MARKET REPORT
(Unburdened by what has been)
Vieille Bourse and bell tower Chamber of Commerce, French Flanders
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:
– FOMC MINUTES:
– A “substantial majority” of Fed officials supported lowering rates by 50 basis points at the last meeting, but “some” would have preferred to have lowered by 25 basis points
– Those who argued for a 25 basis point reduction noted that inflation was still somewhat elevated, while economic growth was strong and unemployment low.
– Those who argued for a jumbo-sized cut said a 50 basis point move would help sustain strength in the economy and the job market while continuing to bring down inflation.
– The Fed’s rate-setting committee was also almost evenly split on the number of additional rate cuts expected this year, with seven policymakers favoring one additional 25 basis point rate cut before year-end and nine members favoring 50 basis points of additional easing. Two policymakers expected no more rate cuts.
– Traders are currently assigning a 78% chance for a quarter-point cut in November
– Mixed US 10yr auction
– Fed’s Logan supported decision to cut rates, but with a more gradual approach ahead; Jefferson to take decisions meeting by meeting
– AtlantaFed GDPNow unchanged at 3.2%
– US Whole Sales and Inventory revisions miss
– Bigger-crude builds than expected in EIA, though, less than API
– ECB’s Kazimir not as convinced as media reports on an October cut
– RBNZ cut the OCR by 50bps as expected
COMPANIES:
– IBM increased to a 45-year high of 229.60 USD. Over the past 4 weeks, IBM gained 11.47%, and in the last 12 months, it increased 61.07%
– Boeing’s (-3.5%) talks with union breakdown
– DoJ threatens to request judge to break-up Google
GENERAL:
– MILTON bears down on Florida (watch this space) as Cat FIVE
– CHY-NA smoked again
Goldman Sachs “this net selling was 1.4 times larger than the previous record for net selling and represents a 6.5 Standard Deviation event on our records. Hedge funds not only unwound their long positions but added shorts to their books as well”
– Euro Bourses close higher
– ALL EYES CPI tom!
– Goldmans has the election at an absolute dead-heat
– 60minutes EDITS Kamala interview (Its not a state run media, it’s a media run state)
– Top commodity losers are Natural gas (-2.89%), Methanol (-2.62%), Heating Oil (-1.18%), Brent Crude Oil (-0.66%) and Crude Oil WTI (-0.20%).
– Top commodity gainers are Cheese (9.02%), Cocoa (4.22%) and Lumber (1.64%). Biggest losers are Sugar (-1.73%) and Oat (-1.06%).
– Equities up, Treasuries down, Crude down, Dollar up
Coming Up:
– US CPI!!!!!!!!!!!!!
– Japanese Corporate Goods Prices, Italian Industrial Output, Initial Jobless Claims, US Federal Budget, NZ Manufacturing PMI, Chinese M2 Money Supply
– ECB Minutes; Tesla Robotaxi Event; AMD AI Event
Speakers:
– Fed’s Cook, Barkin, Williams
Earnings:
– Domino’s Pizza, Delta.
MAJORS:
DX:
– Markets do have senses of humor. DX at its strongest since mid-August, retracing all the drop since the August CPI print (ahead of tomorrow’s CPI)
– Traders now wait the CPI and PPI data due this week to assess how price pressures are evolving in the economy.
The odds for a 25bps cut in the fed funds rate currently stand around 78%.
The greenback strengthened against major currencies, notably the yen and euro.
EUR:
– Stournaras sees the case for two more rate cuts this year, conversely, Kazimir says he’s not convinced as media reports on an October cut.
Patsalides spoke for the first time as a governor, saying there seems to be room for a rate cut, and Middle-east implications should be assessed.
On oil prices, Wunsch said if the increase accelerates, the ECB runs the risk of having to recalibrate interest rate policy in the short term.
Makhlouf said services inflation and wage growth present some uncertainty, albeit, they remain on track to hit 2% inflation in Q4 2025.
ECB’s Minutes on Thursday is now in focus.
AUD:
– AUD/NZD heads into the US close at around 1.1085, a level not seen since late July this year.
