Musk agrees to Twitter purchase
The saga that is Elon Musk’s approach to buy Twitter took another twist as the mercurial businessman said he would now proceed with his $44bn offer. A delaying tactic? He was due to be deposed later this week, and Twitter is said to be concerned he’s just running rings around the process to buy time. Or is it acknowledgment that he didn’t stand a very good chance in the court? Most thought Twitter would win and Musk probably agreed after the early exchanges. The Tesla supremo sent a letter to Twitter on Monday night reigniting the deal, a filing shows. Twitter stock surged 22% to $52, a little short of the $54.20 the deal priced the shares, before being halted. The deal is still not complete.
Wall Street posts best 2-day gain since 2020
Stocks rallied again with Wall Street surging 3% on the day and notching its best two-day rally since 2020. It was the kind of out-of-nowhere face-ripper compounded by lots of short covering by everyone who’d gone short in the hole…melt-up before the main epic blow-up...it’s coming. If anything, markets acting to ease financial conditions before the Fed stops only delays the pivot because the market is not listening to the Fed and provides it ample cover to keep on until something really breaks. European stocks are giving back a bit this morning after the strong start to October.
Yields move up, dollar under pressure
After we saw a very abrupt correction in bond markets at the start of the week, yields are moving higher again. Rates volatility is high, which does not bode well for stocks. Anyway, US 10yr yields rose back to 3.67% this morning, whilst UK gilts are being offered at a pace with the 10yr moving close to 4% again. Sterling is still in bounce mode, with GBPUSD nudging the 1.15 level this morning. This, it should note, comes amid broad dollar strength with EURUSD rising to within a whisker of parity.
Today’s events
ADP employment figures, US ISM services PMI. Also, we get to hear from the embattled UK prime minister Liz Truss amid open conflict within the Conservative party.
OPEC+
OPEC and allies led by Russia are set to cut production significantly – talk now of 1m-2m bpd. Brent trades firmer at $91.
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