Daily Market Analysis from ForexMart

Indexes in the green, oil in the red: What's behind the market paradox?

Powell warns of caution
The S&P 500 unexpectedly soared to record highs on Monday, after earlier being under pressure due to comments from Federal Reserve Chairman Jerome Powell. He signaled that the Fed will not rush into another rate cut, despite market expectations.

The index was supported by positive sentiment, as well as strong monthly and quarterly results. As a result, all three key US indices — the Dow, S&P 500 and Nasdaq — closed the session in the "green zone", updating their historical maximums.

Important signals for the market
Speaking at the National Economic Association conference in Nashville, Powell indicated that the regulator expects two more rate cuts this year if economic indicators meet forecasts. In total, this amounts to 50 basis points, which allows investors to assess the Fed's further steps.

"Many people believe that the Fed's actions are already priced in for the rest of the year," comments Jake Dollarhide, CEO of Longbow Asset Management. "But I think the Fed may have more surprises in store for 2024. It is quite possible that the soft landing scenario will actually happen."

The market reacts to forecasts
The Fed already took a step towards easing policy earlier this month, cutting the rate by 50 basis points. Investors are closely monitoring the likelihood of a similar decision in November, which, according to CME Group, fell to 35% from 37% before Powell's speech and 53% on Friday.

Results of the day: all indices are positive
The Dow Jones Industrial Average added 17.15 points (+0.04%), reaching 42,330.15. The S&P 500 rose by 24.31 points (+0.42%) and ended the day at 5,762.48. The Nasdaq Composite showed an increase of 69.58 points (+0.38%) and closed at 18,189.17.

Now, investors' attention is focused on future Fed statements and economic data, which can either confirm or adjust the market's expectations regarding the further movement of interest rates.

Best September in Seven Years
The S&P 500 ended September with a gain of 2%, which was its best result for this month since 2013. Moreover, this is the fifth month in a row when the S&P 500 has demonstrated positive dynamics. By the end of the quarter, the index added 5.5%, Nasdaq showed growth of 2.6%, and the Dow Jones became the leader, having strengthened by an impressive 8.2%.

Short-Term Volatility
The market reaction to Jerome Powell's statements was mixed. After his speech, the indices went down, but towards the end of the trading session there was a reversal and the market recovered. Experts believe that one of the reasons for this movement could be the activity on the last day of the quarter, when investors are trying to fix their positions.

"There's always a lot of trading activity toward the end of a quarter — it's standard behavior to buy the winners and dump the losers," says Jake Dollarhide, CEO of Longbow Asset Management.

The Fed and Market Expectations
The Federal Reserve is in a wait-and-see period ahead of its November meeting, according to Quincy Crosby, chief global strategist at LPL Financial, as it receives a slew of new economic data that will shape the path of monetary policy.

There are several key releases coming this week, including initial jobless claims and private payrolls. The market is watching these indicators closely as they could impact the rate decision.

CVS Health Stock Rises
The company's stock jumped 2.4% on news that activist shareholder Glenview Capital Management is set to meet with CVS Health executives. According to insiders, the meeting will be devoted to possible changes in the company's strategy to improve its efficiency.

Optimism on the stock markets
On the New York Stock Exchange, the number of shares that showed growth exceeded the number of those that fell by 1.06 to 1. On the Nasdaq, this ratio turned out to be balanced - 1.00 to 1, which indicates an even mood of market participants.

The S&P 500 registered 30 new annual highs and only two new lows, while the Nasdaq index showed 82 new peaks and 88 lows. Current data indicates significant volatility, but also an active recovery of the positions of leading companies.

Trading volumes are high
Trading volumes on US stock exchanges reached 12.64 billion shares, which is higher than the average for the last 20 sessions, which is 11.93 billion. Increased activity may be due to investor nervousness amid statements by Fed Chairman Jerome Powell and increased uncertainty about further monetary policy.

Markets in anticipation
The MSCI world stock index started the week on a minor note and showed a decline, while the dollar strengthened amid reduced expectations for a more aggressive easing of the Fed's policy. Powell made it clear that the regulator does not intend to sharply cut rates yet, which increased volatility in the markets and adjusted investor expectations. At the same time, oil futures ended trading sideways due to uncertainty around the conflict in the Middle East.

Powell's comments wobbled
Markets were mixed after Powell said the Fed would not force a rate cut. Investors who had expected a deeper cut are reconsidering their positions as the Fed chief raised the prospect of two 25 basis point rate cuts by the end of the year, provided the economy continues to grow within current forecasts.

Strong inflation data supports gains
Wall Street's major indexes rose strongly last week after U.S. core inflation data came in below expectations, raising the prospects for further monetary easing. However, as of Monday, the probability of a 50 basis point rate cut in November had fallen to 36.7% from 53.3% on Friday, according to CME Group.

Investors continue to assess the likelihood of further rate cuts as the U.S. economy shows mixed signals. The focus remains on employment, inflation and GDP growth data, which could either strengthen Powell's position or lead to a revision of current forecasts. The market remains in a state of heightened uncertainty, which is reflected in trading volumes and volatility.

Rates are high, and so are risks
In the coming weeks, market participants will be closely watching the speeches of Fed officials for the slightest hint of a possible change in course. Market expectations have become more subdued, but any new information could change the situation again.

Stocks have returned to previous levels
Despite an initial decline at the time of Jerome Powell's speech, the S&P 500 and Dow indices ended the session at record highs, recouping losses in the final hours of trading. The gains came on the final day of the quarter, when investors traditionally adjust portfolios, adding additional volatility to the market.

"The strong close can be partly attributed to the impact of so-called 'quarterly rebalancing', a typical practice of recalibrating portfolios at the last minute to improve performance," said Rick Meckler, partner at Cherry Lane Investments.

Strong growth for the month and quarter
The S&P 500 index rose 2.01% in September, demonstrating an impressive fifth consecutive month of positive dynamics. And for the quarter, it strengthened by 5.53%, which underscores the market's resilience amid uncertainty over the Fed's further actions.

The MSCI Global Index also ended the day in the red, falling 0.21% to 851.02. However, for the month, the index gained about 2%, and for the third quarter, it showed a strong growth of 6%, which indicates a restoration of optimism among global investors.

Risk Factors Remain in Play
Per Stirling Capital's Tim Phipps warns that investors continue to keep a close eye on the geopolitical situation in the Middle East, the aftermath of Hurricane Helen and the threat of a major US dock strike. Added to this is the uncertainty surrounding the Chinese economy, which is struggling to maintain growth momentum with new stimulus measures.

China Adds Positive to Asian Markets
China's stock market has responded with a strong rally as Beijing unveils stimulus packages. The CSI300 index of China's leading companies posted its biggest daily gain since 2008, jumping 8.5%. This follows a rally over the past five trading days, during which the index has gained more than 25%.

Investor Strategies and Expectations
Investors remain in a holding pattern as further moves by both the Fed and major economies such as China could have a significant impact on global markets. Current events highlight the importance of balancing domestic and external risks, including macroeconomic indicators and geopolitical factors.

Against this backdrop, experts recommend caution and focus on portfolio diversification, as instability could prove to be a long-term trend.

Fed chief's hawkish stance worries the market
The US currency strengthened after Jerome Powell signaled that the Fed may not cut rates significantly in November. The statement caught the market by surprise and forced investors to reassess their expectations.

"It looks like Powell has taken his share of hawkish pills," said Steve Englander, head of global G10 FX research and macro strategy at Standard Chartered Bank, with irony. In his opinion, traders are now starting to worry that the regulator is really set for two small rate cuts of 25 basis points this year.

The dollar is steadily growing against major currencies
The dollar index, reflecting its dynamics against key currencies such as the euro and the yen, rose by 0.32%, reaching 100.76. As a result, the euro weakened to $1.1133, which is 0.27% lower than the day before, and the dollar against the yen rose by 1% to 143.61.

The debt market reacts to the Fed's rhetoric
The yield on US Treasury bonds also changed following the updated expectations of investors. The benchmark 10-year bond rose by 3.6 basis points, reaching 3.785%. This is higher than the value of Friday, when the yield was 3.749%.

Two-year bonds, which are usually more sensitive to interest rate changes, showed an even sharper move. Their yields rose 7.4 basis points to 3.637%, up from 3.563% late Friday.

Yield curve signals shift in sentiment
The gap between the two-year and 10-year Treasury yields, often used as a proxy for economic growth expectations, was 14.6 basis points. That figure is seen as a sign of rising investor confidence in the resilience of the U.S. economy despite continued uncertainty around monetary policy.

What's next?
A stronger dollar and rising bond yields highlight a shift in market sentiment. Market participants will be watching further Fed comments and economic data to see whether the Fed will continue to tighten its rhetoric or decide to pursue more aggressive easing later in the year.

US oil shows its biggest drop in a year
US WTI oil prices fell slightly, ending the day at $68.17 per barrel, losing just 1 cent during the trading session. However, the results of September turned out to be much more dramatic - the cost of raw materials fell by 7% in a month, which was the largest drop since October 2023. By the end of the quarter, the drop reached 16%, which makes it the most significant in the last year.

Brent is also in the red
The global benchmark of Brent crude oil closed the session at $71.77 per barrel, down 21 cents. In September, Brent fell by 9%, showing the strongest monthly drop since November 2022 and continuing the downward trend for the third month in a row. The quarterly results are even less comforting: Brent lost almost 17%, which was the most significant quarterly decline in the last 12 months.

Gold Cools Off After Explosive Rally
After an impressive rally fueled by the Fed's soft rhetoric and geopolitical tensions, gold retreated slightly, taking a pause before the end of the quarter. The spot price of the precious metal fell by 1% to $2,631.39 per ounce. US gold futures also showed a correction, falling by 0.54% to $2,629.90 per ounce.

Gold's Best Quarter Since the Start of 2020
Despite the current weakness, the precious metal is ending the quarter with its best results since the beginning of 2020. Investors view gold as a reliable safe-haven asset amid high uncertainty in financial markets and escalating geopolitical risks, including instability in the Middle East.

Outlook
With oil prices falling and gold stabilizing, the energy and precious metals market remains in a zone of high volatility. Market participants will be watching the actions of major oil producing countries and how the global economy develops, which could determine the future trajectory of commodity assets in the next quarter.
More analytics on our website: bit.ly/3VobLUv

USD/JPY: Shigeru, Ueda, and ADP report

The yen is losing ground again. After nearly a 500-pip rally, the Japanese currency has been falling against re greenback again. On Monday, the USD/JPY pair hit a two-week low, dropping to 141.66, reacting to the unexpected results of the elections of the ruling political party's leadership. The Liberal Democratic Party is now headed by Shigeru Ishiba, who has taken over the government and announced plans to hold early parliamentary elections—one year ahead of schedule.

The yen responded positively to Ishiba's victory, as he is considered a proponent of tight monetary policy and raising interest rates to combat inflation. Importantly, he defeated Sanae Takaichi, a candidate from the highly conservative wing of the LDP (who was considered the frontrunner in the race), who, in contrast, advocated for a softer monetary policy.

In response to Ishiba's victory, the USD/JPY pair dropped 500 pips, falling from 146.50 to the mid-141 range. However, as is often the case with political factors, their influence fades quickly—by the end of the week, the pair's buyers had recovered almost all lost points. The "Shigeru factor" was swiftly priced in by the market, which is quite logical, given that the election of a new prime minister, even one with "hawkish" views, doesn't mean the Bank of Japan will automatically accelerate rate hikes. Ishiba will play his part, of course, but not immediately and not in the public sphere. Don't expect any "Trump-style" statements from the new Japanese prime minister, like those made by the former US president who openly urged the Federal Reserve to cut interest rates.

Meanwhile, the classic fundamental factors suggest that the Bank of Japan will not rush into the next round of rate hikes. In particular, the Tokyo Consumer Price Index reflected a slowdown in inflation: the overall CPI dropped to 2.2% in September (after rising to 2.6% in August), while the core CPI fell to 2.0%. This index is considered a leading indicator for determining inflation trends nationwide, so its downward trend is a worrying sign for USD/JPY sellers. Other macroeconomic indicators also disappointed. Japan's industrial production volume dropped by more than 3% in August on a monthly basis (-3.3%) against a forecast of -0.5%. Additionally, the volume of new housing starts in Japan declined sharply in September by 5.1% (against a forecast drop of 3.3%).

Such fundamental conditions do not support the tightening of monetary policy. Bank of Japan Governor Kazuo Ueda confirmed this assumption in his recent speeches. He emphasized the need to maintain a wait-and-see strategy, "considering global economic risks and financial market instability." In his speech yesterday, he also reiterated a cautious stance. According to him, the regulator will pursue "appropriate monetary policy in order to sustainably and stably achieve the inflation target of 2%."

For the most part, the Bank of Japan's leader made general, conventional, and non-committal statements. But this is precisely what is weighing on the Japanese currency. Many of his policymakers (Naoki Tamura, Hajime Takata, and Junko Nagakawa) hinted in their September speeches that the central bank might raise interest rates again in the near future. They specifically pointed to wage indicators (which showed positive dynamics, rising by 1.1% year-on-year in June and 0.4% year-on-year in July).

However, Kazuo Ueda cooled the enthusiasm of USD/JPY sellers. He stated that the October data on service prices "will be key in determining whether inflation is accelerating." Only after a thorough analysis of this data, the regulator will shed light on whether any policy changes can be expected.

In other words, the head of the Bank of Japan cast doubt on another rate hike this year, though he did not rule out such a scenario. This indecisiveness from Ueda disappointed USD/JPY sellers. So, the yen ceased to act as a "driving force" in the USD/JPY pair.

All of this suggests that a resumption of a downward movement is only possible if the US dollar weakens. The instrument is following the dollar index, which in turn is awaiting the key report of the week—the US nonfarm payrolls to be published the day after tomorrow, on October 4. I remind you how traders reacted to the ADP report, which came out in the green today, reflecting the creation of 144,000 jobs in the private sector. On the one hand, this is a relatively modest result. On the other hand, most experts expected this figure to be around 124,000. This has sparked hope among dollar bulls that nonfarm payrolls will also be in the green. In that case, the likelihood of a 50-point rate cut at the November meeting will drop to 20-15%, and the dollar will receive additional (and quite significant!) support.

From a technical perspective, the USD/JPY pair has approached the resistance level of 145.30 (the upper line of the Bollinger Bands indicator on the daily chart). It would be advisable to enter long positions after buyers break above and consolidate above this level. In that case, the next medium-term target for the upward movement will be 147.00, which is the lower border of the Kumo cloud on the same time frame.
More analytics on our website: bit.ly/3VobLUv

Middle East conflict steals the show as Tesla and Nike reports leave investors cold

S&P 500 remains flat amid Middle East tensions and job data concerns
The U.S. stock index S&P 500 ended Wednesday's trading session nearly unchanged as tech stocks managed to gain, but investors remained cautious due to geopolitical risks in the Middle East and anticipation of critical U.S. employment data expected later this week.

Nvidia's gains offset by Tesla's drop
A rise in Nvidia shares by 1.6% provided support to the S&P 500's tech sector. However, Tesla shares declined by 3.5% after the electric vehicle manufacturer reported quarterly vehicle deliveries that fell short of market expectations.

Market eyes on the Middle East
Investors closely monitored developments in the Middle East after Israel vowed to retaliate for Iran's missile attack on Tuesday. U.S. President Joe Biden stated on Wednesday that he would not back an Israeli strike on Iran's nuclear facilities in response to the attack and urged Israel to act "proportionately."

Labor market remains resilient
Early Wednesday, data showed that U.S. private sector jobs increased more than expected in September, suggesting continued strength in the labor market. Still, traders remain focused on the upcoming non-farm payrolls report due Friday, as well as Thursday's jobless claims data, which could further influence market expectations.

With the market in a state of suspense, any surprise data or geopolitical developments could serve as a catalyst for volatility in the days ahead.

Investors brace for earnings season and Fed decisions
U.S. stock indices saw little change on Wednesday as investors prepared for an upcoming wave of earnings reports and Federal Reserve decisions. "We're about to see the employment report on Friday, and then next week kicks off the earnings season," commented Michael O'Rourke, Chief Market Strategist at JonesTrading in Stamford, Connecticut.

Dow, S&P 500, and Nasdaq barely budge
The Dow Jones Industrial Average added 39.55 points, or 0.09%, to close at 42,196.52. The S&P 500 edged up 0.01%, gaining just 0.79 points to end at 5,709.54. Meanwhile, the Nasdaq Composite rose by 14.76 points, or 0.08%, to 17,925.12.

Fed's unexpected move fuels September rally
The stock market wrapped up September with strong gains after the Federal Reserve unexpectedly cut rates by 50 basis points to support the labor market. As a result, the S&P 500 climbed 19.7% year-to-date.

The probability of another 25 basis point cut at the November FOMC meeting now stands at 65.7%, up from 42.6% a week earlier, according to the CME Group FedWatch tool.

Major banks to lead earnings season
JPMorgan Chase and other banking giants will kick off the third-quarter earnings season on October 11, setting the tone for the broader S&P 500 as investors look for signs of stability amid economic uncertainty.

Dockworkers strike paralyzes U.S. ports
Meanwhile, a strike involving 45,000 dockworkers, which has brought shipping at East Coast and Gulf Coast ports to a halt, entered its second day on Wednesday. Negotiations between the unions and employers have yet to be scheduled, according to sources.

Analysts at JPMorgan estimate that the strike is costing the U.S. economy approximately $5 billion per day, intensifying concerns over potential supply chain disruptions.

The market remains on edge as investors await further updates that could impact corporate earnings and broader economic trends.

Nike disappoints Wall Street: shares plunge after withdrawing revenue forecast
Nike shares dropped sharply by 7% on Wednesday after the sportswear giant pulled its annual revenue target, leaving investors puzzled over the company's turnaround timeline under new CEO Elliott Hill.

Investor day canceled, adding to uncertainties
In addition to retracting its revenue forecast, Nike also canceled its investor day scheduled for November 19. The company's CFO, Matthew Friend, explained that the decision would provide Hill with "the necessary flexibility to review Nike's strategies and business trends," hinting at possible restructuring.

How does Nike stack up against competitors?
Currently, Nike's forward price-to-earnings ratio stands at 27.98, compared to 27.08 for Deckers and 35.14 for Adidas. Despite the recent decline, Nike shares, trading at $82, have still recovered 10% since the announcement of Hill's appointment in September.

Industry insiders optimistic about Hill's appointment
The CEO of British retailer JD Sports expressed confidence in Hill, stating, "It's good to have someone from within the industry who knows Nike and understands its product range." This suggests that Hill's familiarity with the company could help navigate Nike through its current challenges.

Competitors suffer alongside Nike
Other sportswear stocks weren't immune to the market's jitters: Under Armour and Lululemon both declined by over 2%, while Foot Locker fell by 3%, reflecting broader concerns about supply chain disruptions and sales slowdowns.

Humana plunges amid Medicare warning
Elsewhere, shares of Humana Inc. tumbled 11.8% after the health insurer warned that it expects a drop in enrollment in its top-rated Medicare Advantage plans for seniors in 2025. This statement has sparked worries about the broader healthcare sector's outlook.

With markets digesting these developments, Nike's outlook remains under scrutiny as the company grapples with uncertain forecasts and growing competition.

Wall Street braces for key Fed moves as global markets wobble
Global markets displayed mixed performance as traders digested U.S. labor data and awaited signals from the Federal Reserve. "Given the latest job numbers in the private sector, the bond market is betting against a 50 basis point cut at the next Fed meeting," noted Matt Miskin, Co-Chief Investment Strategist at John Hancock Investment Management.

Indices move sideways
The MSCI global equity index (MIWD00000PUS) dipped by 0.04% to 845.49 points, reflecting overall cautious sentiment. Earlier, the STOXX Europe 600 managed to close with a slight gain of 0.05% at 521.14 points.

Oil prices under pressure, but holding ground
On the energy front, U.S. crude oil rose 0.39% to $70.10 per barrel, while Brent finished the day at $73.90 per barrel, up 0.46%. Despite geopolitical tensions in the Middle East, the upward momentum was capped by a significant increase in U.S. crude inventories.

Treasury yields extend gains
U.S. Treasury yields continued their upward trajectory: the benchmark 10-year yield climbed by 4 basis points to 3.783%, compared to 3.743% the previous day. Meanwhile, 30-year bonds saw a 4.9 basis point rise, closing at 4.1299%. The 2-year yield, which is more sensitive to Fed rate expectations, edged up 1.4 basis points to 3.6352%.

Yield curve hints at cautious optimism
A closely-watched segment of the U.S. yield curve, measuring the gap between 2-year and 10-year yields, remained at a positive 14.6 basis points — suggesting that investors are not pricing in a near-term recession.

Dollar strengthens amid market uncertainty
The dollar index, which tracks the greenback's value against a basket of currencies, rose by 0.34% to 101.60. The euro slipped by 0.16% to $1.1049, while the dollar surged 2% against the Japanese yen, reaching 146.43.

Gold loses its luster
In the precious metals market, spot gold declined by 0.14% to $2,659.22 per ounce, while U.S. gold futures fell by 1.02% to $2,640.00. Rising bond yields and a stronger dollar weighed on gold's appeal as a safe-haven asset.

