Stocks rise during US pre-market trading, with Big Tech leading the gains as Microsoft and Alphabet and the other tech giants are expected to report strong earnings again. Treasuries stabilized after U.S. 10-Y Treasuries reached resistance at 5% (again) yesterday. The S&P 500 (and Dow Jones) gave back their early gains yesterday and closed lower again on Monday, but open higher today.
European equities also advanced despite weak PMI data as Wall Street advanced pre-market and Hermes released a strong earnings report. However, the EUR ended its recent run higher and is trading lower today. Germany, France and the Eurozone as a whole continue to struggle.
Yields on 10-year government bonds fell as much as five basis points to a one-week low of 4.80% before recovering. Europe's Stoxx 600 index rose slightly, while U.S. futures suggested stocks were ending their five-day losing streak. Asia closed with gains.
Bitcoin breached temporarily $35,000, which also weighed on gold, which briefly fell below $1,960 despite continued safe-haven demand. The possible approval of the first U.S. bitcoin ETFs in the coming weeks fueled appetite for bitcoin.
Market sentiment was also brightened slightly by the rise in Chinese equities – but only because the country's sovereign wealth fund bought exchange-traded funds to support prices.
We see a shaky stabilization on the back of the big tech stocks (as so often in recent years/months) driving the market and sentiment.
French President Emmanuel Macron called for an international coalition to fight Hamas. The war between Israel and Hamas remains in the spotlight. Recent developments have eased some concerns about an intensification of the conflict, but it is unlikely to ease significantly in the foreseeable future, especially as the situation in Gaza worsens by the day.
I expect optimism for strong earnings in Big Tech companies to stabilize / support Wall Street today. As Big Tech rises ahead of corporate earnings, there is a risk of profit taking due to concerns that earnings will not be as strong as hoped before the NYSE closes today.
👁 ROB'S MARKET OVERVIEW:
October 24, 2023
🇺🇸 US Markets ↗️/↕️ (early gains will hit some profit taking before NYSE closing)
Cyclical Stocks ↗️/↕️
Tech/Growth Stocks ↗️/↕️
Financial Stocks ↗️/➡️
Defensive Stocks ➡️/↗️
Energy Stocks ➡️/↗️ (recovering from recent overselling)
Materials Stocks ↗️/➡️
AUD ➡️/↗️ (benefiting from improved risk sentiment, no CN losses)
GBP ↗️/➡️ (benefited from strong labor market, upside limited)
CHF, JPY ➡️/↘️ (headwinds from improved risk sentiment)
EUR ↘️ (losses after weak PMI, recent outperformance)
⚒ Commodity Markets ↕️
Oil prices ↕️/↗️
Natural Gas prices ↗️/➡️
Metal prices ↕️/↗️ (headwinds due to concerns of weakening economies; Ongoing CN worries)
Gold ↘️/➡️ (sees some profit taking after recent gains)
⚡️Cryptos ↗️ (cryptos see gains on ETF optimism – face resistance for now at $35K)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)