MARKET REPORT
(Unburdened by what has been)
Weighing Gold Bullion at the Bank of England 1873
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:
– Kashkari said balance sheet shrinking has a ways to go and pencilled in neutral rate at closer to 3%
– Markets are assigning a nearly 85% chance the Fed will cut deliver a 25bps rate cut in November vs another 50bps reduction.
COMPANIES:
– Amazon cut as Wells Fargo warns cloud strength is ‘not enough’ (-2.67%)
– Super Micro shares surge as AI boom drives 100,000 quarterly GPU shipments (+15.5%)
– DJT climbs on Musk cameo at Pen rally (same place as asass attempt(+15%)
– Google Judgement (Alphabet -2.47%) on App Store must host competitors
GENERAL:
– The 3rd Qtr Earnings Season is about to kick off later in the week: JPMorgan, Wells Fargo and Bank Of New York Mellon
– Goldman see’s S&P at 6000 by end 2024
– Hurricane Milton in the Caribbean strengthens, possible Cat 5
– Hamas unleashes rocket barrage on 7th Oct anniversary
– Thursday CPI!
– Top commodity losers are Cotton (-8.02%), Coffee (-3.23%) and Sugar (-2.39%). Gains are led by Cheese (6.36%), Rubber (6.23%) and Orange Juice (2.62%)
– Equities down, Treasuries down, Crude up, Dollar flat
Coming Up:
– RBA Minutes
– Japanese All Household Spending, Australian NAB Business Conditions, German Industrial Output, French Trade Balance, US NFIB Business Optimism Index, RCM/TIPP Economic Optimism, International Trade, Canadian Trade Balance
Speakers:
– RBA’s Hauser; Fed’s Kugler, Bostic, Collins, ECB’s Schnabel; BoE’s Breeden
MAJORS:
DX:
– The Dollar was flat to start the week in what was a day of pretty quiet newsflow as participants await Israel’s response to Iran.
There was no tier 1 US data on Monday, with only Fed’s Kashkari (2026 voter) on the wires, who said balance sheet shrinking has a ways to go yet, and he pencilled in neutral rate closer to 3% at the September SEP’s, but there is huge uncertainty about the neutral rate (Fed median 2.9%).
Highlighting the thin newsflow, the Dollar Index saw a high of 102.620 vs. a low of 102.36.
Ahead, FOMC Minutes (Wed), CPI (Thurs), PPI & UoM prelim (Fri) are the highlights, as well as any Middle East escalation and the category 5 hurricane Milton.
YEN:
Japan’s top FX diplomat warned against speculative moves as the Yen fell as he said “We will monitor currency market moves including speculative trading with a sense of urgency”
EUR:
– ECB’s Villeroy said the ECB will quite probably cut rates in October due to rising risk of inflation undershooting the 2% target, while Kazaks told Econostream he expects continued cuts of the same magnitude, unless the economy does worse than expected. He added there is no need to delay the decision in October and if ECB sees in October that they can cut rates, “and I think we can – then we will’.
On the data footing, EU retail sales (Aug) disappointed Y/Y but was in line with expectations M/M, while the Sentix Index (Oct) was not as bad as feared.
EQUITIES
EUR:
– Bank of France’s governor hinted at potential rate cuts by the European Central Bank in October.
– Euro Stoxx 50 +0.29% at 4,931, DAX -0.14% at 19,012, CAC 40 +0.46% at 7,510, FTSE 100 +0.28% at 8,304
US:
– SPX -0.96% at 5,969, NDX -1.17% at 19,801, DJIA -0.94% at 41,954, RUT +1.50% at 2,213
Sectors (S to W): Energy +0.35%, Materials -0.17%, Industrials -0.29%, Health -0.49%, Technology -0.68%, Real Estate -0.73%, Consumer Staples -1.1%, Financials -1.24%, Consumer Discretionary -1.92%, Communication Services -1.97%, Utilities -2.32%
GOLD/SILVER:
– Over the past week, gold futures have been consolidating within a $50 range, between $2,650 and $2,700. Each dip in gold continues to be met with buying, further signaling underlying strength. Gold’s pause over the past week was largely driven by the surging U.S. dollar, which benefited from flight-to-safety capital flows:
OIL:
– First time since Aug hit $77:
BONDS:
2Y and 10Y yields both topping 4%
US 1-MO: 4.864 +0.005
US 6-MO: 4.459 -0.001
US 1-YR: 4.24 +0.048
US 5-YR: 3.867 +0.053
US 10-YR: 4.028 +0.047
US 30-YR: 4.304 +0.036
2’s/10’s: 0.03 -0.02
The yield curve (2s10s) briefly inverted once again this morning
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=mtdiVGAQSqY
Song of the day:
https://www.youtube.com/watch?v=UnP-SKbmUCU
Joke of the Day:
https://www.youtube.com/watch?v=jaG8PpJx-PQ
(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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