Markets deliver mixed results 03/10/2024

HOT stories for today
03.10.2024.

Middle East tension:

• Tensions in the Middle East hit a boiling point as Israel vowed a fierce response to Iran's unprecedented missile barrage on Tel Aviv, leaving the region teetering on the brink of an all-out war. Though Israeli officials reported no casualties, with most missiles intercepted, the attack marks a dangerous turning point. Tehran’s bold move signals its determination to show Israel it can strike at will, resetting the balance of power.
• The markets are bracing for impact. Defense stocks are already surging, and after a long period of calm, oil prices could be poised for a sharp spike as fears mount over potential threats to global crude supplies. Could this conflict ignite further economic turmoil? The world is watching closely.

Oil still in the spotlight:

• Oil has been climbing for the 3rd day, but traders largely dismissed Middle East risks until Tuesday, focusing instead on weak demand in China and increasing OPEC+ output. But now, with Israel vowing a "painful" response, the threat to Iran’s oil infrastructure looms large, potentially cutting off 1.8 million barrels per day and pushing prices up by $5 to $10 per barrel.
• In response, a flurry of crude options betting on oil hitting $100 per barrel lit up the market on Wednesday. Traders scrambled to hedge against supply shocks, with some buying outright $100 call options. In contrast, others used spreads, pairing $100 calls with $120 options to cap potential profits while safeguarding against a significant price surge. As the tension escalates, oil bets reflect the market's growing unease.

US Pre-Market & today’s action:

Further labor market data awaits investors on Thursday, with the release of weekly initial jobless claims. The main event for traders — and the Federal Reserve as it has embarked on a rate-cutting cycle — is September’s payrolls report, due on Friday morning. Investors are awaiting more labor market data on Thursday, including weekly jobless claims. However, the key focus remains on Friday's September payrolls report, which will be crucial for traders and the Federal Reserve as it navigates its rate-cutting cycle.

Watchlist for today: LEVI, HUM, NKE, TSLA, COIN, STZ, PINS​​​​​​​

Bitcoin & Crypto

• Bitcoin extended its decline by about 1% on Wednesday, trading around $60,300. Speculators hoping for a typical October surge were met with an early setback as rising tensions in the Middle East fueled caution in global markets. Recently, digital assets have moved in line with stocks, suggesting that macroeconomic factors, like monetary policy, are currently driving Bitcoin’s price.
• Ripple has received "in-principle approval" from the Dubai Financial Services Authority to expand operations in Dubai. This allows the company to offer cross-border payment services from the Dubai International Financial Centre, advancing its goal of providing efficient payment solutions and strengthening its global presence as a regulated entity.
  Watchlist: Bitcoin: 60 148-66 510, Ethereum: 2402-2736, Solana: 142.10 -162.50

Forex Market

• The U.S. dollar strengthened against most major currencies during Thursday's Asian session. It hit a 3-week high of 1.1032 against the euro and a 1-week high of 0.8511 against the Swiss franc, up from the previous day's closes of 1.1045 and 0.8497, respectively. The dollar also increased to 1.3245 against the pound, compared to 1.3267 the day before.
• The yen continued its decline on Thursday, extending a drop to 2.9% triggered by Japanese Prime Minister Shigeru Ishiba's comments that the economy isn't ready for another interest rate hike.
  Whatchlits: EUR/USD: 1.1046-1.1215, USD/JPY: 141.65-146.60

Basic Materials

• Oil prices showed caution despite rising 2% on Wednesday morning; Brent crude was up 1.56% at $74.71 per barrel, while West Texas Intermediate (WTI) rose 1.66% to $70.99, surpassing the $70 mark. However, prices could surge further if Israel follows through on its threat to target Iranian oil and gas infrastructure in retaliation.
• Spot gold prices dipped before bouncing back on haven buying after Iran attacked Israel. This morning, gold edged lower, with buyers lacking momentum to push it higher. While consolidation may be underway, record highs remain within reach. However, a close below $2,600 could signal a more significant pullback and a break in the current trend.
  Watchlist: GOLD 2600-2685, US Oil: 66.50-72.42

The TEFS Analyst team wishes you a successful day!