Semis slump: SMCI’s story 31/10/2024

HOT stories for today

Stocks on the move:

• Microsoft (MSFT): Slipped nearly 4% as revenue guidance for Q2 (at $68.1B-$69.1B) fell short of analysts' expectations ($69.83B).
• Starbucks (SBUX): Edged down 1% after reporting a 7% drop in global same-store sales for Q4, with weaker demand in the U.S. and China.
• Meta Platforms (META): The stock fell 2% after posting third-quarter earnings that beat expectations, but it pulled back as Meta outlined continued plans to invest heavily in AI infrastructure.
• Coinbase (COIN): Declined nearly 3% following a miss on Q3 estimates.
• Carvana (CVNA): Surged over 20% after beating analysts' forecasts for Q3, with the company expressing optimism about the future of the used car platform industry.

Markets & today's action:

• Asia-Pacific markets declined on Thursday as investors awaited the Bank of Japan’s rate decision and key business activity data from China. The BOJ kept its benchmark policy rate steady at 0.25%, issuing a brief statement with no hints on future rate changes. In China, the manufacturing purchasing managers index (PMI) moved into expansion territory for the first time since April, signaling a potential uptick in economic activity.
• Stock futures dipped Thursday morning as Wall Street digested fresh earnings from major tech companies. S&P 500 futures slid 0.48%, Nasdaq 100 futures dropped 0.7%, and Dow Jones futures fell 76 points, or 0.18%. Another key driver looms with the release of the September personal consumption expenditures (PCE) price index—the Federal Reserve’s preferred inflation gauge. Thursday also brings earnings reports from Apple, Amazon, Uber, Merck, and Intel. Additionally, the weekly jobless claims report will offer further economic insights.

Watchlist for today: AMZN, AAPL, CVNA, SBUX, MSFT, META, COIN

Bitcoin

• Ether climbed 2.5%, outpacing Bitcoin and possibly setting up for further gains. Despite Ether’s recent downtrend relative to Bitcoin, it showed resilience as Bitcoin remained relatively flat, dipping slightly in early trading.
• Bitcoin has seen gradual gains recently, partly driven by investor anticipation of a potential Donald Trump victory in the upcoming U.S. election on Nov. 5. Adding to the bullish sentiment, Michael Saylor’s MicroStrategy announced plans to raise $42 billion over the next three years to increase its Bitcoin holdings. However, Bitcoin appeared muted this morning with a slight decline.
  Watchlist: Bitcoin: 70 000-73 620, Ethereum: 2380-2780, Solana: 162-185

Forex

• The Japanese Yen increased as the Bank of Japan (BoJ) held policy steady, pulling USD/JPY below the 153.00 level. However, lingering uncertainty around future BoJ rate hikes may cap further JPY gains, especially as some USD buying emerges to support USD/JPY. Traders now await the BoJ’s post-meeting conference and the upcoming US PCE Price Index.
• Meanwhile, EUR/USD slipped on Thursday, facing selling pressure amid modest USD strength. With bets on more minor Fed rate cuts and high US bond yields supporting the USD, the EUR/USD pair erased part of its previous gains, dipping below the mid-1.0800s as the European Central Bank (ECB) holds off aggressive easing measures.
  Watchlist: EUR/USD: 1.0750-1.0850, USD/JPY: 151.30-154.20

Basic Materials

• Crude oil prices held steady today following a modest inventory draw of 500,000 barrels reported by the U.S. Energy Information Administration for the week ending October 25. Brent crude trades at $72.25 per barrel, while WTI stands at $68.29 per barrel. This slight inventory drop contrasts with last week's significant 5.5 million-barrel build, which had previously added downward pressure to oil prices.
• Gold prices reached a record high of $2,800 an ounce on Wednesday, though analysts suggest this rally could be nearing a peak. One expert noted that gains may stall until a "clearer correction" surfaces, as rising Treasury yields highlight the opportunity cost of holding non-yielding assets like gold. “Gold bulls have solid reasoning,” says Han Tan, chief market analyst at Exinity, pointing to gold’s role as an inflation hedge and safe haven, especially with the added uncertainty of the upcoming U.S. election. Investors now look to the US PCE Price Index for potential fresh momentum.
  Watchlist: GOLD 2700-2790, US Oil: 66.70-70.00

The TEFS Analyst team wishes you a successful day!