Source: Wall Street See

Non-farm payroll in the United States increased by a higher-than-expected 254,000 in September, the highest in half a year. The revisions for July and August were also increased by 72,000. The unemployment rate unexpectedly dropped to 4.1%, confirming that the economy remains healthy.But after the bursting of the internet bubble and the Fed's rate cut in 2001, the ROI dropped by more than 10%.These results, which exceeded expectations, led traders and investment banks to cancel their bets on a significant rate cut in November.

Some traders are even concerned that the Fed's rate cut in November may not be sufficient at 25 basis points. The 'New Fed Communication Agency' stated that the September non-farm report may close the door to a 50 basis points rate cut in November, making a 25 basis points cut more plausible.

The data caused the US Dollar Index to rise sharply by over 60 points, breaking above 102 to a seven-week high, with spot gold pressuring below $2630, US stock futures jumping before the market open, US Treasuries experiencing a sharp decline, and yields uniformly rising by double digits. The two-year US Treasury yield surged by 20 basis points to the best level in six months. Traders' expectations for the Fed's future rate cuts over the next four meetings are less than 100 basis points, also reducing bets on rate cuts in Europe and the UK.

According to CCTV news, the EU voted to approve the final ruling on the anti-subsidy case for electric cars, imposing additional tariffs on Chinese electric vehicles, with Germany strongly opposing the move. However, European automotive stocks surged by over 2%, with Volvo, Volkswagen, and Renault in Europe all rising by about 3%.

The market continues to focus on the Middle East tension, with oil prices rising for the fourth consecutive day and up over 9% for the week. US President Biden said he is considering sanctions on Iranian oil, causing oil prices to give back a 2% increase earlier. Goldman Sachs mentioned that if an Israeli attack leads to a one million barrels per day reduction in Iran's oil production for a period of time, oil prices could soar $10 to $20 per barrel. Other analysis suggests that if the conflict escalates over the weekend, gold futures could easily rise back to $2700 or even hit new highs.

On Friday, October 4th, boosted by expectations of an economic soft landing, the US stock market opened higher across the board. Chinese and technology stocks led the gains, with the Dow rising over 230 points at the opening, the Nasdaq up over 1%, small-cap indices gaining 1.5%, significantly outperforming the 2.4% rise in Chinese concept stocks. The US stock market continued to surge and closed at daily highs, with the Dow up over 340 points to a new high, Tesla up nearly 4%, AMD up almost 5%, and Chinese concept stocks up over 3%, with a nearly 12% weekly gain.

• US stock indices rose across the board. The S&P 500 index closed up 51.13 points, a 0.90% increase, at 5751.07 points. The Dow, closely related to the economic cycle, closed up 341.16 points, a 0.81% increase, at 42352.75 points. The tech-heavy Nasdaq closed up 219.37 points, a 1.22% increase, at 18137.85 points. The Nasdaq 100 rose by 1.22%. The Nasdaq Tech Market Cap Weighted Index (NDXTMC), measuring the performance of Nasdaq 100 technology sector stocks, closed up by 1.24%. The Russell 2000 small-cap stock index, more sensitive to the economic cycle, closed up by 1.50%. The fear index VIX fell by nearly 7% to below 20.

• For the entire week, the S&P rose by 0.2%, the Dow was slightly up, the Nasdaq increased by 0.1%, the chip index fell by 0.2%, and the small-cap index dropped by 0.6%. The S&P energy sector surged over 7%, the best performance in nearly two years. The Nasdaq Golden Dragon China Index surged over 3%, leading the gains, closing above 8000 for the first time since February 1, 2023, up nearly 12% for the week and rising for four consecutive weeks, with a cumulative increase of 36.77% since the close of September 23rd.

• US stock industry ETFs generally closed higher, with the aviation industry ETF leading with a rise of over 3.3%. The global aviation industry ETF closed up by 3.34%, the internet stock index ETF and regional bank ETF rose over 2%, while the banking sector ETF, financial sector ETF, semiconductor ETF, consumer discretionary ETF, and technology industry ETF rose by 1.85%-1.11%, and the utility ETF fell by 0.16%.