EQUITIES:
– S&P 500 hit another all-time intraday record high today and is now experiencing the strongest YTD performance of the 21st century
EUR:
– DAX: +1.00% at 19,258, FTSE 100: +0.65% at 8,244, CAC 40: +0.52% at 7,560, Euro Stoxx 50: +0.67% at 4,982
US:
– SPX +0.71% at 5,792, NDX +0.80% at 20,269, DJIA +1.03% at 42,512, RUT +0.26% at 2,201
Sectors (W to S): Utilities -0.89%, Communication Services -0.55%, Real Estate +0.02%, Energy +0.50%, Materials +0.64%, Consumer Discretionary +0.73%, Consumer Staples +0.78%, Financials +0.87%, Industrials +0.92%, Technology +1.01%, Health +1.02%.
GOLD/SILVER:
– Gold HOLDS above $2600/oz despite continued Dollar strength.
Though Silver and other metals have faced downward pressure recently (driven by stronger-than-expected US jobs data that reduced investor expectations for a significant 50 bps rate cut by the Fed in November).
Silver prices were weighed down following a briefing from China’s National Development and Reform Commission, which offered limited details on further stimulus measures.
Silver’s industrial demand in China, particularly in the renewable energy sector for electrification technologies and solar panel production, remains a key factor influencing its price.
OIL:
– WTI (X4) SETTLED USD 0.33 LOWER AT 73.24/BBL; BRENT (Z4) SETTLED USD 0.60 LOWER AT 76.58/BBL
Crude settles in the red but off lows after inventory data. Attention remains on the impact of Israel’s response to Iran. US President Biden and Israeli PM Netanyahu had a call (which ultimately revealed little details), however, before the phone call The Times of Israel reported that the Israeli response to Iran “as of now, will likely focus on military targets, but that could still change”, and the “US wants to make sure the response doesn’t lead to more escalation”. After that, Iran State Media citing a chief aide to the IRGC suggested they are prepared to launch 1000s of missiles at Israel and they’ll hit Israeli military and economic sites if they are attacked, and while there will not be a war, it will hit back if Israel strikes.
In terms of oil-specific newsflow, the crude complex saw upside in the wake of the weekly EIA data whereby crude stocks saw a larger build than expected, but not as great as the private inventory build seen on Tuesday night. In addition, distillates and gasoline drew more than expected, while crude production rose 100k to 13.4mln.
Looking ahead, market participants await the aforementioned Israel response, while on the macro footing, US CPI is on Thursday.
For the record, WTI and Brent saw lows of USD 71.53/bbl and 75.15/bbl, respectively, against peaks of 74.45/bbl and 78.02/bbl.
OPEC: Russian Deputy PM Novak stated it is too early to assert if the global market is ready to digest additional OPEC+ oil barrels in Dec, and there is no change to OPEC+ deal currently being discussed. The group will later decide on the December 1st summit format. Lastly, oil output at Kazakhstan’s Tengiz field rose to a record 699k BPD in early-October, according to Reuters citing sources/calculations. Kazakhstan is likely to meet the OPEC+ quota in October, due to maintenance at Kashagan, although OPEC+ compliance could become problematic from November onwards, as output rises at the facilities. Oil report courtesy of newssquark.
BONDS:
– Treasury yields were higher across the board today (5-6bps up with no curve bias), pushing 2Y and 10Y further above 4.00% (and 20Y to 4.40%). The belly of the curve is the worst performer of the week for now (7Y +10.5bps):
US 1-MO: 4.799 -0.027
US 6-MO: 4.475 +0.026
US 1-YR: 4.264 +0.054
US 5-YR: 3.918 +0.053
US 10-YR: 4.075 +0.04
US 30-YR: 4.345 +0.02
2’s/10’s: 0.05 -0.01
CRYPTO
– Quiet. Lower on the day.
– Peter Todd named in HBO special as Satoshi Nakamoto, Todd denies.
– The identity of bitcoin’s creator matters because Nakamoto “mined” about one million bitcoins in the digital currency’s first year of existence and has never moved the tokens. Mining is the process through which an array of computers generate random numbers in hopes of finding the right combination to unlock new bitcoins.
Those bitcoins are now worth more than $60 billion, which would make the holder one of the richest people in the world.
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/P-O3oh7bVbM
&
https://www.youtube.com/shorts/D-XIp4UC-nE
Song of the day:
https://www.youtube.com/watch?v=DuvWq4NnTVo
Joke of the Day:
https://www.youtube.com/watch?v=cLtV9UtfmWU
– So much for rate cuts helping homeowners as growth and inflation anxiety is pushing the long-end of the curve up – sending mortgage rates dramatically higher (back near 7%):
(Seize all assets of Duke and Duke enterprises)
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