MARKET REPORT
(Unburdened by what has been)
Hamburg Borse 1728
You were found in clear conditions. But you’re handsome in the Fog.
“Voters seem to forget when politicians ‘give’ you money, it is the voters’ money they have already taken.”
Day in Review:
Today:
(Kamalanomics: Govt-manipulated data with un-reported historic downward revisions to make the economy look more favorable):
DATA:
– Empire Fed Manufacturing Crashes From 30-Month High To 5-Month Low
– From +11.5 to -11.9
– A measure of current new orders plunged nearly 20 points to -10.2 after climbing a month earlier to the highest since April 2023.
– The index of shipments decreased almost 21 points to minus 2.7.
– The employment index, however, rebounded to 4.1 – the first expansion in a year – while a measure of hours worked also climbed.
– UK adds more jobs than expected, unemployment surprisingly ticks lower
– Soft Canadian CPI
– Better-than-expected German ZEW Economic Sentiment
COMPANIES:
– Citigroup (-5.16%, Yup) released earnings per share at 1.51, compared to market expectations of 1.30, shares fall as bank boosts loan loss reserves
– UnitedHealth (-8.11%!!!!!) released earnings per share at 7.15, compared to market expectations of 7.02, Shares smoked as 2025 outlook reduced
– Bank Of America (+0.52%) released earnings per share at 0.81, compared to market expectations of 0.76
– Goldman Sachs (UNCH) released earnings per share at 8.40, compared to market expectations of 6.93
– Charles Schwab (+6%) released earnings per share at 0.77, compared to market expectations of 0.75
– Citigroup (-5%) released earnings per share at 1.51, compared to market expectations of 1.30, earnings overshadowed by rising credit costs
– Walgreens SURGES +15% on Outlook/Earnings.
GENERAL:
– Bloomberg reported the Biden administration discussed capping sales of advanced AI chips to some countries.
– ASML -17%!, NVDA -5%, AMD -5%
– Oil stocks down 3% on Crude plunge (-4%)
– Stocks in Israel Hit 29-month High
-TA-125 increased to a 29-month high of 2135.00 Index Points. Over the past 4 weeks, TEL AVIV TA-125 IND gained 5.8%, and in the last 12 months, it increased 24.71%.
– Euro Bourses flat to lower
– Mask Mandates set to return to parts of California
– ‘Biden’ admin mulls export cap on AI chips to some countries. AI chip stocks puke
– Boeing Desperate For Liquidity, Files $25 Billion Shelf Registration
– Fed’s Daly is “cautiously optimistic” about the economic outlook
– Israeli Prime Minister Benjamin Netanyahu is denying a Monday Washington Post report which sent oil prices sliding and which painted a picture of President Biden using diplomatic finesse to ensure Israel won’t strike Iran’s nuclear or oil sites.
– “We listen to the opinions of the United States, but we will make our final decisions based on our national interests,” Netanyahu’s office said Tuesday, as cited in Bloomberg. The new report notes that Israeli is merely “weighing US misgivings” and has committed to nothing concrete regarding strike plans.
– This is widely being taken as a clear denial of the main substance of the prior WaPo report, which stated Monday afternoon that “Israeli Prime Minister Benjamin Netanyahu has told the Biden administration he is willing to strike military rather than oil or nuclear facilities in Iran” – citing two unnamed officials.
– Top commodity losers are Crude Oil WTI (-4.73%), Brent Crude Oil (-4.49%) and Heating Oil (-1.69%).
– Top commodity losers are Copper (-1.43%), Steel Rebar (-1.14%) and Platinum (-0.72%). Gains are led by Silver (1.04%) and Gold (0.55%).
– Top commodity gainers are Cheese (10.73%), Cocoa (4.94%) and Sugar (2.14%). Biggest losers are Canola (-2.24%), Coffee (-1.89%) and Orange Juice (-1.88%).
– Equities down, Treasuries up, Crude down, Dollar flat
Coming Up:
– UK CPI, Services, Italian CPI, US Import/Export prices.