• In terms of research and strategy, citing EPFR Global data, U.S. banks reported that for the week ending on October 3rd, the recent inflows into Chinese stock funds and global emerging market stock funds hit historical second highs at $13.9 billion and $15.5 billion respectively. Investors flocked to large-cap Chinese ETFs, with iShares China large-cap stock ETF (FXI) recording a $1.4 billion inflow on Thursday, more than doubling the previous historical record.

• "Tech Seven Sisters", with only Microsoft falling, while Meta hits a new high. Apple closed up 0.5%, Nvidia up 1.7%, Tesla up 3.9%, Microsoft down 0.12%, Google A up 0.7%, Meta up 2.3%, Amazon up 2.5%.

• On the news front, Apple is expected to launch the iPhone SE 4 with an Apple-designed 5G Modem next spring, which will feature an OLED screen for the first time and be priced between $459 and $499. Prior to OpenAI, the Meta version of Sora was unveiled, called Meta Movie GenSora, which can create high-definition long videos of different aspect ratios, with many more features than Sora, such as generating accompanying background music and sound effects, editing videos based on text commands, and creating personalized videos based on user-uploaded images. According to J.P. Morgan Securities, if Amazon adopts Rivian electric trucks and autonomous driving technology in medium-haul transportation, abandoning internal combustion engine trucks, Amazon could save over $20 billion per year.

• Chip stocks rose together. The PHLX Semiconductor Index rose 1.6% for the day but fell 0.2% for the whole week. The industry ETF SOXX closed up 1.4%; Nvidia's two times long ETF rose 3.3%. Intel closed up 1.5%, Taiwan Semiconductor ADR gained 0.9%, Broadcom was up 2.8%, Arm Holdings rose 1.7%, Micron Technology was up 0.4%, Applied Materials rose 1.2%, ASML Holding ADR edged up, KLA Corp gained 1.7%, AMD rose 4.9%, while Qualcomm dipped slightly.

• AI concept stocks had more gains than losses. Dell Technologies rose over 4%, Super Micro Computer fell 0.8%. Serve Robotics rose 11%, CrowdStrike rose nearly 3%, BullFrog AI fell over 3%, SoundHound AI, an AI voice company Nvidia holds shares in, closed flat, BigBear.ai rose 1.7%, C3.ai rose 4.6%, Snowflake rose 3.9%, Oracle rose 2.4%, and Palantir rose around 2%.

• Chinese concept stocks continued to strengthen. The NASDAQ Golden Dragon China Index rose over 3%, with a nearly 12% weekly gain and four consecutive weeks of increase, reaching the highest level since February last year. The China Technology Index ETF (CQQQ) closed up 5.7%, accumulating a weekly gain of 20.30%, following last week's 23.25% rise in performance. The China Internet Index ETF (KWEB) closed up 3.3%, with a weekly gain of 13.2%, continuing the 26.79% rise from last week's performance. The FTSE China 3x Bull ETF (YINN) rose nearly 11%, accumulating a weekly gain of 35.22%, continuing the previous week's 59.50% rise in performance; the FTSE China 3x Bear ETF (YANG) fell nearly 10%. The China Dragon ETF (DRAG) rose around 2%, rising nearly 13% pre-market and closed more than 9%, being listed in the USA on the following day after its IPO. XtrackersHarvest CSI 50 (ASHS) closed up 6.03%, Deutche Bank Harvest CSI 300 Index ETF (ASHR) closed up 5.26%. FTSE A50 Night Futures rose over 0.9%, hitting a new high since January 2012.

• Among popular Chinese concept stocks, Bilibili, Nio, Li Auto, Alibaba, and Baidu all rose over 1%, Xpeng rose over 3%, Tiger Brokers rose nearly 35%, Ctrip rose almost 6%, but Fangdd Network fell close to 33%. BingEx Ltd. (ADR code FLX) had a flat opening on its first day of US IPO, reporting $16.50. It surged up to 33% to nearly $22 at one point, closed up more than 9%, and was temporarily halted during trading due to excessive volatility. The company provides services to individuals and businesses in China.

