Market focus converges on the earnings season, with ASML's impact persisting and the Nasdaq and European chip stocks lagging behind. The luxury goods industry continues to face a harsh winter, with industry benchmark LVMH reporting poor performance, leading to a collective decline in European luxury goods concept stocks. Data centers are too power-hungry, prompting tech giants to sign power purchase agreements with nuclear power companies, causing a surge in US nuclear power concept stocks. Morgan Stanley's earnings in the United States exceeded expectations, boosting a general rise in bank stocks.
Internationally, the UK's CPI in September increased by 1.7% year-on-year, touching the lowest level since 2021. Weak inflation data in Europe and the UK have boosted expectations for a rate cut by the Bank of England in November and the European Central Bank this Thursday. Bond yields in Europe and the United States have collectively declined, with US Treasury yields falling to their lowest in over a week. Coupled with the London Bullion Market Association (LBMA)'s forecast that gold prices will rise to $2,917.40 per ounce within 12 months, this has propelled gold prices to be "just one step away" from their historical highs.
Advertisement
Expectations for a slight interest rate cut by major central banks around the world have heated up, with traders currently estimating about a 94% chance of a 25 basis point rate cut by the Federal Reserve in November. Investors are looking to the September retail sales data to be released on Thursday for clues on rate cuts, with the market expecting a month-on-month increase of 0.3%, higher than the previous value of 0.1%.
US stocks rose across the board and closed near their daily highs, with the Russell Small Cap Index leading with a 1.64% gain, as investors withdrew from mega-cap stocks, and rotation helped small-cap stocks reach a nearly three-year high. The Dow Jones hit a new high, with ongoing concerns about ASML affecting its performance, and the Nasdaq closed up 0.28%, trailing in gains. Boosted by Morgan Stanley's strong performance, the financial sector stood out, with only the telecommunications and daily consumer goods sectors declining. Amazon signed a power purchase agreement with a nuclear power company, and US nuclear power concept stocks rose significantly. Most Chinese concept stocks rebounded, with Fangdd closing up 55.43%:
All three major US stock indices rose. The S&P 500 broad market index rose by 27.21 points, a gain of 0.47%, to 5,842.47 points. The Dow Jones, closely related to the economic cycle, rose by 337.28 points, a gain of 0.79%, to 43,077.70 points. The Nasdaq, which is heavily weighted with technology stocks, rose by 51.49 points, a gain of 0.28%, to 18,367.08 points. The Nasdaq 100 rose by 0.07%. The Nasdaq Technology Market Value Weighted Index (NDXTMC), which measures the performance of technology stocks in the Nasdaq 100, closed down 0.09%. The Russell 2000 small-cap index, which is more sensitive to the economic cycle, closed up 1.64%. The VIX Volatility Index closed down 5.14%, at 19.58.
Small-cap stocks once again performed well, with the Nasdaq trailing in gains.
US sector ETFs closed broadly higher. The Global Airlines ETF rose by more than 4%, the Utilities ETF rose by nearly 2%, Regional Banks ETF and Financials ETF each rose by more than 1%, and the Consumer Discretionary ETF, Energy ETF, and Biotechnology Index all rose by about 0.5%.
In terms of investment research strategy, a global survey conducted by Bank of America in October showed that after a series of stimulus measures were introduced in China, the net percentage of global fund managers who expect the Chinese economy to strengthen in the next 12 months reached 48%, the highest since April 2023. However, global stock markets are showing sell signals for the first time since February 2021. Goldman Sachs' trading department expects the S&P 500 Index to rise to 6,270 points before the end of the year.The "Tech Seven Sisters" experienced more declines than gains. Nvidia closed up 3.13%, nearing its highest point, and "Soros's comrade-in-arms" Druckenmiller stated that clearing out Nvidia was a significant mistake, and he would buy more if the stock price drops. Tesla closed up 0.8%, while the "Metaverse" Meta closed down 1.62%. Amazon closed down 0.43%, and Amazon has become a new tech company supporting the development of nuclear energy, signing three related agreements at once to explore the prospects of developing small modular reactors (SMRs). Microsoft closed down 0.63%, Google A closed down 0.18%, and Apple closed down 0.89%.
