MARKET REPORT
(Unburdened by what has been)
– 1987
Day in Review:
Today:
(Kamalanomics):
DATA:
– Dovish BoJ Uchida
– Strong Kiwi Jobs data
– Larger EIA crude draw than expected
– VIX pushed higher today
– Rate-cut expectations dropped for 2025 but were flat for 2024
COMPANIES:
– Meta Platforms (-1.05%) is selling $10.5 billion of investment-grade bonds, its largest-ever debt sale
– Disney’s (-4.61%) streaming unit turned its first ever profit. Park business struggled:
– Walt Disney (DIS) released earnings per share at 1.39 USD, compared to market expectations of 1.20 USD
– Hilton Worldwide (-1.74%) released earnings per share at 1.91 USD, compared to market expectations of 1.86 USD
– CVS Health (-3.21%) released earnings per share at 1.83 USD, compared to market expectations of 1.73 USD
– Shopify (+17.83%) released earnings per share at 0.26 USD, compared to market expectations of 0.20 USD.
GENERAL:
– Euro Bourses close stronger
– Reports the Ukrainian Armed Forces have captured the Sudzha gas measurement station
– Nat Gas jumped. 8 month high
– Tropical Storm Debby of US East coast set to unleash 12T Gallons
– Do Not Fly order issued over Iran
– ugly 10Y auction
– spot commodity prices one-percent away from three year lows
– Nat Gas +6%, Cocoa +6.73%, Copper -2.77%, Corn -5.26%
– Crypto down (ETH SMOKED), Early equity strength sold into close, Crude BOUNCE, Gold holds at $2400
DOLLAR DX up: 103.19 +0.22% (103.36 – 103.08) MID
– AUD UNCH: 65.19 UNCH (65.75 – 65.15) Off LOWS
– EUR UNCH: 91.53 UNCH (91.66 – 91.42) MID
– GBP UNCH: 126.89 UNCH (127.35 – 126.84) LOWS
– JPY UP: 146.73 +1.55% (147.80 – 146.15) MID
GOLD down: $2423 -0.33% (2447 – 2421) LOWS
DOW/ES/ND down/down/down: 38780 -0.9%, 5202 -1.2%, 17857 -1.77%
CRYPTO: BTC/ETH DOWN: 55071 -2.19%, 2351 -5.19%
CRUDE UP: $75.44 +3.0% (73.04 0 – 75.78) HIGHS
Coming Up:
– US IJC, RBI Policy Announcements, BoJ SOO
Speakers:
– RBA’s Bullock, Fed’s Barkin
EARNINGS:
– Allianz, Deutsche Telekom, Siemens, Antofagasta, Entain, Eli Lilly
MAJORS:
DX:
The Dollar Index was slightly firmer, seeing a boost on the Yen weakness after comments from BoJ Deputy Governor Uchida overnight.
Dollar specific news-flow was light in general thinner trading conditions, amid no Fed speak or tier 1 US data. As such, DXY traded between 102.910-103.370 and currently sits in the middle of the range.
Jobless claims and Fed’s Barkin (2024 voter) scheduled the up-coming highlights.
DOLLAR DX up: 103.19 +0.22% (103.36 – 103.08) MID
EUR
Thin news-flow had a TIGHT 24-pip range for the session.
EUR UNCH: 91.53 UNCH (91.66 – 91.42) MID
GBP:
Nothing of note
GBP UNCH: 126.89 UNCH (127.35 – 126.84) LOWS
AUD:
Aussie sold off late in session as sell-off in US equities prompted demand for the US dollar
AUD UNCH: 65.19 UNCH (65.75 – 65.15) Off LOWS
YEN:
Yen aggressively hit overnight after dovish remarks from BoJ Deputy Governor Uchida. Briefly recapping, he noted they won’t hike rates when markets are unstable and must maintain the current degree of monetary easing for the time being
JPY UP: 146.73 +1.55% (147.80 – 146.15) MID
GOLD/SILVER:
Gold often sells off early in a bear market for stocks.
In 2020, gold had a 3 percent decline multiple times in the early days of the pandemic selloff. In October 2008, gold plunged by more than 7 percent in the early days of the financial crisis.
But why?
Precisely because gold serves as a hedge.
Investors often liquidate winning gold positions during a sharp downturn to cover stock losses. But gold generally falls less sharply and recovers more quickly – exactly the scenario that played out on Monday.
Here’s how an analyst explained it to Bloomberg:
“Virtually every time there is marked equities weakness, investors who hold gold as a risk hedge will liquidate part of their holdings to raise liquidity against any potential margin calls. When the dust settles, they almost invariably buy it back.”
Margin calls are a big problem for investors during a sharp stock market downturn.
When an account falls below a certain threshold, brokers demand additional deposits of money or securities to bring the account balance up to a required minimum level.
Given gold’s liquidity, investors can quickly sell to raise the cash necessary to cover margin calls.
