MARKET REPORT
(Unburdened by what has been)
“Ordinance against the disorder in the sugar auctions:
We mayors and Council of the Free Imperial City of Hamburg are dismayed to hear of the abuses that have crept into the sugar auctions, which range not only from disorders and quarrelling, but also are highly disadvantageous to the merchant class. … We order the following:
1. The calling broker may not accept waving or nudging as a bid, rather he should only accept bids from those whose bid can be heard.
2. That until now in cases where several persons lay claim to the final bid once the auction is finished and there has been counsel as well as die-throwing; this is to be completely forbidden … Also, the same [the broker] should, as in other auctions, call three times before he accepts the final bid.
3. … Those brokers who do not comply with this ordinance, or who set up obstacles in its way, shall be punished with confiscation of their broker’s stick.
This ordinance is to be read aloud by the broker prior to every sugar auction …”
During the last decades of the eighteenth century, Hamburg’s sugar industry contracted and expanded together with the ever-changing geopolitical situation both in Europe and in the colonies. From 1799 until 1803, a glut of sugar, in particular from Cuba, and a greatly expanded market of consumers across Europe lead to a further sugar boom. In 1806, just before the French occupation of Hamburg by Napoleon, there numbered around 400 largely small-scale sugar refineries in the city. There was much money to be made with sugar, both for brokers and refiners.
Sugar brokers, who would send their samples out for buyers (refiners and re-exporters) to inspect prior to auctions, traded at the Stock Exchange. This ordinance suggests a kind of goldrush anything-goes atmosphere at the sugar auctions, uncharacteristic of auctions of other goods and incompatible with the ideal of the serious, civilized and upstanding Hamburg merchant.
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.”
Day in Review:
Today:
(Kamalanomics: Govt-manipulated data with un-reported historic downward revisions to make the economy look more favorable):
DATA:
– The Fed’s favorite inflation indicator – Core PCE – printed hotter than expected in September (+2.7% vs +2.6% exp), flat with August’s 2.7% rise
– The headline PCE rose 0.2% MoM, which dragged down YoY PCE to +2.1% – its lowest since Feb 2021
– Initial jobless claims plunged last week to 216k (from 228k) – the lowest since April
– Continuing Claims also fell, from 1.888m Americans to 1.862m Americans (but remains near its highest since Dec 2022:
– EZ unemployment rate ticks lower & CPI above expectations
– Chicago PMI plummets
COMPANIES
– Amazon stock popped as much as 5% in after-hours trading Thursday after the company reported stronger revenue and earnings per share for the third quarter than Wall Street expected
– The company also said it expects revenue in a range of $181.5 billion to $188.5 billion in the fourth quarter. Analysts had forecast $186.36 billion in revenue for the quarter. Meanwhile, Amazon said operating income is expected to be between $16.0 billion and $20.0 billion during the fourth quarter. Wall Street had projected $17.49 billion.
– Apple(-1.82%) announced its fourth quarter earnings on Thursday, giving Wall Street its first look at whether the company’s Apple Intelligence platform is juicing iPhone sales
– For the quarter, Apple saw earnings per share (EPS) of $0.97 on revenue of $94.9 billion. The company said it saw a one-time charge related to the reversal of a European General Court decision that requires Apple to pay 13 billion euros to Ireland for back taxes. Shares fell about 2% following the report.
Without the charge, EPS would have come in at $1.64. That would have blown past expectations of $1.59 per share and revenue of $94.3 billion.
Apple reported EPS of $1.46 on revenue of $89.4 billion during the same period last year.
– DJTWW Extends sell-off (-10%)
GENERAL:
– Zelensky expects to engage Nth Korean troops within days
– Trump drives a garbage truck to Green Bay (GO PACK!)
– Who bought this? Why didn’t you? Orange man put coal in stockings
– Israeli intelligence points at an Iran attack from Iraq in the coming days
– Continued fallout from UK budget
– Equities down, Treasuries down, Crude up, Dollar down
Ahead:
– Australian PPI!
