Equity futures are in the green as the bond market chills out (for now).
BBG’s Reynolds says Treasuries are a headache for most, with volatility above that for most peers, extreme positioning (shorts), and more supply than the market tends to have. So, investors are being more price sensitive these days, and bond volatility is spilling over into assets beyond equities, per Bloomberg.
For all you hodlers out there, there is hope with Bitcoin up at $35,000 after a court ruled the SEC must reconsider Grayscale’s bid for a spot Bitcoin ETF.
Lots of tech earnings start today. With 7 large US tech co’s driving all the gains in global stocks this year, per the FT, they had better beat and raise… To note, Reuters shared that hedge funds trimmed their exposure to megacap tech names in recent days, so they’re either booking gains or taking a stance on 3Q23 earnings.
Daily Chartbook put out a nice chart showing that CTAs are less short after this recent market drop.
The ECB looks to pause interest rate hikes because it needs to shrink its balance sheet, per the FT.
World leaders are lobbying Israel to delay their Gaza invasion. Israel’s military said it expects “long weeks of fighting ahead”. Macron, at a joint briefing with Netanyahu, said he’s ready for a coalition to fight against Hamas and emphasized the priority of freeing hostages. From a humanitarian perspective, the world hurts. From an investment perspective (which is the focus of these notes), things can shift quickly, so we caution against complacency.
BofA was crowned the best US sell-side research firm by Institutional Investor, bumping JPMorgan off its seven-year reign. Morgan Stanley’s Mike Wilson was chosen as the best portfolio strategist, even though his imminent doom call did not happen yet.
China’s economy needs to grow by about 5% in 2024 to signal its development is stable and healthy, stated an ex-PBOC official. Yet S&P is out with a forecast that GDP growth may drop to 2.9% next year if the real estate slowdown deepens, per Bloomberg. That’s a big delta. So, it’s no surprise that the Standard is reporting on the largest capital outflow from China since 2016.
The Bank of Japan conducted an unscheduled bond-buying operation, per Reuters. The scuttlebutt is that officials will be monitoring data until the last minute before they decide whether to adjust the YCC (yield curve control) program at next week’s policy meeting. So, it’ll be an open-the-envelope moment, it seems.
The EZ-area PMIs showed the region’s economy may be in a recession, as the index slowed to 3-yr low in Oct to 46.5, with the important services sector slowing down, per Reuters. Also, the UK PMI reflected a contraction in their private sector for a 3rd mo, per Reuters.
The IMF projects that Germany’s economy may become larger than that of Japan, due to a depreciation of the yen.
Check out Schwab’s chart below. Lots of cancelled home purchase agreements.
GM beat 3Q expectations but pulled full year guidance because of the strike costs. Coke beat estimates and raised its outlook—volume and price were up. Spotify beat, but its stock is down. GE beat on top and bottom lines and lifted its guidance due to increased demand for aerospace. 3M also did a beat and raise. Barclays fell because its ibanking rev was down and margins were pressured. China tossed its defense minister…the guy who’s been missing for 2 mo. 8 newbies will take to the floor for this week’s Dancing with the Republicans as the House struggles to find a speaker.