• Other key stocks: 1) Reports suggest Tencent is considering acquiring French gaming company Ubisoft Entertainment, pushing Ubisoft's European stocks up over 33%. 2) 'Tesla rival' Rivian fell nearly 9% before closing down over 3%, revising down its car production guidance for the year, and Q3 delivery volumes lower than anticipated, attributed to production interruptions caused by supply shortages. 3) US low-cost airline Spirit Airlines plummeted over 37% before closing down over 24% to a record low. Reports indicate the company is discussing potential bankruptcy application terms with bondholders, with a regulatory halt in March on its planned merger with JetBlue Airways - facing a year of setbacks. 4) CVS Health rose 2.6%, considering a split of its retail pharmacy and health insurance departments and undergoing a strategic evaluation of its business, seen as a significant reversal of long-term strategy. 5) In the aviation sector, Frontier Group rose 16.43%, JetBlue Airways rose 14.24%, United Airlines and American Airlines rose approximately 6.4%.

Boosted by optimistic sentiment, European stocks extended their gains in late trading, halting a four-day decline, yet still ended the week with an accumulated decrease. The oil and gas sector continued to follow the rise in oil prices, automotive stocks turned positive, and the Italian stock index rose over 1%. Dockworkers on the US East Coast and Gulf Coast ended their strike, while European shipping stocks fell across the board as they missed out on seizing market share opportunities. Danish shipping giant Maersk fell over 8% at one point.

The STOXX 600 index in Europe closed up 0.44% at 518.56 points, with a weekly decline of 1.80%. The Euro STOXX 50 index closed up 0.68%, with a weekly decline of 2.22%. The FTSE All-World 300 index closed up 0.33%, with a weekly decline of 1.80%.

The German DAX 30 index closed up 0.55%, ending a four-day decline with a weekly decline of 1.81%. The French CAC 40 index rose 0.85%, accumulating a weekly decline of 3.21%. The Italian FTSE MIB index closed up 1.28%, with a weekly decline of 3.23%. The UK FTSE 100 index closed down 0.02%, with a weekly decline of 0.48%. Norwegian stock indices rose over 3% for the week, driven by oil prices.

The market downturn leads to a decrease in interest rate expectations for the European and American central banks, with a sharp drop in US bonds and a double-digit surge in yields across the board, particularly in short-term bonds. The two-year US bond yield soared by 22 basis points to 3.92%, marking the best half-year increase in four weeks, while the 10-year benchmark bond yield rose by nearly 14 basis points to 3.99%, reaching a two-month high. European bond prices followed the decline in US bonds.

• US Bonds: At the close, the two-year US bond yield rose by 22 basis points to 3.9259%, below 3.73% before the 20:30 Beijing non-farm payrolls release, accumulating a 36 basis point increase throughout the week. The yield on the US 10-year benchmark bond rose by over 13 basis points to a daily high of 3.9827%, with a weekly increase of over 22 basis points.

• European Bonds: At the close, the 10-year German bond yield rose by 6.6 basis points to 2.210%, marking a three-day consecutive increase and a weekly gain of nearly 8 basis points, showing an overall V-shaped reversal trend. The two-year German bond yield rose by over 12 basis points to 2.203%, up nearly 13 basis points for the week. The 10-year UK bond yield rose by over 11 basis points, with a weekly increase of over 15 basis points, while the two-year UK bond yield rose by 17 basis points, the largest increase in four and a half months, with a weekly rise of around 20 basis points.

Safe-haven demand and positive economic data have driven the US Dollar Index to rise for the fifth consecutive week, breaking through 102 to reach a seven-week high and ending a four-week losing streak. The single-week performance is the best since September 2022. The Euro and British Pound declined for six consecutive days, with the Japanese Yen falling over 1% at one point below 149 to a seven-week low, dropping by 4.7% for the week. Offshore Renminbi fell for six consecutive days, dropping by 500 points at one point, falling below 7.10 yuan, erasing gains since September 18, and Bitcoin rose back above $62,000.

• US Dollar: The DXY US Dollar Index rose by 0.7% to 102.69, reaching a seven-week high since August 16, standing above the 50-day moving average for the second consecutive trading day, accumulating a 2.2% increase for the week.

• Non-US Currencies in General Decline: The Euro against the US Dollar saw the deepest drop of 0.37%, falling below 1.10 to a seven-week low since August 15, with a weekly decline of 1.8%. The British Pound against the US Dollar saw the deepest drop of 0.4%, temporarily falling below 1.31 to a three-week low since September 12, with a weekly decline of 2%.

