Good morning,

Alright, folks, let’s break down this week’s financial whirlwind with some hard numbers and a sprinkle of analysis.

Table of Contents

In Conclusion: A Week of Numbers and Nuances
CALENDAR & MOVERS
Tech Titans Take the Stage
Economic Pulse & Pricey Matters
ECB’s Rate Riddle
A Mixed Bag of Market Moves
BONDS
COMMODITIES
Oil & Energy
Gold & Precious Metals
What This Means for Investors
CRYPTOCURRENCY


Hold onto your hats, market watchers, we had a couple of big events happen that could trigger a big market move in the near future.

The 5.00% Shockwave: Equities seemed to have lost their footing this week, largely due to the drama surrounding interest rates. The 10-yr note yield made headlines by crossing the 5.00% threshold for the first time since 2007. To add a cherry on top, it jumped a whopping 29 basis points to settle at 4.92% by week’s end. Meanwhile, the 2-yr note yield wasn’t far behind, rising four basis points to close at 5.09%.
Powell’s Perspective: The Fed’s Balancing Act: Fed Chair Powell’s speech at the Economic Club of New York was the talk of the town. He acknowledged the surge in long-term rates but also hinted that the Fed’s policy might not be as tight as some think. It’s akin to a tightrope walker subtly adjusting their balance mid-performance.
House Drama: The 3-Round Saga: The House of Representatives was more dramatic than a season finale of a TV show. After three tumultuous rounds of voting, Rep. Jim Jordan faced a setback, losing his bid for Speaker of the House. The GOP conference vote went against him by a “wide margin,” making it a week to remember (or forget, depending on where you stand).
The Good, The Bad, and The Numbers: Retail sales were the star of the show, coming in stronger than anticipated. On the flip side, existing home sales hit a low not seen since October 2010. And the Leading Indicators index? It was down for the 18th consecutive month. It’s like sifting through a report card with a mix of A’s and C’s.
Earnings Extravaganza: Netflix and Tesla were the talk of the town, but other big players also made headlines. The Vanguard Mega Cap Growth ETF (MGK) dipped by 3.0%, the S&P 500 declined by 2.4%, and the Invesco S&P 500 Equal Weight ETF (RSP) fell by 2.3%. It’s a reminder that the market is a lot like a rollercoaster – thrilling highs and stomach-churning lows.
Geopolitical Tensions: A Statistical Overview: The Israel-Hamas situation is escalating, and the numbers are a testament to this. The US, in response to the rising tensions, is deploying THAAD batteries to the Middle East. With aid trucks entering Gaza and the Israeli army’s stern warnings, the numbers are indicating a situation on the brink.
Argentina’s elections are set for a second round: Finance Minister Sergio Massa and right-wing figure Javier Milei, known for his admiration of Donald Trump, are poised for a November runoff. This comes after Massa’s Peronist coalition outperformed predictions in the recent general election. The global community is closely monitoring the situation, as under Massa’s leadership, Argentina has seen inflation rates skyrocket to almost 140% and poverty levels rise to 40%. Milei, with his unconventional libertarian views, has gained traction due to widespread dissatisfaction.
Sector Spotlight: In the S&P 500’s sector showdown, consumer staples and energy emerged as the victors, each gaining 0.7%. But not all sectors had reason to celebrate. Real estate and consumer discretionary sectors faced the music, dropping by 4.6% and 4.4%, respectively.
In Conclusion: A Week of Numbers and Nuances
To wrap it up, this week was a numerical rollercoaster. From the 5.00% interest rate shocker to the S&P 500’s 2.4% decline, the market was a maze of percentages and data points that appeared to be contradictory.

Two things that are on my mind are a potential looming recession and the Fed having to keep rates high or even increase interest rates. Overall, the economic indicators seem to be pointing to a slowing economy, with the exception of jobs. Looking at the jobs reports (which seem to be “revised”) there appears to be some arguments that most jobs created are second jobs and not real jobs.

There is a potential for a bull run in the markets because I think there is pressure on the Fed to keep the economy up before the election. However, if you are a conservative investor like me, a 5% return in the bank seems very good as we wait out some of the market swings and the Israel-Hamas war.

As we gear up for the weeks ahead, one thing’s for sure: in the world of finance, numbers never sleep. And neither do we. Here’s to another week of navigating the numbers!

CALENDAR & MOVERS
Wednesday: New Home Sales (September)
Thursday: GDP (QoQ) (Q3)
Friday: Personal Income
Friday: Consumer Sentiment
Fed Talks
Earnings
Middle East Tensions
Tech Titans Take the Stage
As we roll further into the Q3 earnings season, four of the tech world’s “Big Seven” are gearing up to unveil their numbers. On the docket for Tuesday are giants like Microsoft (MSFT) and Alphabet (GOOGL), Google’s parent entity. Mid-week, Meta Platforms (META) steps into the spotlight, while Amazon (AMZN) takes its turn on Thursday. These behemoths have been the wind beneath the S&P 500’s wings this year. So, any hint of a growth hiccup might just send the market into a tizzy. And let’s not forget other industry bigwigs like Visa (V), Mastercard (MC), Ford (F), General Motors (GM), IBM, Intel (INTC), and ExxonMobil (XOM), all set to share their financial tales.

Economic Pulse & Pricey Matters


Eyes and ears will be tuned in to key economic indicators this week, shedding light on the nation’s fiscal health. Come Thursday, the curtains will rise on the Q3 GDP figures. With analysts pegging the annualized growth at 4.1%, spurred by consumer splurges, it’s believed we might be bidding adieu to this growth spurt, gearing up for a more subdued economic rhythm ahead. And to wrap up the week, Friday will see the release of the Core PCE Price Index, the Fed’s go-to inflation barometer, hinting at a 3.7% year-on-year price uptick.

ECB’s Rate Riddle
Over in Europe, all eyes are on the European Central Bank’s monetary policy huddle this Thursday. The buzz on the street is that the ECB might hit the pause button on rate hikes, a move we haven’t seen in over a year, spanning a good ten meetings. Market mavens will be hanging on every word from ECB Chief, Christine Lagarde, especially her take on the longevity of these elevated rates, given the recent bond yield bounce.

A Mixed Bag of Market Moves
In other corners of the financial world, the Middle East’s geopolitical tango continues to cast a shadow, especially with its sway over oil price dynamics. The region’s unpredictability and the looming threat of things heating up have the market on its toes. Bond buffs, too, are in for a ride, especially post the 10-year Treasury yield’s leap past the 5% mark, a scene we haven’t witnessed since 2007. This cocktail of events has Wall Street’s nerves jangling, evident from the CBOE Volatility Index (VIX) hitting a near seven-month peak last Friday. As we tread ahead, it’ll be intriguing to see if investors cozy up to safe havens like the dollar, gold, and bonds.

Continue Reading

Have a great week!



Irving Wilkinson
Editor
AlphaBetaStock.com

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