The start of the 4th quarter in the United States (US) yesterday saw equities trade in gains with Treasury yields falling after weak manufacturing sector data.
It is understood that the US manufacturing sector PMI data from the ISM survey published in the New York session yesterday recorded a decline to 50.9 points compared to the previous record of 52.8 points and failed to surpass the market forecast of 52.5 points.
This indirectly added to the decline in US 10-year yields after the Prime Minister of the United Kingdom (UK), Liz Truss canceled her tax cut program to make way for rate hikes.
That streak, Wall Street saw a 'green' ray to close above 2% even though concerns about interest rate hikes and economic growth slowdown still dominated the market.
The Dow Jones Industrial Average closed 2.66% higher at 29,490.89 while the S&P 500 gained 2.59% at 3,678.43 and the Nasdaq Composite added 2.27% at 10,815.44.
In the European zone, the European STOXX 600 index also closed higher by 0.7% to cover the initial loss of 1.3%.
In the Asian region, the trading opening saw Japan's Nikkei 225 rise 2.19% with Topix gaining 2.44% while South Korea's Kospi advanced 1.81% and Kosdaq climbed 2.24%.
Australia's S&P/ASX 20 index jumped 2.35% and MSCI's broadest gauge of Asia Pacific shares outside Japan added 0.71%.
In the meantime, Art Hogan of B. Riley Wealth explained that this positive trend in equities is indeed related to the pullback in the yield market and it may signal a risk-on environment.
He also touched on yesterday's manufacturing sector data, saying positive readings are a catalyst for selling while negative output can encourage buying.
On that factor he is not shy to say that bad news is good news for the equity market.
