Markets show mixed results 23/10/2024

HOT stories for today

Stocks on the move:

• McDonald’s (MCD): Shares plunged 9% after the Centers for Disease Control and Prevention (CDC) announced an E. Coli outbreak tied to McDonald’s Quarter Pounder burgers, resulting in 10 hospitalizations and one death. The outbreak has impacted ten states, with most cases involving individuals who consumed a Quarter Pounder from McDonald's.
• Verizon Communications (VZ): The telecom giant fell short of revenue expectations, citing a slower-than-anticipated phone upgrade cycle. Despite adding 239,000 monthly phone subscribers—exceeding forecasts by about 8%—the subscriber growth wasn’t sufficient to counterbalance the revenue miss. Shares dropped 4%.
• Philip Morris International (PM): The cigarette maker surged 10%, hitting record highs after surpassing third-quarter expectations and raising its full-year profit outlook. Strong demand for smoking alternatives and higher prices fueled this growth, reflecting the success of its multi-billion-dollar investments in cigarette substitutes.
• Lockheed Martin (LM): The defense contractor raised both its profit and sales forecasts for the year, but its F-35 fighter jet program encountered setbacks due to delays in government contracts. Prolonged contract negotiations mean Lockheed will need to cover the costs of procuring jets scheduled for delivery in 2026 and 2027. Shares slid 6%.

Market's action today:

• Asia-Pacific markets mostly gained on Tuesday, diverging from major Wall Street indices, as Japanese subway operator Tokyo Metro’s impressive market debut lifted investor sentiment. Tokyo Metro shares surged as much as 47% before settling at nearly 45% higher, fueling optimism among investors.
• Meanwhile, U.S. stock futures fell Tuesday evening following the S&P 500’s first consecutive losses since early September. Futures tied to the broad market index dipped by nearly 0.1%, Dow futures dropped 126 points or 0.3%, and Nasdaq 100 futures slid 0.1%. Several major companies are set to report earnings on Wednesday, including AT&T, Coca-Cola, and Boeing, before the market opens. Tesla and IBM will follow after the closing bell.

Bitcoin:

• Bitcoin options traders are betting on a surge to $80,000 by the end of November, regardless of the outcome of the U.S. presidential election. Implied volatility for options expiring around Election Day is high, with a bias toward call options, signaling optimism for new highs.
• Analysts believe Bitcoin will perform well no matter who wins. Pro-crypto sentiments from Donald Trump and Kamala Harris contrast the Biden administration's tougher stance. Non-political factors like possible Federal Reserve rate cuts also fuel bullish sentiment. Bitcoin recently neared $70,000, and options activity shows traders favoring $80,000 by November, positioning for a breakout.
  Watchlist: Bitcoin: 66,500-69,780, Ethereum: 2530-2780, Solana: 160.00-172.50

Forex:

• The Japanese Yen (JPY) continues to weaken, dropping below 152.00 against the U.S. dollar for the first time since late July, marking a fresh three-month low. The decline, which has persisted for three consecutive days, is driven by uncertainty over the Bank of Japan's ability to raise interest rates further this year.
• Meanwhile, the EUR/USD pair slipped another 0.16% on Tuesday, nearing a key technical level that could push the Euro to fresh 16-week lows. European Central Bank (ECB) President Christine Lagarde's comments, which offered little new insight or forward guidance, failed to provide support, leaving the Euro on track for its fourth consecutive weekly decline against the U.S. dollar.
  Whatchlits: EUR/USD: 1.0780-1.0900, USD/JPY: 150-152.50

Basic Materials:

• Gold prices (XAU/USD) edged lower during Wednesday's Asian session, though they remained near the record high reached the previous day. The U.S. dollar strengthened to its highest point since early August, driven by expectations of smaller interest rate cuts from the Federal Reserve. This also pushed U.S. Treasury yields to a three-month high. This rise prompted profit-taking on gold, which appeared slightly overbought on daily charts.
• Shares of energy companies rose as cooler U.S. weather boosted demand for longer-term natural gas contracts, with December prices up 3.1%. Oil futures also increased, driven by Middle East tensions and reports of a Hezbollah drone strike on Israeli Prime Minister Netanyahu’s residence. In the U.S., crude inventories rose by 1.643 million barrels for the week ending October 18, exceeding expectations and following a 1.58-million-barrel draw the previous week, according to the American Petroleum Institute (API).
  Watchlist: GOLD 2680-2756, US Oil: 68.60-72.50

The TEFS Analyst team wishes you a successful day!