Stocks fall, Chinese yuan crosses 7.2 against dollar

Credit Suisse says it’s time to enter the green hydrogen business, with a number of catalysts in place to boost the power of clean energy.

“Green hydrogen is a growing market – we are increasing our 2030 market estimates by [over] 4x,” the bank said, predicting green hydrogen production will increase about 40 times by 2030.

He names two stocks to play the boom – giving a rise of more than 200%.

CNBC Pro subscribers can learn more here.

—Weizhen Tan

The offshore and onshore Chinese yuan rose above 7.2 against the dollar, hovering at the weakest levels since early 2008.

The US Dollar Index also gained 0.33%, trading at 114.47.

Consumer inflation excluding fresh food is expected to rise this year, but the rate of increase will subsequently slow on energy prices, minutes from the Bank of Japan’s July report said the meeting.

A few members also said inflation, excluding fresh food and energy, was unlikely to reach 2% over its projection period. This CPI reading was 1.6% in August.

“These members expressed the view that unless commodity prices continue to rise, the CPI inflation rate is expected to decline from fiscal year 2023,” the minutes read.

Regarding the yen, a member of the BOJ board said that the downward pressure on the currency could be eased if a slowdown in the global economy leads to lower inflation and interest rates in the world.

Another member said the yen could even appreciate if the global economy experiences shocks.

—Abigail Ng

Neil Veitch, chief investment officer at Edinburgh-based SVM Asset Management, says he expects the macro landscape to remain “quite challenging” for the rest of the year.

Speaking to CNBC Pro Talks last week, Veitch named the key drivers that could help the stock market become “more constructive” and shared his views on growth versus value.

CNBC subscribers can find out more here.

— Zavier Ong

The Dow Jones and S&P 500 have fallen for six straight days, with many seeing large-scale selling typical of so-called “washout” days.

This can sometimes be a counter buy signal on Wall Street, but many investment professionals are skeptical that the sell will end. One reason is that earnings forecasts for next year still show solid growth, which would be unlikely in a recession.

“We know that if we start to see a reversal in 2-year yields…and if we start to see a reversal in the dollar, that gives us the opportunity to rebound from these extremely oversold conditions,” said Andrew Smith, director investments. strategist at Delos Capital Advisors in Dallas. “But I’m having a hard time reconciling in my mind that the earnings story will be as good as expected.”

Additionally, dramatic moves in the bond and currency markets mean “something snapped” and it may be wise to wait for that information to come out, Smith said.

On the positive side, Smith pointed to a strong labor market and signs of continued travel spending as a sign that the US economy may be able to avoid a major recession.

—Jesse Pound

The 10-year Treasury yield is approaching 4%, a level it has not reached since 2010.

The US 10-year is the benchmark yield that sets the price of mortgage rates and other consumer and business loans. It jumped higher this week as UK gilt yields rise and on expectations of an aggressive Federal Reserve.

The yield was 3.96% in afternoon trading. The 10-year yield reversed an earlier decline and gained around basis points. (One basis point equals 0.01 percentage point)

“It’s really impressive, and I just don’t think anyone is ready to step in and catch the falling knife yet,” BMO’s Ben Jeffery said. He added that a lack of liquidity has also pushed up yields, which move opposite to prices.

Jeffery said the yield was also rising ahead of the 5-year note auction at 1 p.m.

He said the 10-year tested the 4% level in 2010. “The last time we were sustainably above 4% was in 2008. There is another technical level at 4.10 %, then there’s not much to note until 4.25%,” he said.

— Patti Domm