With traders balancing geopolitical risks and economic indicators, market sentiment remains fragile, and any new developments could tip the scales in unexpected directions.
More analytics on our website: bit.ly/3VobLUv

Spirit Airlines Bankruptcy, Oil Rising: How the U.S. Balances Labor Market Gains and Geopolitics

Dow Ends Week at Record High, Nasdaq Shows Solid Gains
The Dow hit record highs on Friday, while the Nasdaq posted an impressive gain of more than 1%, driven by an unexpectedly strong increase in U.S. employment, which somewhat allayed investors' fears about possible economic weakness.

Record Job Growth
September was the month with the most significant job growth in the past six months. According to the published data, the unemployment rate fell to 4.1%. Experts took this report as a signal that the economy remains resilient and does not lose momentum.

"The data confirms that we can expect stable economic activity in the fourth quarter," commented Peter Cardillo, chief economist at Spartan Capital Securities.

Impact on Interest Rates
The improving economic situation, however, may slow down the interest rate cuts that were previously expected. Cardillo noted that positive news from the labor market will most likely slow the process of further rate cuts.

Traders also adjusted their expectations for the upcoming Federal Reserve meeting, scheduled for November 6-7. The chance of a 50 basis point rate cut fell to 8% from 31% earlier in the day, according to CME Group's FedWatch data.

Small Caps, Financials Rise
Amid the broader market rally, small caps and financials stood out. The Russell 2000 Index rose 1.5%, while the S&P 500 Index rose 1.6%.

The trading session's results showed that despite the uncertainty surrounding the Fed's future actions, investors remain optimistic about the resilience of the U.S. economy.

Spirit Airlines Shares Plunge, Airlines Mixed
Spirit Airlines shares plunged 24.6% on news that the company may be in bankruptcy talks with bondholders. While Spirit plunges into crisis, other airlines are rallying. Thus, Frontier Group shares soared by 16.4%, United Airlines jumped by 6.5%, and Delta Air Lines rose by 3.8%.

Growth of leading indices
Friday's session ended with growth of the main American stock indices. The Dow Jones Industrial Average increased by 341.16 points (0.81%), reaching 42,352.75. The broad market index S&P 500 also added 0.90% and closed at 5,751.07, and the Nasdaq Composite demonstrated growth by 1.22%, ending the day at 18,137.85.

Weekly results amid geopolitical instability
Although the main indices showed growth on Friday, their results remained modest for the week. Strong investor concerns are associated with the tense situation in the Middle East. The Dow added just 0.1%, the S&P 500 rose 0.2%, and the Nasdaq also ended the week with a symbolic gain of 0.1%.

Energy on the rise
The energy sector showed notable gains thanks to a sharp jump in oil prices, which is also associated with political instability in the Middle East. The S&P energy index rose 1.1% on Friday and showed an impressive 7% gain for the week, which was the largest weekly gain since October 2022.

The dynamics in the markets highlight how geopolitical risks and corporate news can have diametrically opposed effects on different sectors of the economy.

Biden urges Israel to consider alternatives in the conflict
US President Joe Biden suggested that if he were in Israel's place, he would consider other measures besides attacks on Iranian oil facilities. He also said he believed Israel had not yet made a final decision on how to respond to Iran's missile strikes this week.

Rivian Shares Slide
Rivian shares fell 3.2% after reporting disappointing production data. The electric vehicle startup cut its full-year guidance and reported delivering fewer vehicles than planned in the third quarter.

S&P 500 Earnings Expectations
Investors are eagerly awaiting the start of the third-quarter earnings season for the S&P 500 next week. Particular attention will be focused on major financial players like JP Morgan Chase, Wells Fargo, and BlackRock, which will report on October 11.

Stock Market Optimism
Investor optimism remains as the S&P 500 has posted a 20.6% gain for the year. Many are hoping that quarterly results will meet high expectations, supporting the continued rally in stock markets.

US Port Backlogs Expected to Ease
Ports on the US East Coast and Gulf of Mexico have reopened, but shipping backlogs may take time to clear as logistical challenges persist. Advancing Stocks Outnumber Declining Stocks

On the New York Stock Exchange (NYSE), advancing stocks outnumbered declining ones by a ratio of 1.72 to 1. On the Nasdaq, the ratio was even higher, at 2.20 to 1 in favor of advancing stocks.

Highs and Lows on the Stock Exchanges
The S&P 500 Index posted 33 new 52-week highs and just one new low. The Nasdaq Composite posted 98 new highs and 91 new lows.

Trading Volume on U.S. Exchanges Falls
Trading volume on U.S. exchanges on Friday was 10.91 billion shares, below the 20-day average of 12.03 billion. Despite this, global markets remained positive amid strong U.S. labor market data.

Global Markets and the Dollar's Rise
MSCI's global stock index rose, and the U.S. dollar hit its highest level since August. This came after an unexpectedly strong employment report eased investor fears of a possible economic slowdown.

Oil prices rise amid geopolitical risks
Oil prices ended the week with their biggest gain in a year, driven by the escalation in the Middle East and the threat of a wider regional conflict. However, further gains were curbed after US President Joe Biden urged Israel to refrain from an immediate attack.

Strong US employment data
On Friday, the US Bureau of Labor Statistics reported the creation of 254,000 new jobs in September, well above the 140,000 expected. The unemployment rate fell to 4.1%, and data for August were revised up, indicating a stable US labor market.

Reaction to Treasuries and Fed actions
Amid a stronger-than-expected employment report, US Treasury yields rose to their highest since August. This has caused traders to recalibrate their expectations for a Federal Reserve rate cut. The probability that the Fed will cut rates by a quarter percentage point in November has risen to 97%, up from 68% the day before, according to CME Group's FedWatch data.

Economic data continues to have a significant impact on the market, causing forecast revisions and creating dynamic changes in investor strategy.

Market Reaction to Strong Employment Data
U.S. stocks responded positively to strong employment data despite the Federal Reserve's hawkish sentiment. This, according to Julia Hermann, a strategist at New York Life Investments, highlights the fact that investors are now focusing on economic growth, even if it comes with higher interest rates.

"The market has been able to adapt well to this shift, which suggests a constructive approach to the economic outlook," Hermann said, pointing to strong moves in Treasuries and stocks in recent days.

Economic relief: Ports reopen
The US economy also got some breathing room as ports on the East Coast and Gulf Coast reopened. Dock workers and port operators reached a wage agreement, ending one of the sector's largest strikes in 50 years. However, clearing up the backlog of supplies that has accumulated during the strike could take some time.

Global indices and rising oil prices
The MSCI World Index ended the day up 0.57%, reaching 847.12 points, although it had fallen 0.7% for the week. The European STOXX 600 index also showed gains, adding 0.44%.

Investors continue to closely monitor events in the Middle East. The question of Israel's response to the missile strikes launched by Iran is particularly acute. Iran's Supreme Leader Ayatollah Ali Khamenei has made it clear that Iran and its allies have no intention of backing down.

Oil Prices Rise
Oil prices continued to rise. US crude rose 0.9% to $74.38 a barrel, while North Sea Brent added 0.55% to end the day at $78.05 a barrel. This highlights the ongoing geopolitical risks weighing on energy markets.

The current situation in global markets shows that investors are balancing positive economic news with increasing tensions on the international stage.

The dollar strengthens amid strong employment data
The US dollar showed significant strength, reaching a seven-week high. This is due to the fact that fresh employment data forced traders to revise their expectations for an interest rate cut by the Federal Reserve. The dollar is on track to end the week with the largest gain since September 2022.

Dollar Index Movement
The dollar index, which tracks the dollar against a basket of major global currencies, rose 0.56% to 102.48. The euro, by contrast, weakened 0.5% to $1.0976, while the Japanese yen lost 1.25%, pushing the dollar higher to 148.77 yen.

Treasury yields rise
U.S. Treasury yields also rose. The benchmark 10-year note rose 12.5 basis points to 3.975%, while the 30-year yield rose 7.9 basis points to 4.259%. Yields on the 2-year note, which is most sensitive to changes in interest rate expectations, rose particularly sharply, adding 21.8 basis points to 3.9321%.

Gold Slips
Gold prices slipped on the back of a strong U.S. jobs report that reduced the likelihood of a major Fed rate cut. Spot gold lost 0.23% to $2,649.89 an ounce. U.S. gold futures also fell, falling 0.38% to $2,647.10 an ounce.

The economic outlook has put precious metals, traditionally seen as safe havens, under pressure as investors reassess their expectations for U.S. monetary policy.
More analytics on our website: bit.ly/3VobLUv

Who Will Hold Wall Street Back? Amazon and Alphabet Under Attack, Pfizer Takes the Lead

Wall Street Closes in the Red as Investors Brace for New Challenges
US stock markets closed Monday with the major indexes down about 1% as Treasury yields rose, driven by traders' revised forecasts for the Federal Reserve's future policy and concerns about the impact of instability in the Middle East on global oil prices. Escalation and anticipation of new data

Market participants continue to analyze economic indicators and prepare for the start of the earnings season for major companies. Additional concerns are caused by the approaching Hurricane Milton, which is expected to reach the United States in the coming days. Recall that Hurricane Helene, which recently swept across the country, claimed more than 200 lives and affected six states, leaving significant damage and requiring large-scale restoration work.

Corporate news: a blow to the giants
Investor sentiment worsened after a US court decision against Alphabet, which will have to reconsider its approach to mobile applications. This is due to the need to expand the capabilities for Android users, which may affect the company's profitability. In turn, analysts' forecasts caused a decline in the shares of such tech giants as Amazon and Apple.

Rising bond yields: Fed rate revision
Friday's employment report turned out to be more optimistic than expected, which prompted market participants to revise their expectations regarding future Fed decisions. Traders have now virtually ruled out the possibility of a 50 basis point rate cut in November, with an 86% chance of a 25 basis point rate cut. Moreover, there is a 14% chance that the Federal Reserve will leave rates unchanged, according to the CME FedWatch tool.

Record 10-Year Note Yield
The adjustment in interest rate expectations has led to a sharp rise in US Treasury yields. For the first time in two months, the yield on 10-year US government securities has exceeded 4%, which has become an additional factor of pressure on the stock market.

Experts continue to monitor the situation and predict possible fluctuations depending on new macroeconomic data and corporate reports, which can determine the further direction of the markets.

Investors await key economic signals
The financial world is eagerly preparing for the publication of the consumer price index for September and the start of the third quarter earnings season, which can set the direction for the markets in the coming months. Attention is also focused on the upcoming Federal Reserve meeting next month. With the first quarterly earnings results from major banks already underway, market participants will be closely monitoring the sector to assess the economic situation and possible regulatory measures.

Geopolitics heighten risks in the Middle East
In parallel with economic expectations, tensions in the Middle East are increasing, causing concern among investors. The Lebanese group Hezbollah has launched rocket attacks on northern Israel, including the major port city of Haifa. In response, the Israeli military is demonstrating its readiness to expand ground operations in southern Lebanon. Concerns about a possible escalation of the conflict are adding to the turbulence in stock and commodity markets.

Leading indices decline
The main US indices closed trading with significant losses on Monday. The Dow Jones Industrial Average fell by 398.51 points (0.94%) and closed at 41,954.24. The broad S&P 500 fell 55.13 points, or 0.96%, to 5,695.94, while the tech-heavy Nasdaq Composite lost 213.94 points, or 1.18%, to end the day at 17,923.90.

Fear Index Soars
The CBOE Volatility Index (VIX), often seen as a gauge of market uncertainty and panic, jumped 3.4 points to 22.64, its biggest one-day gain in a month and a half and its highest close since early August, signaling heightened nervousness among market participants.

Energy Gains on Oil Price Jump
Of the 11 key S&P 500 sectors, only energy ended the day in the green, up 0.4%. Oil prices continued to rise amid concerns about potential supply disruptions due to the escalation in the Middle East, leading to a fifth straight day of gains for U.S. crude futures, which rose 3.7%.

Worst Losers: Utilities and Communications
Utilities were the worst performers among all sectors, falling 2.3%. The communications sector was also hurt by a significant decline in Alphabet shares, with the tech giant's stock falling 2.5%, continuing a string of negative news for the company.

Stock analysts continue to closely monitor macroeconomic and geopolitical factors that could impact further market dynamics in the coming days.

Giants Fall: Apple and Amazon Under Pressure
One of the most notable moves in the market was a sharp decline in Apple shares after Jefferies analysts changed their outlook on the stock from a "buy" to a "hold." As a result, the company's shares fell by 2.3%, which was the largest decline among the components of the S&P 500 index on the day. Following it, Amazon shares also came under pressure, ending the trading session with a decline of 3%. This happened against the backdrop of a rating downgrade by Wells Fargo, which increased investor pessimism towards the e-commerce giant.

Generac in the Spotlight Amid Hurricane
At the opposite extreme of the index, Generac Holdings was the company whose shares soared by 8.52%. The growth was caused by increased demand for generators and backup power systems, which is associated with expectations of another hurricane approaching the United States. Investors are betting that demand for the company's products will increase significantly in the event of major disruptions and power outages.

Pfizer on the Rise with Activist Investor
Shares in pharmaceutical giant Pfizer rose 2% after news that hedge fund Starboard Value had acquired a stake in the company worth about $1 billion. The entry of a major shareholder known for his active influence on the management of companies has fueled optimism among investors who expect the new strategic stake could spur growth.

Air Products and Chemicals Succeeds: Mantle Ridge's Bet
Shares in Air Products and Chemicals also saw a strong move, closing with an impressive 9.5% gain after news that hedge fund Mantle Ridge had increased its stake in the company, raising expectations for a positive change in the company's strategy.

Overall Market Sentiment: Bearish sentiment prevails
Despite positive results from some companies, the overall market sentiment remained negative. On the New York Stock Exchange, decliners outnumbered advancers by a ratio of 2.73 to 1. There were 222 new highs and 55 new lows on the day, highlighting the significant volatility in the market.

On the tech-heavy Nasdaq, the picture was even grimmer, with 2,988 stocks ending the day in the red against 1,292 gainers, reflecting a ratio of 2.31 to 1. The S&P 500 posted 34 new yearly highs and just two new lows, while the Nasdaq reported 83 highs and 118 new lows, highlighting the bearish sentiment prevailing among market participants.

Trading Volumes Decline
Trading volume on U.S. stock exchanges totaled 11.39 billion shares, below the 20-session average of 12.06 billion shares. The decline in activity points to uncertainty among market participants, who are likely to take a wait-and-see approach ahead of upcoming economic and corporate events.

Global Markets Under Pressure: U.S. Bond Yields Rise
Global stock indices began the new week in negative territory, while U.S. Treasury yields continued to rise steadily. Benchmark 10-year bonds rose above 4%, signaling to investors that the Federal Reserve may be changing its monetary policy. The gain was the highest since early August and confirmed that market participants are preparing for a less aggressive rate cut by the Fed.

Yields hit record high after strong employment data
The 10-year Treasury yield hit 4.033%, the highest since August 1 and the first time it has been above 4% since August 8. The reason was last Friday's employment report, which was much better than expected and significantly changed expectations for the central bank's next steps. Investors believe that the Fed may take a more cautious stance and avoid sharp rate cuts, which has led to a revision of market forecasts.

Rate change probability: the market has adjusted expectations
The probability of the Fed cutting rates by 25 basis points in November is now estimated at 84.6%, and the chances that the regulator will leave rates unchanged have increased to 15.4%, according to the CME FedWatch Tool. Just a week ago, the market was confident that a 25 basis point cut was imminent and even priced another, larger 50 basis point cut at 34.7%.

Strategists Warn of a Possible Reversal
"The market has changed its outlook dramatically, from expecting a significant rate cut in November to expecting rates to remain unchanged," said Gennady Goldberg, chief rates strategist at TD Securities in New York. He said the shift in expectations occurred in just a few days, amid positive macro data that has forced investors to rethink their positions.

"It would be surprising for the Fed to back off from further cuts so quickly after the recent 50 basis point cut," Goldberg added. He stressed that the market is still in flux and much will depend on data in the coming weeks.

Outlook for the Future: Cautious Optimism or Pause?
Financial analysts agree that the Federal Reserve is unlikely to take any drastic steps, given that the recent rate cuts have already caused significant volatility in the markets.

Instead, the regulator may prefer to wait and see how previous decisions affect the economy and inflation. At the same time, some market participants warn that current expectations may change again if future economic data is not as optimistic as the latest employment figures.

The market situation remains tense, and any change in expectations could affect Treasury yields, which in turn will affect stock performance and overall volatility.

US markets close in the red: only the energy sector showed growth
Trading on Wall Street on Monday ended with quotes falling, and only the energy sector was able to stay in positive territory. Shares of energy companies included in the S&P 500 index showed growth amid continuing rise in oil prices. This is due to concerns that the deepening crisis in the Middle East could lead to disruptions in the supply of raw materials and restrictions on exports.

Global indices under pressure: MSCI goes into the red
The MSCI world share index lost 3.66 points (0.43%), falling to 843.74. This was the fifth decline in the last six trading sessions. The tense situation in global markets reflects increasing caution among investors ahead of important economic data. At the same time, the European STOXX 600 index managed to break into positive territory, closing with a gain of 0.18%. Despite this, the rise was limited due to pressure on sectors sensitive to interest rate changes, such as real estate and utilities.

Treasury yields again went up
The yield on 10-year US Treasury bonds jumped by 4.3 basis points, reaching 4.024%. This follows a recent revision to expectations for the Federal Reserve's rate path. Short-term 2-year notes, whose yields are closely linked to interest rate expectations, also rose 5.7 basis points to 3.989%. Earlier in the session, their yield rose to 4.027%, the highest since August 20.

Yield Curve Signals Sentiment Shift
Investors are closely watching the behavior of the Treasury yield curve, which is considered an important indicator of economic expectations. The gap between the 2-year and 10-year yields, which has been inverted for some time, is now positive at 3.3 basis points.

This is the first time the curve has shown a sustained increase since briefly falling into negative territory on September 18. An inversion of the yield curve is traditionally seen as a harbinger of a recession, and its return to positive territory may signal an easing of concerns about an economic downturn.

Awaiting Key Data: All Eyes on CPI
Economic uncertainty remains as key U.S. macroeconomic data is not due until Thursday. Investors are awaiting the release of the Consumer Price Index (CPI), which could provide further clues about the Federal Reserve's next steps.

Earlier, Fed Chairman Jerome Powell and his colleagues said the central bank was now shifting its focus from fighting inflation to maintaining labor market stability. The announcement triggered a revision in market expectations, adding uncertainty to the near-term rate outlook.

Market participants are now taking a wait-and-see approach, hoping for more data to help clarify the path the Fed will take in managing monetary policy.

Top Fed Officials Set to Speak: Markets Await Signals
Market participants are eagerly awaiting speeches from several key Federal Reserve officials this week. Fed Governor Michelle Bowman and Atlanta Fed President Raphael Bostic are scheduled to speak on Monday, which could shed light on the current sentiment of the Fed and provide additional clues about future rate management.

Kashkari: US economy showing resilience
Minneapolis Fed President Neel Kashkari noted that despite signs of a slowdown, the labor market remains strong, supporting overall economic stability. He said the Fed's goal is to maintain current labor market conditions even as rates are lowered, which should support sustainable growth. The statements confirm that the Fed is prepared to tread carefully to avoid abrupt changes in the economy.

Oil Market Shows Solid Gains
Oil prices continue to rise amid geopolitical tensions and expectations of further supply disruptions. U.S. crude oil rose 3.71% to $77.14 a barrel. Meanwhile, Brent crude also rose 3.69% to close the day at $80.93 a barrel. Energy demand is picking up, with traders keeping a close eye on the situation in the Middle East for fear of further disruptions to supply chains.

Dollar at a crossroads: currency gyrations continue
The dollar index, which measures its strength against a basket of six major currencies, was down 0.05% to 102.48. The euro, meanwhile, was also down slightly to $1.0973. Meanwhile, the Japanese yen strengthened, rising 0.42% against the dollar to close the day at 148.09 yen after recently hitting a seven-week high of 149.13. The British pound also slipped, losing 0.22% to end the day at $1.3083. This points to continued volatility in currency markets, where investors are assessing the risks and prospects for monetary policy in the world's largest economies.

BoJ prepares for rate hike: wage growth will be key factor
The Bank of Japan said wage growth is becoming more sustainable, which is helping to boost consumer activity. As companies across the country pass on higher costs to consumers, the Japanese economy is moving closer to meeting the conditions for raising interest rates. This could be a significant step forward for the Bank of Japan, which has long maintained an ultra-loose monetary policy.

Analysts say that any changes in central bank policy could significantly affect sentiment in global markets. Investors will be watching the Fed's speeches and news from Japan to understand how events will develop and what actions the world's largest central banks may take in the coming months.
More analytics on our website: bit.ly/3VobLUv

PepsiCo Leads Gains, Tech Boosts Nasdaq as Investors Brace for Inflation Surprises

Tech Returns: Wall Street Ends Day on a Positive Note
U.S. stock indexes rose on Tuesday, partially recouping losses from the previous session. Investors turned their attention back to the tech sector as attention shifts to upcoming inflation data and the start of the third-quarter earnings season.

Recovering from the Crash: How Did Wall Street Overcome Monday's Slump?
The major indexes fell sharply earlier in the week amid rising Treasury yields, heightened geopolitical risks in the Middle East, and a reassessment of U.S. interest rate expectations. Each of the three major indexes lost about 1%.

However, falling bond yields sent the market into a buying frenzy on Tuesday, with attention once again focused on high-growth stocks that benefit from lower borrowing costs. As a result, investors increasingly bought shares of tech giants, which are traditionally sensitive to changes in the cost of capital.

