up 0.7% but were down more than 1%.

Futures are absolutely volatile.

Apple stocks are 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, along with TSLA stocks.

The 10-year Treasury yield reached 4.005% earlier in the morning, but then fell 8 basis points to 3.9% on the BOE move.

Crude oil futures moved higher.

Keep in mind that an overnight action in Dow futures and elsewhere does not necessarily lead to actual trading in the next regular trading session.

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Fair Tuesday

The stock market closed mixed on Tuesday, but after a strong opening, it quickly bounced back down, with the S&P 500 index undermining its intraday bear market lows.

The Dow Jones Industrial Average fell 0.4% in Tuesday’s trading. 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 rose 9 basis points to 3.96%, a new 12-year high.

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Apple iPhone production

Apple has told suppliers to plan 90 million iPhone handsets in the current fiscal year, Bloomberg reported. The Dow Jones tech titan had expected to make six million more handsets, but failed to see an expected increase in demand, the latest sign of weak consumer electronics spending.

Apple shares fell 3.5% before the opening.

Shares rose 0.7% to 151.76 on Tuesday, a second consecutive small gain. The stocks are still below their 50 and 200 day moving averages. But according to MarketSmith’s analysis, relative strength for AAPL stocks is at an all-time high.

TSM stocks, Broadcom, Qorvo and Qualcomm are all at or near 52-week lows. Shares of Taiwan Semi and QRVO fell 2% in the premarket, while Qualcomm fell 1%. AVGO shares were not yet on the market.

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 study in patients with early-stage Alzheimer’s disease.

Alzheimer’s drugs have been elusive. The FDA, in a controversial move, approved Biogen’s aducanumab for Alzheimer’s disease last year, despite concerns about its efficacy. Medicare has limited coverage of aducanumab, greatly limiting its use.

Shares of Biogen, after initially rising in June 2021 following FDA approval, have been on a declining trend for months.

The BIIB share rose 43% on Wednesday.

Tesla vs BYD: Which EV Giant is the Best Buy?

BYD Europe Launch Event

China EV and battery giant held a virtual event to kick off the great European expansion and release European prices. BYD is currently selling the Tang SUV in limited quantities in Norway. The automaker will expand into Germany and much of Europe, adding the Han sedan and Atto 3 small crossover to its options. With BYD aiming to at least double sales to four million by 2023, it must gain a strong foothold in the world’s No. 2 EV market.

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

On October 1, Nio will release the September and third quarter deliveries, but the startup expects record sales every month in the fourth quarter. BYD will likely publish monthly and quarterly sales a day or two later. They should both be a record again.

Tesla should release global production and deliveries for the third quarter over the weekend. Tesla should report record deliveries, but demand in China is a bit of a concern.

Shares of BYD fell 1.4% to 26.68 on Tuesday, near its lowest level in four months. Nio shares fell 2.4% to 17.19, still at an all-time low but falling further from its 200- and 50-day lines.

Tesla stock climbed 2.5% to 282.94 on Tuesday, though it met resistance near the 50-day line. TSLA shares have a buy point of 314.74 from a short base within a long, deep consolidation.

Tesla declined modestly on Wednesday as Citigroup lowered its third-quarter delivery targets and said the fourth quarter was at risk.

Read The Big Picture every day to stay up to date on market direction and leading stocks and sectors.

Follow Ed Carson on Twitter at @IBD_ECarson for scholarship updates and more.


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