– Swiss CPI
– US NFP, ISM Manufacturing
Earnings:
– ExxonMobil, Chevron, Ares Management, Dominion Energy, Charter Communications, Imperial Oil, LyondellBasell, Cardinal Health, Cboe Global Markets
MAJORS:
DX:
– Dollar soared in October (its biggest monthly rise since Sept 2022) having touched unchanged on the year at the end of Sept (after the rate cut):
YEN:
– The Yen was the clear gainer in the G10 space amid the BoJ unanimously keeping the short-term policy rate unchanged at 0.25%, as expected. The move stemmed from remarks made by BoJ’s Governor Ueda, who downplayed concerns over financial stability risks acting as an impediment to further policy tightening. The governor noted that uncertainties remain but markets have slowly regained stability (prev. said won’t hike when markets are unstable), as such, boosting optimism regarding a future rate hike, leaving USD/JPY at lows of 151.84, with the 200 DMA (151.51) approaching
EURO:
– EZ Unemployment Rate which surprisingly ticked lower. EZ CPI was above expected, but regional releases had suggested such an outcome. EUR/USD rose above its 200 DMA (1.0864) but failed to remain above the 21 DMA (1.0881)
POUND:
– Cable’s downside, which involved the pair heading to levels last seen in August, it was seemingly a continuation of participants digesting the recent UK budget on Wednesday, and concerns have been stoked by borrowing forecasts from the OBR which have subsequently seen a surge in UK yields which the Pound has been unable to benefit from due to the fiscal risk premium which now appears to be embedded.
BMO Capital believes that the BoE meeting next week is now more likely to keep rates unchanged, when “considering the composition of the MPC, and the effect the budget measures will have on the BoE projections and on inflation persistence, we think at least 5 may well vote for an unchanged Bank Rate”. Money markets put 80% chance of a 25bps rate cut at the meeting
EQUITIES:
– A very ugly end to the month for Nasdaq smashed it into the red for October along all the other majors
– All the MAG7 stocks were lower today led by MSFT, META, and NVDA
EUR:
– DAX: -1.03% at 19,059, FTSE 100: -0.61% at 8,110, CAC 40: -1.05% at 7,350, Euro Stoxx 50: -1.28% at 4,823
US:
– SPX -1.86% at 5,705, NDX -2.44% at 19,890, DJIA -0.90% at 41,763, RUT -1.63% at 2,197
Sectors:
– Technology -3.57%, Consumer Discretionary -1.81%, Real Estate -1.73%, Communication Services -1.63%, Materials -1.52%, Financials -1.22%, Industrials -1.13%, Health -0.81%, Consumer Staples -0.14%, Energy +0.66%, Utilities +1.04%
OIL:
WTI (Z4) SETTLED USD 0.65 HIGHER AT USD 69.26/BBL; BRENT (F5) SETTLED USD 0.61 HIGHER AT USD 73.16/BBL
The crude complex was firmer and benefitted from the initial Dollar weakness and an ever-continuing tense Middle Eastern situation.
In a since-deleted post on X from Sky Arabia that Tel Aviv is considering launching a large-scale pre-emptive attack against Iran. The Israeli Military issued a couple of evacuation orders in Lebanon, but conflicting reports have come post. Sky News Arabia, citing CNN, initially said US officials doubt the possibility of reaching a ceasefire before the presidential election, Asharq News later reported that an Israeli official told ABC News that there is significant progress towards a ceasefire in Lebanon after several days of meetings. Sky News Arabia citing US Secretary of State Blinken noted ‘good progress’ towards a ceasefire in Lebanon.
Mossad posted on X that “Movement of Ballistic missiles in Iran”.
Energy Intel’s Bakr said, regarding recent OPEC+ source reports, that “they didn’t even talk about this yet”.
Reuters sources reported on Wednesday that OPEC+ could delay the planned oil output hike scheduled for December by one month or more.
US payrolls report is the highlight on Friday ahead of the US election and FOMC next week. WTI and Brent hit highs of USD 69.76/bbl and 73.26/bbl early in the US session, before dwindling off them through the afternoon but coming nowhere near the earlier lows in the EZ morning of USD 68.30/bbl and 71.82/bbl. Oil report courtesy of newsquark.
BONDS:
– Belly is up almost 60bps on the month and almost 70bps since The Fed cut by 50bps
– Mortgage rates have soared back above 7.00% in October since The Fed cut
CRYPTO
– Despite a puke today, Bitcoin had a huge month (best month since May), rallying up to record highs yesterday near $74,000
– BTC ETF inflows have been huge in October
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/watch?v=gMCgkXpEOIY
https://www.youtube.com/watch?v=a0X5HWaYLMY
https://www.youtube.com/watch?v=YSksJT5epgk
Song of the day:
https://www.youtube.com/watch?v=TG8yXHy7cME
Or…acoustic?
https://www.youtube.com/watch?v=MpNHqJs7rXQ
Joke of the Day:
https://www.youtube.com/watch?v=S9ZSzuj1UpA
(Seize all assets of Duke and Duke enterprises)
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