Tech on the Rise: Palantir and Palo Alto Lead
The information technology sector led the S&P 500's gains, adding 2.1%. The biggest contributors were Palantir Technologies, which jumped 6.6%, and Palo Alto Networks, which gained 5.1%.

The Magnificent Seven Are Back: Nvidia Sets the Tone
Among the "magnificent seven" tech titans, Nvidia has attracted particular attention. Its shares soared by 4.1%, recording the largest daily gain in the last month. Other tech giants such as Apple, Tesla and Meta Platforms (banned in Russia) were also in the green, adding between 1.4% and 1.8%.

Slight Growth Amid Expectations
Despite the positive mood, the Nasdaq and S&P 500 managed to rise only slightly compared to last week's levels. However, the tech sector continues to attract investors' attention amid expectations of new inflation data and corporate earnings reports that could set the direction of the market's future.

Confident Rise: Major US Indexes End the Day on a Positive Note
On Tuesday, US stock indexes once again demonstrated upward momentum, recouping some of the losses from the previous days.

The broad-based S&P 500 added 0.97%, rising 55.19 points to 5,751.13. Meanwhile, the tech-heavy Nasdaq Composite rose 1.45%, adding 259.01 points to 18,182.92. The Dow Jones Industrial Average also gained 126.13 points, or 0.30%, to end the day at 42,080.37.

Rates Are the Key Driver: What's Happening to Trader Sentiment?
Despite the positive momentum, investors continue to closely monitor any signals that could hint at the Federal Reserve's next steps in monetary policy. A decline in Treasury yields has been a catalyst for buying in the tech sector, but uncertainty around interest rates continues to dominate the market.

Throughout the year, market participants have been held hostage by the Fed, scrutinizing every macroeconomic report for hints of a possible policy shift. The main question on investors' minds is: when and at what speed will the Fed begin its long-awaited rate cuts?

Expectations shift: All eyes on inflation data
Last week, economic data, including a stronger-than-expected employment report on Friday, forced the market to slightly revise its expectations. Investors began pricing in a lower probability of an aggressive rate cut. Instead of a 50 basis point cut, most analysts now expect the Fed to limit itself to a 25 basis point cut at its next meeting in November.

According to the CME FedWatch tool, traders are currently pricing in a nearly 89% chance of a 25 basis point rate cut in November.

Crucial Benchmark: Inflation to Lead the Way
The next big move in this "expectations game" will come on Thursday, when the CPI data is released. It is these numbers that will be critical to understanding the Fed's next moves and how soon the regulator will begin to ease its tight policy. Any deviation from the forecasts can immediately affect the behavior of markets and investor sentiment.

In any case, interest rates will remain the focus of market attention in the coming days, and any changes in macroeconomic data will be closely monitored to see which way the scales will tip – towards further easing or maintaining tight policy by the Fed.

Markets at a Crossroads: Inflation and Employment Are Crucial Indicators for the Fed
Leading macroeconomic reports continue to be the focus of investors' attention, shaping expectations for the future policy of the US Federal Reserve. According to Jason Pride, head of investment strategy at Glenmede, it is the latest labor market data and the consumer price index (CPI) that will be the key benchmarks for the Fed ahead of their next meeting.

"If the CPI report comes in within the forecast range, this will be a signal for the regulator to limit the rate cut by 25 basis points in November," Pride said, commenting on the current expectations of market participants.

Sectoral confusion: who won and lost in the trading?
Amid the mixed movement of stocks on Tuesday, most sectors of the S&P 500 index ended the day in positive territory, but there were exceptions. Two sectors ended in the negative zone: materials and energy. The materials index (.SPLRCM) fell by 0.4%, which happened against the backdrop of a decline in metals prices. Investors lost optimism about possible measures to support the economy from the Chinese government, which led to a decrease in quotes in this segment.

Amid the general pessimism, shares of major Chinese companies listed on US exchanges also felt the pressure. For example, Alibaba Group, JD.com and PDD Holdings fell by 5.4%, 7.5% and 5.7%, respectively, following the decline of Chinese domestic indices.

Energy sector under attack: why did oil retreat?
The biggest losers were the energy sector (.SPNY), which fell by 2.6% - the largest daily drop since August 20. The reason is the correction in oil prices after their rapid rise at the beginning of the week. Concerns about slowing global demand and uncertainty around economic stimulus in China weakened support for oil, which was reflected in the quotations of energy companies.

Earnings season: the market awaits banking giants
Investors are also focusing on the third-quarter earnings season. This Friday, attention will be focused on large US banks, which will be the first to present their financial results. According to analysts at LSEG, the average earnings growth rate for S&P 500 companies is expected to be around 5%.

PepsiCo Surprises: Earnings Beat Expectations
Among the companies that reported on Tuesday, PepsiCo stood out. The largest maker of beverages and snacks rose 1.9% after publishing adjusted earnings per share data that beat market expectations. Despite cutting its full-year sales growth forecast, investors took the company's results as a positive sign, which helped support the rise in its shares.

Amid growing interest in data and macroeconomic guidance, the market continues to balance expectations for Fed easing with concerns about global economic risks. The next earnings reports could be a determining factor for the future direction of stock markets.

Wall Street Trading: Investors Recover Losses Awaiting New Data
US stock markets ended Tuesday on a positive note after the S&P 500 and Nasdaq posted strong gains. With geopolitical pressure easing and tech sector signals up, stock indexes were able to partially recover from their previous declines. Total trading volume on US exchanges was 11.57 billion shares, below the 20-session average of 12.1 billion shares.

US Rally Overshadows Weak Chinese Stimulus
The rally in global markets was largely driven by a rally on Wall Street, which was able to offset investor disappointment over the lack of concrete support measures from China. Market participants are eagerly awaiting details on possible stimulus measures, but for now their attention is shifted to upcoming macroeconomic reports in the US and the start of the quarterly earnings season.

Technology lifts the index: S&P 500 is back in the game
US indices showed a confident rebound yesterday after falling by 1% the day before. A particularly powerful leap was recorded in the technology sector, where the S&P 500 (.SPX) added 0.97%, rising by 55.19 points, and closed at 5,751.13. In turn, the Nasdaq Composite (.IXIC) strengthened by 1.45%, jumping by 259.01 points and ending the session at 18,182.92. The Dow Jones Industrial Average (.DJI) added 0.30%, increasing by 126.13 points to 42,080.37.

Monday's decline: what caused it?
The decline at the start of the week was caused by concerns about the escalation of the conflict in the Middle East and a reassessment of expectations for the Fed's monetary policy. Strong data on the US labor market, published on Friday, increased concerns that the Fed will not rush to ease its policy, which led to a decrease in risk appetite among investors.

Waiting for a new signal: what will inflation show?
All attention is now focused on fresh inflation data, which will be published on Thursday. The consumer price index (CPI) will be an important marker for determining the future direction of the Federal Reserve's monetary policy. If inflation turns out to be higher than expected, this could reinforce current expectations that the Fed will take a tougher stance on interest rates.

Banking sector prepares for the start of the reporting season
Investors are also preparing for the start of the corporate reporting season. The largest US banks, which are traditionally the first to disclose their financial results, will give the start later this week. Attention will be focused on their comments on the state of the economy and the outlook for the monetary policy shift.

Looking Ahead: What's Next for Markets?
With US indices recovering and geopolitical concerns easing, investor sentiment remains heavily dependent on upcoming macroeconomic data and corporate earnings. Inflation, the labour market and the Fed's strategy will all shape the trading dynamics in the coming weeks, impacting investors' appetite for risk assets and, therefore, the sustainability of the current rally.

European Markets Under Pressure: What Went Wrong?
European stock indices ended lower on Tuesday as investors were disappointed by the lack of concrete details on China's new fiscal stimulus. Market expectations were not met, leading to a fall in stocks focused on Chinese demand, such as miners and luxury goods makers.

Global Indicators: Who Managed to Hold Their Ground?
MSCI's global share index showed a small gain, rising 0.15% to 844.96 points, thanks to a partial recovery in the US and Asian markets. However, the pan-European STOXX 600 index fell 0.55%, reflecting the general mood of pessimism on the continental markets.

Hong Kong in the epicenter of turmoil: Hang Seng index falls at a record pace
The main disappointment was the dynamics of Hong Kong's Hang Seng, which fell by 9.4% - the largest drop since 2008. This happened after the head of China's National Development and Reform Commission Zheng Shanjie, who assured that the country's economy is "confidently" moving towards its goals for 2024. Moreover, he noted that the authorities intend to direct 200 billion yuan (about 28.36 billion US dollars) to support regional projects and investment in infrastructure. However, investors were expecting much more, as the lack of concrete steps and new support measures has raised doubts about Beijing's ability to effectively counter the current economic downturn.

Chinese Stocks Slip: Mistrust of Government Words
After the end of the national holidays, Chinese stock indices such as the Shanghai Composite and CSI300 showed sharp declines, falling by 4.6% and 5.9%, respectively. These losses effectively "ate up" a significant part of recent gains accumulated amid expectations of a large-scale economic stimulus. The decline in indices was a response to the uncertainty surrounding the Chinese government's plans and the lack of clear signals about further economic stimulus.

Bonds and Rates: The US in Waiting Mode
Meanwhile, the US Treasury market saw a slight decline in yields, reflecting investor caution in an uncertain environment. Market participants continue to closely monitor the Federal Reserve's signals, trying to understand how macroeconomic data and the regulator's positioning will affect the trajectory of interest rates.

What's Next? Investors Look for New Benchmarks
Amid a general decline in stock markets, investors have adopted a wait-and-see attitude. The focus remains on the upcoming inflation and corporate profit reports in the US. In the coming days, it is these data that will determine the further direction of both US and international indices. Any surprises, be they positive or negative, could trigger significant changes in the markets, especially against the backdrop of fragile confidence in the prospects for China's economic recovery.

While markets are looking for new reference points, the issue of trust in the actions of central banks and governments comes to the fore: their decisions can either support investor sentiment or exacerbate volatility in financial markets.

The intrigue remains: markets are wondering what the Fed will do
According to the latest data from the CME FedWatch Tool, the probability of the Federal Reserve cutting rates by 25 basis points in November is estimated at 87.3%. However, there is still a small chance - 12.7% - that the Fed will choose to leave rates unchanged. Just a week ago, the market had a different view: expectations for a rate cut were almost fully priced in, but uncertainty about the size of the next step has reduced the likelihood of a more aggressive easing by 50 basis points.

US Treasury yields remain stable
The yield on the 10-year US Treasury note, a key benchmark for markets, fell by 0.6 basis points to 4.02%. Such a small change indicates continued caution amid ongoing speculation about the Fed's next steps and the macroeconomic situation in the country.

Oil: from recovery to correction
After the recent rally triggered by geopolitical risks, oil prices have sharply corrected downwards. The main driver of the decline is easing concerns about supply disruptions amid the military standoff in the Middle East and improving weather conditions in the Gulf of Mexico. U.S. WTI crude lost 4.63% to $73.57 a barrel, while Brent crude also fell 4.63% to close at $77.18 a barrel.

Middle East in Focus: Netanyahu Expands Offensive
Military tensions in the Middle East continue, weighing on global markets. Israeli Prime Minister Benjamin Netanyahu announced that airstrikes had killed two key successors to the slain Hezbollah leader, in the latest escalation of the conflict. Meanwhile, the group's deputy leader left the door open for ceasefire talks, raising hopes for a possible easing of tensions. The comments came just hours after Israel expanded its offensive against Iran-backed militias.

Currency Markets: Dollar under pressure, pound and euro in positive territory
The dollar index, which tracks the dollar against a basket of six major currencies, was unchanged, closing at 102.48. Meanwhile, the euro showed a slight strengthening, adding 0.04% to $1.0978. The Japanese yen weakened by 0.07%, and the dollar rose to 148.29 yen per unit of the American currency. In contrast, the pound sterling strengthened by 0.13%, rising to $1.31, demonstrating confidence amid relative stability in European markets.

Uncertainty remains: what lies ahead for markets?
The current fluctuations in financial markets reflect the ambivalent mood of investors. Amid geopolitical tensions and volatile commodity markets, traders' attention is shifting to macroeconomic reports and upcoming central bank meetings. The publication of US inflation data and further signals from the Fed could become catalysts for both further growth and a new round of volatility on global markets.
More analytics on our website: bit.ly/3VobLUv

USD/JPY: Analysis and Forecast

The USD/JPY pair pulls back earlier on Thursday after reaching its highest level since August, trading with a moderately negative bias.

The intraday pullback lacks a specific fundamental driver, and amid uncertainty regarding the Bank of Japan's rate hike plans, it is likely to remain limited. According to data released on Tuesday, Japan's real wages for August declined after two months of growth. Household spending also decreased, raising doubts about the strength of private consumption and the durability of the economic recovery.

Moreover, the Bank of Japan's quarterly survey, released today, revealed that the proportion of Japanese households expecting price increases within a year was 85.6% in September, down from 87.5% the previous month. Additionally, another report from the Bank of Japan showed that the CGPI – the Corporate Goods Price Index, which measures the price that companies charge each other for goods and services – unexpectedly increased to 2.8% year-over-year in September. At the same time, reduced import costs suggest that price pressure from raw material costs is easing. All these factors, along with pointed remarks from Japan's Prime Minister Shigeru Ishiba on monetary policy, have reduced expectations for further rate hikes. Consequently, this is generally expected to limit the yen's appreciation.

The U.S. dollar is moving toward a new eight-week high as traders fully assess the likelihood of a rate cut by the Federal Reserve in November. These expectations were reinforced by the minutes of the FOMC's September meeting, released on Wednesday, which indicated that in the face of high inflation, sustained economic growth, and low unemployment, some members would prefer only a 25 basis point rate cut. This continues to support the U.S. dollar, providing a tailwind for the USD/JPY pair.

Today, before opening new directional positions, traders may want to wait for the release of the latest U.S. inflation data. The Core CPI – Consumer Price Index – will be released later during the North American session. This will be followed by the U.S. Producer Price Index (PPI) on Friday. These data could play a key role in shaping market expectations regarding the direction and size of the Fed's next rate decision, potentially boosting demand for the U.S. dollar and helping to determine the short-term trajectory for the USD/JPY pair.

For confirmation that the multi-week uptrend has ended, strong follow-up selling is needed.

Last week's breakout above the 50-day simple moving average (SMA) favors the bulls. Moreover, oscillators on the daily chart remain far from the overbought zone and are gaining positive momentum, indicating that the most favorable direction for the USD/JPY pair is to the upside.

Therefore, any significant dip can be viewed as a buying opportunity near the 148.70–148.65 area. This zone should help limit the pair's decline to the key psychological level of 148.00. A break below this level could trigger technical selling, pulling spot prices to intermediate support at 147.35, with further declines toward the next round levels of 147.00 and 146.50.

Conversely, a push beyond the Asian session high of 149.54 could enable the USD/JPY pair to reclaim the psychological level of 150.00, and climb higher.
More analytics on our website: bit.ly/3VobLUv

XAU/USD. Analysis and Forecast

Today is the second consecutive day of positive momentum for gold, driven by expectations of further interest rate cuts by the Federal Reserve.

Gold continues to gain positive momentum as markets anticipate additional interest rate cuts from the Federal Reserve. The sharp rise in weekly jobless claims in the U.S. indicates signs of weakness in the labor market, which could allow the Federal Reserve to continue reducing interest rates. This, in turn, leads to a modest decline in U.S. Treasury yields, which supports the upward momentum of gold.

Following the release of stronger-than-expected consumer inflation data in the U.S. yesterday, investors have ruled out the possibility of another substantial rate cut by the Federal Reserve in November. These developments, following stronger-than-expected inflation data, helped the U.S. dollar halt its corrective pullback from the mid-August high, posing a headwind for gold.

Today, the U.S. Producer Price Index (PPI), the preliminary Michigan Consumer Sentiment Index, and statements from the Federal Reserve are key indicators to watch for short-term momentum.

Technical Analysis: A solid rebound from the psychological level of $2600 and a subsequent move above the $2630 level favor the bulls. Additionally, oscillators on the daily chart remain in positive territory. This suggests that the path of least resistance for the precious metal is upward. Consequently, further strength toward the resistance level of $2656 and into the supply zone at $2672 appears likely. From there, momentum could lift the XAU/USD pair toward its recent high near $2700. If surpassed, this level could pave the way for the continuation of the established multi-month upward trend.

On the other hand, the Asian session low around the $2630 level serves as support. A break below this level could challenge the key $2600 support. A convincing break beneath this psychological level could signal deeper losses. The XAU/USD pair could then continue its corrective decline toward the next support zone near $2560, progressing toward the $2532 level before ultimately descending to the psychological level of $2500.
More analytics on our website: bit.ly/3VobLUv

EUR/USD. Weekly Preview. PMI Indices, Fed's Verbal Signals, Lagarde's Interview

Last week, the EUR/USD pair dipped into the 1.08 range for the first time since August. EUR/USD bears managed to drive the price down to the lower end of the 1.08 range (with a low recorded at 1.0812) but did not venture into the 1.07 range. Moreover, toward the end of Friday's trading, buyers took the initiative, attempting to regain previous levels, aiming to move back above the 1.0900 target. However, they were unsuccessful—more precisely, they ran out of time.

Thus, the main intrigue for the upcoming week revolves around a simple question: Will sellers be able to solidify their position within the 1.08 range, or will buyers manage to build on their momentum? It should be noted that this is not about a trend reversal—rather, it's about the scale of the correction. The overall fundamental background supports a further decline in price in the medium-term outlook.

The economic calendar for the upcoming week is not packed with significant events for EUR/USD. However, each trading day of the five days holds some interest.

Monday
On Monday, the International Monetary Fund (IMF) meeting will begin from October 21 to 26. Typically, this event indirectly impacts the dynamics of major currency pairs. However, with a nearly empty economic calendar on Monday, the IMF meeting might draw the market's attention. Participants will be particularly interested in the Fund's forecasts regarding the largest global economies (especially China and the U.S.) and the global economy as a whole. It's worth noting that in September, China announced a package of stimulus measures to revive its economy (the People's Bank of China cut interest rates, eased the burden of mortgage loans, and promised to inject additional funds into the financial system). Meanwhile, China's GDP growth slowed to 4.6% in the third quarter. The IMF's "verdict" could strengthen or weaken interest in risk assets, with the EUR/USD pair responding accordingly.

Additionally, Monday will feature speeches from representatives of the Federal Reserve. Dallas Fed President Lorie Logan and Minneapolis Fed President Neel Kashkari will share their perspectives. Although they do not have voting rights this year, they will gain them through the rotation system next year. Logan's rhetoric could support the greenback. In a speech two weeks ago, she noted that inflation remains subject to "real upward risks," and the economic outlook carries "significant uncertainty." Logan also mentioned that she supports a more moderate pace of rate cuts (in 25-basis-point increments). Kashkari, in turn, recently remarked that the labor market remains strong and that "some progress" has been made in the fight against inflation.

Tuesday
Tuesday will feature speeches from several Fed representatives. We will hear from Kansas City Fed President Jeffrey Schmid (non-voting member this year), San Francisco Fed President Mary Daly (voting member), and Philadelphia Fed President Patrick Harker (non-voting member in 2024). They may comment on the recent inflation reports released in the U.S. two weeks ago (CPI, PPI), which showed a slowdown in overall inflation but an acceleration in core inflation.

Additionally, several European Central Bank (ECB) representatives will speak on this day. Most notably, Francine Lacqua will interview ECB President Christine Lagarde on Bloomberg Television. During this interview, Lagarde may comment on the outcomes of the ECB's October meeting in the context of the central bank's future actions. Lagarde will also speak at the IMF, though this address will not focus on the ECB's monetary policy ("The Future of Cross-Border Payments").

Furthermore, ECB Board Member Joachim Nagel and the ECB's Chief Economist, Philip Lane, will make remarks on Tuesday.

Wednesday
On Wednesday, Fed Board member Michelle Bowman will speak. It's worth noting that she was the only member of the Committee who, in September, voted against a 50-basis-point rate cut. Since that meeting, she has repeatedly expressed concerns about high inflation. On October 23, she will comment for the first time on the September CPI and PPI reports, which, as a reminder, reflected an acceleration in core inflation. If she even hypothetically suggests the possibility of maintaining a wait-and-see stance in November, the dollar could receive strong support. Currently, the likelihood of such a scenario is only 10%, according to the CME FedWatch tool.

Also, the Consumer Confidence Indicator for the Eurozone will be published on Wednesday. This indicator has been in negative territory for over a year, but it showed positive momentum in September, rising from -13.5 to -12.9. The positive trend is expected to continue in October (forecast at -12.7).

During the U.S. session on Wednesday, we will learn about the September figures for existing home sales in the United States. In August, sales volume decreased by 2.4%, and another decline of 1.2% is expected for September.

Additionally, the Fed's Beige Book will be released on Wednesday. This report, compiled by the 12 Fed Banks, provides an overview of economic conditions across various regions of the United States. While the report is informative, it typically has a limited impact on the market.