It’s important to put Monday’s gold selloff into perspective. Even with the downturn, gold hit a record just a few weeks ago, and the yellow metal is still up well over 15 percent on the year with bullish factors firmly in place.
As far as silver, an economic downturn would temper industrial demand, and the white metal is much more volatile than gold.
But silver is fundamentally a monetary metal, and it tends to track with gold over time. In fact, silver has historically outperformed gold in a gold bull market. For example, during the pandemic, gold increased by about 40 percent, while silver increased by 141 percent.
– $2400 Holds
GOLD down: $2423 -0.33% (2447 – 2421) LOWS
EQUITIES:
– Late sell-off saw all major bourses close in the red
– The S&P 500 tested up to its 100DMA this morning then plunged back lower
– The Dow actually tested above its 50DMA at the open today, but was then smacked back below its 100DMA
EUR:
– DAX +1.47% 17,610
– FTSE +1.75% 8,167
– CAC +1.91% 7,266
– ES50 +2.00% 4,667
US:
– SPX -0.77% 5,200
– NDX -1.16% 17,867
– DJI -0.60% 38,763
– RUT -1.41% 2,033
Sectors (W to S): Utilities +0.55%, Energy +0.43%, Consumer Staples +0.08%, Financials +0.06%, Communication Services -0.39%, Industrials -0.50%, Real Estate -0.79%, Health -1.06%, Technology -1.33%, Materials -1.37%, Consumer Discretionary -1.41%
STOCKS
– Super Micro Computer (-20%) – Missed on profit and gross margin, with gross margin guidance underwhelming, and announced a 10-for-1 stock split.
– Ralph Lauren (-3.37%) – Beat on the top and bottom line
– Airbnb (-13.38%) – Fell short on profit and gave soft guidance for the next quarter, with the executive seeing some signs of slowing demand from US guests.
– Rivian Automotive (-6.86%) – Deeper loss per share than expected, and has seen its order backlog fall in recent quarters as deliveries increased and some customers cancelled their reservation
– Nvidia (-5.12%) – Nvidia clears Samsung’s (SSNLF) 8-layer HBM3E chips for use in AI chipsets, and it is set to sign a deal to begin supplies of such chips by end-Q4.
OIL:
WTI crude oil futures rose above $75 per barrel on Wednesday, continuing their upward trend after the EIA report showed a larger-than-expected drop in US crude oil inventories. Crude stocks fell for the sixth week, declining by 3.728 million barrels, much more than the anticipated 0.4 million barrel decrease. However, gasoline and distillate stockpiles increased during this period. Rising oil prices are also being driven by supply-side concerns.
Tensions are escalating in the Middle East, with reports of Hamas appointing a new leader, Yahya Sinwar, potentially heightening conflict with Israel and threatening regional oil supplies. Additionally, Libya’s largest oil field, Sharara, has announced a reduction in production due to protests and security issues.
CRUDE UP: $75.44 +3.0% (73.04 0 – 75.78) HIGHS
BONDS:
– Treasury yields were higher across the board today with the long-end unperforming (30Y +8bps, 2Y +3bps), not helped by a very ugly tail at the 10Y auction. Since payrolls, yield have basically roundtripped to unchanged (aside from the 2Y)
– The 2Y yield was stuck at 4.00%
US 1-MO 5.338 +0.002
US 6-MO 4.945 -0.002
US 1-YR 4.433 UNCH
US 5-YR 3.774 +0.045
US 10-YR 3.952 +0.065
US 30-YR 4.252 +0.075
2YR/10YR -0.3
CRYPTO
– Mt. Gox was once a dominant cryptocurrency exchange, but a devastating security breach caused it to collapse and left approximately 127,000 creditors waiting to recover their funds.
Those creditors have waited over a decade to get their hands on their Bitcoin, but surprisingly, many are still just holding onto it.
Data shows that nearly half of the Bitcoin owed to Mt. Gox creditors — 59,000 out of a total of 141,686 BTC — has already been distributed.
Despite the over $3.2 billion in Bitcoin appropriated to creditors, the market hasn’t seen a sell-off related to that distribution.
CRYPTO: BTC/ETH DOWN: 55071 -2.19%, 2351 -5.19%
KEEP DOING WHATS WORKING
Best of luck out there. Let the market come to you
Post of the day:
https://www.youtube.com/shorts/w5Rn6RTvNd4
Song of the day:
https://www.youtube.com/watch?v=TWcyIpul8OE
Joke of the Day:
https://www.youtube.com/watch?v=2MZZ__5F_-A
Fact of the Day:
– Some 44,534 New Zealanders, almost 1% of the nation’s population of 5 million, left to live in Australia in 2023. The net migration loss, which takes into account Australians moving to New Zealand, was 27,011 last year, an 85% increase on 2022 and the most since 2013
(Seize all assets of Duke and Duke enterprises)
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