Chip stocks varied. The Philadelphia Semiconductor Index closed up 0.21%, the industry ETF SOXX was flat, and the Nvidia double long ETF closed up 6.12%. ASML ADR closed down 6.42% to a near one-year low, having closed down over 16% the previous trading day, with the company's third-quarter orders being only half of market expectations and lowering sales and profit targets for next year. KLA closed down 3.55%, Qualcomm closed down 1.5%, AMD closed down 0.33%, Intel closed down 1.54%, while Marvell Technology closed up 2.86%, TSMC ADR closed up 0.19%, Arm Holdings closed up 1.21%, Micron Technology closed up 4.72%, Broadcom closed up 0.48%, and Wolfspeed closed up 15.22%.
AI concept stocks were mixed. Snowflake closed down 3.13%, Palantir closed down 1.18%, C3.ai closed down 0.08%, BigBear.ai closed down 0.57%, SoundHound AI, an AI voice company with Nvidia holdings, closed down 1.13%, while BullFrog AI closed up 3.47%, CrowdStrike closed up 1.3%, Dell Technologies closed up 0.72%, Oracle closed up 0.39%, Serve Robotics closed up 3.93%, and Super Micro Computer closed up 2.07%.
Most Chinese concept stocks rebounded. The Nasdaq Golden Dragon China Index rose nearly 2.2% during the session and closed up 0.93%, at 7008.21 points. Among ETFs, the China Technology Index ETF (CQQQ) closed up 0.76%, the China Internet Index ETF (KWEB) closed up 1.66%, the FTSE China 3x Long ETF (YINN) closed up 5.38%, the FTSE China 3x Short ETF (YANG) closed down 4.87%, and the "China Dragon" ETF RONDHL CHINA ETF (DRAG) closed up 1.24%. The FTSE A50 futures continuous night session closed up 0.71%, at 13375.000 points.
Among popular Chinese concept stocks, Fangdd closed up 55.43%, Sanhe Intelligence (STEC) closed up 601.92%, VS Media rose 130.33%, Smart Charging rose approximately 17.1%, Meituan ADR closed up 4.44%, Jikrypton closed up 2.92%, Ctrip.com closed up 2.46%, Tiger Brokers closed up 1.28%, Baidu closed up 1.38%, Bilibili closed up 1.38%, Tencent Holdings ADR closed up 1.2%, JD.com closed up 0.95%, Mengniu Dairy ADR closed up 0.49%, Alibaba closed up 0.32%, New Oriental closed up 0.07%, while NIO closed down 1.96%, XPeng Motors closed down 0.99%, Pinduoduo closed down 0.63%, NetEase closed down 0.23%, Li Auto closed down 0.32%, VIPShop closed down 0.92%, and Miniso closed down 2.26%.
Bank stocks generally closed higher. The Philadelphia Stock Exchange KBW Bank Index closed up 1.71%, at 122.78 points. The Dow Jones KBW Regional Banking Index closed up 1.54%, at 119.47 points. Morgan Stanley closed up 6.5% to a new high, rising over 8% at one point, the largest intraday gain in nearly four years, with the company's Q3 net revenue and earnings per share exceeding expectations. JPMorgan Chase closed up 0.56%, BlackRock closed up 0.87%, Wells Fargo closed up 1.36%, Goldman Sachs closed up 1.43%, Bank of America closed up 1.57%, UBS closed up 1.75%, Barclays closed up 1.87%, and Citigroup closed up 2.57%.
Morgan Stanley soared due to profits, rising over 8% at one point to the highest in four and a half years.
The US stock airline index closed up 6.5%, marking the best single-day performance since October 2022. United Airlines closed up 12.44% to the highest in four and a half years, with favorable earnings and the first share buyback since the pandemic. Boeing rose about 1.7%, American Airlines rose over 7.1%, Delta Air Lines rose about 6.8%, Alaska Airlines rose about 2.2%, and Southwest Airlines rose about 1.4%; Spirit AeroSystems, a major Boeing parts supplier, also rose nearly 1.2%.
Data centers consume too much electricity, and Amazon has signed a power purchase agreement with a nuclear power company, leading to a general rise in US nuclear power concept stocks. Oklo, invested in by Sam Altman and developing a fast-fission power plant, closed up 41.97%. NuScale Power (SMR) closed up 40.01%, Centrus Energy (LEU) closed up 26.25%, Cameco (CCJ) closed up 7.87%; among nuclear power ETFs, the VanEck Uranium and Nuclear ETF (NLR) closed up 7.16%, and the Range Nuclear Renaissance Index ETF (NUKZ) closed up 7.76%.
