Significant market fluctuations were observed, especially in the U.S. ahead of the presidential election, with notable gains and losses among various stocks. The Nasdaq fell by 2.4% and the S&P 500 by 1.9%. European markets also experienced declines, while some Asian markets had mixed outcomes. Attention is now focused on U.S. employment data, crucial for the Fed’s upcoming rate decisions, with expectations of around 100,000 new jobs created. Meanwhile, Bitcoin dipped below $69,000.
Yesterday’s market fluctuations were astounding, particularly with Société Générale’s impressive 11% rebound following its results. However, the real drama unfolded in the U.S. stock market, where investor reactions seem increasingly irrational, likely fueled by the collective frenzy ahead of next Tuesday’s presidential election. On the S&P 500, Paycom surged by 21% and Entergy gained 15%, while Estée Lauder plummeted by 22%, Aptiv fell 17%, and MGM Resorts decreased by 11%. Super Micro Computer, the former AI darling, saw a combined decline of 48%, with an 11% drop following a staggering 37% fall from the previous day. Uber and Regeneron dropped 9%, while eBay fell 8%. Notably, Microsoft, typically seen as a safe bet, suffered a significant 6% drop.
The Nasdaq ended the day down 2.4%, with 75% of its constituent stocks in the red. The S&P 500 was only slightly better off at -1.9%. In Europe, markets were similarly bearish, particularly in France and Switzerland. Surprisingly, September, often regarded as a challenging month for stocks, turned out to be relatively positive this year, while October, historically more fruitful, has disappointed. Japan was the only significant gainer, climbing 3%, while other markets struggled: the S&P 500 fell 1%, the Stoxx Europe 600 dropped 2.85%, and Hong Kong’s Hang Seng index decreased by 3.9%. Notably, India’s market faced the most turbulence this October, with a 6.1% decline. Conversely, Germany’s DAX managed to limit its losses to 0.35%, aided by SAP’s comeback.
As the stock markets opened for November, a strong rebound in oil prices took center stage following Axios reports of Iran preparing a response against Israel. Concurrently, the Caixin manufacturing PMI for China corroborated the previous day’s official figures, indicating a slight recovery in the industrial sector. Beijing also revealed the first signs of an uptick in real estate transactions, a result of substantial government encouragement for households to invest in property. Another significant macroeconomic update involved the rise of borrowing costs in Britain after the release of the Labour party’s budget. The British finance minister is working to calm the markets to avoid a repeat of the so-called ‘Truss moment,’ which led to a severe systemic risk in the British government bond market due to poorly laid out fiscal plans.
Despite these developments, investors are intensely focused on the U.S. job market ahead of the release of October statistics at 1:30 PM. These data points are crucial to the Federal Reserve’s decision-making regarding interest rates. With just six days remaining before the next monetary policy decision, the anticipated figures are particularly significant, with economists projecting an average of just over 100,000 new jobs added in the U.S. over the past month.
Amidst all this, Bitcoin has dipped below the $69,000 mark, possibly due to a slight decline in Donald Trump’s odds among bookmakers over the last 24 hours. In finance, even minor changes can have substantial impacts.
In the Asia-Pacific region, Tokyo closed down 2.5% as the week ended, while declines were more gradual in Australia, South Korea, India, and Taiwan, each dropping about 0.5%. Hong Kong’s index rallied by 0.9%, and the mainland CSI300 gained 0.3%. European early indicators appear tentatively optimistic, bolstered by a modest uptick in U.S. market enthusiasm following Amazon and Intel’s results.
The CAC 40 opened 0.2% higher at 7,358 points. The SMI rose 0.4% to 11,838 points, while the Bel20 retreated by 0.4% to 4,198 points.
Economic Highlights for the Day
In the U.S., the non-farm payroll changes and unemployment rate for October will be released at 1:30 PM, followed by the manufacturing PMI at 2:45 PM, and construction spending and ISM manufacturing at 3:00 PM. Full agenda available here.
- Euro: 1.0877 USD
- Gold (per ounce): 2752 USD
- Brent Crude: 74.18 USD
- 10-Year U.S. Treasuries: 4.27%
- Bitcoin: 69,400 USD
Major Recommendation Changes
- Aixtron: Jefferies dow