• Japanese Yen: The Japanese Yen against the US Dollar experienced the deepest drop of 1.4%, temporarily falling below 149 to a seven-week low since August 16, with a three-day consecutive decline and a weekly decrease of 4.7%.

• Offshore Renminbi (CNH): The offshore Renminbi against the US Dollar saw the deepest drop of 500 points or 0.7%, falling below 7.10 yuan at one point, with a six-day consecutive decline and erasing gains since September 18, accumulating a weekly decline of over 1100 points or 1.7%.

• Cryptos: The largest market cap leader Bitcoin rose over 2%, reclaiming $0.062 million, with a weekly drop of over 5%. The second largest Ethereum rose nearly 4%, breaking through $2,400 to move away from a two-week low. At the New York afternoon close, CME Bitcoin futures BTC main contract reported $62,720.00, up 2.80% from Thursday's New York afternoon close, with a weekly cumulative drop of 5.17%. CME Ethereum futures DCR main contract reported $2,440.00, up 3.41% from Thursday, with a weekly cumulative drop of 10.43%.

The market continues to worry about escalated conflicts in the Middle East leading to supply disruptions, especially concerned about Israel's strike on Iran's oil infrastructure. Oil prices rose for four consecutive days, with Friday briefly surging over 2% to a five-week high, Brent oil briefly rising above $79, narrowing gains towards the close, with a weekly rise of over 9%. U.S. oil achieves its best single-week performance since October 2022, while European natural gas also rises to a five-week high.

• US Oil: WTI November crude oil futures closed up $0.67, nearly 0.91%, at $74.38 per barrel, with a weekly increase of 9.09%. On Friday, it reached a high of $1.84 or 2.5%, briefly breaking $75, the highest in five weeks since August 30.

• Brent Oil: Brent December futures closed up $0.43, 0.55%, at $78.05 per barrel, with a weekly gain of 9.10%. On Friday, it rose by $1.67 or 2.2%, crossing $79 for the first time since August 30, with speculators' bullish sentiment for Brent oil at a five-week high.

• Natural Gas: NYMEX November U.S. natural gas futures fell over 3.90% to $2.8540 per million British thermal units, with a weekly decline of over 1.65%. Europe's TTF Dutch natural gas futures benchmark briefly rose over 3% to a five-week high, with a weekly increase of over 7.3%, while EU carbon taxes fell over 6% this week.

Steady employment has eliminated the expectation of a significant rate cut by the Fed in November. The rebound of the dollar and U.S. bond yields together put pressure on gold for two consecutive days. Gold saw its first weekly decline in four weeks, but silver rose for four consecutive days to reach a twelve-year high, with nickel up about 2.3% on Friday and a weekly gain of over 5.8%.

• Gold: COMEX December gold futures fell 0.50% to $2,665.79 per ounce at the close. Spot gold fell the most after the release of non-farm payroll data in pre-market trading with a $24 drop or 0.9%, dipping below $2,630, and later narrowing to a 0.2% drop back above $2,650, then slightly widened to a 0.5% drop hovering around $2,640 at the end of the week, with a 0.5% weekly decline, halting a three-week rise.

• Silver: COMEX December silver futures fell 0.15% at the close to $32.415 per ounce. Spot silver also fell following non-farm payroll data at one point by 1.6% below $32, but later rose 2.9% to almost reach $33, rising for four consecutive days to the highest level in twelve years since 2012, with the closing gain significantly narrowing to 0.3% trading at $32.15, with a weekly increase of 1.7%.

• London industrial metals generally rose: LME copper futures closed up $78 or 0.8% at $9,944 per ton, with a weekly decline of 0.4%. LME aluminum futures rose $24 to $2,653 per ton. LME zinc futures rose $42, up more than 1.3% to $3,166 per ton, with a weekly increase of nearly 2.46%. LME lead futures rose by $7 to $2,150 per ton. LME nickel futures rose by $403, an increase of 2.29%, to $17,992 per ton, with a weekly increase of 5.86%. LME tin futures rose by $96 to $33,805 per ton, with a weekly increase of 2.71%. LME cobalt futures remained unchanged at $24,300 per ton.

Editor / jayden