Source: Wall Street See

US stocks rose across the board on Monday, possibly due to this being the busiest week of the third-quarter earnings season for Europe and America. This week, about 169 companies in the S&P 500 index will report their results. Tech giants Google, Microsoft, Meta, Amazon, and Apple will all announce their earnings. Investors hope that strong earnings from these companies can drive the Nasdaq to new highs this week. Given the overall high valuation of US stocks, Wall Street is closely monitoring whether the growth in earnings of these companies can absorb the high valuation bubble, especially in terms of capital expenditure guidance.

Furthermore, the cooling of geopolitical tensions has boosted risk sentiment. Over the weekend, Israel did not bomb Iran's oil and nuclear facilities, leading to a sharp drop in oil prices. Moreover, with the upcoming US election and the Fed's FOMC meeting next week, Wall Street is closely watching a series of economic data this Monday for clues on interest rate cuts, including the first reading of actual GDP in the third quarter on Wednesday, September's core PCE price index on Thursday, and US non-farm payrolls for October on Friday.

The Dallas Fed's manufacturing index for the US was -3.0, the highest in 30 months, exceeding the market's expected -9, showing further signs of economic resilience. The auctions of two-year and five-year US Treasury bonds were weak, causing bond yields to rise. Attention shifted to the US Treasury Department's financing expectations, with an estimated need to borrow $546 billion in the fourth quarter, less than their previous forecast of $740 billion. By the end of December, the cash balance is expected to be $700 billion, less than the earlier expectation of $850 billion.

Economic data showing resilience is dampening expectations of interest rate cuts. The market currently expects one or two interest rate cuts in 2024, each by 25 basis points, and only three rate cuts in 2025.

On Monday, October 28th, cooling geopolitical tensions boosted risk sentiment, with US stock indices collectively rising. The Nasdaq narrowed its gains at the close but approached historical intraday and closing highs. The only sectors that fell were technology and energy, with the latter being impacted by the large drop in oil prices. Chinese concept stocks surged significantly, outperforming the broader US market, with solar stocks shining brightly. JinkoSolar led the gains by rising nearly 18%, followed by Canadian Solar rising by almost 16%, Daqo New Energy increasing by over 14%, and Nio Inc. surging over 10%.

• All three major US indices rose. The S&P 500 index closed up 15.40 points, a 0.27% increase, at 5823.52 points. The Dow Jones Industrial Average, closely linked to the economic cycle, rose 273.17 points, a 0.65% increase, to 42387.57 points. The Nasdaq, comprising mostly tech stocks, rose 48.58 points, a 0.26% increase, to 18567.19 points. The Nasdaq 100 index closed flat. The Nasdaq Technology Market Capitalization Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 tech components, rose 0.16%. The Russell 2000 small-cap stock index, which is more sensitive to the economic cycle, increased by 1.63%. The VIX fear index fell by 2.61% to 19.8.

• Most sectors of the S&P 500 index rose. The financial sector rose by 1.14%, the materials sector by 0.80%, utilities sector by 0.79%, telecom sector by 0.70%, industrial sector by 0.27%, real estate sector by 0.28%, medical care sector by 0.13%, discretionary sector by 0.12%, essential consumer sector by 0.11%, information technology/tech sector fell by 0.07%, and the energy sector fell by 0.65%.

• Most U.S. industry ETFs closed higher. Regional bank ETFs and banking ETFs rose by nearly 3%, global aviation industry ETF rose by over 2%, financial industry ETF rose by over 1%, biotech index ETF and utilities ETF each rose by nearly 1%. However, semiconductor ETFs and energy industry ETFs both fell by over 0.5%.

• On the research front, JPMorgan pointed out that the pressure on U.S. water resources is intensifying due to the development of AI, with large data centers consuming up to 5 million gallons of water per day, equivalent to the water usage of 0.05 million people in urban areas, while semiconductor chip production still requires tens of billions of gallons of water. This may lead to poorly managed water supply risk disrupting the global supply chain and having a significant impact on AI-related business activities.

