Tech Stocks Struggle Post-Earnings👀
In equities, prices were never able to bounce back above the previous day's close, as the poor reception to Alphabet's and Meta's earnings were too much for the market to shake off. The Nasdaq traded as much as -2.3% weaker before close the day down -1.7%, while the -1% day in SPX masked a dramatic outperformance of value over growth stocks (~2%) despite a recovery in bond yields. We might be seeing a mini-rotation out of big-tech and growth names back into value as the markets become more convinced that the rise in the term premium is here to stay.
#Nasdaq #SPX #ValueOverGrowth #BondYields #MarketRotation

Markets Rally on Yellen’s Temperate QRA and Balanced FOMC Outcome🤔
Santa Claus appears to have arrived early this year, nearly 2 months early.A much more benign QRA (Quarterly Refunding Announcement) from Yellen, a balanced FOMC, and a below-consensus print on NFP struck an old-fashioned 'risk-on' rally across all asset classes. Equites higher (+1.5%), bond yields lower (-15bp on 2s), DXY sell-off (-1.1%), IG CDS tightening (back to Sep lows), rate cuts back in the picture (1st cut 1Q24), crypto prices held in (BTC >$35k, ETH +2.3%), and even SBF saw a swift guilty verdict after just an expedited trial.US NFP increased 150k in October, worse than consensus estimates with a negative -101k revision to the previous 2 months as well. The unemployment rate moved up to 3.9% while AHE fell to 0.2%, with the YoY rate dropping from t.43% down to 4.1%, the slowest since June 2021. The autoworkers strike subtracted 33k from the jobs gain, while private hiring was dragged weaker from manufacturing. Later on, ISM services came in at a lacklustre 51.8, greatly missing expectations, and adding fuel to the fire over the dovish rate outlook. A sharp drop in the employment component (-3.2 pts) and new export orders (-14.9)
#BondYields #DXY #RateCutExpectations #YoY #macro

Hamas attack on Israel disrupts market calm☕
However, the market calm would not last, as this weekend saw an unprecedented attack by the Hamas Group on Israel, leading to concerns of a more entrenched conflict in the region and risks of another war. The last Israeli intelligence of this magnitude led to the Yom Kippur War in 1973, which saw dramatic rallies in oil (less supply) and gold (flight to quality), a jump in bond yields (inflation), and a corresponding sell off in equities. This time around, markets are relatively more reserved, as we are opening Monday morning with a small pop in oil/gold/bond prices and a mild -0.6% sell off in stocks. Outside of the human tragedy associated with all kinetic conflicts, the market's major focus will be on oil supply, and whether the current attack significantly unwinds the Middle East detente that the world has strived to broker in recent years. We pray that conflicts can de-escalate quickly to minimize the toll on human losses.
#Oil #Gold #BondYields #stock #finance