Challenging week awaits the markets 28/10/2024

Hot stories for today

Stocks on the move:

• Bank stocks took a hit as New York Community Bancorp(NYCB) dropped 8.3% following a weaker outlook, with Goldman Sachs Group Inc. (GS) declining 2.3% and JPMorgan Chase & Co. (JPM) slipping 1.2%. 
• In retail, Tapestry (TPR) shares jumped 13.5%, while Capri’s (CPRI) stock plunged 48.9%, following a court ruling in favor of the Federal Trade Commission's case to block Tapestry's acquisition of Capri.
• Meanwhile, shares of Western Digital (WDC) rose 4.7% after the data storage company reported better-than-expected earnings for its fiscal first quarter.
• Booz Allen Hamilton (BAH) shares surged 9.2% after the defense contractor raised its full-year guidance for earnings and revenue growth.

Watchlist for today: BA, TSLA, TPR, HCA, JPM, NVDA, SAVE

Markets & today's action:

• Japan's benchmark Nikkei 225 and the Topix index advanced on Monday, buoyed by a weaker yen amid political uncertainties following the ruling LDP's loss of its parliamentary majority. The Nikkei climbed 1.54%, leading gains across Asian markets. Meanwhile, in China, industrial profits fell at their steepest rate since the pandemic began, yet the Hang Seng index managed to stay in positive territory despite the economic challenges.
• U.S. equity futures surged on Monday morning as investors anticipated a series of megacap tech earnings, expected to continue driving the Nasdaq Composite to new highs this week. An easing of geopolitical tensions further boosted risk appetite. Dow Jones Industrial Average futures climbed by 179 points, or 0.42%, while S&P 500 futures rose 0.53%, and Nasdaq 100 futures increased by 0.73%.
• Over the weekend, Israel's airstrikes on Iran did not target oil or nuclear facilities as initially feared, contributing to a decline in early oil futures trading. Wall Street is gearing up for a pivotal week, marked by the busiest period of third-quarter earnings reports and the final stretch before the Nov. 5 U.S. Presidential election. Five of the "Magnificent Seven" tech giants—Alphabet, Microsoft, Meta Platforms, Amazon, and Apple—are set to release their third-quarter earnings.

Bitcoin

• Bitcoin hovered around $67,000 on Oct. 26 after a series of news events triggered a nearly 5% price drop last week. Analysts pointed to high open interest in Bitcoin futures as a factor causing price instability, suggesting it could be driving volatility.
• Speculation is growing around a possible liquidity “flush” down to $60,000, as some traders anticipate that clearing out leveraged positions could set the stage for a stronger price recovery. This potential dip may attract more buyers and stabilize the market before a new upward momentum.
  Watchlist: Bitcoin: 65,200-69,780, Ethereum: 2380-2580, Solana: 159.50-179.50

Forex

• The EUR/USD pair edged lower for the second consecutive day, trading around 1.0780 during the Asian session on Monday. On the daily chart, the pair is testing the upper boundary of its descending channel, potentially reinforcing a bearish outlook.
• Meanwhile, the Japanese Yen (JPY) hit a new three-month low against the US Dollar (USD) during the Asian session. The ruling coalition’s loss of a parliamentary majority in Japan has cast doubt on the Bank of Japan's ability to continue raising rates, adding downward pressure on the yen. Additionally, a generally positive risk sentiment is weakening the yen’s safe-haven appeal, while ongoing USD buying has lifted the USD/JPY pair closer to the 154.00 level.
  Whatchlist: EUR/USD: 1.0760-1.0900, USD/JPY: 151.30-154.00

Basic Materials

• Crude oil futures dropped on Sunday after Israeli airstrikes on Iran, anticipated to target critical oil facilities, instead struck Iranian air-defense sites and military infrastructure. Following an initial decline of more than 5%, West Texas Intermediate (WTI) crude settled down by 4.6%, reaching $68, Brent crude, the global benchmark, decreased by 4.4% to $72.34 per barrel. Oil prices had risen last week over concerns that an Israeli response, prompted by an Iranian missile barrage against Israel on Oct. 1, might target Iran’s oil infrastructure, potentially triggering a broader Middle Eastern conflict. However, the narrower focus of Saturday’s strikes led some analysts to suggest that the risk of significant escalation in the region might be lower than initially feared.
• The price of gold (XAU/USD) rebounded, recovering much of its intraday losses and surpassing the $2,740 mark to reach a new daily high ahead of the European session on Monday. Ongoing safe-haven demand, fueled by geopolitical tensions in the Middle East and uncertainties surrounding the upcoming U.S. presidential election, continues to provide upward momentum for the precious metal.
  Watchlist: GOLD 2700-2762, US Oil: 68.00-72.50

The TEFS Analyst team wishes you a successful day!