Markets kick off the week on a soft note 08/10/2024

HOT stories for today
08.10.2024.

Stocks on the move:

• Super Micro Computer (SMCI) surged 15.6% after announcing the deployment of more than 100,000 liquid-cooled GPUs for some of the largest AI factories, an order estimated by Barron’s to be worth several billion dollars.
• Apple (AAPL) dropped 2.3% to $221.69 after Jefferies downgraded it to Hold from Buy, though they raised the price target to $212.92, citing overly high expectations for the upcoming iPhone 16 and iPhone 17.
• DuPont (DD) slid 1.8% to $85.94 following a downgrade to Underweight by Barclays.
• Amazon (AMZN) dropped 3.1% to $180.80 after Wells Fargo downgraded it to Equal Weight, noting that Amazon Web Services’ strength alone isn't enough to counterbalance the stock's challenges.

Markets & today’s action:

• The rally in Chinese markets fizzled out on Tuesday after a much-anticipated briefing from the National Development and Reform Commission fell short of offering significant new stimulus details. Hong Kong’s Hang Seng index suffered a sharp 10% drop before recovering to a 6.4% loss across the Asia-Pacific markets mostly fell, with investors keeping a close eye on Japan’s economic data. 
• Stock futures showed little movement Monday night, following a down day on Wall Street, as rising oil prices and bond yields weighed on the markets. Dow Jones Industrial Average futures dropped 38 points, or 0.09%, while S&P 500 and Nasdaq 100 futures also slipped slightly. The rise in bond yields, with the 10-year Treasury yield climbing above 4%, added pressure on stocks.
• Investors are looking ahead to Tuesday’s economic reports, including data on small businesses and the trade deficit while monitoring key speeches from central bank officials like Boston Fed President Susan Collins and Atlanta Fed President Raphael Bostic.

Bitcoin

• Why is Bitcoin struggling to break past the $64,000 mark? As socio-political uncertainty drives investors toward stocks and cash, Bitcoin has been unable to sustain levels above $66,000 since July 31, despite a 5.2% gain in early October. Could the growing U.S. federal debt be boosting Bitcoin’s long-term prospects? Some analysts think so, but why hasn’t this correlation influenced short-term price trends? With the global monetary base (M2) expanding from $104 trillion in June to $108 trillion in October, why hasn’t Bitcoin rallied past $68,000? Is geopolitical instability the real force behind Bitcoin's limited upside?
  Watchlist: Bitcoin: 59 700-63 510, Ethereum: 2320-2550, Solana: 133 -152.50

Forex Market

• The EUR/USD pair continued its recovery, reaching around 1.0985 in early European trading on Tuesday, as the U.S. Dollar modestly weakened. However, gains for EUR/USD may be limited, with traders anticipating only a minor interest rate cut from the U.S. Federal Reserve in November.
• Meanwhile, the Japanese Yen stalled its overnight recovery from a nearly two-month low against the Dollar. Uncertainty surrounding a potential Bank of Japan rate hike is capping gains for the Yen, offering some support to USD/JPY. However, ongoing geopolitical tensions could favor the safe-haven Yen, limiting further gains for the pair.
• The GBP/USD pair found some buyers during the Asian session on Tuesday, seemingly breaking its five-day losing streak that took it to a nearly four-week low near the 1.3560 level on Monday. The pair is showing signs of recovery, but it remains to be seen if this rebound will gain traction or face further resistance in the sessions ahead.
  Whatchlits: EUR/USD: 1.0947-1.1.1000, USD/JPY: 146-149.50

Basic Materials

• U.S. crude oil prices surged over 3% on Monday as the market braced for potential Israeli strikes on Iran, further escalating tensions in the Middle East. Fears of retaliation from Israel, particularly against Iran’s oil industry after a ballistic missile attack, fueled last week’s price spike. West Texas Intermediate (WTI) surged 9.09% last week, marking its biggest weekly gain since March 2023, while Brent crude jumped 8.43%, the largest rise since January 2023.
• As tensions flared on Monday with Hezbollah launching rockets into Israel and Israel intercepting a missile from Yemen, oil prices tracked upwards again by nearly 3.5%. By 2:30 p.m. ET, Brent crude traded at $80.63, and WTI at $76.83. These developments come on the one-year anniversary of the October 7, 2023, Hamas attack on Israel, intensifying fears of further escalation in the region. Hezbollah also claimed responsibility for targeting an Israeli military base south of Haifa and hinted at additional strikes.
  Watchlist: GOLD 2620-2685, US Oil: 71.60-77.50

The TEFS Analyst team wishes you a successful day!