Markets eye possible election scenarios 30/10/2024

HOT stories for today

Stocks on the move:

• Alphabet, Google’s (GOOGL) parent company, reported third-quarter earnings that surpassed expectations for both revenue and profit, sending shares up 3%. Alphabet’s strong performance sets a positive tone for the week of mega-cap tech earnings.
• However, Chipotle’s (CMG)stock dipped after the company reported mixed quarterly results. Despite increased customer traffic, same-store sales growth fell short.
• Visa (V) surpassed earnings and revenue forecasts for its fiscal fourth quarter, pushing shares up by about 1.5%. The company also announced a 13% increase in its quarterly dividend, raising it to 59 cents per share.
• Meanwhile, Reddit (RDDT) shares surged 16% following an earnings beat and an optimistic forecast for the fourth quarter, exceeding market expectations.
• AMD reported earnings in line with expectations on Tuesday, but its revenue forecast for the December quarter came in slightly below estimates. This led to a drop in after-hours trading, with AMD shares initially falling to 6%.

Watchlist for today: GOOGL, AMD, RDDT, SNAP, CMG, AMD, V, CAT, LLY, ADP

Markets & today's action:

• Asian stocks edged lower as traders remained cautious ahead of next week’s U.S. election and the Federal Reserve’s upcoming rate decision. Mainland China and Hong Kong benchmarks fell over 1% in the region, leading to losses. Meanwhile, Japan’s Topix and Nikkei indexes gained, supported by the yen’s recent depreciation. European markets are also set for a downbeat start on Wednesday as investors await critical regional growth data, the U.K. government’s Budget announcement, and a new round of earnings.
• In the U.S., S&P 500 futures rose slightly Tuesday night, with traders anticipating significant tech earnings, including Meta Platforms and Microsoft on Wednesday, followed by Apple and Amazon on Thursday. Economically, investors are looking forward to the first preliminary GDP reading, which is also scheduled for Wednesday.

Bitcoin

• Bitcoin neared its March record high on Tuesday, driven by rising expectations of a Trump victory in the upcoming election. The CoinDesk Bitcoin Price Index climbed 4.9% to $72,987, just shy of its March peak, with gains of nearly 10% this week and 15% in October.
• Beyond election influences, Bitcoin’s rally is also linked to its April halving, a regular reduction in mining rewards historically tied to price increases. Chris Kline of BitcoinIRA predicts Bitcoin could reach $100,000 early next year as investors seek alternatives amid economic concerns.
  Watchlist: Bitcoin: 70 000-73 620, Ethereum: 2380-2780, Solana: 162-185

Forex

• EUR/USD is slipping after two days of gains, trading near 1.0810 during Wednesday’s Asian session. The Euro faces downward pressure amid expectations that the European Central Bank (ECB) may cut its Deposit Facility Rate further. Investors also focus on preliminary GDP data from Germany and the Eurozone for additional insights.
• Meanwhile, the Japanese yen (JPY) edged slightly against the U.S. dollar, though it lacked momentum and remained near a three-month low reached earlier this week. Concerns that Japanese authorities may intervene to support the Yen provide some stability. However, gains are limited due to ongoing uncertainty around the Bank of Japan’s (BoJ) rate-hike plans.
  Watchlist: EUR/USD: 1.0750-1.0850, USD/JPY: 151.30-154.20

Basic Materials

• Oil prices closed slightly lower on Tuesday, extending Monday’s 6% drop amid reports that Israeli Prime Minister Netanyahu is pursuing a diplomatic solution to the Lebanon conflict. Brent crude settled at $71.12 per barrel, and U.S. West Texas Intermediate at $67.21. Market pressures include weak demand from China, though BP expects recovery with the upcoming Chinese stimulus. Investors await U.S. inventory data, with crude and gasoline stockpiles likely rising. Additionally, anticipated Fed rate cuts in November could impact oil demand by spurring economic activity.
• Gold (XAU/USD) continues its upward momentum from the overnight breakout, hitting a new record high during Wednesday’s Asian session as it builds on its recent short-term trading range. Gold prices are reaching new all-time highs, driven by U.S. election uncertainty and Middle East tensions. The rally remains strong despite high U.S. Treasury yields and a bullish USD. Traders now await key U.S. economic data to assess the potential for further gains.
  Watchlist: GOLD 2700-2790, US Oil: 66.70-70.00

The TEFS Analyst team wishes you a successful day!