The morning brings a return to risk-off mode, even though the previous session on Wall Street was strong (S&P 500 +0.58%, Nasdaq +1.05%). Investors have digested Meta’s and Tesla’s earnings, and sentiment has clearly deteriorated. The epicenter of the sell-off today is in Asia—CHN.cash (-3.16%) , which fits the picture of a Chinese bear market (the CSI 300 has fallen 20% from its June peak, marking its tenth consecutive week of declines amid an oversupply of power, a weak real estate market, and eroding retail investor confidence). Japan is also looking weak—JP225 (-2.76%). In the U.S., the pressure is once again shifting to tech companies vulnerable to the funding boom in AI—US100 is down 1.63%, significantly more than the broader US500 (-0.86%) . Europe is also in the red: EU50 -1.08%, DE40 -0.77%, ITA40 -0.94%, while the UK100 (-0.28%) is holding up slightly better.
The precious metals market saw a marked reversal of the previous trend—SILVER plummeted 3.07% to around $56.1, while GOLD fell by 1.12% below $4,100 (around $4,094), testing the key support level of $4,100–$4,117; a sustained decline below this level opens the way to the psychological level of $4,000. Rising yields and higher oil prices are putting pressure on metals. It is oil that is on the other side today—driven by a geopolitical premium (reports of plans to strike Iran again after the midterms, intensified Houthi attacks on Saudi Arabia) OIL is up 1.66% to about $107.5, and OIL.WTI is up 1.70% to about $99.4. In the foreign exchange market, the dollar is slightly weaker (USDIDX -0.19%) — EURUSD +0.15% to 1.1247, GBPUSD +0.10%, and USDJPY is down 0.63% to about 157.1. The risk-off sentiment isn’t sparing cryptocurrencies either — BITCOIN -2.66% to about 82,400 USD.
What's driving the market today:
This trading session is light on macroeconomic data. News from Asia included a slowdown in inflation in New Zealand (3.7% y/y vs. a forecast of 3.8%) and the Bank of Korea’s decision to keep interest rates at 3.00%, leaving the door open for a move in November. Here in Poland, at 9:00 a.m., we’ll see the Polish retail sales figures (year-over-year). However, the highlight of the day remains the U.S. weekly initial jobless claims at 14:30 (consensus around 200,000), followed by the EIA natural gas inventory report at 16:30.
The earnings season is setting the pace. Yesterday was dominated by reports from Meta (record revenue up 26% year-over-year to $64.6 billion and a strong forecast for Q4, but capex up 80% year-over-year and negative free cash flow—the cost of the “all-in on AI” strategy) and Tesla (a positive surprise in earnings quality and talk of a potential merger with SpaceX). Today, before the market opens, Procter & Gamble (PG.US), Western Digital (WDC.US), and Lockheed Martin (LMT.US) will report before the market opens, and Valero Energy (VLO.US) will report after the market closes. Bill Ackman’s appearance on CNBC (around 5:00 p.m.) will also draw attention.
In the broader context, it will be worth watching whether the Asian sell-off (particularly the Chinese bear market) and this morning’s weakness will intensify at the U.S. market open, as well as whether a further rise in oil prices will reignite inflation fears and put pressure on central banks.
Daily Summary: SpaceX and the tech sector drive Wall Street, oil retreats sharply below $97
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BREAKING: US oil inventories fall more than expected, but distillate build cools enthusiasm
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