- After a mostly negative session in Europe — where major indices such as the DAX, FTSE 100, and CAC40 fell between 0.4% and 0.65% — Wall Street is also contributing to weaker sentiment at the end of the week. US100 and US500 futures are trading slightly lower, though it’s worth noting that equities continue to hover near record highs.
- U.S. stock indices are on track to end the week higher, with the exception of the Russell 2000, which is set to close the week down over 1%, pressured by higher bond yields and fading expectations for a Fed rate cut in December.
- Precious metals are under pressure, with gold sliding nearly 1% amid a stronger U.S. dollar. The EUR/USD pair has fallen to its lowest level since early August, while markets now price a 50% chance of a Fed rate cut in December, compared with 90% before this week’s FOMC meeting. The Chicago PMI rose to 43.8 in October, beating expectations of 42.3 and up from 40.6 previously.
- Neither the U.S.–China trade deal, which largely met market expectations, nor the Fed’s rate cut managed to spark a strong rally on Wall Street. A sense of caution has been visible across global equities in recent days, even though buyers still hold the upper hand. Apple shares erased nearly all their post-earnings gains, while Amazon jumped over 10% on the back of a strong quarterly report and upbeat forecasts.
- U.S. Treasury Secretary Scott Bessent emphasized today that the trade deal with China was signed for a 12-month period, while Donald Trump said he expects it to be “long-lasting.” Markets largely shrugged off the news, and interestingly, Chinese equities have also declined in recent days despite what are generally positive headlines for Chinese companies. Trump also signaled his intention to lower tariffs on China by another 10 percentage points, reducing the effective rate to 37% from 47% currently (down from 57% before the APEC Summit).
- Bank of America assessed that Chinese equities and gold could outperform amid an overheated U.S. stock market. The Magnificent Seven stocks currently trade at 31 times expected 12-month earnings, while the S&P 500 trades at 23 times, compared with a 20-year average of around 16.
- AbbVie shares fell more than 5% after earnings. The company beat expectations on both profit and revenue but disappointed in oncology growth. In contrast, MicroStrategy gained over 4% after the world’s largest corporate Bitcoin holder reported record third-quarter profits.
- One of the weakest performers in the U.S. market today is Meta Platforms. The social media giant extended losses amid concerns of overinvestment in artificial intelligence; rising AI-related CAPEX is expected to pressure short-term cash flows, prompting Deutsche Bank to lower its forecasts for the company.
- Oil prices initially declined but quickly recovered most losses after Trump stated that the U.S. does not plan any military operations in Venezuela. Brent crude (OIL) is now trading nearly 1% higher. In the grain market, wheat futures are up more than 1.5%.
- Market sentiment remains mixed, while Bitcoin slipped back below $110,000 ahead of options market settlement. Dealer gamma positioning suggests that the $113,000 level could be a key threshold — a breakout above it may trigger a bullish momentum, attracting buying activity from market makers.
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