Thursday
Thursday is PMI day, a key report, especially for the euro. The results of the ECB's October meeting were mixed. Lagarde neither confirmed nor denied discussions among ECB members about a 50-basis-point rate cut. However, she indicated that the pace and timing of further monetary policy easing would depend on incoming data, with PMI indices playing a crucial role. The September figures were in the "red," significantly influencing the outcome of the last ECB meeting. If October shows a continued downward trend in key indicators, the likelihood of a rate cut in December will increase significantly. Preliminary forecasts suggest minimal growth in both the manufacturing and services sectors. For instance, Germany's manufacturing PMI is expected to rise slightly from 40.6 to 40.7. The euro could come under pressure if the release disappoints amid such weak forecasts.

The U.S. manufacturing PMI will be released during the U.S. session on Thursday. Forecasts suggest the indicator will remain in contraction territory but show an upward trend, moving from 47.3 to 47.5. The dollar would receive substantial support only if the index, contrary to expectations, crosses the 50-point threshold.

Additionally, several Fed representatives will speak on Thursday. Cleveland Fed President Beth Hammack, who holds voting rights this year, will share her views. She was appointed in September of this year, replacing Loretta Mester. It will be interesting to assess her dovish or hawkish stance.

Also, on Thursday, attention should be paid to the trend in initial jobless claims. Over the past two weeks, this indicator has been relatively high (260,000, 241,000), raising legitimate concerns among dollar bulls. Another result above 230,000 could put pressure on the greenback.

Friday
On the last trading day of the week, the main focus for EUR/USD traders will be on the IFO indices. Last month, these indicators disappointed, adding to the pessimism reflected in the PMI figures. A minimal but positive growth is expected in October. For instance, the business climate index in Germany is forecasted to rise from 85.4 to 85.6. This release should be viewed in the context of the October PMIs, which will be published on Thursday. The IFO indices could amplify the impact if they come in weaker or stronger than expected, confirming the PMI trend (which is the critical factor).

The durable goods orders report will be released during the U.S. session. In August, this indicator was flat (excluding transportation; it showed a 0.5% increase). For September, a decline of 1.1% is expected (excluding transportation, a decrease of 0.1%).

Additionally, the University of Michigan Consumer Sentiment Index will be published on Friday, with a slight increase anticipated—from 68.9 to 69.6.

Conclusions
As we can see, the economic calendar for the upcoming week is not packed with significant events, but the scheduled releases could still trigger volatility in the EUR/USD pair. The key focus will be on the remarks from Fed representatives, who will likely comment on the September inflation reports in the U.S. Lagarde's interview with the chief editor of Bloomberg Television will also be of particular interest. Plus, the PMI indices are noteworthy. All other releases will play a secondary or, rather, a supporting role.

Technically, on the D1 timeframe, the pair is positioned between the middle and lower lines of the Bollinger Bands indicator and below all Ichimoku indicator lines, which suggests a preference for short positions. The first target of the downward movement is 1.0810 (the lower line of the Bollinger Bands on H4). The main target is 1.0780 (the lower line of the Bollinger Bands on the daily chart).
More analytics on our website: bit.ly/3VobLUv

Talks and earnings: 114 companies set to surprise, but Nasdaq already up

Market pauses: Stocks fall after record highs
The Dow Jones and S&P 500 ended lower on Monday, ending an impressive six-week rally. Investors were wary of rising Treasury yields and were waiting for more earnings reports from major companies.

Resting after a winning streak
"After six weeks of consecutive records, it's logical that the market needs a breather," said Carol Schleiff, chief investment officer at BMO Family Office. With bond yields rising, market participants are taking a break, reassessing their outlook amid concerns about lofty market valuations.

The Dow Jones Industrial Average (.DJI) fell 344.31 points, or 0.80%, to 42,931.60. The S&P 500 (.SPX) lost 10.69 points, or 0.18%, to end the day at 5,853.98. Meanwhile, the Nasdaq Composite (.IXIC) rose 50.45 points, or 0.27%, to 18,540.01, helped by a rally in Nvidia (NVDA.O) shares. The chipmaker's shares jumped 4.14%, closing at a record high of $143.71.

Bond Questions and Investor Concerns
The yield on 10-year U.S. Treasury bonds rose to 4.17%, the highest in 12 weeks. This raised questions about the economic outlook.

"An increase in bond yields could indicate that the economy is growing too quickly, as well as persistently high employment levels," said Sam Stovall, chief investment strategist at CFRA Research. According to him, such a situation could slow the process of lowering interest rates by the Federal Reserve.

Last week - a series of records
Recall that on Friday, the Dow and S&P 500 indices updated their records, ending the sixth week in positive territory in a row - the longest rally this year.

Tech under pressure: Giants fall ahead of earnings
Rate-sensitive tech stocks were under pressure, with Tesla (TSLA.O) falling 0.84%, one of the victims of rising bond yields that has added to investor anxiety.

Findings in focus: Tesla and Coca-Cola in the crosshairs
After a strong start to earnings season, investors were eagerly awaiting the results of 114 S&P 500 companies scheduled to report this week, including giants Tesla, Coca-Cola (KO.N) and Texas Instruments (TXN.O).

Analysts believe that market participants are taking some profits ahead of a busy earnings week. "Many are now assessing how overblown current market expectations are," said David Laut, chief investment officer at Abound Financial.

As of Friday, 83.1% of companies that had reported earnings in the past period had beaten earnings estimates, according to LSEG, highlighting the relative strength of the corporate sector.

Broad declines: from real estate to small caps
The decline on Monday affected almost all the key sectors of the S&P 500, with 11 of them ending the day in the red. The traditionally rate-sensitive real estate sector (.SPLRCR) lost 2.08% as bond yields rose, while the tech sector managed to show positive momentum, led by a rise in Nvidia shares.

The Russell 2000 (.RUT), which includes economically sensitive small-cap companies, fell 1.61%, reflecting the jitters in the market.

Elections and volatility: Political factors in play
Investors are also keeping a close eye on the upcoming US presidential election, where former President Donald Trump, the Republican candidate, is showing positive momentum in the latest polls.

Danske Bank analysts warn: "As the election date approaches, even small changes in the polls could be a catalyst for significant swings in market sentiment."

Boeing in positive territory, Spirit Airlines soars on news
Boeing (BA.N) shares rose 3.1% on news that a five-week strike could end. Workers could vote on a new deal that would allow the company to avoid further losses related to the production shutdown.

Spirit Airlines on High: Shares Surge
Spirit Airlines (SAVE.N) shares soared 53.06%, which was a reaction to successful negotiations to extend the refinancing of its debt by two months. This allowed the company to buy time and stabilize its financial obligations, which attracted the attention of investors.

Healthcare Sector Decline: Humana and Cigna Lose
On the opposite side of the market, Humana (HUM.N) shares fell 2.46%. This is due to Cigna (CI.N) resuming merger talks with Humana, which caused some concerns in the market. The decline did not pass by Cigna shares, which lost 4.69%.

Economic Week: Key Reports on the Horizon
Investors are expecting the publication of a number of key economic data this week, including home sales reports, preliminary PMI indices, as well as durable goods data. In addition, the market will be focused on the release of the so-called Beige Book of the Federal Reserve, a document assessing the state of the economy.

Bearish sentiment prevails
On the New York Stock Exchange (NYSE), the vast majority of stocks ended the day in the red: for every one advancing stock, there were 3.51 declining ones. However, there were still some positive moments in the market: 262 new highs and 47 new lows were recorded.

The S&P 500 posted 42 new yearly highs and two new lows, while the Nasdaq Composite Index posted 89 new highs and 51 new lows. Trading volume on U.S. exchanges totaled 11.35 billion shares, slightly below the average volume of 11.59 billion over the past 20 trading days.

Markets under pressure: Geopolitics and elections keep investors on edge
Global stock markets started the week lower as rising geopolitical tensions and the upcoming U.S. presidential election kept traders cautious. This market sentiment played into gold's hands, as futures for the precious metal soared again, reaching new records.

Gold in Focus: The Precious Metal at its Peak
Gold prices hit new all-time highs on Monday, remaining at $2,719.33 an ounce. U.S. gold futures rose 0.3% to close the day at $2,738.9. Gold's rise reflects investor sentiment, which is seeking safe havens amid uncertainty and turbulence in global markets.

Nvidia Continues to Win
Nvidia (NVDA.O) shares are back on a high, finishing at a record high. The gains come ahead of a big earnings week, raising investor expectations for strong financial results.

European and Asian indices under pressure
European stock markets also fell in the general negative trend, with the STOXX index losing 0.66%. MSCI's Global Equities Index, which covers stock markets around the world, fell 0.37%. In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5%.

Earnings Season and Elections: Risk Factors for the Market
As James St. Aubyn, chief investment officer at Ocean Park Asset Management, noted, there is a certain nervousness in the market right now due to the start of the busy earnings season. However, investors' attention is still focused on the US elections, which will take place in two weeks. Despite this, the usual pre-election volatility of September and October is felt less this year.

Oil recoups losses: growth against the background of the previous drawdown
Oil prices demonstrate confident growth, adding almost 2% after a significant drop last week. Brent crude futures increased by 1.68%, reaching $ 74.29 per barrel, and American West Texas Intermediate (WTI) oil rose by 1.94%, stopping at $ 70.56 per barrel. This growth signals the return of confidence among market participants after the past fluctuations.

Fed in the crosshairs: probability of a rate cut
Markets are actively monitoring the probability of a Fed rate cut at the November meeting. According to the CME FedWatch tool, the probability of a 25 basis point rate cut is estimated at 89.3%. Meanwhile, the chances of maintaining the current rate level remain minimal - only 10.7%.

The yield on the 10-year U.S. Treasury note also extended its climb, rising 11.9 basis points to 4.194%. The data underscores the tension in the market as players try to anticipate the Federal Reserve's next moves.

Dollar Strengthens as Bond Yields Rise
The US dollar continued to strengthen, supported by rising bond yields. The euro, on the other hand, weakened, falling 0.46% to $1.0815. Sterling also lost ground, falling 0.51% to $1.2982.

The Japanese yen came under pressure, with the dollar up 0.86% against the yen to $150.79. The gains in the US currency reflected global market sentiment driven by expectations of a tighter US monetary policy.

ECB Cuts Rates Again, German Producer Prices Continue to Fall
The European Central Bank took another step toward easing monetary policy last week, cutting interest rates for the third time this year. The measures are aimed at supporting the eurozone economy amid slowing growth and inflation pressures.

German Producer Prices Fall More Than Expected
New data on Monday showed that German producer prices fell more than expected in September, adding to concerns about the outlook for Europe's largest economy, where manufacturing sectors continue to struggle amid global economic uncertainty.

Dollar Continues to Rise: Amid Global Tensions
The dollar index, which tracks the dollar against a basket of major currencies including the euro and yen, rose 0.49% to 103.97. The dollar's gains come as geopolitical tensions continue to mount, with the US presidential election looming, leading to increased market jitters.

Markets Brace for Election: Caution Among Investors

"With the Middle East escalating and the US election just days away, it is likely that markets are starting to get jittery and participants are trying to rebalance their positions," said Wasif Latif, president and chief investment officer of Sarmaya Partners.
More analytics on our website: bit.ly/3VobLUv

Verizon and GE Aerospace Fall, GM Gains: Three Key Stocks of the Day on Wall Street

U.S. stocks ended the day with little change
Tuesday's trading session on U.S. stock markets closed without significant movements, although Nasdaq showed a slight rise. Investors continue to closely monitor the dynamics of Treasury bond yields while awaiting corporate earnings reports to better assess the state of the U.S. economy.

Market digesting bond yields
"In recent days, the market has been trying to digest changes in Treasury bond yields. We're seeing quite significant fluctuations in this segment," said Jack Janasiewicz, portfolio manager at Natixis Investment Managers Solutions.

Key index results
During volatile trading, the Dow Jones Industrial Average (.DJI) fell by 6.71 points, or 0.02%, to 42,924.89. The S&P 500 (.SPX) dropped by 2.78 points, or 0.05%, closing at 5,851.20. Meanwhile, Nasdaq Composite (.IXIC) saw a gain of 33.12 points, or 0.18%, reaching 18,573.13.

Consumer goods sector leads gains
Nearly half of the S&P sectors closed in positive territory, with the consumer goods sector (.SPLRCS) leading the charge, up by 0.92%, driving market optimism.

Treasury yields hit new highs
Earlier in the day, the yield on 10-year Treasury bonds hit 4.222%, its highest level since July 26, as investors reassessed expectations for the Federal Reserve's monetary policy. However, yields dipped slightly during the session.

Investors fear Fed's aggressive moves
"The main concern is rising interest rates and fears that the Federal Reserve may have been too aggressive in September. This is fueling a global sell-off in bonds," noted Michael Green, portfolio manager at Simplify Asset Management.

GE Aerospace drags industrial sector down
Shares of GE Aerospace (GE.N) tumbled by 9%, despite an optimistic profit forecast for 2024. Persistent supply chain issues negatively impacted the company's revenue, weighing down the broader industrial index (.SPLRCI), which fell by 1.19%.

Tech sector holds steady
At the same time, the technology sector (.SPLRCT) posted a modest gain of 0.15%. Leading the charge was Microsoft (MSFT.O), with its shares rising by 2.08%, maintaining a sense of optimism amid market instability.

Volatility continues during earnings season
"Earnings season is traditionally accompanied by high volatility, especially given the uncertainty surrounding future interest rate changes," explained Chuck Carlson, CEO of Horizon Investment Services.

Experts expect the next few weeks to remain turbulent for stock markets, as investors closely watch corporate earnings, economic data, and the outcome of U.S. elections, followed by the Federal Reserve's decision.

Chances of rate cuts remain high
According to CME's FedWatch data, traders are pricing in an 89.6% probability of a 25 basis point rate cut in November. This indicates strong market confidence in a dovish stance from the Federal Reserve.

Disappointments and surprises from major players
Verizon (VZ.N) fell by 5.03% after its third-quarter financial results failed to meet market expectations. The telecom giant underperformed revenue forecasts, leading to a negative reaction from investors.

Shares of 3M (MMM.N) declined by 2.31%, despite the company raising its full-year adjusted profit forecast. The market seemed unimpressed, responding with a sell-off.

General Motors surprises, Lockheed Martin disappoints
Amid the broader market tension, General Motors (GM.N) surged by 9.81% after its third-quarter results exceeded Wall Street's expectations. In contrast, Lockheed Martin (LMT.N) dropped by 6.12% following the release of its earnings, which failed to impress analysts.

Housing sector under pressure from rising rates
Stocks of companies sensitive to interest rates, particularly in the housing sector, took a hit during the latest trading session. The PHLX Housing Index (.HGX) dropped by 3.05%, driven largely by a 7.24% decline in PulteGroup (PHM.N) shares, despite the company surpassing earnings and revenue forecasts.

Facing headwinds from interest rates
"While the earnings themselves were quite solid, companies highly exposed to interest rate changes are likely facing some headwinds, as investors grapple with the overall interest rate narrative," said Carlson.

Upcoming reports: Baker Hughes and Texas Instruments
Investor attention is now turning to Baker Hughes (BKR.O) and Texas Instruments (TXN.O), which are set to report earnings after the market closes. Market participants are eagerly awaiting these figures to gauge the broader corporate landscape.

NYSE market breadth favors decliners
On the New York Stock Exchange (NYSE), decliners outnumbered gainers by a ratio of 1.37 to 1. Additionally, 186 new highs and 58 new lows were recorded during the trading session.

The S&P 500 saw 15 new 52-week highs and 4 new lows, while the Nasdaq Composite registered 72 new highs and 61 new lows. Total trading volume on U.S. exchanges reached 11.45 billion shares, surpassing the 20-day average of 11.28 billion.

Gold hits record high, dollar strengthens
Gold prices reached a record high of $2,750.9 per ounce on Wednesday, driven by ongoing Middle East tensions and uncertainty surrounding the Federal Reserve's future moves and the U.S. election. Meanwhile, the dollar strengthened, putting pressure on both the yen and euro, while Asian stocks saw slight gains as investors remained cautious ahead of the contested U.S. elections.

Asian markets post mixed results
The broad MSCI index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) climbed 0.3% in recent trading. Meanwhile, Japan's Nikkei (.N225) fell 1% ahead of the upcoming national elections this weekend.

Chinese stocks rise on stimulus hopes
Chinese and Hong Kong stocks finished higher on Wednesday, buoyed by government promises to support the economy. However, the specifics of the timing and scale of the stimulus measures remain unclear, keeping investor optimism in check.

European markets remain cautious
In Europe, the mood remained subdued: Eurostoxx 50 futures edged up 0.08%, while Germany's DAX futures rose by 0.11%. However, FTSE futures dipped slightly, falling by 0.04%, reflecting continued caution among European traders.

Trump presidency back in focus
Investors are also paying close attention to the prospect of Donald Trump's potential return to the White House. His policies, which include tariffs and stricter controls on illegal immigration, are expected to drive inflation higher. This has further strengthened the dollar as markets anticipate U.S. interest rates remaining higher for longer than previously expected.

Tight race for the White House
The odds of Trump defeating Democratic candidate and Vice President Kamala Harris have improved on betting platforms. However, polls show that the presidential race remains highly competitive and too close to call.

Market volatility expected ahead of elections
With less than two weeks to go before the November 5 election, investors are bracing for increased market volatility. The yield on 10-year U.S. Treasury bonds hit 4.234% during Asian trading hours, the highest level in three months, reflecting expectations of prolonged high rates.

Treasury bond sell-off intensifies
The sell-off in U.S. Treasury bonds has accelerated this week as markets recognize the risk that the Federal Reserve could reignite inflation if it eases its stance in an improving economy. Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities, highlighted the growing concerns about inflation.

Trump's election prospects shift market expectations
The improved odds of Donald Trump winning the upcoming U.S. election have also dampened market expectations of further Fed easing in 2025. There's a chance that the Federal Reserve may take a back seat for six months next year, which could alter the trajectory of monetary policy.

Dollar strengthens amid Fed rate outlook
Expectations of slower Fed rate cuts have pushed the dollar higher in recent weeks. The dollar index, which measures the currency's value against six major rivals, climbed to 104.17, its highest since August 2.

Yen and euro face pressure
The yen fell to a three-month low of 152.28 against the dollar, while the euro dropped to $1.0792, its lowest since August 2. Both currencies are facing headwinds as the dollar continues to strengthen.

Gold hits new highs amid geopolitical tension
Gold prices soared to a new record high of $2,750.9 per ounce, as the ongoing conflict in the Middle East and uncertainty surrounding the Fed's future moves and the U.S. election drive demand for safe-haven assets.

Oil prices correct after rally
Oil prices saw a slight correction after sharp gains earlier in the week. Brent crude futures fell 0.14% to $75.93 per barrel, while West Texas Intermediate (WTI) crude futures dropped 0.18% to $71.61 per barrel.
More analytics on our website: bit.ly/3VobLUv

Tesla Benefits as Giants Slip, Shares Rise 12% After Quarterly Results

Wall Street Closes in the Red: Bond Yields Pressure Stocks
On Wednesday, trading on Wall Street ended with a decline in the indices, amid rising Treasury bond yields, which negatively affected large-cap companies. Investors lost confidence in a rapid rate cut by the Federal Reserve, while corporate news added tension, hitting McDonald's and Coca-Cola stock prices.

Bond Pressure and Fed Doubts
The yield on 10-year U.S. Treasury bonds reached its highest point in three months. Investors are reconsidering their expectations for future Fed decisions, given steady economic indicators and the upcoming presidential elections.

"The market is struggling to digest this latest rise in yields," noted Adam Turnquist, chief technical analyst at LPL Financial, emphasizing that higher rates are putting additional pressure on stocks.

Mega Caps Under Fire
Shares of large-cap companies sensitive to interest rate changes were in decline: Nvidia dropped 2.81%, Apple lost 2.16%, Meta Platforms (an organization banned in Russia) fell by 3.15%, and Amazon saw a decrease of 2.63%. These tech giants dragged down the tech-heavy Nasdaq index.

Market Leaders and Laggards
Among the 11 sectors in the S&P 500 index, only utilities and real estate showed positive momentum. All other sectors finished the day in negative territory.

Market Results
The Dow Jones Industrial Average fell by 409.94 points, or 0.96%, to 42,514.95. The S&P 500 lost 53.78 points, or 0.92%, to 5,797.42, and the Nasdaq Composite dropped by 296.47 points, or 1.60%, closing at 18,276.65.

McDonald's and Coca-Cola Under Pressure from the News
McDonald's stock dropped by 5.12% amid alarming news of an E. coli outbreak linked to its Quarter Pounder burgers. The incident resulted in one death and numerous illnesses, dealing a significant blow to the company. Coca-Cola also came under pressure, with its shares falling by 2.07%, despite confirming its annual profit forecast. Investors were disappointed as the expected revenue didn't meet higher expectations.

Consumer Goods Sector Declines
The broader consumer goods sector saw a 1.82% decline. The information technology sector followed suit, with a drop of 1.68%, adding to the overall negative market trend.

Investors Lock in Profits
"The market recently reached new all-time highs, and many portfolio managers have decided to lock in profits," noted Thomas Martin, senior portfolio manager at Globalt Investments. He added that the current market sentiment is contributing to mass selling as investors seek to secure gains amid growing uncertainty.

Boeing Hit by Strike-Related Losses
Boeing shares fell by 1.76% following the announcement of $6 billion in quarterly losses due to a prolonged production halt caused by a strike. Later that day, Boeing workers were set to vote on a new contract proposal that could end the five-week-long standoff.

Texas Instruments and AT&T Shine
Despite the overall negative market trend, Texas Instruments posted positive results, with its shares rising by 4% after third-quarter earnings exceeded analyst expectations. AT&T also pleased investors, with its stock climbing 4.60% as the company's wireless subscriber growth in the third quarter outpaced forecasts.

