Daily Summary – Wall Street Rally Driven by Powell’s Promises

Powell suggested that a sharp slowdown in hiring poses a growing risk to the US economy, reinforcing the potential for further interest rate cuts. He simultaneously stressed the overall stability of the US economy.

The US100 surpassed 25,000 points today, currently gaining 0.6%, with the US500 up 0.35%.

Gains were fuelled by strong bank earnings, particularly in trading and investment banking.

Morgan Stanley significantly beat expectations across the board (EPS $2.80 vs. expected $2.09), with the stock rising 5.5%.

Bank of America also outperformed (EPS $1.06 vs. expected $0.95), with shares up 4%.

European markets rallied, led by the CAC40's nearly 2% surge, driven by political stabilization in France (narrowing of the France-Germany yield spread).

Luxury giant LVMH reported revenue of $18.28 billion, halting the negative earnings trend with unexpected sales growth in the US and Asia; shares gained as much as 13%.

Strong results and a promising outlook from semiconductor equipment maker ASML also boosted sentiment, with the stock rising 2.6%.

Gold reached new absolute historical highs, exceeding $4,200 per ounce, raising concerns about a speculative bubble after a 60% YTD gain.

WTI Crude continued its decline, falling below $58 a barrel, amid forecasts of an extreme supply surplus exceeding 4 million barrels per day next year.

The NY Empire State Index surprisingly posted a positive reading of 10.7 (vs. expected −1.4).

Inflation in France and Spain rose as expected, easing pressure on the ECB to cut rates this year; the Euro gained against the Dollar.

Cocoa stabilized above $5,800 despite negative processing data from Malaysia and Brazil; key European and Asian grind data are due tomorrow.

Fed's Miran suggested that AI-driven productivity gains should allow rate cuts toward the neutral rate, while Waller warned AI could impact the labour market.

China's CPI fell more sharply than expected MoM (−0.3%), reflecting subdued demand, although core CPI rose 1%, its highest since February 2024.

Inflation in Poland remained at 2.9% YoY, keeping the possibility of another rate cut this year open.

Bitcoin continued its sharp slide, falling to $110,000.

TSMC's Q3 results are due tomorrow morning, with expectations pointing to a record quarter before stabilization.