- US indices are experiencing significant upward pressure today, offsetting a portion of the losses from the beginning of the week. The US500 is now only about 0.6% away from its all-time high.
- The US500 is up 0.7% today, the US100 is up 1.0%, and the US2000 is up over 1.5%.
- Tech giants like Amazon and Tesla have seen particularly strong gains. It's worth noting that the earnings season on Wall Street kicks off next week, with expectations pointing to solid results.
- The European Union has decided to impose tariffs on Chinese electric vehicles. The tariff rates vary by manufacturer and range from 7.8% to 35.3%. Tesla which is still one of the most popular EVs in China has the lowest tariffs of 7.8%.
- Airline stocks have surged today following news of Spirit Airlines' potential insolvency. On October 21, the company's debt refinancing deadline falls, and if no agreement is reached with creditors, it may have to resort to Chapter 11 bankruptcy proceedings. Spirit Airlines' stock has plummeted by nearly 27% today. JetBlue, the main competitor of the Spirit Airlines is up more than 15%.
- Strong US job market data has also helped European indices close in the green. The DAX gained 0.6% today, the CAC40 rose 0.85%, the Stoxx Europe 600 gained 0.4%, and the Italian FTSE MIB saw a 1.3% increase.
- Following rumors of a potential takeover by Tencent and the Guillemot family, Ubisoft surged over 33% today. The company has thus recovered almost half of its September losses.
- US job market data came in significantly above expectations. Non-farm payrolls hit 254,000, compared to expectations of 150,000. The unemployment rate fell to 4.1%, while wage growth accelerated to 4.0%.
- In response to this data, the probability of the Fed cutting interest rates by 50 basis points at its November meeting has dropped below 10%, down from a previous estimate of 33%.
- Reacting to lower expectations for interest rate cuts, bond yields have jumped. The yield on 10-year US Treasury bonds has risen to 3.97% (the highest since early August this year), while 10-year German bond yields have increased to 2.2% (+6.6 basis points).
- Beyond the strong gains on Wall Street, we're seeing a strengthening US dollar. The EURUSD pair has fallen below 1.10, reaching its lowest level since mid-August.
- Gold is likely to post its first weekly decline in four weeks, despite heightened risks related to the situation in the Middle East.
- The world is bracing for a potential Israeli attack on oil infrastructure in Iran. Although Iran exports only 1.5% of global supply, it controls the Strait of Hormuz, through which over 20% of global oil supply, primarily from Saudi Arabia, passes daily. Brent oil is up over 2% and is approaching the $80 per barrel level. Oil is up 10% this week
- Asian indices have returned to growth. The Shanghai Composite gained nearly 3%, while the Nikkei 225 rose 2.5%. Next week, China returns to the market after the Golden Week holiday.
- Bitcoin is rebounding and gaining over 2% today, surpassing the $62,000 level, despite the significant strengthening of the US dollar.
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