Among other key stocks: (1) Novavax closed down 19.44%, as the company announced that the US FDA has suspended its clinical application for its flu vaccine and a combined COVID-19 and flu vaccine. (2) BlackBerry closed up 4.42%, with the company expected to "turn a profit" in the fiscal year 2025. (3) Alcoa closed up 1.86%, with third-quarter EBITDA exceeding expectations, and the stock price rising over 8% in after-hours trading. (4) US electric vehicle manufacturer Lucid Group announced the issuance of hundreds of millions of additional shares, with third-quarter revenue and vehicle deliveries exceeding expectations, and the stock price plunging nearly 14% in after-hours trading.LVMH Group and ASML's poor performance dragged down chip stocks and luxury goods concept stocks, causing European stock markets, French stock index, and Dutch stock index to close lower, but the British stock index rose nearly 1%:
The European STOXX 600 index closed down 0.19%, at 519.60 points. The Eurozone STOXX 50 index closed down 0.77%. Sectors rose and fell, with the "industry benchmark" LVMH Group's poor performance, once falling nearly 7.5% during the day and ultimately closing down 3.68%, L'Oréal fell more than 2%, Hermès fell 1.34%, and Kering Group fell 0.82%. ASML's European stock closed down 5.12%, BE Semiconductor Industries fell 1.26%, while ASM International closed up 0.12%.
The German DAX 30 index closed down 0.27%. The French CAC 40 index closed down 0.40%. The Italian FTSE MIB index rose 0.24%. The British FTSE 100 index rose 0.97%. The Dutch AEX index closed down 0.74%. The Spanish IBEX 35 index rose 0.56%.
Global expectations for central bank interest rate cuts strengthened, and bond yields in Europe and the United States fell together, with the yield on the 10-year U.S. benchmark Treasury bond once falling below 4% to the lowest in a week and a half. Weaker-than-expected UK inflation data opened up room for interest rate cuts, causing the yield on two-year UK government bonds to fall by more than 11 basis points:
U.S. Treasury bonds: At the end of the day, the two-year U.S. Treasury bond yield, which is more sensitive to monetary policy, fell by 0.79 basis points to 3.9376%, trading in the range of 3.9518%-3.9165%. The yield on the 10-year U.S. benchmark Treasury bond fell by 1.36 basis points to 4.0180%, trading in the range of 4.0414%-3.9927%.
European bonds: At the end of the day, the yield on the 10-year German benchmark bond fell by 3.8 basis points to 2.184%. The yield on the two-year German bond fell by 4.2 basis points. The yield on the UK's 10-year government bond fell by 9.7 basis points, and the yield on the two-year UK government bond fell by 11.1 basis points. The yield on France's 10-year government bond fell by 3.5 basis points, and the yield on Italy's 10-year government bond fell by 5.1 basis points.
U.S. Treasury bond yields fell across the board, but the decline was not significant (1-2 basis points). Long-term U.S. Treasury bonds continued to perform well this week.
The Japanese yen has been continuously depreciating against the dollar, recently reaching 150. Weaker-than-expected UK inflation data increased the room for the Bank of England to cut interest rates, causing the pound to fall to its lowest level in two months. Before the European Central Bank meeting, the euro fell to its lowest level in ten weeks. Bitcoin once reached $69,000 during the trading day:
U.S. dollar: The U.S. Dollar Index (DXY) rose 0.24%, at 103.513 points, trading in the range of 103.172-103.608 points during the day, and once approached the August 2 peak of 104.426 points and the June 26 peak of 106.130 points at 03:21 Beijing time.The Bloomberg Dollar Index rose by 0.31%, closing at 1253.29 points, with intraday trading ranging from 1248.20 to 1253.70 points. The index fluctuated upwards throughout the day, approaching the August 2nd peak of 1259.42 points, the July 30th peak of 1263.55 points, and the June 28th peak of 1274.31 points.
The US dollar once again reached its highest level since the release of the non-farm employment data on August 2nd.
Non-US currencies: The euro fell by 0.26% against the US dollar, the British pound fell by 0.63% against the US dollar, and the US dollar rose by 0.38% against the Swiss franc. Among commodity currency pairs, the Australian dollar fell by 0.61% against the US dollar, the New Zealand dollar fell by 0.42% against the US dollar, and the US dollar fell by 0.17% against the Canadian dollar. The Swedish krona rose by 0.92% against the US dollar, and the Norwegian krone rose by 0.83% against the US dollar.
Japanese yen: The yen fell by 0.26% against the US dollar, closing at 149.60 yen, with intraday trading ranging from 148.88 to 149.81 yen, and has been continuously testing the 150 level in recent days. The yen rose by 0.08% against the euro, closing at 162.50 yen. The yen rose by 0.41% against the British pound, closing at 194.331 yen. Bank of Japan member Seiji Adachi stated on Wednesday that while raising interest rates, a loose financial environment will be maintained. Given the uncertainty in the global economic outlook and the development of wages in Japan, the central bank must raise interest rates at a "very moderate" pace to avoid premature rate hikes.