S&P 500 Sees Third Consecutive Drop
The S&P 500 index recorded its third consecutive daily decline, highlighting the market's growing tension and investor concerns.

U.S. Markets Near Record Highs, But Volatility Looms
U.S. stock markets are hovering near record levels, but analysts warn that a combination of earnings reports, shifts in monetary policy expectations, and the upcoming presidential election could test the rally and spark volatility.

Fed's Struggle with Inflation
Richmond Federal Reserve President Thomas Barkin noted that the Fed's battle to bring inflation back to its 2% target may take longer than expected, which could limit the potential for rate cuts in the near future.

Beige Book: Economy on Pause, Hiring Increases
The latest report from the Federal Reserve, known as the Beige Book, showed that U.S. economic activity has remained largely unchanged from September to early October. However, companies continue to increase hiring, offering some optimism for the labor market.

NYSE Pressure: Declining Stocks Dominate
On the New York Stock Exchange, declining stocks significantly outnumbered gainers, with a ratio of 3.27 to 1. The exchange recorded 102 new highs and 59 new lows, illustrating mixed market performance.

New Highs and Lows: Divergence Continues
The S&P 500 index registered 28 new 52-week highs and 4 new lows, while the Nasdaq Composite saw 60 new highs but also recorded 90 new lows, indicating ongoing risks in the market.

Trading Volume on the Rise
Trading volume on U.S. exchanges for the day totaled 11.83 billion shares, surpassing the 20-day average of 11.29 billion shares. This increased investor activity could signal that the market is preparing for significant changes in the near future.

Rivian and Lucid See Gains Amid Tesla's Success
Shares of Tesla's smaller electric vehicle competitors, Rivian and Lucid, both rose by 2% after trading hours, reflecting growing confidence in the electric vehicle market. This growth underscores the attention to the sector, where Tesla remains the dominant player.

Self-Driving Cars: Ready by Next Year?
Elon Musk confirmed Tesla's plans to launch self-driving cars with paid rides as early as next year. The company is awaiting approval from regulatory authorities in California and Texas, which could pave the way for the commercialization of this technology.

Tesla's Autopilot Gains Momentum
Following the robotaxi presentation, demand for Tesla's Full Self-Driving (FSD) software surged. In response to the growing interest, the company offered existing users free access to FSD for one month, marking the second time this year that such an offer was made. This reflects increasing adoption of Tesla's technologies and supports confidence in its long-term strategy.

Tesla Invests in the Future Despite Market Uncertainty
Despite uncertain demand for electric vehicles and the withdrawal of some competitors from the market, Tesla continues to expand its product line and reduce production costs. The company is also investing heavily in artificial intelligence projects and manufacturing capacity. Tesla plans to release new, more affordable models within the next two years, with the first sales expected in the first half of 2025.

Tesla's Profit Margins Exceed Expectations
Tesla's third-quarter results impressed analysts: the company's automotive profit margin, excluding regulatory credits, reached 17.05%, up from 14.6% in the previous quarter. This figure exceeded Wall Street's forecast of 14.9%. These results highlight the company's financial resilience, even amid market challenges and competition in the industry.

Tesla Lowers Production Costs, Beats Earnings Forecasts
Tesla announced that the cost of producing a single electric vehicle reached a historic low, at about $35,100. This was achieved through reduced labor and material costs. Moreover, the company reported an adjusted profit of 72 cents per share for the third quarter, significantly surpassing analysts' expectations of 58 cents.
More analytics on our website: bit.ly/3VobLUv

XAU/USD. Analysis and Forecast

Gold prices remain under pressure near the lower edge of their daily range, influenced by several factors. The U.S. dollar has paused its corrective pullback from the nearly three-month high reached yesterday, supported by expectations of a more gradual rate reduction by the Federal Reserve. Simultaneously, a positive risk sentiment undermines the growth of the precious metal, traditionally considered a safe-haven asset.analytics671b6a03c5cfb.jpgHowever, the ongoing decline in U.S. Treasury yields is preventing dollar bulls from adopting aggressive positions. Additionally, political uncertainty in the U.S. ahead of the presidential elections on November 5, and escalating tensions in the Middle East, may lend moderate support to the precious metal.

For trading opportunities today, focus on U.S. macroeconomic data, including durable goods orders and the revised University of Michigan Consumer Sentiment Index.

From a technical perspective, recent price action on short-term charts has formed a bearish "head and shoulders" pattern. The neckline support of this pattern is situated around the $2,707 level, which now serves as strong support. Any further selling that drives the price below the psychological level of $2,700 would pave the way for deeper losses, pulling the price down to the $2,685 support level, with the potential to extend further towards the $2,662 level.

On the other hand, the $2,740 level has emerged as an immediate strong barrier. Sustained strength beyond this region would invalidate the "head and shoulders" pattern, allowing the precious metal to target a retest of the historical high around $2,758, which was reached earlier this week. A subsequent upward movement could push the XAU/USD pair towards the psychological level of $2,800.
More analytics on our website: bit.ly/3VobLUv

Nasdaq up, Capri down: Surprise winners and losers of the week

Nasdaq Rises: Hope for the "Magnificent Seven" Inspires Investors
Friday's trading session on the Nasdaq closed on a positive note, fueled by gains in mega-cap stocks as investors eagerly awaited upcoming earnings reports from some of Wall Street's largest players. This anticipation created a notable surge of interest across the market.

Tesla Back in the Spotlight
Tesla shares became a symbol of renewed optimism on Wall Street. Brian Jacobsen, Chief Economist at Annex Wealth Management, noted that Tesla's performance strengthened investors' belief that the rally in tech giants — known as the "Magnificent Seven" — is far from over. This elite group includes the stocks of major companies that are sensitive to interest rate changes and actively involved in AI advancements.

Nvidia Takes the Lead Over Apple
Amid this tech rally, Nvidia (NVDA.O), the largest chipmaker, briefly surpassed Apple (AAPL.O), making it the most valuable company by market capitalization. This achievement highlights the high interest in AI-developing companies, further supporting the entire tech sector.

A Test of Resilience: Bond Yields and Employment Data
Investors are also closely monitoring U.S. 10-year Treasury yields, which rose again. On Friday, they approached a three-month high of 4.26%. This level of yield generally pressures the stock market, raising questions about the future of Federal Reserve interest rates. All eyes are now on next week's U.S. employment data, which may provide clues about the Fed's upcoming rate decisions.

Dow Falls: Banks and McDonald's Struggle
The Dow Jones Industrial Average (.DJI) dropped by 259.96 points, or 0.61%, to settle at 42,114.40. Meanwhile, the S&P 500 (.SPX) slipped by 1.74 points, or 0.03%, to 5,808.12, while the Nasdaq Composite (.IXIC) gained 103.12 points, or 0.56%, reaching 18,518.61.

The Dow Jones dropped primarily due to weak bank stock performance. For example, shares of Goldman Sachs (GS.N) fell by 2.27%. McDonald's (MCD.N) also lost 2.97% amid a negative reaction to news of an E. coli outbreak allegedly linked to its burgers.

Next week promises to be eventful, as the earnings results of major companies and economic data could set a new tone for Wall Street.

Stock Market in Tension: High Valuation of S&P 500 Under Pressure of Expectations
The S&P 500 (.SPX) has shown impressive annual growth of about 22%, but recent days have seen a pullback from record levels. Despite this, stocks remain highly valued, making them vulnerable in the event of unexpected disappointments in the near future.

Record Price-to-Earnings Ratio: Risk or Growth Signal?
According to LSEG Datastream, the S&P 500 P/E ratio, calculated based on expected earnings over the next 12 months, reached 21.8. This value is approaching a three-year high, highlighting investors' high expectations. High multiples, as known, can provoke a deeper correction in case of negative news, and in the coming days, investors, as noted by Chase Investment Counsel Corp. President Peter Tuz, will be "on pins and needles."

Key Market Players on the Verge of Earnings
Five of the largest tech giants from the "Magnificent Seven" group — the very companies that have consistently influenced the stock market in recent years — are preparing to release their quarterly reports. Next week, investors will closely monitor the results of leaders such as Alphabet (GOOGL.O), Microsoft (MSFT.O), Meta Platforms (banned in Russia), Apple (AAPL.O), and Amazon (AMZN.O). The outcome of their reports could set the tone for the market in the near future.

High Stakes for Tech Giants
The combined market value of these giants constitutes 23% of the total S&P 500. This means that their financial results could significantly impact the overall market, as any fluctuation in these corporations' stocks will inevitably affect the main indices.

Investors on Edge: The "Magnificent Seven" Under Close Scrutiny
Shares of the so-called "Magnificent Seven" companies are currently trading at a forward P/E ratio of 35. This is significantly above the average for other S&P 500 companies, as these tech giants have consistently outperformed in profit growth. However, experts predict that this gap will gradually narrow in the coming quarters.

High Multiples Under Pressure: Expectations in the Balance
Bryant VanCronkhite, Senior Portfolio Manager at Allspring Global Investments, noted that high valuations are only justified as long as these companies maintain stable growth. "If the justification for these high valuations weakens, there could be significant downside," he emphasized, adding that stock price fluctuations will directly depend on the consistency of growth metrics.

AI Investments: Path to Future Gains or Risky Bet?
Investors are paying close attention to these tech giants' spending on artificial intelligence. Companies with massive AI platforms, such as Microsoft, Amazon, Alphabet, and Meta, plan to increase capital spending by 40% this year. Meanwhile, other companies in the S&P 500 are expected to cut capital spending by 1% in 2024, according to BofA Global Research. This underscores the strategic importance of AI initiatives for tech leaders, but also raises questions about the potential return on these investments.

Tesla Kicks Off Earnings Season: Musk Forecasts Sales Growth
Tesla (TSLA.O) became the first of the "Magnificent Seven" to release its latest quarterly results. The company saw a boost in its stock price after CEO Elon Musk announced plans to increase car sales by 20-30% next year. This positive outlook heightened interest in the upcoming earnings reports and further fueled enthusiasm for Tesla shares, which remain influenced by the company's ambitious goals.

In the coming weeks, investors will assess whether the new investments in artificial intelligence and technology scaling justify the high expectations placed on the "Magnificent Seven," or if the market will need to adjust its hopes.

A Packed Earnings Week: Corporate Results and Key Economic Data
The upcoming week promises to be one of the busiest for the third-quarter earnings season, with over 150 companies from the S&P 500 expected to report their financial results. This is a crucial moment for the market, as many investors are counting on solid numbers that could drive further growth.

Employment Report: New Jobs Under Analysts' Spotlight
The U.S. employment report, expected on November 1, comes amid debates over whether a robust economy could prevent the Federal Reserve from cutting interest rates. Economists estimate that the U.S. economy added around 140,000 jobs in October. However, recent severe storms could complicate the data. Special attention will be on wage data, as it may provide insight into future inflation dynamics, explained Nanette Abuhoff Jacobson, Global Investment Strategist at Hartford Funds.

Treasury Yield Rises: Shifting Expectations
This week, U.S. Treasury yields reached three-month highs, indicating rising expectations of a less dovish Federal Reserve policy. Moreover, there is an increasing likelihood of higher spending under a new president. Political betting markets have recently raised the probability of a Trump victory, as the Republican candidate is associated with protectionist policies, including tariffs, that could lead to higher inflation.

Mounting Tension: Elections and the Fed's Decision
Next week marks the beginning of a series of significant events that could impact the market. From Election Day on November 5 to the Federal Reserve's announcement on November 7, investors may find themselves in a state of anxious anticipation. In such an environment, every economic report and corporate result will be critical in shaping future market sentiment.

Volatility Returns: VIX Indicator Signals Increased Risk
The Cboe Volatility Index (.VIX), known as an indicator of demand for protection against market swings, is again showing signs of strain. After dipping below the 15 mark at the end of last month, the VIX is now hovering around 19, reflecting growing unease among market participants ahead of the upcoming election.

Analysts Warn: Prepare for Swings
UBS Global Wealth Management analysts, in a Thursday note, highlighted that investors should brace for increased volatility ahead of the November 5 presidential election. As Election Day approaches, market confidence will likely remain under pressure, and any news event could trigger sharp price swings.

Vulnerable Sentiment: Market on the Verge of Change
Experts believe that the high volatility is tied to overall uncertainty and political risks that typically accompany election periods in the U.S. Investors seeking to protect their assets are increasing demand for protective options, which is reflected in the VIX's rise.
More analytics on our website: bit.ly/3VobLUv

Boeing Falls, Russell 2000 Gains: How Wall Street Reacts to Weekly News

Wall Street Up at Start of Busy Earnings Week
The U.S. stock market ended the day in the green on Monday amid growing optimism ahead of a flurry of earnings from major corporations and the final push before the November 5 presidential election. Investor confidence was boosted by the fact that energy supplies remain stable despite the escalation in the Middle East, which has not affected critical infrastructure.

Israel's Response: Focus on Defense Facilities
Israel's response to the Iranian attack earlier this month focused on military plants and strategic sites near Tehran, leaving refineries and nuclear facilities out of the strike zone. That caution has reduced the risk to global oil supplies and provided reassurance to investors worried about the impact of geopolitical tensions on the energy sector.

Earnings Week: Markets Await the Magnificent Seven
This week's key event will be the release of quarterly earnings reports from 169 companies in the S&P 500, including many of the tech leaders. Investors are particularly focused on the so-called "Magnificent Seven" — the tech giants that have driven the market to record highs. Alphabet, Meta, and Apple are set to report results in the coming days, fueling speculation about further gains.

The major indexes gained steadily on Monday, with the S&P 500 up 15.4 points (+0.27%) to 5,823.52; the Nasdaq Composite up 48.58 points (+0.26%) to 18,567.19; and the Dow Jones up 273.17 points (+0.65%) to close at 42,387.57.

Nvidia Overtakes Apple, AI Remains in Focus
Last week was a big one, with Nvidia overtaking Apple in market value to become the world's most valuable company. Investors are now eagerly awaiting data on AI spending, which could play a key role in the tech sector's performance given the huge expectations for AI in the coming years.

Corporate Earnings: A Look Ahead
"Earnings reports will be key to understanding what capital expenditures companies can afford to make next year," said Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute. Corporate executives will be disclosing their plans for the future, which will be an important guide for investors. Microsoft and Amazon, in particular, will be in the spotlight this week when they report results.

Small Caps Take the Lead
The Russell 2000 index, which tracks small-cap companies, rose 1.63% today, outperforming the major indexes. The jump underscores investors' appetite for riskier assets as larger companies focus on earnings.

Energy Slips, Financials Gains
As crude oil prices fell 5%, the energy sector took a hit, falling 0.65%. The easing of concerns over oil supplies has dampened interest in energy, while financials have been the most dynamic sector, demonstrating the attractiveness of banking and insurance assets in the current economic environment.

Market Optimism: Stocks Rise
The New York Stock Exchange was dominated by gainers today, with nearly two gainers for every one that fell (a ratio of 1.88 to 1). An impressive number of stocks reached new highs, with the NYSE recording 147 new records and 41 new lows. The S&P 500 posted 15 new yearly highs and 2 new lows, while the Nasdaq Composite posted 101 new highs and 67 new lows.

Economic Data: What to Expect from the Fed
Markets will be watching economic data closely this week, especially the Consumer Price Index (CPI) due out on Thursday. The data is critical for the Federal Reserve as it is an indicator of inflation and could influence its future policy.

Presidential Election: A New Chapter or Continuation of Politics?
With the presidential election approaching, investors are keeping a close eye on the political situation in the United States. Despite the close forecasts, markets are considering the possibility of a second Donald Trump administration, adding an additional layer of uncertainty to the investment strategy for the coming years.

Boeing Seeks Funding as Shares Fall
Aircraft giant Boeing shares fell 2.8% after the company said it would raise up to $22 billion in additional funding. The funds are expected to support Boeing as it struggles financially with an ongoing labor strike that is having a significant impact on its business.

3M Supports Dow with JP Morgan
3M shares jumped 4.4%, providing significant support to the Dow. The gains came after analysts at JP Morgan raised their price target for the industrial conglomerate, boosting investor optimism and adding to the positive sentiment in the market.

Japanese Yen Hits Lows
The yen fell to a three-month low against the US dollar. The moves came amid political instability in Japan following the recent elections, which left the country in a state of political uncertainty that has spilled over into the currency market.

US Jobs Report: Key Data on the Horizon
Markets are eyeing US jobs data for October on Friday. The economy is expected to add 123,000 jobs and the unemployment rate will remain steady at 4.1%. The report will be a key indicator of the health of the economy ahead of the presidential election in a week.

The White House Race: In the Homestretch
Ahead of the US presidential election, polls show a tight race, with Vice President Kamala Harris holding a narrow lead over Donald Trump, 46% to 43%, according to a national survey. The November 5 vote is expected to be one of the closest and most unpredictable in recent memory.

Bond Yields Peak: Election and Data Awaiting
With political and economic data in the air, the yield on the US 10-year Treasury note has hit a three-month high. On Monday, the yield rose 4.4 basis points to 4.274%, indicating a growing appetite for longer-dated assets ahead of the election and more economic data.

'Calm before the storm' on Wall Street
"We are experiencing a kind of calm before the storm," is how Subadra Rajappa, head of US rates strategy at Societe Generale, described the current situation. According to her, investors have become cautious ahead of the presidential election, trying to minimize risks.

Oil falls: calm in the Middle East supported prices
Oil prices fell sharply as fears of an escalation in the Middle East eased. Brent crude futures closed at $71.42 a barrel, down 6.09%, or $4.63. American WTI crude also fell, by 6.13% or $4.40, to close at $67.38 per barrel. The decline put pressure on energy stocks, and the S&P 500 energy sector ended the day down 0.7%, although the major indices remained in positive territory.

Truth Social shares soar
Shares in Trump Media & Technology Group, the owner of the Truth Social platform, jumped 21.6% on Monday, continuing their recent rally. Interest in the company is growing in light of the upcoming elections and increased attention to media assets associated with Donald Trump.

Global markets are on the rise
Global markets also saw growth, with the MSCI index for world shares rising by 0.29%, or 2.44 points, to close at 847.93. The European STOXX 600 index also ended the day up 0.41%, reflecting positive investor sentiment in the global market.

Yen under pressure: political instability in Japan
The Japanese yen continues to remain under pressure due to political changes in the country. The results of the latest elections have weakened the ruling coalition, and this brings significant uncertainty to the political course and monetary policy. The Liberal Democratic Party of Japan lost its parliamentary majority, leaving the country with 215 seats in the lower house instead of the required 233, which has presented the country with new challenges in governance and financial policy.

Dollar strengthens against the yen
The dollar against the yen shows significant gains, rising 1% to reach 153.88, which was the yen's lowest value since late July. Later, the dollar corrected slightly, ending the trading session up 0.64% at 153.28. This reflects the continued interest in the dollar despite the instability that has gripped the Japanese currency following the country's political changes.

Dollar under pressure: rate against world currencies
The dollar index, which tracks its value against a basket of major world currencies, showed a slight decline of 0.08%, reaching 104.30. At the same time, the euro strengthened by 0.19%, reaching $1.0813. These indicators indicate the complex dynamics of currency markets against the backdrop of global political and economic factors, as well as the delicate balance between the American and European currency blocs.
More analytics on our website: bit.ly/3VobLUv

Alphabet Soars as Nasdaq Hits New High: How Tech Giant Breathed Life into Market

Tech Boom and Big Expectations
The Nasdaq stock index hit a new record close on Tuesday, while the S&P 500 showed positive dynamics. However, the Dow remained in the red, while investors kept a close eye on financial reports. The main event of the evening was the results of Google's parent company, Alphabet (GOOGL.O), which were released after the end of the trading day.

Alphabet, one of the so-called "Magnificent Seven" tech giants, reported earnings that beat market expectations, adding to investor confidence.

Earnings Week: Focus on the Magnificent Seven
This week has been one of the busiest this quarter for the S&P 500, with five of the "Magnificent Seven" reporting their quarterly results. The reports could help determine whether Wall Street continues to embrace the tech and AI bullishness that has driven stock indexes to new highs this year.

Yield Distortion: Focus on the Magnificent
"One of the key things the market is thinking about right now is whether there's a potential plateau in earnings growth between the Magnificent Seven, which are heavily weighted in the market, and the rest of the pack," explains Bill Mertz, head of capital markets research at U.S. Asset Management. Bank.

Market Summary: Facts and Figures
The Nasdaq Composite (.IXIC) rose 145.56 points, or 0.78%, to close at 18,712.75, surpassing its previous record close in July.

The S&P 500 (.SPX) added 9.45 points, or 0.16%, to close at 5,832.97. Meanwhile, the Dow Jones Industrial Average (.DJI) fell 154.52 points, or 0.36%, to close at 42,233.05.

Tech Prospects: New Wave or Correction?
The next earnings results from the Magnificent Seven will be crucial in assessing whether the tech and AI sector can continue to rise or whether the market will face a correction.

VF Corp on the Rise: Return to Profit
Investors reacted enthusiastically to quarterly earnings reports, carefully assessing the prospects of companies. One of the bright spots was VF Corp (VFC.N), the owner of the Vans brand. The company reported its first profit in two quarters, sending its shares up an impressive 27%. VF Corp's rally was one of the few positive signs that gave the market optimism.