Speakers:
– BoJ’s Adachi; ECB’s Lagarde.
Earnings:
– Citizens Financial Group, U.S. Bancorp, Abbott Laboratories, Morgan Stanley, Prologis, ASML, Whitbread.
MAJORS:
DX:
-The dollar was ultimately flat in choppy trade, extending on recent gains against the Euro and Antipodes while paring recent strength against the Yen.
The dollar index pared early weakness at the US cash open in risk off trade, extending while Republican Presidential candidate Trump’s interview with Bloomberg got underway. The former president towed the usual enthusiasm surrounding tariffs, living up to the inflationary theme his policies beget, albeit, the rally failed to breach earlier peaks set in the European session.
On data, the day saw a poor October Mfg report from the NY Fed, falling to its lowest figure since May, -11.9 (exp, 3,85, prev. 11.5), and the NY Fed’s SCE (September), which kept 1yr inflation expectations at 3%, while the 3yr rose to 2.7% (prev. 2.5%) and 5yr increased to 2.9% (prev. 2.8%). However, the expectations on credit card delinquencies rose to the highest rate since April 2020.
On Fedspeak, Daly (2024 Voter) said she is “cautiously optimistic” about the economic outlook, adding that 3% may be around the neutral rate (vs Fed median of 2.9%).
Looking ahead, US Import/Export Prices on Wednesday for September are next in view, with Retail sales on Thursday. Dollar report courtesy of newssquark
GPB
– The Pound was amongst the better performers versus the buck as the latest UK jobs report revealed a much larger print than anticipated in Employment Change in August, +373k (exp. 250k), an unexpected drop in the ILO Unemployment rate to 4.0 % (exp. 4.1%) while UK Avg Earnings (Ex-Bonus) grew 4.9% as expected.
In terms of BoE pricing, that was largely unchanged, perhaps as ONS noted in the release that the report may be overstating underlying employment growth, albeit, Cable’s bid persisted over the European session, finding a peak of 1.3103 at the US cash open, before paring the move late into the US session, finishing flat ahead of APAC trade.
On the contrary, some desks are positing that vacancy data and HMRC metrics should be seen as more accurate as they are pointing towards more of a loosening in the jobs market.
Next up for Cable watchers is UK CPI and PPI on Wednesday.
Regarding the budget at the end of the month, FT reported that Chancellor Reeves is aiming to close the GBP 40bln funding gas as she plans tax hikes in the budget, a much larger number than the initial GBP 22bln touted. Dollar report courtesy of newssquark
EQUITIES:
EUR:
– DAX: +0.06% at 19,521, FTSE 100: -0.52% at 8,249, CAC 40: -1.05% at 7,522, Euro Stoxx 50: -1.85% at 4,948
US:
– SPX -0.76% at 5,815, NDX -1.37% at 20,160, DJIA -0.75% at 42,740, RUT +0.05% at 2,250
Sectors (W to S): Energy -3.04%, Technology -1.79%, Health -1.24%, Industrials -0.74%, Materials -0.03%, Communication Services -0.02%, Consumer Discretionary +0.21%, Financials +0.26%, Utilities +0.45%, Consumer Staples +0.64%, Real Estate +1.23%.
GOLD/SILVER:
– Gold prices edged up to $2,665 per ounce on Tuesday, buoyed by declining Treasury yields as investors awaited key U.S. economic data for signals on the Federal Reserve’s policy outlook. A drop in 10-year Treasury yields, following weak manufacturing data from New York, increased the appeal of non-yielding assets like gold. Meanwhile, the dollar eased 0.2% but remained near recent highs. Traders also place a 90% probability on a 25-basis-point Fed rate cut in November, based on CME’s FedWatch tool. Upcoming U.S. retail sales, industrial production, and jobless claims reports will be closely monitored. Looking ahead, investors are eyeing U.S. retail sales, industrial production, and jobless claims data. Gold remains a safe haven amid economic and geopolitical uncertainty, though easing tensions in the Middle East could limit its upward momentum.
