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.”
Day in Review:
Today:
(Kamalanomics: Govt-manipulated data with un-reported historic downward revisions to make the economy look more favorable):
DATA:
– HK shares had their worst single day since Oct 2008 with double-digit percentage losses for major indices:
– Chinese stocks puked hard overnight as the return from Golden Week was greeted by less-then-wished-for stimulus chatter from China:
Markets now anticipate an 87% chance of a more modest 25 basis point rate cut in November
– Very poor US 3yr auction
COMPANIES:
– Electric vehicle (EV) manufacturer Fisker Inc. is under investigation by the U.S. Securities and Exchange Commission (SEC) and faces formal objections from the U.S. Department of Justice (DOJ) over its Chapter 11 bankruptcy proceedings. The company filed for bankruptcy earlier this year after halting production in March.
– NVDA chalks up 5th day of gains (+4%)
GENERAL:
– Euro Bourses close lower
– Hurricane Milton barrels toward Florida
– Airlines cancel flights to Florida
– Texas Attorney General Ken Paxton has demanded that the Biden-Harris administration turn over data to verify the citizenship status of nearly 454,289 registered voters in Texas.
– Rate-cut expectations remain notably more hawkish than they have been since the last FOMC meeting
– Israeli Jets attack Damascus
– Top commodity losers are Natural Gas UK GBP (-5.86%), Natural Gas EU Dutch TTF (-5.77%), Crude Oil WTI (-4.69%) and Brent Crude Oil (-4.63%). Gains are led by Methanol (2.16%).
– Top commodity losers are Silver (-3.87%), Copper (-2.33%), Platinum (-1.90%) and Gold (-1.03%).
– Top commodity gainers are Cheese (9.73%) and Cocoa (1.66%). Biggest losers are Soybeans (-1.79%), Oat (-1.78%) and Canola (-1.72%).
– Equities up, Treasuries up, Crude down, Dollar flat
Coming Up:
– Australian Consumer Sentiment, German Trade Balance, US Wholesale Sales
– RBNZ & RBI Policy Announcement; FOMC & NBH Minutes
Speakers:
– ECB’s Elderson; Fed’s Jefferson, Bostic, Logan, Goolsbee, Jefferson, Barkin, Collins, Daly
MAJORS:
DX:
– The Dollar Index was flat and within tight parameters, 102.290-640, in a lack of tier 1 US data ahead of FOMC Minutes on Wednesday, CPI (Thurs), and PPI, UoM prelim, and big bank earnings on Friday.
US NFIB rose marginally, August International trade saw a slightly narrower deficit than forecasted, and Atlanta Fed GDPnow model for Q3 was revised higher to 3.2% from 2.5%.
Fed speak (Musalem, Williams, Kugler, Bostic) with comments from NY Fed’s Williams arguably the highlight as in an interview with the FT said the US economy is well positioned for a soft landing and the current monetary policy stance is well positioned to both keep maintaining strength in the economy and labour market.
AUD:
Aussie was weighed on due to the disappointment from the Chinese NDRC overnight, whereby they failed to announce a raft of new stimulus measures.
RBA Minutes stated the Board discussed scenarios for lowering and raising interest rates in the future and members felt not enough had changed from the previous meetings that the current Cash Rate best-balanced risks to inflation and the labor market
EQUITIES:
EUR:
– Euro Stoxx 50 -0.40% at 4,912, DAX -0.20% at 18,912, CAC 40 -0.72% at 7,476, FTSE 100 -1.36% at 8,184
US:
– SPX +0.97% at 5,751, NDX +1.55% at 20,108, DJIA +0.30% at 42,080, RUT +0.09% at 2,195.
Sectors (S to W): Technology +2.12%, Communication Services +1.07%, Consumer Discretionary +1.04%, Consumer Staples +0.67%, Financials +0.57%, Health +0.54%, Real Estate +0.28%, Industrials +0.22%, Utilities +0.06%, Materials -0.37%, Energy -2.63%
GOLD/SILVER:
– Gold prices dropped more than 1% to around $2,615 per ounce on Tuesday, heading for their steepest decline in six weeks, after strong U.S. employment data tempered expectations for a larger rate cut by the Federal Reserve, while investors awaited minutes of the Federal Reserve’s latest policy meeting.
Markets now anticipate an 87% chance of a more modest 25 basis point rate cut in November. Lower interest rates typically reduce the opportunity cost of holding non-yielding assets like gold.
Investors are also awaiting key CPI and PPI data this week, as well as FOMC minutes and speeches from Fed officials, for further monetary policy signals.
Despite the pullback, gold’s safe-haven appeal remains supported by rising tensions in the Middle East.
Meanwhile, China’s central bank abstained from purchasing gold for its reserves for the fifth consecutive month in September.
Gold puked on Dollar strength
OIL:
– Oil also tanked as the lack of MOAR China stimulus took the shine off. This was WTI’s worst day since Nov 2023:
WTI (X4) SETTLED USD 3.57 LOWER AT 73.57/BBL; BRENT (Z4) SETTLED USD 3.75 LOWER AT 77.18/BBL
The crude complex was notably lower, and gave back some of its recent extensive gains amid the ever-escalating Middle Eastern tensions as players await the Israeli response.
WTI and Brent saw significant downside, although did briefly pare some losses after one of the latest updates was NBC reporting that Israel is considering striking energy facilities in Iran, while in further news PM Netanyahu refused to approve Defense Minister Galant’s trip to Washington planned for tonight until he gets a phone call with President Biden and until the Israeli cabinet approves the response to Iran’s missile attack.
Nonetheless, oil prices were subdued after the Chinese NDRC update disappointed, as they did not announce any fiscal bonanza, in addition to the fact that the Israeli retaliation on Iran looms which will be the next big catalyst, depending on the extent of the attack and the scope it has to further escalate tensions.
Elsewhere, NHC said Hurricane Milton rapidly intensified into a category 5 hurricane and is expected to make landfall on Wednesday.
For the record, WTI and Brent saw highs of USD 78.46/bbl and 81.14/bbl, respectively, against later lows of 73.82 and 77.40. Looking ahead, aside from the geopolitical updates, attention will be on private inventory data after-hours, whereby current expectations are (bbls): Crude +2.0mln, Distillates -1.9mln, Gasoline -1.1mln.
EIA STEO: US oil production to average 13.32mln BPD in October (prev. 13.25mln BPD in September), and to average 13.51mln BPD in November. Oil report courtesy of newssquark.
BONDS:
US 1-MO: 4.836 -0.026
US 6-MO: 4.454 UNCH
US 1-YR: 4.208 -0.032
US 5-YR: 3.848 -0.021
US 10-YR: 4.014 -0.012
US 30-YR: 4.296 -0.008
2’s/10’s: 0.05 +0.03
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/Cr_qz4ln6Uw
&
https://www.youtube.com/shorts/eirFQBZRutA
&
https://www.youtube.com/watch?v=kY3luFEvjIY
Song of the day:
https://www.youtube.com/watch?v=GZ-kXZsUa_w
Joke of the Day:
https://www.youtube.com/watch?v=6IjuSycXjqM
(Seize all assets of Duke and Duke enterprises)
Previous Hamas Minister of the Interior and of National Security Fathi Hammad
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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