Oil’s decline boosts market gains 29/10/2024

HOT stories for today

Stocks on the move:

• Cadence Design Systems (CDNS) saw a 5% increase in its stock after third-quarter earnings surpassed Wall Street expectations, along with an increased midpoint outlook for its 2024 non-GAAP EPS.
• VF Corporation (VFC), the parent of The North Face and JanSport, surged 17% on stronger-than-expected fiscal Q2 earnings and announced a 9-cent per share quarterly dividend.
• Ford (F) dropped about 5%; while Q3 results beat analyst forecasts, investors were concerned with full-year guidance falling at the lower end of the expected range.
• F5 (FFIV) jumped 10% after reporting better-than-anticipated earnings for its fourth fiscal quarter.

Watchlist for today: MCD, GOOGL, VFC, FFIV, F, AMD, PFE

Markets & today's action:

• Asia-Pacific markets showed mixed performance despite Wall Street’s recent gains, as investors awaited major tech earnings to potentially push the Nasdaq Composite higher this week. Japan’s Nikkei 225 rose 0.68%, continuing its upward trend, with Japan’s jobless rate improving slightly to 2.4% in September from 2.5% in August. Hong Kong’s Hang Seng Index climbed 0.39%, while China’s CSI 300 fell 0.68 European stocks advanced despite Volkswagen’s announcement of a 10% workforce reduction, which raised concerns across the automotive sector.
• Stock futures remained subdued early Tuesday as investors prepared for a lineup of major corporate earnings, particularly from prominent tech firms. Dow Jones Industrial Average futures edged down 33 points, while S&P 500 and Nasdaq 100 futures showed minimal movement.
• Traders are focused on earnings from companies like Pfizer and McDonald’s, set to report before the opening bell, with Alphabet, Snap, Reddit, Chipotle, and Advanced Micro Devices scheduled to release their results after market close. Additionally, investors will track job openings and labor turnover data in the morning, along with housing price and consumer confidence reports, to gauge the job market and economic health.

Bitcoin

• Bitcoin briefly topped $70,000, reaching $70,207 on Monday, as investors looked forward to MicroStrategy’s earnings and the U.S. presidential election. The cryptocurrency, trading at $69,925, remains in a tight range between $55,000 and $70,000, with potential for a breakout as Election Day on Nov. 5 and a Fed policy decision on Nov. 7 approach.
• Republican candidate Donald Trump has positioned himself as pro-crypto, while Democratic candidate Kamala Harris has been more reserved, creating uncertainty about the election's impact on crypto. Coinbase and MicroStrategy are both set to report earnings on Wednesday, with MicroStrategy recently closing at a peak since 2000.
  Watchlist: Bitcoin: 65,200-70 200, Ethereum: 2380-2580, Solana: 159.50-179.50

Forex

• The EUR/USD pair maintains levels above 1.0800, hovering around 1.0810 during Asian trading hours on Tuesday. A look at the daily chart indicates the pair is testing the upper boundary, potentially signaling a return to its descending channel pattern, which could strengthen a bearish outlook for the pair.
• The Japanese Yen sees modest gains, supported by a surprise drop in Japan’s unemployment rate and concerns over potential intervention. However, uncertainty around a possible Bank of Japan rate hike limits the Yen’s upside, with investors eyeing the upcoming BoJ decision and key U.S. economic data this week. The 154.00 level may act as resistance, just before the 154.35-154.40 zone. Continued buying could push USD/JPY toward 155.00 and potentially the late-July high near 155.20.
  Whatchlist: EUR/USD: 1.0760-1.0810, USD/JPY: 151.30-154.00

Basic Materials

• Oil prices saw a sharp decline on Monday, providing further impetus for U.S. average gasoline prices to potentially dip below $3 per gallon for the first time since 2021—especially timely with the U.S. presidential election just over a week away. The median price for U.S. gasoline dropped to $2.99 per gallon on Monday, and the national average is also expected to fall below $3 soon, according to GasBuddy. This would mark the first sub-$3 national average since 2021.
• Gas prices have remained well below record highs, becoming less of a prominent issue, with expectations of seasonally low prices continuing into spring, regardless of the election outcome. However, gas prices typically rise again in spring due to seasonal trends.
• Heading into Tuesday's European session, gold (XAU/USD) trades above $2,750, close to last week’s peak. Geopolitical risks and U.S. political uncertainty act as supportive factors for gold as a safe-haven asset, alongside a softer tone in U.S. Treasury yields and an overall cautious market atmosphere.
  Watchlist: GOLD 2700-2762, US Oil: 68.00-72.50

The TEFS Analyst team wishes you a successful day!