D.R. Horton Disappoints with 2025 Outlook
However, not everyone had a good day. Large U.S. homebuilder D.R. Horton (DHI.N) fell 7.2% after issuing a 2025 outlook that was below analysts' expectations. Other companies in the construction sector followed suit, sending the PHLX Housing Index (.HGX) down 2.5%. The housing market remains under pressure, and sentiment in the sector is still mixed.

Ford on the decline: Profit forecast misses expectations
There was also bad news from auto giant Ford (F.N), whose shares lost 8.4% on the day. The company said it was likely to meet only the lower end of its full-year profit forecast. The news dampened investor interest and raised concerns about the auto industry's prospects amid a tough economic environment.

Visa and Chipotle report profits after the close
Payment processor Visa (V.N) and restaurant chain Chipotle Mexican Grill (CMG.N) also reported after the close. Their figures are of particular interest because they could impact investor confidence in the resilience of the services sector amid ongoing volatility.

Labor Market Worries and Surprisingly High Confidence
According to the Labor Department's JOLTS survey, the number of job openings in the United States fell to 7.44 million in September, while economists had forecast about 8 million. This may indicate a weakening of hiring activity and adds uncertainty to the economic picture. However, contrary to this, the consumer confidence index unexpectedly rose to 108.7 in October, which significantly exceeded the forecast of 99.5 and indicates continued optimism among consumers.

Communications Sector Growth Amid Utilities Fall
The leader of growth on this day was the communications sector (.SPLRCL), supported by such giants as Alphabet and Meta (banned in Russia), while utilities (.SPLRCU) fell by 2.1%.

Treasury yields cap gains
Adding to the pressure on markets was the benchmark 10-year Treasury yield, which rose to 4.3%, the highest since early July. The jump in yields points to a possible tightening of business conditions, curbing the strong gains in stock indices.

Investors brace for volatility as earnings and geopolitics play on nerves
Tough weeks lie ahead for Wall Street, as corporate earnings rise, investors must cope with the escalating situation in the Middle East and prepare for the US elections on November 5. The Federal Reserve will meet shortly after this important event to discuss further steps to regulate financial policy. These key moments, intertwined with corporate earnings, promise to add even more tension to the markets.

Selling Dominance on NYSE: Markets Record Gap
The New York Stock Exchange (NYSE) saw a 1.78-to-1 ratio of selling assets to buying assets, with 176 new highs and 75 new lows reported for the day among stocks traded on the exchange. The S&P 500 posted 19 new highs over the past 52 weeks and no new lows, while the Nasdaq Composite posted 93 new highs and 70 new lows.

Trading Activity Above Average
Trading volume on U.S. stock exchanges totaled 12.59 billion shares, above the 11.5 billion share average over the past 20 trading days. The increased activity indicates growing investor interest as investors navigate the growing volume of corporate earnings and expected volatility.

Stocks Rising: Betting on Tech and AI
US stocks have been on a steady rise this year, driven in large part by optimism around tech companies and the booming field of artificial intelligence. With such expectations, investors continue to look to long-term opportunities, even as turbulence may hit the market in the coming weeks.

Political Heat: US Prepares for Election
The decisive round of the US presidential election will take place on November 5. The race between incumbent Vice President Kamala Harris, representing the Democratic Party, and former President Donald Trump, the Republican nominee, remains tight, with polls showing a narrow gap in the ratings of the candidates. Political uncertainty is adding to the jitters in the markets, where traders and investors are closely monitoring the news.

Short-Term Outlook: Risk Reduction and Trading Turbulence
"I wouldn't be surprised to see some de-risking in the coming days and some turbulent trading leading up to Election Day next Tuesday," said Michael Brown, senior strategist at Pepperstone. In the short term, the market is likely to remain on edge, balancing between internal and external factors that promise a variety of scenarios.

Expectations ahead of the employment report: investors are waiting in anticipation
The US Department of Labor's JOLTS survey found that the number of job openings in September was 7.44 million, short of the 8 million forecast, raising concerns about the state of the labor market. Investors are already eagerly awaiting Friday's US employment report for October, which could provide some clarity and influence the Federal Reserve's next steps.

World indices: MSCI in the green, STOXX 600 in the red
Amid global uncertainty, the MSCI Worldwide Equity Index (.MIWD00000PUS) showed a slight increase of 0.02%, reaching 848.08. However, Europe's STOXX 600 (.STOXX) fell 0.57%, reflecting weak sentiment in European markets.

Bond yields and US election: Caution ahead of change
US 10-year Treasury yields neared their highest in four months as investors remain cautious about buying debt ahead of an election that could impact the country's fiscal policy. However, a successful auction of seven-year bonds saw yields ease slightly to 4.272%.

Japanese yen stabilises after three-month low
The yen, which lost ground on Monday, found support amid political instability, with the defeat of Japan's coalition government over the weekend raising uncertainty about the country's future fiscal and monetary policies. The dollar ended the day up 0.12 percent at 153.47 yen ahead of a decision by the Bank of Japan, which analysts expect to leave interest rates unchanged at its meeting on Thursday.

Political Turbulence in Japan: What's Next for the Liberal Democratic Party
With the election over, Japan is entering a difficult phase of coalition-building. The loss of the majority in the Diet by Prime Minister Shigeru Ishiba's Liberal Democratic Party and its ally Komeito is creating uncertainty for the country's budget plans and complicating the Bank of Japan's efforts to normalize rates. The political shake-up in the Japanese government could lead to increased fiscal spending, potentially putting pressure on the country's financial stability and jeopardizing the current monetary policy stance.

Opposition Leader Seeks Monetary Stability
The head of the Democratic Party for the People, Japan's main opposition force, said on Tuesday that the Bank of Japan should refrain from making any drastic changes to its current ultra-loose monetary policy. As long as real wages remain stable, he said, maintaining current financial market conditions is important for economic stability.

Currency Market: Dollar and Euro Little Changed
On the currency market, the dollar index, which measures the dollar against a basket of other currencies, added 0.01% to 104.27. The euro, meanwhile, lost 0.03% to settle at $1.0815. These fluctuations highlight investors' cautious sentiments amid global uncertainty.

Oil Prices: Weak Recovery from Crash
Oil futures ended the day slightly lower after a significant 6% drop in the previous session. While geopolitical factors continue to weigh, Axios reporter Barak Ravid reported that Israeli Prime Minister Benjamin Netanyahu is planning a meeting to seek a diplomatic solution to the conflict in Lebanon. The news has brought some stabilization to commodity markets.

Brent crude fell 30 cents, or 0.4%, to $71.12 a barrel, while U.S. West Texas Intermediate (WTI) futures fell 17 cents, or 0.3%, to $67.21 a barrel.

Online Advertising Drives Market Caps: Alphabet and Snap Lead Gains
On Tuesday, online advertising stocks enjoyed a particularly strong evening. Upbeat quarterly results from giants Alphabet (GOOGL.O), Reddit (RDDT.N) and Snap (SNAP.N) boosted investor confidence, adding more than $100 billion to their combined market value. With Amazon (AMZN.O) and Meta Platforms (banned in Russia) set to report, the market remains keen on tech and advertising stocks.

Alphabet Gains Strength as Cloud, Advertising Take Center Stage
Alphabet shares soared 4% in after-hours trading after reporting earnings that beat analysts' estimates. The company's robust growth in digital advertising and a surge in demand for cloud services linked to artificial intelligence technologies played a key role in the company's success, bolstering investor confidence that Alphabet will continue to lead the tech sector.

Snap Rebounds with Positive Results and User Growth
Online advertising niche Snap (SNAP.N) also posted strong results, beating revenue and active user estimates. The company's shares jumped 7% on the news, despite facing stiff competition from TikTok and other major platforms. Snap has had a tough year, however, with its shares down more than 30% since the start of 2024, and only a strong quarter has helped restore some of its investor confidence.

Reddit is gaining ground in the ad space: AI-powered content licensing impact
Reddit (RDDT.N) is also not far behind, with shares up 20% in extended trading after an upbeat quarterly revenue outlook. This is due to successful AI-powered content licensing deals, which have attracted new ad deals to the platform. Since Reddit went public on Wall Street in March, the company has been gradually increasing its influence, which is now starting to pay off financially.
More analytics on our website: bit.ly/3VobLUv

AI Breaks and Breaks: Amazon Spends, Microsoft Gains, Nasdaq Slips

U.S. Indexes Close Lower: 'Chip' Fever and Earnings Expectations
The American stock market ended Wednesday with a decline, as chipmakers slipped and investors paused, awaiting corporate earnings.

Microsoft: Beating the Estimates
After the market closed, Microsoft and Meta Platforms (banned in Russia) reported earnings that exceeded revenue forecasts. These positive results drew attention to upcoming reports from other tech giants, reinforcing confidence in the "heavyweights" of the tech market.

Alphabet: 'Magnificent Seven' Reports Offer a Bright Spot
Among the largest players in the top "Magnificent Seven," Alphabet also showed impressive results. Its 2.8% growth on Tuesday after beating third-quarter revenue and earnings expectations gave the market a small boost, helping to offset the negative impact from the decline in chipmaker stocks.

Chipmakers Under Pressure: AMD and Qorvo Slump
Shares of Advanced Micro Devices (AMD) and Qorvo faced significant pressure. Grim forecasts triggered drops of 10.6% and 27.3% in their stock prices, respectively.

Heavy Losses for Super Micro and Nvidia
Super Micro Computer dropped 32.6% after Ernst & Young stepped down as the company's auditor. Nvidia also ended in the red, with a 1.4% drop.

Tech Sector Hit Hard
The information technology sector saw the biggest drop among S&P 500 sectors, down 1.34%, while the communication services sector showed slight growth due to Alphabet's success.

Market Optimism Fades
According to Michael James, managing director of equity trading at Wedbush Securities, the volatility in Qorvo, Advanced Micro, and Super Micro stocks is raising questions and "dulling the rosy picture" set by Alphabet's impressive report.

Focus Turns to Earnings and Forecasts
"There will be a laser focus on earnings and company guidance reports," added James, highlighting the intense anticipation among investors.

Small Losses but Significant Expectations
Wednesday ended with small declines across major indexes. The Dow Jones Industrial Average fell by 91.51 points (0.22%) to settle at 42,141.54. The S&P 500 also slipped, down by 19.25 points (0.33%) to 5,813.67, while the Nasdaq Composite recorded the largest drop, losing 104.82 points (0.56%) to close at 18,607.93.

U.S. Economy Grows but Below Expectations
According to preliminary data from the U.S. Department of Commerce, GDP grew by 2.8% annually in the third quarter, slightly below the forecasted 3.0% growth rate. This minor gap between actual and expected results raised some concerns in the market, although the overall growth trend remains positive.

Private Sector Exceeds Job Growth Expectations
In other positive news, the private sector saw stronger-than-expected job growth. October added 233,000 new jobs, above forecasts, signaling steady recovery in the labor market and giving investors a reason for optimism, reinforcing expectations of consumer activity and economic strength.

Political Tensions: Harris and Trump Run Neck-and-Neck
With the upcoming presidential election on November 5, the race between Kamala Harris and Donald Trump is a hot topic among market participants. According to the latest polls, the candidates are running neck and neck. Investors are keeping a close eye on the election's potential impact on economic policy and the market.

Disappointing Corporate Reports: Eli Lilly and Starbucks
Eli Lilly disappointed investors, dropping 6.2% after falling short of sales forecasts for its popular weight loss and diabetes medications. Analysts expected better results, leading to a decline in the pharma giant's stock.

Starbucks reported a decline in quarterly sales, with a decrease in global demand impacting the company's profits. Investors closely monitoring the cafe chain received confirmation that global economic challenges have affected even the largest brands.

NYSE Remains Positive Despite Declines
Despite the overall market downturn, the New York Stock Exchange showed a positive balance: for each stock that declined, another rose. A total of 210 new highs and 52 new lows were recorded, indicating a mixed sentiment, with many investors remaining optimistic.

New Highs and Lows: S&P 500 and Nasdaq Show Divergent Movement
The S&P 500 recorded 24 new 52-week highs and five new lows, while the Nasdaq Composite saw 126 new highs and 98 new lows. This divergence in performance illustrates mixed investor sentiment, with investors balancing between growth expectations and concerns for the tech sector.

Amazon Up Next: Markets Brace for Earnings Report
Amazon is expected to release its financial results on Thursday, and the forecasts suggest trends similar to recent reports from other tech giants. Investors worry that aggressive investments in AI and infrastructure could impact the company's high margins, potentially reducing interest in its stock.

Tech Sector Under Pressure: AI Comes at a High Cost
Shares of major tech giants continued to decline in aftermarket trading on Wednesday. A key challenge these companies face is balancing ambitious AI initiatives with the need to demonstrate short-term returns. "Investing in AI is costly. Building capacity is expensive," commented GlobalData analyst Beatriz Valle.

Capacity Competition: Capital Expenditures on the Rise
Tech corporations are in a race to build AI infrastructure, but widespread adoption of the technology will take time. According to Visible Alpha, Microsoft's quarterly capital expenditures now exceed its annual spending level before 2020. Meta has also significantly increased its spending, with quarterly investments now comparable to its annual costs before 2017.

Microsoft: AI Spending Increases and Potential Azure Slowdown
Microsoft reported a 5.3% increase in capital spending to $20 billion in the first fiscal quarter and confirmed further increases in AI investment in the coming quarter. However, the company warned that growth in its Azure cloud business may slow due to limited data center capacity. This statement added to investors' concerns.

These investments will undoubtedly help tech giants strengthen their positions in the AI market in the long term, but for now, the question of profitability and margin growth remains open.

Investments and Their Impact: Microsoft Slows Margins for Future Gains
Head of technology research at D.A. Davidson, Gil Luria, points out, "Investors sometimes overlook that each time Microsoft makes major investments, it dampens the company's margin by a full percentage point, which can drag on for the next six years." According to Luria, the current capital expenditures could slow Microsoft's margin metrics, creating a temporary barrier to profitability.

Chipmakers Struggling to Meet Demand: AI Growth Drives Shortages
Chip manufacturers like Nvidia face challenges in meeting the growing demand for AI components. Advanced Micro Devices, which reported earnings earlier this week, emphasized that AI chip demand is surging faster than production capacity. The company warned that AI chip supply will likely remain limited into next year, leaving some orders unfulfilled.

AI Investments Echo the Early Days of Cloud Technology
These substantial investments by tech giants hark back to the times when companies actively invested in cloud technology, waiting for customers to adopt and adapt to the new technology.

High-Stakes Bet on AI Infrastructure
"We're on the verge of significant opportunities, even if building infrastructure may raise questions for investors in the short term," said Meta (banned in Russia) CEO Mark Zuckerberg, commenting on the company's current spending. He stressed that the company plans to continue making substantial investments in AI infrastructure, preparing for future demand and long-term results.
More analytics on our website: bit.ly/3VobLUv

Microsoft's Big AI Spend Weakens Wall Street, Nasdaq Dow

U.S. Indices Close in the Red: AI Costs Hit Market Optimism
All three major U.S. stock indices ended Thursday's trading session in negative territory after reports from Microsoft and Meta Platforms (banned in Russia) highlighted rising AI-related expenses that could impact future profits, dampening enthusiasm for the mega-cap companies that had driven this year's rally.

Microsoft: Record Profits Couldn't Prevent Stock Drop
Despite Meta Platforms (banned in Russia) and Microsoft (MSFT.O) surpassing profit expectations, their stocks fell significantly, with Meta dropping by 4.1% and Microsoft by 6%. This decline followed reports indicating rising AI costs, which investors perceived cautiously, seeing the potential for these costs to reduce profit margins.

The "Magnificent Seven" Lose Ground
Among other tech giants in the so-called "Magnificent Seven," both Amazon.com (AMZN.O) and Apple (AAPL.O) released their quarterly results. Amazon exceeded revenue forecasts, driven by strong growth in its cloud division, while Apple pleased investors with higher-than-expected iPhone sales and met expectations in both revenue and profit.

Amazon Up, Apple Down: Market Reacts to Earnings Reports
As a result, Amazon.com shares rose by 4.5% after market close due to solid quarterly results that exceeded Wall Street's estimates. Apple shares, however, slipped by 2% despite its positive report, remaining aligned with investor forecasts. During the regular trading session, Amazon saw a decline of 3.3%, while Apple's shares fell by 1.8%.

Alphabet Also Ends Lower
Alphabet (GOOGL.O), which reported earlier on Tuesday, also faced pressure, with its shares dropping by 1.9%.

Investors Wary: Unlimited AI Budgets Raise Questions
"The 'Magnificent Seven' are clearly hinting that their AI-related budgets remain open-ended, and this isn't a comforting message for investors," said Carol Schleif, Chief Investment Officer at BMO Family Office. "While long-term benefits for the U.S. economy could be substantial, the short-term question remains: where is the immediate profit from these investments?"

Microsoft Points to Rising Capital Expenditures
Microsoft confirmed that increasing capital expenditures are linked to its expansion of AI investments, potentially affecting its profit margin, causing uncertainty among shareholders.

Market Downturn: Major Indices Lose Ground
The market reacted with declines across all major indices. The Dow Jones Industrial Average (.DJI) closed down by 378.08 points, or 0.90%, at 41,763.46. The S&P 500 (.SPX) dropped by 108.22 points, or 1.86%, to 5,705.45, while the Nasdaq Composite (.IXIC) lost 512.78 points, or 2.76%, ending the trading day at 18,095.15.

Monthly Losses: Market Ends Extended Growth Streak
Amid September's fluctuations, the S&P 500 lost 0.99% for the month, Nasdaq fell by 0.52%, and the Dow ended with a 1.34% loss, marking the end of a five-month growth streak for the Dow and S&P.

Inflation Continues to Rise: Consumer Spending Exceeds Expectations
According to the latest Personal Consumption Expenditures (PCE) index, a key inflation indicator closely watched by the Federal Reserve, prices rose by 0.2% in September, aligning with analyst forecasts. However, the annual core inflation rate reached 2.7%, slightly above the 2.6% forecast, while consumer spending also exceeded expectations, adding further uncertainty regarding the central bank's future actions.

Intel Faces Restructuring Costs and Write-Downs
Intel (INTC.O) presented its earnings report post-market close, which showed the impact of restructuring costs and asset write-downs. Despite optimization efforts, the company's financial results fell short of expectations, leading to a restrained reaction from investors.

Market Under Pressure: NYSE Decliners Outnumber Advancers
On the New York Stock Exchange (NYSE), the number of declining stocks outpaced gainers by more than two and a half times, at a ratio of 2.66 to 1. During the trading day, the S&P 500 recorded 24 new 52-week highs and nine new lows, while the Nasdaq Composite registered 59 new highs and 159 new lows, reflecting the general negative market sentiment.

U.S. Consumer Spending Rises, Economy Strengthens
Thursday morning data indicated that U.S. consumer spending in September exceeded expectations, providing a positive signal for the economy, directing it toward a stronger growth trajectory in the year's final quarter. This increase in spending could bolster confidence in economic resilience.

Labor Costs Slow Growth
Another report showed that the Employment Cost Index (ECI), the broadest measure of labor costs, rose by 0.8% in the third quarter. This growth marked the slowest pace since mid-2021, lower than the previous quarter's 0.9% figure, indicating a potential easing in wage inflation.

Dollar Weakens as Yen and Euro Strengthen on Economic News
The dollar came under pressure against the yen after the Bank of Japan took a slightly more hawkish stance than anticipated, while the euro gained ground following data indicating faster-than-expected inflation in the eurozone in October. This factor supported arguments for a cautious approach to potential rate cuts by the European Central Bank, adding additional strength to the euro.

Dollar Index Declines, Yen and Euro Gain Ground
The dollar index, which measures the dollar's value against a basket of six major currencies, fell by 0.2% to 103.88, while the euro edged up by 0.04% against the dollar to $1.0859. Meanwhile, the dollar weakened 0.8% against the Japanese yen, reaching 152.18 yen. These currency fluctuations come amid expectations for the upcoming Fed meeting.

Rate Cut Anticipation: Markets Almost Certain
The market is nearly convinced that the Fed will implement a 25-basis point rate cut during its November 6-7 meeting. However, according to CME Group's FedWatch tool, there is only a 70% chance of an additional cut in December, reflecting investor caution.

Eyes on Employment Report and Presidential Race
Traders and investors are focused on key events in the coming days, with October's U.S. employment report due on Friday and the presidential election set for Tuesday. Polls indicate a close race between Republican Donald Trump and Democrat Vice President Kamala Harris, adding uncertainty on the political front.

Global Indices Fall, Bond Yields Rise
The global MSCI Index (.MIWD00000PUS) closed down by 12.64 points, or 1.50%, at 832.30, and saw a 2.3% decline in October, ending a five-month winning streak. The European STOXX 600 index also ended the day in the red, down 1.2%.

Yields on U.S. Treasury bonds rose following the release of economic data. The 10-year bond yield increased by 1.8 basis points to 4.282%, nearing Tuesday's four-month high of 4.339%.

Cryptocurrency Market Under Pressure: Bitcoin Loses Ground
On the cryptocurrency market, Bitcoin, the world's largest cryptocurrency by market capitalization, fell by 3.2%, reaching $70,458. This level is about 4% below its all-time high from March, signaling short-term fluctuations amid market volatility.