• "Tech Magnificent Seven" had more gains than losses. Apple rose over 1.4% midday then closed up 0.86%, releasing a new iMac computer with the most powerful M4 chip and Apple AI capabilities. Indonesia banned the sale of Apple iPhone 16, citing non-compliance with relevant investment requirements. NVIDIA fell by 0.72%. Amazon rose by 0.3%. Microsoft fell by 0.36%. "Metaverse" Meta rose by 0.86%, reported to be developing an AI search engine in an attempt to reduce dependence on Google search and Bing from Microsoft. Google Class A rose by 0.88%, briefly dropping nearly 0.8% due to short-term reports on Meta developing an AI search engine, and the company also launched AI Overviews in over 100 countries and regions. Tesla rose by 1.6% before closing down by 2.48%.

• Chip stocks saw mixed movements. The PHLX Semiconductor Sector Index erased its initial 0.7% gain to close down by 0.02%, at 5211.67 points. The SOXX industry ETF rose by 0.06%; NVIDIA's double long ETF fell by 1.32%. AMD rose by 2.36%, KLA Corp rose by 0.19%. ASML Holding, with positive earnings reports, rose by 1.39%, Arm Holdings rose by 4.36%, Qualcomm rose by 1.15%, UBS Group lowered Qualcomm's target price from $205 to $185, maintaining a neutral rating. ASML Holding ADR fell by 0.43%, Broadcom fell by 0.57%, Taiwan Semiconductor ADR fell by 4.31%, Micron Technology fell by 1.41%, Applied Materials fell by 0.63%.

• AI concept stocks had more gains than losses. BullFrog AI rose by 3.83%, C3.ai rose by 4.19%, Snowflake rose by 1.11%, Super Micro Computer rose by 0.95%, Serve Robotics rose by 21.15%, Palantir rose by 0.25%, NVIDIA-backed AI voice company SoundHound AI rose by 18.15%, BigBear.ai rose by 8.81%, CrowdStrike rose by 0.23%, Oracle fell by 0.63%, Dell Technologies fell by 1.54%.

• China concept stocks significantly outperformed the broad U.S. market. The Nasdaq Golden Dragon China Index closed up 4.05% at 7203.68 points, approaching the October 14 closing level of 7380.22 points. Among the ETFs, the Invesco China Technology ETF (CQQQ) rose by 2.08%. The KraneShares CSI China Internet ETF (KWEB) rose by 3.05%. The Direxion Daily FTSE China Bull 3X Shares ETF (YINN) rose by 4.81%. The Direxion Daily FTSE **** 3X Shares ETF (YANG) fell by 4.96%. The Davis Select Worldwide ETF (DWLD) rose by 1.95%. The FTSE China A50 Index Futures continued to rise in night trading by 0.44% to 13604.000 points.

• Among popular China concept stocks, JinkoSolar led the gains with a 17.77% increase, followed by Canadian Solar with a 15.66% increase, DouYu with a 14.91% increase, Daqo New Energy with a 14.1% increase, Fangdd Network with a 9.26% increase, and Miniso with a 10.51% increase. Meituan ADR rose by 1.9%. New Oriental rose by 5.65%, Trip.com rose by 5.21%, Tencent ADR rose by 0.06%. Bilibili rose by 7.65%, Mengniu Dairy ADR rose by 6.46%, JD.com rose by 4.36%, Alibaba rose by 2.58%, Pinduoduo rose by 2.71%, Baidu rose by 3.72%, NetEase rose by 1.68%, Vipshop rose by 4.33%, Tiger Brokers rose by 8.4%. Li Auto rose by 1.18%, Zeekr rose by 0.8%, XPeng rose by 8.98%, EHang Intelligent rose by around 7.8%, KE Holdings rose by over 6.2%, and following a buy rating upgrade from Morgan Stanley, Nio Inc surged over 14%.