Offshore Renminbi (CNH): The offshore renminbi fell by 14 points against the US dollar at the close, closing at 7.1368 yuan, with overall intraday trading ranging from 7.1212 to 7.1417 yuan.
Cryptocurrencies: The largest market capitalization leader, Bitcoin, rose by 0.97% at the close, closing at $67,870.00, with intraday trading ranging from $66,665.00 to $68,695.00. The second-largest, Ethereum, rose by 1.78% at the close, closing at $2,629.00, with intraday trading ranging from $2,579.00 to $2,656.00.
Concerns about disruptions in Middle Eastern oil supplies have eased, with oil prices continuing to fall, giving up most of the gains made after Iran fired ballistic missiles at Israel on October 1st. US oil broke below $71, and Brent oil fell towards $74. US oil once again fell by more than 1% and briefly broke below $70, with the closing loss significantly narrowing:
US Oil: WTI November crude oil futures fell by $0.19, a decrease of approximately 0.27%, closing at $70.39 per barrel. US oil continued its earlier upward momentum, with European stocks rising by more than 1% in the morning to break above $71.30, followed by a continuous downward trend, with US stocks falling by more than 1.3% in the morning to approach $69.60.
Brent Oil: Brent December crude oil futures fell by $0.03, a decrease of about 0.04%, closing at $74.22 per barrel. Brent oil's trend was similar to that of US oil, with European stocks rising by more than 0.9% in the morning to approach $75, and US stocks falling by more than 1.1% in the morning to approach $73.40.
In terms of news: According to current information, Israel has informed the United States of the scale of its strikes against Iran and has essentially received US approval. The US requirements are, first, not to strike nuclear facilities, and second, not to strike oil facilities. Israel has essentially agreed, so diplomatic communication between Israel and the United States has essentially ended.Natural Gas: U.S. November natural gas futures closed down by over 5.24%, at $2.3670 per million British thermal units (MMBtu).
Oil prices continued to fall, with U.S. crude oil temporarily dipping below $70 for a brief period, falling by more than 1%.
Global expectations for central bank rate cuts intensify, U.S. Treasury yields drop to a one-week low, ongoing geopolitical conflicts raise risk aversion, and the London Bullion Market Association (LBMA) bullish on gold and silver, all support spot gold to rise by over 0.4% on Wednesday, reaching a high of $2685.35, just a stone's throw away from the historical high of $2685.58:
Gold: COMEX December gold futures rose by 0.41% to $2689.90 per ounce, reaching a high of $2702.50 during the U.S. stock market opening, approaching the historical high of $2708.70 set on September 26th. Spot gold was mostly up throughout the day, with a rise of over 0.8% during the U.S. stock market opening, and a 0.42% increase by the close, at $2673.75 per ounce.
Silver: COMEX December silver futures rose by 0.37% to $31.875 per ounce. Spot silver was mostly up throughout the day, with a rise of over 2.1% during the U.S. stock market opening, approaching $32.20, and a 0.65% increase by the close, at $31.6902 per ounce.
Peter A. Grant, Vice President and Senior Metal Strategist at Zaner Metals, stated that expectations for a 25 basis point rate cut by the Federal Reserve in November have strengthened, while weaker inflation data in Europe and the UK have increased market bets on rate cuts by the European Central Bank and the Bank of England, leading to a general decline in yields in Europe and the U.S., supporting the rise in gold prices, which could approach $3000 by the first quarter of next year. Ole Hansen, Head of Commodity Strategy at Saxo Bank, stated that the main bullish factors for gold include fiscal instability risks, safe-haven appeal, geopolitical tensions, uncertainties surrounding de-dollarization, and central bank rate cuts. Representatives at the LBMA annual meeting estimated that gold prices will rise to $2917.40 per ounce by the end of October next year, nearly a 10% increase from current levels, and silver prices are expected to rise by 43% during the same period, reaching $45 per ounce.
London base metals were mixed: the economic barometer "Dr. Copper" closed up by $28, at $9558 per ton. COMEX copper futures rose by 0.71%, at $4.3685 per pound. LME lead closed up by $5. LME zinc was unchanged. LME aluminum closed up by $14. LME tin closed down by $246. LME nickel closed down by $145.
Gold prices are heading towards their historical highs.