Gold Retraces After Record High, Monthly Gains Remain Strong
Gold retreated slightly after hitting a new all-time high, though it wrapped up a fourth consecutive month of gains, supported by demand for safe-haven assets. Spot gold dropped by 1.6% to $2,740.45 per ounce, after reaching a peak of $2,790.15 earlier in the session. Gold prices saw a 4% increase over the month, underscoring its appeal during times of instability.

Oil Prices Surge Amid Middle East Tensions
Oil prices continued their upward movement in response to reports suggesting that Iran is preparing to launch an attack on Israel from Iraq within days. WTI crude futures surged by $1.81, reaching $70.42 by 3:00 PM ET. Brent crude futures for January delivery also rose by $1.82, hitting $73.98. U.S. crude climbed by 1.33%, settling at $69.52 per barrel, while Brent rose by 0.94%, ending at $73.23 per barrel.

This increase highlights the oil market's sensitivity to geopolitical risks and confirms its reaction to potential escalations in a region that remains a crucial energy supplier.
More analytics on our website: bit.ly/3VobLUv

Trading Signals for GOLD (XAU/USD) for November 1-4, 2024: sell below $2,766 (21 SMA - 61.8%)

Early in the American session, gold is trading around 2,750, within the uptrend channel, and below the 21 SMA, bouncing after having reached the low of 2,732.

Yesterday, after having reached the low of 2,790, gold made a strong technical correction. Today we observed a technical rebound. However, the instrument remains under bearish pressure. Hence, we could expect that if the metal reaches the 61.8% Fibonacci level around 2,766, it could be seen as an opportunity to resume selling.

On the other hand, in case gold breaks the inverted pennant pattern sharply, we could expect it to reach the 3/8 Murray area around 2,734. The instrument could even continue its fall next week and reach the 200 EMA around 2,673.

The key is to pay attention to the 61.8% retracement level. Below this area, the outlook will remain bearish for gold. Therefore, traders will have an opportunity to sell below this area.

Should XAU/USD bounce and consolidate above 3/8 Murray, we could look for buying opportunities with the target at 2,766 as this could confirm that a strong bottom is in place.
More analytics on our website: bit.ly/3VobLUv

Markets in election grip: Dow, S&P fall, Nvidia climbs steadily

U.S. Stock Market Wrap-Up: Election Anticipation and Investor Anxiety
U.S. stocks ended slightly down on Monday after a volatile trading session, with investors bracing for a decisive week as the nation prepares to choose its next president and the Federal Reserve gets set to release a key policy statement.

Final Push: Trump vs. Harris
In the final hours of the presidential race, candidates Donald Trump and Kamala Harris pulled out all the stops in an effort to secure crucial votes. Polls show a close race, and it may take several days to determine the winner.

Trump Trades Lose Steam
Some of the so-called "Trump trades" faced declines after recent polling showed Harris, a Democratic vice president, leading in Iowa. This led to a dip in the U.S. dollar, Treasury yields, and Bitcoin. Meanwhile, Trump Media & Technology Group (DJT.O) ended up with a 12.37% gain, recovering from early losses of nearly 6%.

Harris's Odds Rise in Betting Markets
Following the Iowa poll, Harris's odds against the former Republican president increased on several betting sites, which many market participants view as a predictor of election outcomes.

"We'll need until at least Thursday to determine who won, so unfortunately, this week will likely be quite volatile," said Sam Stovall, chief investment strategist at CFRA Research in New York.

"Earnings are doing well, the Fed will likely lower interest rates, and the only true uncertainty is the election. Hopefully, it will be resolved sooner rather than later, so investors can get back to business as usual," Stovall added.

Wall Street Indices Struggle Amid Uncertainty
On Monday, major U.S. stock indexes slid into the red. The Dow Jones Industrial Average (.DJI) fell by 257.59 points, or 0.61%, closing at 41,794.60. The S&P 500 (.SPX) also declined, losing 16.11 points, or 0.28%, to settle at 5,712.69. The Nasdaq Composite (.IXIC) joined the downtrend, shedding 59.93 points, or 0.33%, and ending at 18,179.98.

Bond Yields Continue to Slide
On the bond market, ten-year U.S. Treasury yields took another hit, falling 6.4 basis points to 4.299%, following an initial drop of 10 basis points. Investors anticipate a volatile week as they await election results and policy clarity.

Russell 2000 Gains on Falling Yields
With bond yields declining, the Russell 2000 (.RUT) saw a modest 0.4% increase, as lower borrowing costs tend to benefit small-cap stocks, which are seen as more likely to gain from lower rates.

CBOE Volatility Index Rises: Fear Index Holds Steady Near Highs
The CBOE Volatility Index (.VIX), known as Wall Street's "fear gauge," climbed to 21.94, staying well above its long-term average of 19.46. It hovered near last week's two-month high of 23.42, reflecting heightened market tension over the pending election and potential economic fallout.

Fed Rate Cut Expected with Near Certainty
Heading into Thursday, investors are almost certain the Federal Reserve will cut the benchmark interest rate by 25 basis points. According to CME's FedWatch tool, there is a 98% chance of a rate cut and only a 2% chance the Fed will hold rates steady. This expectation has been priced into the market, heavily influencing investor sentiment.

Energy Sector Leads Gains Amid Oil Surge
Among the S&P 500's 11 major sectors, energy (.SPNY) led the way, gaining 1.87%, buoyed by a rise in oil prices following OPEC+'s decision to postpone production hikes.

Nvidia Replaces Intel in Dow
Chipmaker Nvidia (NVDA.O) saw a modest 0.48% gain after news that it will replace Intel (INTC.O) in the Dow Jones Industrial Average. In response, Intel's shares dropped 2.93%, weighing on the Dow.

Marriott Slips on Lowered Profit Outlook
Hotel operator Marriott International (MAR.O) declined by 1.59% after lowering its 2024 profit forecast due to weak domestic travel demand in the U.S. and China.

Constellation Energy Takes a Hit Following FERC Rejection
Constellation Energy (CEG.O) performed the worst in the S&P 500, down 12.46%. The Federal Energy Regulatory Commission denied a deal to expand capacity at Amazon's data center, which is directly connected to Talen Energy's nuclear plant in Pennsylvania, pressuring the utilities sector, which fell 1.21%.

Rising Stocks Outnumber Decliners on NYSE and Nasdaq
On Monday, advancers outpaced decliners on the New York Stock Exchange by a ratio of 1.37 to 1, while on the Nasdaq, the ratio was a narrower 1.01 to 1 in favor of gaining stocks, suggesting a mild overall bullish sentiment despite general caution.

Highs and Lows: Mixed Market Momentum
The S&P 500 registered 10 new 52-week highs and four new lows, reflecting positive expectations in select sectors. Meanwhile, the Nasdaq Composite saw 66 new highs but also 128 new lows, highlighting heightened volatility among technology and innovation stocks.

Trading Volume: Slightly Below Average, But Significant
U.S. trading volumes reached 11.31 billion shares, just under the 20-day average of 11.71 billion. This may indicate a cautious stance among market participants ahead of major events like the Fed meeting and presidential election.

Air France KLM Faces Downgrade and Stock Pressure
Shares of Air France KLM (AIRF.PA) fell after Morgan Stanley downgraded the airline from "equal weight" to "underweight." On Tuesday, the stock dropped roughly 2% at the start of the trading session.

Challenging Cash Flow Outlook for Air France KLM
Morgan Stanley noted that while Air France KLM's stock isn't overly expensive by historical standards, it trades at a notable premium to its peers among national carriers. This premium, combined with challenging free cash flow prospects, suggests a cautious outlook for the airline.

Third-Quarter Earnings in Europe: Surpassing Expectations but China Concerns Linger
Despite economic challenges, many European companies are surpassing low market expectations for third-quarter earnings, with investors rewarding top performers. However, concerns over weak demand in China continue to temper enthusiasm, prompting caution.

Lowered Forecasts Ease the Bar for Earnings Growth
Data from LSEG I/B/E/S shows that analysts revised down profit growth expectations by 380 basis points in the two months before the earnings season. Normally, such adjustments are around 100 basis points, but the substantial drop in projections has made it easier for companies to exceed expectations.

STOXX 600: More Companies Beating Expectations
So far, around 50% of companies in the STOXX 600 (.STOXX) index have reported their earnings, with approximately 56% exceeding forecasts. Citi equity strategists note that this figure aligns with the quarterly average, indicating that European firms are holding steady despite market turbulence.

U.S. Elections Add a Layer of Uncertainty for Europe
The upcoming U.S. elections add another layer of uncertainty, with analysts expecting that the resulting volatility could continue to impact European stocks as investors wait to see how the election outcome might influence the global economy.

Market Dynamics Shift: Reward for Outperformance and Penalties for Misses
This quarter, companies that have exceeded expectations are being notably rewarded by investors. On the other hand, those missing forecasts are feeling the pressure as the market takes a tougher stance on underperformance.

European Banks Boosted by High Interest Rates
European banks have enjoyed another strong quarter as persistently high interest rates continue to support profit margins. Even as the European Central Bank signals potential rate cuts, investor sentiment remains positive.

Higher Structural Rates: A Win for Banks
"Interest rates will structurally remain higher than in previous cycles," remarked Thomas McGarrity, head of equity at RBC Wealth Management. He believes this will benefit banks significantly, allowing them to sustain strong margins. "We're in a favorable position and won't be backing down," McGarrity added.

Financial Sector's Profit Growth Among the Highest
Data from LSEG I/B/E/S shows that the financial sector saw 20.6% profit growth in the third quarter, ranking it third among major sectors after utilities and basic materials. So far, 80% of financial companies have reported earnings that beat analyst expectations.

Economic Stagnation Hits Small and Mid-Caps Hardest
Meanwhile, Europe's economy remains in a state of stagnation. The industrial sector, particularly reliant on energy, faces challenges from rising costs and weak global demand. For small- and mid-cap companies focused on the domestic market, these issues create significant headwinds and unstable growth prospects.

European Stocks Historically Undervalued: Attractive Ratios for Investors
Currently, European stocks remain historically undervalued. The average 12-month forward P/E ratio stands at 13.6x, lower than the long-term average of 14.3x. Mid-cap stocks appear even more attractive, trading at a forward P/E of 12.7x compared to the long-term average of 15x. This undervaluation makes European assets appealing to investors seeking growth potential in stable markets.
More analytics on our website: bit.ly/3VobLUv

XAU/USD. Analysis and Forecast

Gold faced strong selling pressure today, dropping to the key level of $2,700—its nearly three-week low—within an hour before the European session.

The Republican candidate, Donald Trump, leads in the U.S. presidential race and is likely to become the 47th President of the United States. This development triggered aggressive selling of the yellow metal and a sharp rally in the U.S. dollar.

Additionally, concerns over deficit spending and expectations for less aggressive monetary easing by the Federal Reserve pushed U.S. Treasury yields higher, contributing to divestment from gold.

Technical Analysis

The $2,725–$2,720 level continues to act as immediate strong support. A break below this region could accelerate the decline, potentially testing levels below the key $2,700 level. This level aligns with the lower boundary of the short-term upward trend channel, extending from late July into early August. A decisive break below this threshold would pave the way for a deeper correction from the recent all-time high reached last week, likely dragging the XAU/USD pair toward the next significant support zone around $2,675.

On the other hand, the $2,750 level now serves as the immediate hurdle. A move above this level could lift the price to the next barrier at $2,790 or the all-time high reached last month. Beyond this, the key $2,800 level is expected to act as a critical pivot point. Sustained strength beyond this threshold would set the stage for resuming the well-established upward trend.

Market Sentiment

Adding to the pressure, the risk-on sentiment—evidenced by a strong rally in U.S. stock futures—indicates that gold, as a safe-haven asset, faces a downward path of least resistance.
More analytics on our website: bit.ly/3VobLUv

Trump 2.0 - Markets Explode: Dow, S&P, Nasdaq Hit Record Highs!

Trump Back in the White House: Record Growth on Wall Street

On Wednesday, U.S. stock indexes showed a sharp rise, reaching record levels, after Donald Trump won the 2024 U.S. presidential election in a sensational victory. Four years after leaving the political arena, he returned, surprising many analysts and investors.

Strong Start: Dow, S&P 500, and Nasdaq Reach New Highs
The Dow Jones, S&P 500, and Nasdaq Composite indices ended the day at historic highs. Investors responded enthusiastically to the prospect of tax cuts and possible deregulation, anticipating that the new president will continue to express his views on a wide range of issues, from the dollar's exchange rate to the state of the stock market. However, increases in import tariffs, which Trump may initiate, raise concerns about inflation and budget deficits.

"Trump Trades" in Action: Bond Yields and Record Bitcoin
Investor optimism led to higher yields on U.S. government bonds, with the base yield on 10-year treasury bonds reaching a four-month high at 4.479%. Bitcoin also saw record highs, exceeding the $76,000 mark. The dollar also showed significant growth, recording its largest single-day percentage gain since September 2022.

Investors' Forecasts and Expectations
"Investors seem to have been adjusting their portfolios to capture some of the risk exposure in anticipation of an outcome that seemed unlikely," said Mark Luschini, Chief Investment Strategist at Janney Montgomery Scott in Philadelphia.

Trading Results: Wall Street Celebrates
The Dow Jones Industrial Average (.DJI) added 1,508.05 points, or 3.57%, reaching 43,729.93. The S&P 500 (.SPX) rose by 146.28 points, or 2.53%, to 5,929.04, and the Nasdaq Composite (.IXIC) gained 544.29 points, or 2.95%, reaching 18,983.47.

Record Market Gains: Dow and S&P See Largest Single-Day Growth in Two Years
The impressive gains in the Dow and S&P 500 on Wednesday marked the largest single-day jump since November 2022. The Nasdaq index also hit a peak unseen since February, confirming the market's positive sentiment amid political shifts. This growth reflects investor expectations for economic reforms and policy changes with Trump's return.

Financial Sector Leads the Way
The financial sector stood out, surging by 6.16% and becoming the strongest of the 11 major sectors in the S&P 500. Banking stocks showed substantial growth as banks may benefit from deregulation. The S&P 500 Bank Index (.SPXBK) increased by 10.68%, setting a new two-year high.

Small-Cap Stocks Also See Gains
The Russell 2000 index, which tracks small-cap companies, also rose by 5.84%, marking the largest increase since November 2022. This growth highlights expectations that small businesses will receive support through promised tax incentives and deregulation, reducing risks associated with import tariffs. However, experts warn that small companies remain vulnerable due to their reliance on credit and sensitivity to interest rate changes.

Interest Rate Risk: A Challenge for Small Business
Rising U.S. Treasury bond yields may pose additional challenges for small businesses, which typically rely more on borrowed funds. "If interest rates continue to rise and reach levels seen last October, around 5%, it could be problematic not only for small companies but for the entire market," Mark Luschini cautioned.

Fear Index Hits New Low as Inflation Concerns Persist
The CBOE Volatility Index, known as Wall Street's "fear gauge," fell by 4.22 points, reaching a six-week low of 16.27. This decline reflects market participants' confidence in stability, despite rising concerns over future inflation and potential interest rate hikes under Trump's economic policy.

Real Estate and Utilities Under Pressure
Sectors sensitive to interest rates saw a decline: real estate stocks fell by 2.64%, and utilities lost 0.98%. These industries were among the few showing a downturn, as investors weighed the potential for tighter Federal Reserve policy and its impact on future borrowing costs.

Central Bank Policy Adjustments Expected
In light of the current conditions, many analysts predict that the Federal Reserve will cut rates by 25 basis points, a decision likely to be confirmed at the meeting concluding Thursday. However, traders have started adjusting their expectations, reducing bets on a December cut and the number of rate reductions expected next year, following CME's FedWatch index.

"Trump-Friendly" Stocks Rise: Media Group and Tesla in the Spotlight
Stocks that analysts believe may benefit from Trump's second term started to rally. Trump-affiliated Media & Technology Group rose by 5.94% after a volatile session, while Tesla surged by an impressive 14.75% following support from CEO Elon Musk, who expressed backing for Trump's campaign.

"Election Echoes" Throughout the Market
"The results of these elections are leaving traces in everything happening in the markets right now," noted Paul Christopher, Head of Global Investment Strategy at Wells Fargo Investment Institute. Trump's promises to adjust tariffs, cut taxes, and deregulate business have encouraged investors to invest in assets that are likely to benefit from such an economic policy.

Currencies in Focus: Mexican Peso and Euro Under Pressure
Currency markets faced significant fluctuations as investment flows reflected concerns over Trump's potential trade policy. The Mexican peso dropped to a two-year low, while the euro was headed for its biggest daily decline since 2020, underscoring fears about possible tariffs.

Record Trading Volume: Yuan and Peso Take the Lead
Trading intensity reached new highs. By 10 a.m. Central Time, CME Group (CME.O) recorded unprecedented online trading activity for the offshore Chinese yuan, reaching a historic level of $33 billion. The Mexican peso also attracted increased attention, with the volume of futures contracts exceeding the usual average by 43%, highlighting investors' interest in instruments sensitive to tariff policy changes.

Political Support for "Trump Trades"
The strengthening position of Republicans in the Senate boosted investor confidence in supporting Trump's economic agenda. Although the vote count in the House of Representatives was still ongoing, a Republican victory could provide Trump with support for implementing key economic decisions, sparking market excitement.

Long-Term Global Economic Impact
Experts believe that the election results may have a far-reaching impact on U.S. tax and trade policy and could alter the status of the country's major financial institutions, which will inevitably affect assets worldwide.

Treasury Bonds Under Pressure: Inflation and Debt Concerns
Sales of U.S. Treasury bonds increased as investors anticipate higher consumer prices due to potential tariff hikes and expect government spending to raise debt levels. The yield on 10-year bonds reached a four-month high, pausing at 4.48%, before slightly pulling back.

Trump's Economic Agenda: Inflation and Deficit on the Horizon
According to David Kelly, Chief Global Strategist at JPMorgan Asset Management, if Donald Trump successfully implements his economic initiatives, this could lead to budget deficits, tax cuts, and inflation due to new tariffs. "High inflation and increased deficits will inevitably push long-term interest rates up," the expert emphasized.

Cryptocurrencies Soar: Bitcoin Hits Record Highs
The cryptocurrency market responded positively to potential regulatory changes: Bitcoin surged to a new record as investors see Trump's victory as a chance to ease control over digital assets. BlackRock Investment Institute noted that Trump's second term could be accompanied by deregulation, including banking policy relaxation, which may boost the crypto market.

Record Overnight Trades: Robinhood Rides the Wave
Trading began before dawn. Robinhood Markets (HOOD.O) recorded the largest overnight session since this feature launched in May 2023. Trading volume was 11 times the average as traders eagerly bought shares of companies likely to benefit from Trump's policies: from Coinbase Global (COIN.O) and iShares Bitcoin Trust ETF (IBIT.O) to companies linked to Trump and his supporter Elon Musk.

Contrasting Sectors: Energy and Crypto Rise, "Green" Stocks Decline
Political shifts have driven up shares of cryptocurrency, energy companies, and private prison operators. However, renewable energy stocks faced pressure as markets assess the likelihood of continued support under the new administration.

Congressional Control: What's Next for Trump's Economic Program
Now, investors are watching closely to see if Republicans can retain the House majority after securing the Senate. If Republicans maintain control in Congress, it could greatly facilitate Trump's agenda, potentially impacting a wide range of economic decisions.

Market Leaders and Laggards: Advances Outpace Declines
On the New York Stock Exchange, advancing stocks significantly outnumbered declining ones by a ratio of 1.51 to 1, while on the Nasdaq, the ratio was 1.84 to 1, emphasizing the optimistic market sentiment. The S&P 500 recorded 138 new 52-week highs and 12 lows, while the Nasdaq Composite set 456 new peaks, with 115 companies hitting new lows.

Record Trading Volume
Total trading volume on U.S. exchanges reached 18.68 billion shares, significantly exceeding the 20-day average of 12.16 billion. Such activity reflects unprecedented investor interest in the potential impacts of Trump's return as the market anticipates economic reforms and policy shifts.

Europe Under Pressure: Germany in the Crosshairs
The uncertainty over U.S. politics comes at an unfortunate time for the European Union. The potential victory of Republicans led by Donald Trump has heightened concerns over sweeping tariffs on European goods, which could reach 10%, dealing a blow to exporters. Germany, whose main export market is the U.S., faces particular risks, especially in the automotive sector, where higher tariffs could significantly erode the competitiveness of German manufacturers.

European Markets Decline: STOXX 600 and DAX Under Pressure
News of possible tariff threats triggered a negative reaction on European stock markets. The pan-European STOXX 600 index fell by 0.54%, while Germany's leading DAX index dropped by 1.13%. Investors are reassessing their portfolios amid ongoing political uncertainty.

Focus on Central Bank Decisions
On Thursday, attention will be split between political changes and key monetary policy decisions. The U.S. Federal Reserve, the Bank of England, Sweden's Riksbank, and Norway's central bank are all set to announce their rate decisions, which could significantly impact global markets, heightening volatility and awareness of economic shifts.

Spotlight on the Fed: Rate Cuts and Powell's Commentary
The Federal Reserve is expected to cut the interest rate by a quarter point at this meeting. However, investors' main focus will be on what Fed Chairman Jerome Powell says about new inflation risks linked to potential tariffs and immigration restrictions proposed by the Trump administration. Experts believe that the regulator's future steps may depend on how quickly inflationary pressures mount.

Interest in Bank of England Forecasts
The Bank of England is also considering a quarter-point rate cut, and analysts are focused on potential signals regarding future inflationary pressures. The new government budget, which could drive inflation, is a source of concern for markets, and investors are closely watching for any financial forecasts from U.K. authorities.

