October kicks off with Market Turmoil 02/10/2024

HOT stories for today
02.10.2024.

What is behind the Chinese market's shine?:

• Hong Kong's Hang Seng index surged over 6% on Wednesday after reopening from a public holiday, fueled by optimism around Beijing's stimulus measures. Property developers like China Vanke led the charge with gains exceeding 40%, while Chinese tech giants like Baidu, JD.com, Alibaba, Tencent, and Xiaomi also rallied. Mainland China markets remain closed for the Golden Week holiday, but Chinese stocks have shone for other reasons, too. Hong Kong's stock index and options moved in sync for six consecutive days, a pattern last seen before a 30% surge.
• What's next? UBS Group AG sees more upside for the Hang Seng, raising its year-end target to 22,100, 4.6% higher than Monday's close. Global funds are expected to return to China, signaling potential further gains.

The Nike story:

• On Tuesday, Nike shares dropped about 5% in extended trading after the company reported mixed fiscal first-quarter results. But that wasn't the only news shaking things up. Why did Nike also withdraw its full-year guidance and delay its investor day?
• The company is gearing up for a significant leadership change as CEO John Donahoe steps down in October, with longtime veteran Elliott Hill set to take over on Oct. 14. With the new CEO incoming, Nike has decided to provide quarterly guidance for the rest of the year instead of full-year projections. And what about the postponed investor day, initially scheduled for November? Nike has yet to announce when it will be rescheduled.

Watchlist for today: NKE, OXY, XOM, TSLA, CAG, COIN, LLY, CMG

US Pre-Market & today’s action:

• Stock futures dipped in overnight trading after a rough start to October and the final quarter of 2024. Dow Jones futures fell by 96 points, while S&P 500 and Nasdaq-100 futures slipped around 0.1% and 0.2%, respectively. On Wednesday, Wall Street will get a preview of private payrolls with the release of ADP’s Employment Survey, ahead of Friday's key September jobs report. The nonfarm payrolls data could heavily influence the market's direction and the Federal Reserve's upcoming rate decisions as it begins its rate-cutting cycle. MI and ISM Manufacturing PMI are scheduled for release.

Bitcoin

• Cryptocurrencies took a hit Tuesday night, with Bitcoin dropping nearly 4% to around $60,972. Is this just a bump in the road for what’s usually one of Bitcoin’s strongest months? The flagship crypto briefly dipped to $60,175, while Ether tumbled over 5% to $2,449.
• Stocks tied to the crypto world weren’t spared either—Coinbase slid 1%, and MicroStrategy lost 2%. But why the sudden drop when October and November have historically been Bitcoin’s best months, with an average 23% return, earning the nickname “Uptober”?
• Though Bitcoin has struggled to break past $70,000, support at $55,000 remains strong. Could this just be the calm before the storm, or will Bitcoin fail to break out this quarter? While some investors are cautious, many still believe new highs are on the horizon.
  Watchlist: Bitcoin: 60 148-66 510, Ethereum: 2402-2736, Solana: 142.10 -162.50

Forex Market

• The US Dollar strengthened on Tuesday, supported by market caution amid escalating Middle East tensions. In Wednesday’s Asian session.
• EUR/USD traded near 1.1070, while the pair edged lower as Eurozone inflation fell below the ECB's target in September. The US ISM Manufacturing PMI came in weaker than expected for the same month.
• Meanwhile, the Japanese Yen slipped against the US Dollar as the Bank of Japan's recent policy meeting indicated no immediate plans for further rate hikes, though the BoJ remains open to adjustments if economic conditions improve.
  Whatchlits: EUR/USD: 1.1046-1.1215, USD/JPY: 141.65-146.60
   

Basic Materials

• Brent Crude prices are expected to recover to $80 per barrel in the fourth quarter, according to Eni CEO Claudio Descalzi. He noted ongoing price volatility and supply chain struggles to meet the demand of 104 million barrels per day, with few new projects and long delays. Brent was trading below $74 per barrel on Wednesday, down 1.6%, following China’s stimulus. Most analysts predict Brent will stabilize around $80 for the remainder of the year.
• Gold extended its gains on Tuesday, fueled by Middle East tensions and boosted by Goldman Sachs' revised price forecast. On Monday, Goldman raised its gold price target by $200 per ounce, expecting it to reach $2,900 by early 2025. The bank reiterated its long-term bullish stance on gold, citing lower global interest rates, rising central bank demand, and its value as a hedge against geopolitical, financial, and recession risks.
  Watchlist: GOLD 2600-2685, US Oil: 66.50-72.42

​​​​​​​The TEFS Analyst team wishes you a successful day!