MARKET REPORT
(Unburdened by what has been)
Radziwill Palace, Congress of Berlin, 1878
You were found in clear conditions. But you’re handsome in the Fog.
Day in Review:
Today:
(Kamalanomics: Govt-manipulated data with un-reported historic downward revisions to make the economy look more favorable):
DATA:
– Initial claims came slightly higher-than-expected (225k vs 220) while the number of job cuts in the US was little changed in September from August (72k vs 79k)
– (Early in the week, JOLTS job openings and ADP private employment figures surprised on the upside.)
Americans quit their jobs at the lowest rate since 2020 in the latest sign of labor market cooling
– The ISM survey showed the fastest US services sector growth since February 2023 (54.9 vs 51.3 EXP)
– The Swiss Franc weakened slightly to around 0.85 per USD after Swiss inflation eased to 0.8%, falling short of market expectations of 1.1%.
– The softer CPI data bolstered expectations for dovish policymakers pushing for a 50 basis point rate cut by the Swiss National Bank (SNB) in the upcoming December meeting.
– Previously, the SNB had already reduced the key interest rate by 25 basis points for the third consecutive time.
COMPANIES:
– Constellation Brands (STZ) released earnings per share at 4.32 USD, compared to market expectations of 4.08 USD
– Tesla plans $783m debt sale backed by prime leases
– Walmart, Nike, Target at risk of port strike
– NVDA surges after CEO touts ‘insane’ chip demand
– LEVI miss on revenue & issue weak guidance
GENERAL:
– Euro bourses close lower
– Top Energy commodity gainers are Crude Oil WTI (4.72%), Brent Crude Oil (4.48%) and Heating Oil (4.19%) on Biden ‘discussing’ Israel striking Iran oil facilities
– Fed’s Goolsbee says Dock strike may lead to higher prices
– Soybean Prices Slightly Dip from 2-Month High
– Soybean prices dipped slightly to $10.5 per bushel after the U.S. Department of Agriculture’s grain stocks report
– British Pound down 1.15% after Bailey floats faster cuts, Russian Ruble near 12 month lows
– Top Metal commodity losers are Copper (-2.09%), Platinum (-1.20%) and Gold (-0.04%). Gains are led by Silver (0.81%).
– Agricultural Commodities Cheese (3.70%), Sugar (2.61%) and Cocoa (2.05%). Biggest losers are Wheat (-2%), Oat (-1.31%) and Corn (-1.12%).
ANYTHING happening tomorrow?
– Equities down, Treasuries down, Crude up, Dollar up
Coming Up:
– NON FARM PAYROLLS
– EZ/UK Construction PMIs, Italian Retail Sales, US NFP, Canadian Ivey PMI Holiday: Chinese Mainland Market Holiday (Golden Week)
Speakers:
– BoE’s Pill; ECB’s de Guindos, Elderson; Fed’s Williams
MAJORS:
DX:
– The Dollar was firmer on Thursday, rising for its fourth straight day as it continued its week of gains amid the ongoing Middle Eastern tensions, whereby participants are awaiting the Israeli response.
Initial jobless claims rose marginally more than expected but the Dollar was unreactive, while the strong ISM Services figure pushed the Dollar Index above 102 to a high of 102.09. Regarding the data set, the headline jumped to 54.9 (exp. 51.7, prev. 51.5), while employment fell to 48.1 from 50.2, back into contractionary territory, and the inflationary gauge of prices paid rose.
On the Fed footing, Bostic and Goolsbee said little new, although the latter said the new inflation numbers are at the Fed’s target and labour market is at full employment.
Looking ahead, all eyes are on the pivotal US jobs report on Friday and Williams speaking 30 minutes after it.
EUR:
– The Euro dropped to $1.102, a three-week low, as weak Eurozone growth and inflation falling below the ECB’s 2% target raised expectations of a rate cut. Annual inflation in the Eurozone dropped to 1.8% in September, its lowest since April 2021 and below forecasts of 1.9%. Core inflation also eased to 2.7%, down from 2.8%, defying expectations of it remaining steady.
The softer inflation print bolstered market expectations for another rate cut at the ECB’s October meeting, which would mark the central bank’s third reduction this year.
Markets reflect a 95% probability of a 25 bps rate cut this month.
ECB leaders, including Christine Lagarde, have signaled support for this outlook. Isabel Schnabel, typically hawkish, suggested inflation could soon hit the 2% target, boosting rate cut bets.
Meanwhile, strong US services sector data added pressure on the Euro.
EQUITIES:
EUR:
– Euro Stoxx 50 -0.84% at 4,907, DAX -0.90% at 18,964, CAC 40 -1.32% at 7,458, FTSE 100 -0.10% at 8,262
US:
– SPX -0.17% at 5,700, NDX -0.05% at 19,793, DJIA -0.44% at 42,011, RUT -0.68% at 2,180
Sectors (S to W): Energy +1.58%, Technology +0.60%, Communication Services +0.23%, Utilities -0.02%, Financials -0.45%, Industrials -0.49%, Consumer Staples -0.84%, Health -0.90%, Real Estate -0.98%, Materials -1.15%, Consumer Discretionary -1.27%
GOLD/SILVER:
-Gold holding gains DESPITE Dollar strength
OIL:
– WTI (X4) SETTLED USD 3.61 HIGHER AT 73.71/BBL; BRENT (Z4) SETTLED USD 3.72 HIGHER AT 77.62/BBL
The crude complex continued its recent gains on Thursday, driven by escalating geopolitics in anticipation of Israel’s response. The ongoing, ever-heightening Middle Eastern tensions continued to push the crude complex higher, aided by commentary from US President Biden that the US was “discussing” with Israel the striking of Iranian oil facilities. Nonetheless, some downside was seen after the Libyan oil minister said it is to resume oil production today, with the largest oil field resuming and export operations also set to resume normally. Do note, the resumption of oil production and exports was set to be the next step for Libya after they appointed a new central bank governor – the initial pressure was short-lived.
Reports on Wednesday suggested Israel could target Iranian infrastructure and oil facilities, while US President Biden said “we are discussing that”, when asked if he would support Israel striking Iran’s oil fields – which took crude to intra-day highs.
In addition, Sky News Arabia citing Israeli media suggested the response will be within a few days.
Looking ahead, the US jobs report is the key catalyst on Friday as well as ongoing geo-pols, and the weekly Baker Hughes rig count.
Regarding levels, WTI and Brent hit highs of USD 73.95/bbl and 77.65/bbl, respectively, against earlier troughs of 70.52 and 74.31. Oil report courtesy of newsquark.
BONDS:
US 1-MO: 4.827 +0.017
US 6-MO: 4.382 +0.013
US 1-YR: 4.018 +0.056
US 5-YR: 3.629 +0.076
US 10-YR: 3.848 +0.063
US 30-YR: 4.181 +0.05
2’s/10’s: 0.14 -0.01
CRYPTO
Will 60 hold???
KEEP DOING WHATS WORKING, STOP WHAT ISNT
Best of luck out there. Let the market come to you
Post of the day:
https://www.mlb.com/postseason
Song of the day:
https://www.youtube.com/watch?v=xmLv8rfunPo&sttick=0
Joke of the Day:
https://www.youtube.com/watch?v=ABUfXa8yep8
(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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