💥Daily Summary: Tech Sector Crash on Wall Street and Historic Attack on Binance

Stock Markets 📉

• The US tech sector experienced a massive sell-off following the release of a series of disappointing financial results, triggering heightened skepticism over massive capital expenditure on artificial intelligence.
• The main driver of the decline was Intel, whose shares plummeted by over 30% following the presentation of dismal forecasts resulting from weakness in the PC market and deepening profitability issues.
• Pressure mounted after a Financial Times report indicated that Blackstone warned startup Anthropic about the risk of failing to achieve an investment-grade credit rating after its planned stock market debut, raising concerns over a surging cost of debt financing across the entire AI ecosystem.
• Additionally, the SEC confirmed the initiation of a review into tech company filings regarding the accuracy of disclosures on risks related to AI spending.
• Quarterly results from Amazon caused significant concern in the market, pushing the giant's shares down by several percent due to a slower-than-expected growth rate in AWS cloud services and a return to negative free cash flows driven by aggressive capital expenditure.
• Following the leaders, the sell-off impacted a broad range of component and semiconductor suppliers, including entities such as AMD, Arm, Marvell, and Sandisk, which recorded double-digit losses. Investors began questioning whether infrastructure spending in the hundreds of billions of dollars will yield the expected return amid signs of a slowdown in the traditional business pillars of tech giants.
• Deteriorating sentiment on Wall Street also reached European exchanges and the Warsaw WSE, where the tech slowdown translated into sharp declines in local growth stock valuations.
• The European Stoxx 600 index slipped under pressure from commodity companies and chipmakers, ignoring relatively better aggregate GDP readings for the Eurozone.
• Among other Wall Street companies, oil majors ExxonMobil and Chevron had a successful session, beating market expectations thanks to record refining margins driven by tensions in the Middle East. Solid reports were also presented by pharmaceutical giants AbbVie, Gilead, and Regeneron, raising their full-year profit forecasts. On the other hand, online platforms Reddit and Roblox saw their shares collapse by over ten percent following weaker user engagement metrics and the implementation of stricter safety procedures.
• Shares of electric vehicle maker Rivian rose by several percent due to higher-than-expected third-quarter revenue and positive updates on orders for the R2 SUV model, while Ford outlined an ambitious plan to increase sales by 20% by 2032.
• As of 19:15 CET, the S&P 500 stands at 7,584, down 1.48% (losing 1.32% for the week), while the Nasdaq 100 stands at 28,361, down 2.38% (losing 3.14% for the week), and the Dow Jones stands at 51,849, down 1.2% (losing 1.27% for the week). Among leading stocks, Apple stands at 343.23, down 1.64% (down 1.26% on the week), Nvidia at 202.49, down 5.22% (down 4.03% on the week), Amazon at 239.13, down 2.02% (down 3.55% on the week), Meta at 615.61, down 1.37% (down 4.13% on the week), and Google at 278.15, down 1.96% (down 13.14% on the week).

Macroeconomics & Central Banks 🏦

• Federal Reserve officials delivered a distinctly hawkish stance, dampening hopes for an early conclusion to the monetary policy tightening cycle.
• Fed Governor Lorie Logan emphasized that the US economy still requires at least two more rate hikes of 25 bps, describing the failure of inflation to return to the 2% target as unacceptable. In her view, strong economic growth, resilient consumption, and still-favourable financial conditions justify further restrictive measures.
• Similar concerns were voiced by Alberto Musalem and Thomas Barkin, who noted that massive corporate investments in AI infrastructure are becoming a pro-inflationary factor, exerting demand pressure on supply chains and forcing the central bank to remain vigilant.
• The Bank of Japan kept interest rates unchanged, but the post-meeting statement was perceived by market participants as unequivocally hawkish. Monetary authorities in Tokyo signaled an increasing readiness to carry out another interest rate hike amid stabilizing wage and price dynamics in the Japanese economy.
• Preliminary inflation estimates from Germany brought relief to European investors, showing a deceleration in the annual CPI rate to 2.8% compared to the projected 3%, alongside a negative monthly reading of -0.2%.
• In contrast, mixed signals emerged from the Eurozone real economy, where an unexpected economic contraction in France contrasted with a slight improvement in growth pace across the broader currency bloc. European Central Bank representatives, including Chief Economist Philip Lane, highlighted the impact of digital technologies on credit trends and productivity, while noting the sector's sensitivity to financing costs.
• The Prime Minister of Canada announced closer ties with the European Union, indicating an aim to secure closest trade and regulatory partner status without formal membership in the bloc.

Commodities 🛢️

• Precious metals saw a sharp plunge in valuations, resulting in gold recording its largest October decline since 2008.
• A surge in Treasury yields and hawkish signals from the Federal Reserve increased the opportunity cost of holding bullion, driving gold prices below the psychological barrier of USD 4,000 per ounce, and subsequently below USD 3,900. 
• Analysts point out that the metal suffered from forced liquidation of profitable positions by funds seeking liquidity to cover losses in falling equity markets. An even steeper sell-off hit silver, which entered technically oversold territory after losing nearly 18% of its value over the full month.
• Crude oil prices rose dynamically due to escalating geopolitical risk at key transit chokepoints.
• Investor attention was drawn to an explosion on a supertanker carrying over 2 million barrels of crude after striking a sea mine in the Strait of Hormuz, alongside reports of an uncrewed US vessel destroyed by Iranian forces.
• Further driving the risk premium were reports that Washington is considering retaliatory strikes against Iran, as well as continued Ukrainian drone attacks on Russian refineries. According to estimates by ExxonMobil, these attacks knocked out nearly half of Russia's processing capacity and led to an extension of Moscow's diesel export embargo.
• As of 19:15 CET, gold stands at 3,879, down 3.54% (down 3.02% for the week), while silver stands at 48.94, down 5.77% (down 9.48% for the week), and Brent crude stands at 113.58, gaining 1.87% (up 1.79% for the week).

Currencies 💱

• The Japanese yen exhibited heightened volatility following the Bank of Japan statement, initially gaining on the monetary authorities' hawkish announcements. Gains in the Japanese currency remained limited, however, due to a persistent wide rate differential with the United States and continued strength in US Treasury yields.
• The European single currency came under mild selling pressure following softer German inflation data and mixed French GDP readings. Conversely, the Swiss franc gained on safe-haven demand amidst escalating military tensions in the Middle East.
• As of 19:15 CET, EURUSD stands at 1.1158, down 0.29% (down 0.45% for the week), while USDJPY stands at 157.41, down 0.16% (up 0.33% for the week).

Cryptocurrencies 🪙

• The digital asset market was shaken by news of an unprecedented cyberattack on exchange Binance, resulting in the siphoning of assets estimated at USD 6.3 billion. Exchange leadership immediately suspended deposits and withdrawals to implement emergency procedures, while CEO Richard Teng announced a rebuild of the security architecture and thorough testing before resuming services.
• The FBI and Secret Service joined an international investigation aimed at recovering funds and halting money laundering by North Korea-linked groups, while stablecoin issuer Circle preemptively froze funds worth USD 823 million.
• The incident struck institutional investor confidence and triggered a sharp fall in market sentiment indicators to fear levels. The sell-off extended beyond leading tokens to stock valuations of blockchain-related companies, including Coinbase and MicroStrategy.
• As of 19:15 CET, bitcoin stands at 76,856, down 2.43% (down 4.26% for the week), while ethereum stands at 2,236, down 1.43% (down 4.29% for the week).