OIL:
– WTI (X4) SETTLED USD 3.25 LOWER AT 70.58/BBL; BRENT (Z4) SETTLED USD 3.21 LOWER AT USD 74.25/BBL
Crude was hit on reports Israel to avoid striking Iranian oil and nuclear facilities, while China’s demand woes also added pressure.
Both WTI and Brent crude futures tumbled on Tuesday with WTI hitting a low of USD 69.71/bbl, and Brent a low of USD 73.34/bbl.
The downside was primarily in response to reports, in WaPo initially, (but later reported by several others), that Israel PM Netanyahu told the US that Israel would strike Iranian military targets and not nuclear or oil sites.
Further pressure was seen in the European morning after WSJ reported that absent from measures over the weekend were significant moves to boost consumption, and people close to the ministry said that such measures are in the works, but nothing substantial is imminent – adding to fears the stimulus measures will not have the desired impact.
Crude settled marginally off lows after AP reported similar to the aforementioned WaPo article, but added US officials state that nothing is iron-clad with Israel, warning these guarantees are not conclusively confirmed and may change.
Elsewhere, the IEA OMR for October cut the 2024 world oil demand growth forecast to 860k BPD from 900k BPD. It did however raise the 2025 forecast to 1mln BPD (prev. 950k BPD). Report courtesy of newsquark.
CRYPTO
– Poised for a breakout?
Bitcoin broke out of its down-channel today, blowing through the 200DMA
– Unlike his financial system overlord peer Jamie Dimon, BlackRock CEO Larry Fink continues to show an optimistic view on cryptocurrencies.
During yesterday’s earnings call, Fink declared, “I’m not sure if either president would make a difference” on Bitcoin’s growth,” adding “I don’t believe [Bitcoin’s rise] is a function of regulation.”
He went on to compare Bitcoin’s growth to much larger markets like mortgages, noting liquidity and transparency drives adoption more than rules.
Well, first, I’m not sure if either President or other candidate would make a difference. I do believe the utilization of digital assets are going to become more and more of a reality worldwide.
Conversations we’re having with institutions worldwide, conversations about how should they think about digital assets, what type of asset allocation there should be. I mean, we believe Bitcoin is an asset class in itself. It is an alternative to other commodities like gold. And so, I think the application of this form of investment will be expanded to the role of Ethereum as a blockchain can grow dramatically. So if we can create more acceptability, more transparency, more analytics related to these assets, then it will be expanded.
But I truly don’t believe it’s a function of regulation, of more regulation, less regulation. I think it’s a function of liquidity, transparency, and then through that process, no different than when you – years ago when we started the mortgage market, years ago when the high yield market occurred, started off very slow, but it built as we built better analytics and data, and then through better analytics and data, more acceptance and a broadening of the market. And I truly believe we will see a broadening of the market of these digital assets.
And then we’ll see how does each and every country look at their own digital currency. That’s a very different asset than a Bitcoin in itself. But I do believe what we’re going to witness as we build out better analytics, and then the question is, as you mentioned regulation, how do we see in this country the role of digitizing the dollar? And what role does that play? That’s a very different question related to, let’s say, Bitcoin and other items like that. But all of that is going to be under discussion.
And what we re witnessing in other countries, we’re seeing big success in India, in Brazil in the digitization of their own currency for various different reasons. But we believe the technology of these blockchains are going to become very additive. And then you will overlay Al, and having better data analytics, the applicability and the broadening of these markets will occur.
EEP DOING WHATS WORKING, STOP WHAT ISNT
Best of luck out there. Let the market come to you
Post of the day:
https://www.youtube.com/watch?v=XNf40sBcvKk
Song of the day:
https://www.youtube.com/watch?v=xpZBxY0aAag
Joke of the Day:
https://www.youtube.com/watch?v=ToJJEJJJtGo
(Seize all assets of Duke and Duke enterprises)
I can be contacted should anyone have any questions, input at [email protected] during US hours of EST 9am until 5pm
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