On Tuesday (October 24th), as Microsoft's stock price rose, while Google's parent company Alphabet's stock price fell after announcing its financial results, the $2010 billion Exchange Traded Fund (QQ), which tracks the Nasdaq 100 Index, experienced significant fluctuations in late trading.
The S&P 500 index has stopped its five consecutive days of decline. Similarly, after the closing bell, Texas Instruments provided disappointing revenue forecasts, while Visa reported profits that exceeded Wall Street's expectations. The yield of 10-year treasury bond bonds fell slightly. The oil price fell below $84 per barrel.
On Tuesday, gold and silver prices continued to show a correction and consolidation trend after recent positive gains. Today, the US dollar index rose sharply, the crude oil price fell sharply and the yield of US treasury bond bonds rose. These are the external market factors that are bad for precious metals every day. The December deposit finally fell by $12.20 to $1975.70. In December, silver finally fell by $0.195 to $23.01.
In the foreign exchange market, the US dollar index rose to 106.25 on Tuesday, up nearly 0.50%. Although the European Standard&Poor's Purchasing Managers' Index is weak, US data exceeded expectations and the US economy seems to remain resilient. The focus of the market now shifts to the preliminary estimate of the US gross domestic product (GDP) for the third quarter released on Thursday and the September personal consumption expenditure (PCE) data released on Friday, in order for investors to continue simulating their expectations for the Fed's next decision. After withdrawing from around 1.0700, the euro/dollar remained below the 1.0600 level. The pound/dollar fell below 1.2200, erasing most of the gains recorded on Monday.
Investors are searching for some good news during the financial reporting season, pinning their hopes on large technology companies. The five largest companies in the S&P 500 index account for about a quarter of the benchmark market value. According to estimates from Bloomberg Intelligence analysts, the revenue of these leading companies is expected to increase by an average of 34% compared to the same period last year.
David Trainer, CEO of New Constructs, said, "As these large technology stocks move, the entire market will also change. If the performance of large technology companies is outstanding and provides strong guidance for future profits, then we may see a strong rebound in the stock market at the end of the year
Bank of America stated that rising interest rates have made large technology companies that are already overvalued appear increasingly expensive, and large technology companies remain the most crowded trading area among fund managers.
Recently, the plight of US long-term growth stocks has been exacerbated by the rising yield of US treasury bond bonds, but now this situation may soon ease.
Taylor Rule is an equation proposed by Stanford University economist John Taylor in 1993 to measure how the Federal Reserve uses its overnight bank loan rates to control inflation or stimulate the economy. Now, the equation seems to have entered a critical turning point, indicating that the Federal Reserve has finally normalized interest rates, which is of great significance for the US stock market.
In terms of economic data, the US Comprehensive Purchasing Managers' Index (PMI) released by S&P Global reached 51 in October, higher than September's 50.2 and better than economists' expectations of 50, reaching the highest level in six months.
Strategas analyst Don Rissmiller said, "Although the US economy is growing, it still needs to deal with the last mile of policy tightening. If the labor market achieves rebalancing (i.e. labor demand equals supply), we may be more confident that the growth we see is high-quality or sustainable. Until then, continued tightening monetary policies may become too strict
Wednesday trading day focus and wind vane:
① 16:00 German October IFO Business Climate Index, Swiss October ZEW Investor Confidence Index
② 22:00 Annualized total sales of new homes in the United States in September, Bank of Canada announces interest rate resolution
③ 22:30 EIA crude oil inventory for the week from the United States to October 20th, Cushing crude oil inventory for the week from the United States to October 20th, and Strategic Petroleum Reserve inventory for the week from the United States to October 20th
④ 23:00 Bank of Canada Governor and Vice Governor hold a press conference
⑤ At 01:00 the next day, European Central Bank President Lagarde delivered a speech
⑥ The next day at 04:35, Federal Reserve Chairman Powell delivered a speech at the lecture
Analysis of Major Currency Trends:
EUR: EUR/USD closed lower at 1.0589, down 0.74%. Technically, the initial resistance to the upward trend of the exchange rate is at 1.0659, the further resistance is at 1.0729, and the key resistance is at 1.0767; The initial support for the downward trend of the exchange rate is at 1.0551, further support is at 1.0513, and more critical support is at 1.0443.
GBP: GBP/USD closed lower at 1.2133, a decrease of 0.73%. Technically, the initial resistance to the upward trend of the exchange rate is at 1.2247, the further resistance is at 1.2335, and the key resistance is at 1.2382; The initial support for the downward trend of the exchange rate is at 1.2112, further support is at 1.2065, and more critical support is at 1.1977. JPY: USD/JPY closed higher at 149.908, up 0.14%. Technically, the initial resistance to the upward trend of the exchange rate is at 150.121, the further resistance is at 150.329, and the key resistance is at 150.728; The initial support for the downward trend of the exchange rate is at 149.514, further support is at 149.115, and more critical support is at 148.907.