• North American uranium and nuclear energy concept stocks generally rose, with Japanese nuclear power plants set to restart. Oklo, a U.S. nuclear power company supported by OpenAI CEO Altman, surged to a new high by 28.21%. NuScale Power rose by 19.5%. Centrus Energy rose by 9.18%. Cameco, listed in Canada, rose by 2.57%, and NexGen Energy rose by 1.06%. On October 28, Tohoku Electric Power Company in northeastern Japan rose by 1.61%. A nuclear reactor at one of the company's sites in eastern Japan is set to restart on October 29.

• Banking stocks rose across the board. The Philadelphia Stock Exchange KBW Bank Index rose by over 2.1%, with major Wall Street banks Citigroup rising by 3.89%, Goldman Sachs rising by 2.14%, Morgan Stanley, Bank of America, Wells Fargo, and JPMorgan rising between 1.93% to 1.43%.

• As Bitcoin approaches the $70,000 mark, blockchain concept stocks saw widespread gains. Stronghold rose by 14.37%, MARA Holdings rose by over 11%, Canaan ADR rose by over 9.1%, the 'Bitcoin mega holder' MicroStrategy surged over 8.9%, double long Bitcoin ETFs rose by 8.5%, crypto exchange Coinbase rose by around 5.4%, popular online brokerage Robinhood rose by over 3%, while 'volatile stock' Ideanomics IDEX fell by 52.38%; in physical Bitcoin ETFs, BITW and Ark Invest's ARKB under Cathie Wood rose by about 4.4%.

• Other key stocks: (1) Philips unexpectedly saw a drop in third-quarter sales due to deteriorating demand, leading to a 15.95% decline in ADR stock price. (2) Boeing fell by 2.79% as the company initiated a $19 billion stock offering plan to meet liquidity needs and prevent a credit rating downgrade to junk status. (3) Volkswagen ADR fell by 1.06%, planning to close at least 3 German factories, cut tens of thousands of jobs, and implement a 10% salary cut for all employees. (4) Trump Media & Technology Group (DJT) surged by 21.59%, marking its fifth consecutive week of gains, with the stock price soaring over 270% since its September low, creating a market cap of about $9 billion. Stock symbol DJT is gaining popularity on Stocktwits and Reddit, rivaling Tesla and Nvidia. Associated stocks Phunware and Rumble also rose by 15% and 11%, respectively. (5) Online brokerage Robinhood rose by 3.03%, entering the U.S. election gambling field, allowing users to bet on whether Harris or Trump will win the election. (6) Ford lowered its full-year EBIT outlook, causing a post-market drop of over 5%.

European stocks opened higher collectively but turned lower during midday trading, closing higher due to improved risk appetite following easing tensions in the Middle East. Falling oil prices dragged down oil and gas stocks by 1.4%, while luxury goods concept stocks boosted the French index by 0.79%, with Kering rising by over 2%.

• The STOXX 600 Index in Europe rose by 0.41% to 520.95 points. The Euro STOXX 50 Index rose by 0.54%. The FTSE All-World ex-Europe 300 Index rose by 0.38%.

• In each sector, media and construction stocks rose by 1.6% and 2% respectively, while oil and gas stocks fell by 1.4%. Among the components, Dutch household appliance giant Royal Philips' European stocks closed down nearly 17%.

• The German DAX 30 index rose 0.35%. The French CAC 40 index rose 0.79%. The Dutch AEX index fell 0.22%. The Italian FTSE MIB index rose 0.69%. The UK FTSE 100 index rose 0.45%. The Spanish IBEX 35 index rose 0.77%.

Due to the escalation of the 'Trump trade', positive economic data suppressed expectations of interest rate cuts, resulting in weak demand for US bonds, causing US bond yields to rebound across the board, with the 10-year US bond yield rising to a three-month high. Sovereign bond yields in the Eurozone generally opened high and closed low, with French bond yields falling by over 3%, while UK bond yields generally rose on Monday.

