November kicks off green 04/11/2024

HOT stories for today

Stocks on the move:

• Nvidia (NVDA) is set to replace Intel in the Dow Jones Industrial Average on November 8, 2024. Nvidia’s strong growth and market leadership in AI have propelled it to become the world’s second-most valuable company, while Intel has struggled to keep pace. This shift highlights Nvidia’s key role in driving advancements in artificial intelligence.
• Spotify (SPOT) rose 1% after Wells Fargo highlighted it as a top stock pick. Analyst Steven Cahall maintained an outperform rating on the stock and pointed to Spotify’s increasing profit margins, diverse product lineup, and strengthening partnerships with record labels as growth drivers.
• Taiwan Semiconductor Manufacturing (TSMC) shares fell 4% after it paused shipments to China’s Sophgo. This decision came when a TSMC-made chip was found in Huawei's AI processor, potentially conflicting with U.S. export restrictions on Huawei due to security concerns.
• Delta Air Lines (DAL) rose 2% after filing a lawsuit against CrowdStrike, alleging negligence and contract breach in a July outage that led to 7,000 flight cancellations. Delta also gained from a 15% decline in jet fuel prices over the past three months.

Markets & today's action:

• European markets are on track for a primarily positive open as traders prepare for the upcoming U.S. presidential election. Meanwhile, Asia-Pacific markets saw gains on Monday as investors braced for a packed week featuring the Federal Reserve’s policy meeting and the U.S. election. Will this set the stage for a more optimistic outlook? Investors are also closely watching China, where parliament kicks off its session Monday. Could we see new fiscal support measures announced by the end of the week? Additionally, China’s October trade figures, set for release on Thursday, are under scrutiny following weaker-than-expected exports and imports in September.
• In the U.S., stock futures were mixed in overnight trading, with Dow Jones futures slipping 38 points, while S&P 500 and Nasdaq-100 futures edged up 0.2% and 0.34%, respectively. Beyond the election, Wall Street is also highly focused on the Fed’s rate decision, with a 96% likelihood of a rate cut, according to CME Group’s FedWatch tool. How will Fed Chair Jerome Powell’s comments shape expectations on future rate policy?
• Meanwhile, earnings season rolls on, with about 20% of S&P 500 companies set to report this week. So far, around 70% of companies have surpassed earnings forecasts, per FactSet. Investors will watch for updates from major players like Super Micro Computer, Moderna, CVS Health, Qualcomm, and Wynn Resorts, hoping these results can further stabilize market sentiment amidst an event-heavy week.
   

Watchlist for today: DJT, TSM, MAR, FIS, COIN, NVDA, MSFT

Bitcoin

• Bitcoin’s momentum has slowed since the recent rally, yet traders remain optimistic about recovery. Could Bitcoin still reach $100,000 despite election uncertainties? The U.S. presidential election could influence Bitcoin’s trajectory. If Trump wins, his pro-crypto stance might drive a rally, while a Harris victory would likely lead to balanced, cautious crypto regulations. But is the election outcome the main factor?
• Beyond politics, Bitcoin’s role as a hedge against financial instability and inflation continues to attract investors. With regulatory clarity improving, especially in decentralized finance, and the introduction of Bitcoin ETFs stabilizing the market, could Bitcoin’s path to $100,000 be inevitable, regardless of who wins?
  Watchlist: Bitcoin: 67 300-73 620, Ethereum: 2380-2780, Solana: 157.30-170

Forex

• The EUR/USD pair recovers its losses from the prior session, trading near 1.0880 during Monday's Asian session. This upward movement is linked to a weaker US Dollar following softer-than-expected October Nonfarm Payrolls (NFP) data. However, uncertainty around the upcoming US presidential election may drive safe-haven demand, which could limit further gains for the EUR/USD pair.
• Meanwhile, the Japanese Yen strengthened on Monday as the US Dollar declined, likely influenced by heightened uncertainty ahead of Tuesday's election. However, JPY liquidity is somewhat constrained as Japanese markets are closed for Sports Day, hindering physical trading of US Treasuries.
  Whatchlits: EUR/USD: 1.0760-1.0909, USD/JPY: 151-154

Basic Materials

• Gold prices (XAU/USD) remained positive on Monday, buoyed by heightened risks surrounding the impending U.S. presidential election and intensifying geopolitical issues in the Middle East. Known as a safe-haven asset, gold typically draws increased interest from investors during uncertain times, providing a buffer against volatility. However, the recent rise in U.S. dollar demand and climbing U.S. bond yields may curb upward movement for gold, as higher yields often reduce the appeal of non-yielding assets like bullion. Investors are closely monitoring Tuesday’s election, which is expected to be pivotal in shaping market sentiment..
• Oil prices saw a significant rise of over $1 on Monday after OPEC+ postponed its planned production increase by a month. Is this delay fueling expectations of tighter supply in the weeks ahead? Brent crude rose by 1.61%, hitting $74.28 per barrel, as global markets brace for an action-packed week featuring the U.S. presidential election and an important meeting in China. With both events having potential market-shaping outcomes, could oil see continued support soon? This delay by OPEC+ appears to set the stage for heightened anticipation and possible volatility in the oil market.
  Watchlist: GOLD 2700-2797, US Oil: 66.70-72.50

The TEFS Analyst team wishes you a successful day!