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Banks (Finance)

Volatile Trade Continues as Bank of England Buys British Bonds, Apple iPhone Production Weakened

Strategic Insights

— 1 min read

The volatile trade in the global stock market continued on Wednesday morning as the Bank of England made an abrupt announcement to buy long-term British bonds, supporting the plunging pound. The 10-year Treasury yield, which had briefly topped 4%, fell solidly after the announcement. Meanwhile, Apple reportedly is reining in iPhone production, weighing on Apple stock and iPhone chipmakers such as Taiwan Semiconductor, Broadcom, Qualcomm, and Qorvo.

Key Takeaways:

  • The Bank of England's decision to buy long-term British bonds resulted in a brief bounce in the British pound, but it has since fallen, with gilts yields plummeting.
  • Apple has informed suppliers to plan on 90 million iPhone handsets in the current fiscal year, a reduction from the initial expectation of 96 million, indicating weak consumer electronics spending.
  • The 10-year Treasury yield, which had briefly topped 4%, fell 7 basis points to 3.91% after the Bank of England's announcement.
  • Biogen and Japanese partner Eisai reported that their Alzheimer's drug reduced cognitive decline by 27% vs. a placebo in an 18-month phase 3 trial.
  • China EV startup BYD will hold a virtual event to kick off its big European expansion, while Nio will hold its own European event to showcase its 2022 models.
  • Tesla stock climbed 2.5% to 282.94 on Tuesday, but fell modestly on Wednesday after Citigroup cut Q3 delivery targets and said Q4 was at risk.

Statistics:

  • The 10-year Treasury yield fell 7 basis points to 3.91% after the Bank of England's announcement.
  • Apple informed suppliers to plan on 90 million iPhone handsets in the current fiscal year.
  • The 10-year Treasury yield approached 4% earlier in the morning, but eventually tumbled.
  • Biogen stock surged 44% early Wednesday after reporting positive results for their Alzheimer's drug.
  • BYD stock fell 1.4% on Tuesday to 26.68, near four-month lows.
  • Nio stock retreated 2.4% to 17.19, still in a bottoming base.

Sources:

  • Bloomberg
  • Bank of England
  • Biogen
  • Eisai
  • BYD
  • Nio
  • Citigroup

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