MARKET REPORT
(Unburdened by what has been)
Hamburg Bourse
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.”
SUNNY HOSTIN “Would you have done something differently than President Biden during the past four years?”
KAMALA HARRIS “There is not a thing that comes to mind in terms of — and I’ve been a part of most of the decisions that have had impact.”
PLEASE SEE OUR DISCORD FOR THE MARKET REPORT COMPLETE WITH CHARTS AND IMAGES
Day in Review:
Today:
(Kamalanomics: Govt-manipulated data with un-reported historic downward revisions to make the economy look more favorable):
DATA:
– Initial jobless claims unexpectedly falls
– fell to 227k from 242k, despite expectations for an unchanged print as states battled with the recovery of Hurricanes
– New Home Sales tops consensus
– rose by 4.1% to 738k from 709k, above the 720k forecast
– US S&P Global Flash Manufacturing PMI for October rose to 47.8 from 47.3
– above the expected 47.5. Services also topped forecasts, printing 55.3 (prev. 55.2, exp. 55.3), leaving the Composite lifting to 54.3 from 54.0, above the 53.8 forecast
COMPANIES:
– TESLA SOARS +22%
– Tesla beat analyst expectations with adjusted earnings per share of $0.72. The average estimate was for a profit of $0.58. That was achieved because the company’s electric car sales were more profitable than many expected. Tesla reported an operating profit margin of 10.8%. That’s the highest level since the first quarter of 2023. It compares to 5.5% and 6.3% in Q1 and Q2 2024, respectively.
Tesla also said it generated a robust $2.7 billion in free cash flow in the quarter. The company is using that excess cash to fund its plans to introduce fully self-driving cars, improved software, and potentially a network of robotaxis. Those future plans are much of what investors look toward as they value Tesla stock at its lofty level. Tesla stock’s price-to-earnings ratio is near 70, almost triple that of the overall market.
Hedge Funds got smoked today with Tesla surge
– United Parcel Service (UPS) released earnings per share at 1.76, compared to market expectations of 1.63
– Dow (DOW) released earnings per share at 0.47 USD, in line with market expectations
– Northrop Grumman (NOC) released earnings per share at 7.00, compared to market expectations of 6.08
– NASDAQ (NDAQ) released earnings per share at 0.74, compared to market expectations of 0.69
– S&P Global (SPGI) released earnings per share at 3.89, compared to market expectations of 3.64
-Union Pacific (UNP) released earnings per share at 2.75, compared to market expectations of 2.78
– Capital One Financial (COF) released earnings per share at 4.51, compared to market expectations of 3.77
– Court blocks Hand-Bag maker Tapestry’s $8.5B acquisition of Capri
GENERAL:
– The Indian rupee held below 84 per USD since the second half of October, remaining near record lows amid increasing foreign exchange outflows from Indian financial markets.
Lingering concerns that India’s economy will not be able to sustain its aggressively high growth momentum in upcoming years drove investors to reduce their positions on Indian equities and fixed-income instruments.
Consequently, data from exchanges continued to show net outflows from foreign investors in recent weeks, aligned with the rebound for G-Sec yields and the decline in the Sensex and the Nifty since reaching their record highs in September.
Pressure on the rupee was also owed to investors pivoting out of India and into Chinese markets amid bets that the fresh stimulus measures will bring better returns.
On the policy front, expectations that the RBI may commence its easing cycle this year waned after consumer inflation soared past expectations to 5.5% in September, rebounding past the RBI’s target of 4%.
– Stocks in Czech Republic Hit 16-year High
– Euro Bourses close slightly higher
– Mortgage rates climb to highest rates since August
– California Onion grower linked to E-Coli outbreak
– 80% of Americans are in favor of requiring a photo ID to vote
– Hezbollah targets Tel Aviv with large Iranian missiles launched from underground Silos
– Ukraine desertion surges to 51k in 9 months
– Rate cut expectations rebound
Trump Trade surges again
– Top commodity gainers are Natural gas (8.45%), Natural Gas UK GBP (3.10%) and Natural Gas EU Dutch TTF (2.07%). Biggest losers are Heating Oil (-1.43%), Gasoline (-1.30%), Crude Oil WTI (-1.02%) and Brent Crude Oil (-0.89%)
– Top commodity losers are Cocoa (-3.45%), Coffee (-2.92%) and Cotton (-1.31%). Gains are led by Palm Oil (2.59%), Orange Juice (1.33%) and Canola (0.95%)
– Equities mixed, Treasuries up, Crude down, Dollar down
Coming Up:
– EZ M3, German Ifo, US Durable Goods, UoM (Final)
– Moody’s on France, PBoC MLF
Speakers:
– RBNZ’s Conway; Fed’s Collins
Earnings:
– NatWest, Porsche, Mercedes-Benz; Colgate-Palmolive
MAJORS:
DX:
– Only a pause?