• US Bonds: At the close, the yield on the 10-year benchmark US Treasury bond rose by 3.21 basis points to 4.2721%, showing a V-shaped reversal trend throughout the day, hitting a daily low of 4.2280% at 21:14 Beijing time, and then rising to 4.2982% by 01:03, approaching the highs of July 10 at 4.3096% and May 1 at 4.6924%. The two-year US bond yield rose by 3.09 basis points to 4.1355%, also approaching a three-month high.

• Jiang Xianwei, Senior Global Market Strategist at Morgan Asset, stated that the US economy is undergoing a transition from 'hot to warm', with the manufacturing PMI index remaining below the 50 boom-bust line for 6 consecutive months, indicating an economic slowdown. At the same time, holiday season sales growth in the US is expected to be lower than the same period last year, with retail sales in September down to 1.7% year-on-year, further evidence of economic deceleration. Despite the Fed's initiation of an interest rate cut cycle, the latest rebound in non-farm payroll data and the restraint on inflation data may indicate a slowing pace of future rate cuts.

• Eurozone Bonds: At the close, the yield on the 10-year German bond fell by 0.7 basis points to 2.285%. The yield on the two-year German bond fell by 1.7 basis points. The 10-year UK bond yield rose by 2.2 basis points to 4.255%, while the two-year UK bond yield rose by 4.6 basis points. The 10-year French bond yield fell by 3.6 basis points, and the 10-year Italian bond yield fell by 2.1 basis points.

The US dollar index rebounded, not far from the three-month high, about to achieve the largest monthly gain in two and a half years. The Komeito party in Japan suffered defeat in the House of Representatives election, the market is concerned that the Bank of Japan's interest rate hike plan will be thwarted, and the yen came under pressure, falling to a three-month low of 154 against the US dollar. Bitcoin futures surged more than 4%, surpassing the $0.07 million mark.

• USD: The US Dollar Index (DXY) rose 0.05% at the close, to 104.299 points. At 13:19 Beijing time, it had risen to 104.573 points, approaching the top of July 30 at 104.799 points and the top of May 1 at 106.490 points, before giving up gains and briefly turning lower. The Bloomberg Dollar Index rose 0.03% to 1261.86 points, with an intraday trading range of 1260.10-1264.20 points, close to the top of July 4 at 1265.63 points.

• Non-dollar currencies: The euro rose 0.18% against the US dollar to 1.0814; the British pound rose 0.07% to 1.2971 against the US dollar; the US dollar fell 0.16% against the Swiss franc. Among commodity currency pairs, the Australian dollar fell 0.29% against the US dollar, the New Zealand dollar rose 0.11% against the US dollar, and the US dollar fell 0.02% against the Canadian dollar. The Swedish krona fell 0.32% against the US dollar, while the Norwegian krone rose 0.09% against the US dollar.

• The Japanese yen touched a three-month low: the Japanese yen fell 0.64% against the US dollar at the close, to 153.29 yen. The intraday trading range was 152.41-153.88 yen, approaching the top on July 31 at 153.88 yen, near the top on July 30 at 155.22 yen, and the top on July 3 at 161.95 yen. The euro rose 0.79% against the Japanese yen to 165.77 yen; the British pound rose 0.72% against the Japanese yen to 198.838 yen.

• Offshore Renminbi (CNH): The offshore Renminbi against the US Dollar fell 108 points at the close, to 7.1449 yuan. The overall intraday trading ranged between 7.1306-7.1498 yuan, hovering near a two-month low. The last time it fell below 7.15 yuan was on August 19.

• Cryptocurrencies: The largest market-cap leader Bitcoin rose 4.48% at the close to $70300.00. The second-largest Ethereum rose 1.58% to $2536.00.

• Bitcoin traders are bullish on the price again recently, with funds continuously flowing into US ETFs. According to a CoinShares report, last week saw a net inflow of $0.91 billion in digital asset investment products, bringing the total inflow to $27 billion since the beginning of the year, nearly three times the record high in 2021. Ethereum saw an outflow of $35 million last week, the largest among all assets, while Bitcoin attracted most of the funds. Options traders are increasing their bets, expecting Bitcoin to potentially reach a historical high of $0.08 million by the end of November regardless of the outcome of the US election.