Sweden and Norway: Diverging Paths
The Swedish Riksbank is expected to make a more significant cut, lowering the rate by half a point. Meanwhile, Norway's central bank will likely maintain a wait-and-see approach, keeping rates unchanged as the market faces continued uncertainty.
More analytics on our website: bit.ly/3VobLUv

Political instability, rate cuts and Nvidia's record: what's happening in the market?

US markets end the day higher amid Fed rate cuts
US stock markets ended trading on Thursday with a confident rise, helped by the Federal Reserve's decision to cut interest rates by a quarter of a percentage point (25 bps). This development strengthened the positive trend that began after Donald Trump returned to the US presidency.

Fed Cuts Rate as Labor Market Weakens, Inflation Nears Target
The Federal Reserve has decided to cut rates by 0.25%, citing signs of weakness in the labor market and a gradual move in inflation toward the central bank's 2% target.

Markets had largely expected the move, almost entirely factoring the rate cut into their forecasts for the November meeting. Investors are now watching closely for any follow-up comments from Fed officials that could shed light on the future direction of monetary policy.

Hopes for Economic Growth Push Indexes Higher
Expectations of a return to corporate tax cuts and Trump-led regulatory easing have fueled investor optimism, sending key stock indexes higher. The Dow Industrials and S&P 500 posted their biggest one-day gains in two years last trading session, while the Nasdaq was not far behind, continuing to move in the green.

Expert Comment: "Rate Cut Keeps Caps Level, But Eases Them"
"The Fed has kept the drama out of this eventful period," said Brian Jacobsen, chief economist at Annex Wealth Management in Wisconsin. "A quarter-percentage point cut leaves the federal funds rate still in cap territory, but it's not as tight as it used to be." He said Trump's return to the presidency could bring a modest improvement in growth, but it would also likely lead to higher inflation. "The Fed will likely have to cut rates at a more cautious pace," Jacobsen concluded.

U.S. Indexes End Mixed
The Dow Jones Industrial Average (.DJI) was virtually unchanged, down just 0.59 points to 43,729.34. The S&P 500 (.SPX) added 0.74%, rising 44.06 points to 5,973.10, while the tech-heavy Nasdaq Composite (.IXIC) was the biggest gainer, rising 1.51%, or 285.99 points, to end the session at 19,269.46.

Communications Leads as Warner Bros Discovery Gains
Communications (.SPLRCL) was the biggest gainer among sectors, jumping 1.92%. This was helped by a massive 11.81% gain in Warner Bros Discovery (WBD.O) after the company reported unexpectedly strong third-quarter earnings, which encouraged investors to buy into the sector.

Financials Slow Down
The financial sector (.SPSY) was among the laggards, losing 1.62% after a strong rally in the previous session. In particular, banks (.SPXBK) fell 3.09%, reversing a significant gain from Wednesday. JP Morgan (JPM.N) and Goldman Sachs (GS.N) also showed negative dynamics, with their shares falling 4.32% and 2.32%, respectively, putting pressure on the Dow.

Expectations for rate cuts weaken
Sentiment towards further rate cuts has become less optimistic in recent weeks. Economic data points to economic resilience, which could push inflation higher. Such a scenario is likely amid expected tariff changes and increased government spending under the policies of the new Trump administration.

Powell: Fed ready for changes
Fed Chairman Jerome Powell noted that the final decision on the central bank's December policy has not yet been made. However, he stressed that the Fed is prepared to adjust the course and pace of its actions given the current economic uncertainty.

Investors are keeping a close eye on Congress
One of the key factors attracting investors' attention remains the possibility of the Republicans taking control of both houses of Congress. If this happens, it will be easier for Donald Trump to advance his economic agenda, which will potentially increase support for the business sector and cause a positive reaction in the market.

Treasury yields retreat after rally
After a wild rally in recent weeks, 10-year Treasury yields retreated for a time. The benchmark yield, which hit a four-month high of 4.479% on Wednesday, eased slightly after the Fed's announcement to close at 4.332%.

Unemployment remains stable
U.S. jobless claims rose slightly last week, data showed Thursday, pointing to stable labor market conditions. The lack of a significant increase in unemployment is a boost to confidence in economic resilience, easing concerns about the need for urgent changes in monetary policy. NYSE and Nasdaq rally, S&P 500 and Nasdaq Composite hit record highs

On the New York Stock Exchange, gainers outnumbered losers by nearly twice (1.94 to 1). On the Nasdaq, the ratio was 1.18 to 1. The S&P 500 posted 56 new 52-week highs and just 4 new lows, while the Nasdaq Composite posted 193 new highs and 88 new lows.

Trading activity on U.S. exchanges beats averages
Turnover on U.S. exchanges reached 16.78 billion shares on Thursday, well above the average daily volume of 12.46 billion shares over the past 20 trading days.

MSCI Global Index Continues to Rise
The MSCI Index of global equities (.MIWD00000PUS) rose 0.9% to a new record high, signaling continued appetite for global markets amid a pickup in economic activity.

European Markets Rise
Europe's STOXX 600 Index (.STOXX) rose 0.6% following a strong start to Asian trading. The index was also supported by Chinese blue chips, which jumped 3% (.CSI300). Investor sentiment was boosted by expectations of more stimulus measures, which outweighed concerns over escalating trade tensions.

Corporate Tax and Deregulation Optimism
"Equities are reflecting expectations of lower corporate taxes and reacting positively to the prospect of deregulation, which will benefit earnings," said Naomi Fink, chief strategist at Nikko Asset Management. Companies across industries see new growth potential in the policy, spurring further investor interest in key assets.

Treasury yields continue to decline
U.S. Treasury yields continue to decline following the Fed's rate cut, although analysts warn that the process may be less sustainable than expected under the new Trump administration.

Republican victory: potential implications for growth and inflation
There is growing consensus among economists that a Republican election win could be a catalyst for more accommodative fiscal policy. Matthias Scheiber, head of portfolio management at Allspring Global Investments, believes that the combined effect of new tariffs and stimulus could boost the economy but also increase inflation pressures.

Yields: Reaction to rate cuts
The yield on the 10-year Treasury note fell 9 basis points to 4.3355% on Thursday, after rising 14 basis points the previous day. The 30-year yield also fell more than 6 basis points to 4.5393% after a big jump the previous day.

Dollar Loses Ground Amid Corrections
The dollar fell 0.7% against a basket of major currencies, reversing Wednesday's biggest one-day gain in more than two years. Many traders began to close positions on a Trump victory and were looking ahead to the Fed's upcoming decision, weighing on market sentiment.

Euro Strengthens Amid Political Change in Germany
The euro rose 0.7% to $1.0803, partly reversing a 1.8% average loss the previous day. The euro is recovering as investors digest the latest political developments in Germany, where Chancellor Olaf Scholz fired Finance Minister Christian Lindner, leading to the collapse of the coalition government and likely to lead to early elections. Euro Strengthening Forecasts

Deutsche Bank analysts note that while events in Germany are still in the early stages, potential political stability could strengthen confidence in the euro. Economic forecasts also point to possible positive effects if the new government adopts a more proactive fiscal stance.

German Bond Yields Rise
German 10-year bond yields rose 4.8 basis points to 2.441%, reflecting market expectations for future EU policy developments.

Bank of England cuts rates amid inflation risks
Meanwhile, the Bank of England has cut interest rates by a quarter of a percentage point, its second such move since 2020. The regulator has signaled that further cuts will be gradual, given the risks of rising inflation following the new government's budget presented last week.

Pound sterling also shows gains
The British pound also regained some of its positions and rose by 0.8%, rising to $1.2986 after falling by 1.24% on Wednesday.

Norway, Sweden central banks stick to their previous course
Norway and Sweden central banks held their meetings on Thursday, which resulted in no significant changes for the currency markets, fully meeting analysts' expectations. Norges Bank decided to leave interest rates at a 16-year high, maintaining its commitment to tight monetary policy. At the same time, Sweden's Riksbank cut rates by 50 basis points, softening its approach to monetary policy.

Bitcoin at Record Highs
The Bitcoin cryptocurrency has rapidly recovered its recent losses and reached a new all-time high of $76,780 overnight. Against this backdrop, Donald Trump said that he would make the United States the "crypto capital of the world," which has increased investor interest in digital assets.

Gold and Oil Are Gaining Momentum Again
After a significant drop of more than 3% on Wednesday, gold showed confident growth, increasing by 1.8% and reaching $2,707.21 per ounce. Despite this, the price of gold remains close to its recent record high of $2,790.15.

Oil prices also showed positive dynamics after the sell-off caused by the US presidential election. Brent crude futures rose 0.6% to $75.40 a barrel, while U.S. WTI crude rose 0.5% to $72.04 a barrel.

Nvidia Takes the Lead
The leading AI chipmaker rose 2.2%, helped by investor optimism that regulation and tax cuts will be eased following the Republican nominee's election victory. Nvidia's market capitalization reached $3.65 trillion, surpassing Apple's record high of Oct. 21 and becoming the world's most valuable company, according to LSEG.

Apple Strengthens the Market
Apple shares gained 2.1% on Thursday, taking the company's market capitalization to $3.44 trillion. The gains are part of a broader trend in tech, with the S&P 500 index of major tech companies gaining more than 4% over the past two days as Donald Trump wins the presidential election.

Nvidia Leads the AI Race
Nvidia has been the biggest beneficiary of the recent AI frenzy, outperforming giants like Microsoft and Alphabet. Nvidia shares have risen 12% in November and have tripled in value this year. Nvidia is steadily outperforming the world's biggest companies in the race to dominate computing power and cutting-edge technology.

Incredible Market Cap Growth
Today, Nvidia's market cap exceeds the combined value of giants like Eli Lilly, Walmart, JPMorgan, Visa, UnitedHealth Group, and Netflix. Analysts forecast Nvidia's quarterly revenue to increase 80% to $32.9 billion when the company reports results on November 20, underscoring its growing influence in the global market.

Tech trio: tussle for dominance
In June, Nvidia temporarily became the world's most valuable company, but was later overtaken by Microsoft and Apple. Today, the three tech giants are locked in a tight race for the top spot, with each remaining at similar market caps.
More analytics on our website: bit.ly/3VobLUv

Trump Victory Echoes: S&P 500 Breaks 6,000 on Positive Economic Trends

Markets Riding: Trump, Fed Rates Fuel Optimism
The S&P 500 briefly crossed 6,000 on Friday night, ending the week with its biggest gain of the year. Trump and his political outlook had a powerful impact on investor sentiment, raising hopes for favorable economic reforms.

Economic impact of rate cuts
Expectations of a 25 basis point rate cut announced by the Federal Reserve this week have added confidence to stock markets. The Fed's actions have increased the appetite for growth, which could not but be reflected in the performance of stock indices.

The S&P 500 and the Dow Jones Industrial Average (DJIA) recorded their best weekly results since November 2023. Nasdaq, in turn, demonstrated its best week in two months, strengthening amid growing expectations for economic growth and higher corporate earnings.

Political changes: what does a Republican victory promise?
One of the key factors influencing stock markets has become the political situation in the United States. Donald Trump's victory in the election and the possible control of the Republican Party over the Senate and the House of Representatives create the preconditions for stabilization of the political situation. Many believe that this will facilitate the implementation of ambitious plans for tax cuts and deregulation, which in turn stimulates the growth of corporate profits and investment.

Trump and Tax Reform
Corporate tax cuts and deregulation were the main drivers of the Nasdaq's rally, with three straight days of record closings. As a result, the S&P 500 ended the week with its 50th record close this year, underscoring the strength of the current bullish trend.

Mike Dixon, head of research and quantitative strategy at Horizon Investments, said: "While the 6,000 mark is psychologically significant, given all the events of the week, I don't think it matters whether we close at 6,005 or 5,995. The market still put up an impressive gain."

So, it's been a very positive week for stock indices, with major events like the election and the Fed decision continuing to impact financial markets, creating positive expectations for investors.

Markets in the green: News that influenced the rally
This week brought a lot of positive news for stock markets, with investors reacting strongly to the improvements in the economy and politics. As one analyst emphasized, "this flow of good news is much more important than whether the indicator will be at 6000 or slightly below when the market closes." All this prevails over technical issues, highlighting the strong optimism among traders.

Indices on the rise: Dow at a record
The Dow Jones Industrial Average jumped 259.65 points (0.59%), ending the day at 43,988.99. The S&P 500 added 22.44 points (0.38%), closing at 5,995.54, and the Nasdaq Composite rose 17.32 points (0.09%), reaching 19,286.78.

All three indices posted impressive gains for the week, with the S&P 500 up 4.66%, the Nasdaq up 5.74%, and the Dow up 4.61%.

Records and Strong Sectors
One of the highlights of the week was the Dow's historic performance, which surpassed the 44,000 mark for the first time. Salesforce stood out among the growth drivers, with shares rising 3.59% on the back of the company's plans to hire 1,000 new employees to expand its artificial intelligence business through its Agentforce tool.

Interest rate-sensitive sectors such as real estate and utilities were the best performers among the 11 S&P 500 groups. This came as Treasury yields continued to decline for a second session after a sharp jump in the wake of political events.

Fourth consecutive gain
The S&P 500 and Nasdaq ended the week on a positive note, recording a fourth consecutive gain. This confirms that investors are confident that the market will continue to strengthen, despite possible political and economic risks.

Thus, the week turned out to be especially favorable for stock markets, supported by positive news, strengthening of large companies and lower rates, which together gave a strong impetus for further growth.

Market Trends: Yields and Tariffs
Despite positive moves in stock markets, the benchmark 10-year U.S. Treasury yield remained at a four-month high. This weighed on investors' expectations for the pace of rate cuts by the Federal Reserve in 2025. Markets adjusted their forecasts amid growing concerns about the administration's proposed tariffs, which could reignite inflationary pressures.

Russell 2000: Small-cap stocks post strong gains
The Russell 2000 index of small-cap stocks posted a phenomenal 8.51% gain for the week, the biggest weekly gain since April 2020. Experts believe that stocks focused on the domestic U.S. market are benefiting from favorable economic conditions, such as potential tax relief, less regulation, and less reliance on foreign trade and tariffs.

Consumer Optimism
US consumer sentiment indicators hit a seven-month high in early November, with the household expectations index rising in particular, reaching its highest in three years. Republicans are optimistic about the economic outlook, which is having a noticeable impact on confidence, according to the University of Michigan Consumer Sentiment Index.

Problems in the Tech Sector
Despite the overall market growth, several large companies saw a noticeable decline. For example, Airbnb shares fell by 8.66% after the company failed to meet investors' expectations for third-quarter profit. Pinterest fared even worse, with its shares falling by 14% after disappointing revenue forecasts.

Chinese Companies: Declining Interest
Chinese companies' listings on US exchanges also lost value. Investors did not appreciate the latest fiscal support measures from the Chinese government. For example, JD.com shares fell by 6.99%, while Alibaba lost 5.94%.

Market Leaders and Losers
Amid these fluctuations, rising stocks significantly outnumbered falling stocks. The ratio was 1.7 to 1 on the New York Stock Exchange and 1.21 to 1 on the Nasdaq, indicating that positive sentiment prevailed among investors despite some setbacks in large companies.

Markets on the Rise: New Records and Growing Volumes
The S&P 500 Index recorded 88 new 52-week highs and only 10 lows, while the Nasdaq Composite surpassed the 211 new records mark despite 108 lows. Total trading volume on U.S. exchanges amounted to 15.46 billion shares, which was significantly higher than the average of 12.74 billion over the past 20 trading days.

The Fed and Expectations of Rate Cuts
Amid these records, positive economic forecasts from the Federal Reserve supported market sentiment. On Thursday, it announced a long-awaited 25 basis point interest rate cut, helping to bolster investor confidence. But the key question is how long the central bank can maintain this stance, as its actions will depend on how effectively inflation is brought down.

Inflation and Growth Expectations
The November 13 consumer price index report should confirm that inflation is continuing to decline, according to Art Hogan, chief market strategist at B Riley Wealth. U.S. inflation data has been an important indicator in recent months for the Fed as it tries to balance its policy between stimulating the economy and controlling prices.

Trump and Potential Tariffs: Risks to Prices
However, investors are concerned about potential tariff hikes proposed as part of Donald Trump's program, which could put pressure on consumer prices and add uncertainty to the economy. Meanwhile, economic data continues to surprise, with a recent report showing the U.S. economy grew by a robust 2.8% in the third quarter, another positive sign.

CPI forecasts: Moderate growth
Economists forecast the consumer price index (CPI) to rise 2.6% in October from a year earlier. That's up slightly from the 2.4% gain in September, which was the slowest in three years. Still, that pace remains well below the peak inflation levels seen in 2022 that prompted the Fed to raise rates sharply.

Inflation Impact on Fed Rates: New Forecasts
As inflation rises, perceptions of how the Federal Reserve will adjust rates in the future are changing. Market expectations have changed significantly since Donald Trump's election victory. According to federal funds futures, investors now expect rates to be cut to 3.7% by the end of 2025, up 100 basis points from September's estimate. These forecast revisions are based on new economic and political realities.

Rate Cuts as Growth Drivers
Expectations of future rate cuts are playing a major role in supporting growth stocks, along with strong corporate earnings results and optimism about artificial intelligence. Investors are betting that easy monetary policy will continue to spur growth, especially in sectors that are actively using new technologies and innovation.

Markets brace for more policy changes
However, the initial euphoria in the markets may come under pressure as Trump begins to reveal specific policy plans and appoint key figures. According to analysts at UBS Global Wealth Management, Trump's victory so far raises more questions than answers for investors. With each new statement from the presidential transition team, markets will test how these changes will affect the economy and financial flows.

Regulation and Opportunities for Wall Street
The expected policy changes have also generated waves of anticipation in the banking and financial sectors. In particular, financial institutions are counting on the loosening of regulations under the new administration. Wall Street is actively preparing to seize this opportunity, hoping for more lenient financial policies that will give impetus to further development and profit growth.

Trump and Lobbyists: Preparing for Regulatory Changes
After Donald Trump's election victory, financial trade groups are busy compiling lists of changes that they want to propose to the new president's transition team. Industry sources, speaking on condition of anonymity, say a list of proposals covering key regulatory issues is already being actively developed for delivery to Trump's team.

Industry Ready for Action
The process is the result of months of discussions between the transition team and various industry groups, lawyers, and lobbyists. The goal of these meetings, the sources say, is to lay the groundwork for implementing Trump's promises when he potentially returns to the White House in 2025. Reflecting the importance of these initiatives, several trade groups are willing to submit their proposals urgently.

Room for Aggressive Moves
The intensity of preparations for potential regulatory changes underscores the new administration's desire to act quickly and decisively, especially in key areas such as banking, where debate has already emerged over future rules and regulations.

Bank Groups Oppose Basel III Endgame
A major concern in the banking industry is the proposed Basel III Endgame rules, which would require large banks to hold significantly more capital to mitigate risk. The measures have already drawn criticism from banking groups, which have lobbied for months to reduce the requirements. Now they are hoping that the new administration will either roll back the rules or offer more flexible changes to ease the burden on financial institutions.

Banks Want Easier Regulation
U.S. banks are actively seeking ways to ease regulations, especially on issues that currently cause them the most trouble. The banks want relief from some tough requirements, including fair lending rules, which they continue to fight in court, according to sources. In addition, the financial institutions are pushing for easier annual stress tests for large banks and easier evaluation of mergers and acquisitions.

Easy Capital and Basel
Large U.S. lenders say that while they support the core principles of the Basel standards, the international norms for the banking industry, they want more flexible capital requirements. The changes would allow banks to stay within existing rules but reduce the burden on banks by allowing them more flexibility in decision-making, people familiar with the matter said. Discussions on the issues are still ongoing, and lobbying efforts are in the early stages.

Banking Regulatory Issues
Another major issue for banks is the tightening of their oversight by the Consumer Financial Protection Bureau (CFPB). Under Rohit Chopra, the agency has stepped up enforcement efforts, causing further concern in the banking community. The CFPB is becoming a major focus for lobbyists seeking to soften the impact of such initiatives on banking institutions.
More analytics on our website: bit.ly/3VobLUv

Hot Forecast for EUR/USD on November 12, 2024

Despite the public holiday in the United States, the market remained active, and the euro continued to lose ground. The reason lies in the aftermath of the elections. While the outcomes of the presidential and Senate elections are clear, the distribution of seats in the House of Representatives remains uncertain. Yesterday, it was reported that the Republican Party is on the verge of securing a majority in both chambers of Congress.

This scenario implies that nothing would prevent the Republicans from passing a new tariff law, primarily affecting the European Union—already in a fragile state. Germany's economy seems to have narrowly avoided slipping into recession, though most economists believe it is inevitable and likely to begin next quarter. The introduction of higher tariffs by the U.S. would only exacerbate the European economy's issues.

In other words, political factors have retaken center stage, and investors are closely monitoring developments in the House of Representatives. With the vote count nearing completion, clarity is expected in the coming days. Should the Republican Party secure victory, the euro will weaken further. Conversely, if the Democrats gain the majority, a significant rebound could occur, potentially leading to a correction.

For now, macroeconomic data will play a secondary role. Moreover, with tomorrow's U.S. inflation report looming, the macroeconomic calendar remains relatively empty until then.
More analytics on our website: bit.ly/3VobLUv