The Dollar was lower and pared some of its recent notable strength, as it was weighed on by falling Treasury yields in a week that has been devoid of tier 1 risk events ahead of a couple of massive events, starting with NFP and culminating in FOMC, with the US Election sandwiched in between.
EURO:
– EZ morning PMI data was mixed as French metrics were soft, followed by slightly more encouraging German figures before the final EZ release printed mixed but underscored the complex growth picture for the region.
There was a deluge of ECB speak with Chief Economist Lane noting the disinflation process is well on track and inflation is set to return to target in the course of 2025.
ECB’s Wunsch said the ECB does not need a discussion on 50bps at this stage.
POUND:
– Benefitted from the Reeves-induced jump in UK yields. However, the upside in Sterling was tempered by softer than anticipated UK PMI data with the accompanying release suggesting 0.1% quarterly growth in October.
YEN:
– Japanese Finance Minister Kato attempted to jawbone the currency overnight whereby he said the Yen’s recent slide is “one-sided and “rapid.” Furthermore, BoJ Governor Ueda said markets remain unstable and that the recent yen fall is driven partly by optimism over US economic outlook.
EQUITIES:
EUR:
– DAX +0.39% at 19,454, FTSE 100 +0.13% at 8,269, CAC 40 +0.08% at 7,503, Euro Stoxx 50 +0.27% at 4,936
US:
– SPX +0.21% at 5,910, NDX +0.83% at 20,233, DJIA -0.33% at 42,374, RUT +0.23% at 2,219
Sectors:
– Consumer Discretionary +3.24%, Communication Services +0.24%, Real Estate +0.22%, Technology +0.21%, Financials +0.08%, Energy -0.19%, Consumer Staples -0.22%, Health -0.68%, Utilities -0.71%, Industrials -0.71%, Materials -1.42%
GOLD/SILVER:
– Gold recovers yesterday’s losses
– moved it to a new ‘real’ (inflation-adjusted) high since January 1980
OIL:
– WTI (Z4) SETTLED USD 0.58 LOWER AT 70.19/BBL; BRENT (Z4) SETTLED USD 0.58 LOWER AT 74.38/BBL
The crude complex was lower and was weighed on by reports in The Times that Israel delayed the response to Iran due to the need to change some strategies following the recent US intelligence leak. The Times of Israel citing Army Radio later reported that Israel deny this claim, and there is no connection in relation to the timing of the response and the leak of the documents. Separate sources from Kann News noted that plans for an attack on Iran have passed the approval of the Chief of Staff and the Minister of Defense and Israel are waiting for a “green light” from the political level.
News-flow was actually fairly sparse on Thursday and participants continue to await the major risk events such as the tier 1 US data, followed by the US Election, and the FOMC after that.
In terms of energy company earnings, Equinor (EQNR NO) saw profits dip in Q3, but sees FY production stable, while Valero (VLO) beat on the top and bottom line. Report courtesy of newsquark.
BONDS:
– Treasuries were mid across the curve today with the long-end outperforming (30Y -5bps, 2Y -1bp) with the whole curve still holding above 4.00%
YIELD CHANGE
US 1-MO: 4.76 +0.012
US 6-MO: 4.498 -0.001
US 1-YR: 4.267 -0.021
US 5-YR: 4.035 -0.022
US 10-YR: 4.214 -0.028
US 30-YR: 4.477 -0.038
TWO’s/TENS: 0.13 -0.02
CRYPTO
– yesterday’s dramatic inflows into BTC ETFs – which saw BTC prices fall
– BTC bounced back to 68.5k
KEEP 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/shorts/H5bf7J4oShI?sttick=0
https://www.youtube.com/watch?v=XQSr_4BIZ4o
Song of the day:
https://www.youtube.com/watch?v=LwVXkM_YxMg
Joke of the Day:
https://www.youtube.com/watch?v=KBtrQ0GJSV0
(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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