Israel did not attack Iran's oil and nuclear facilities over the weekend, causing US oil to drop over 6%, marking the largest single-day decline in over two years, while US natural gas fell over 8%:

• US Oil: WTI December crude oil futures fell by $4.48, a decrease of nearly 6.13%, to $67.38 per barrel, marking the largest single-day decline since July 12, 2022 (when it dropped 7.93%).

• Brent Crude: Brent December crude oil futures fell by $4.63, a decrease of nearly 6.09%, to $71.42 per barrel.

• Intraday Performance: US Oil and Brent Crude maintained a downward trend throughout the day, with pre-market US oil hitting a low of nearly 6.8% below $67, while Brent crude hit a low of over 6.4% below $71.10.

• On the news front, according to the US Energy Information Administration (EIA) data, Iran accounts for 4% of global oil supply. Due to cooling tensions in the Middle East, Citigroup analysts stated on Monday that the likelihood of an escalation of the situation disrupting oil supply is low, lowering the Brent oil forecast by $4 to $70 per barrel for the next three months. However, RBC Capital Markets warned that if Trump wins the election, it could exacerbate geopolitical risks in the oil market, with the decision on whether the conflict between Israel and Iran escalates determining the disruption of oil supply.

• Natural Gas: NYMEX November natural gas futures fell by 8.25%, closing at $2.1286 per million British thermal units.

Due to the rise in U.S. bond yields and the U.S. dollar, gold prices are under pressure, with spot gold falling by about 0.2% on Monday:

• Gold: COMEX December gold futures rose 0.03% to $2755.30 per ounce in late trading, dropping to $2736.90 in early Asian trading. Spot gold continued its earlier decline in early Asian trading, falling by over 0.4% to below $2720, then continued to rise. The U.S. stock market rose in early trading and hit a daily high of nearly 0.4% close to $2750, fell by 0.19% at the close to $2742.42 per ounce.

• Silver: COMEX December silver futures rose 0.21% to $33.850 per ounce in late trading. Spot silver continued its earlier decline in early Asian trading, dropping by nearly 1.4% to around $33.20, then continued to rise. The U.S. stock market rose in early trading and hit a daily high of nearly 0.9% close to $34, fell by 0.14% at the close to $33.6725 per ounce.

• On the news front, according to the latest statistics from the China Gold Association, as of the first three quarters of 2024, the domestic gold ETF holdings increased to 91.39 tons, an increase of 29.93 tons compared to the end of 2023, a growth rate of 48.69%. At the same time, central banks of various countries continue to increase their gold holdings, especially in Turkey, India, Poland, the Czech Republic, and Iraq.

• London industrial metals varied: London copper fell by $61, a decrease of over 0.63%, closing at $9542 per ton. COMEX copper futures fell by 0.11%, closing at $4.3655 per pound. London aluminum fell by $32, a decrease of over 1.19%, closing at $2646 per ton. London zinc rose by $37, an increase of over 1.19%, closing at $3139 per ton. London lead fell by $16, closing at $2030 per ton. London nickel fell by $152, a decrease of 0.94%, closing at $16015 per ton. London tin rose by $104, closing at $31429 per ton. London cobalt remained unchanged, closing at $24300 per ton.

• Aluminum oxide futures fell 0.54% in the night session on Monday. According to Securities Times, the price of aluminum oxide has recently hit a nearly decade-high, with the main contract price in the domestic futures market stable above 5,100 yuan/ton, and the spot market price of aluminum oxide also approaching 5,000 yuan/ton. This significant price increase has had a major impact on the profitability of aluminum enterprises, with profit per ton of aluminum enterprises shrinking by over 1,000 yuan compared to May this year, and some companies even facing losses. Analysts generally believe that due to the unrealized expectations on the supply side of aluminum oxide, the market supply-demand contradiction still exists, and the short-term strong price trend is difficult to change.

Editor / jayden