Moderate yield increases; Some retailers under pressure
Markets focus Nvidia; S&P falls 0.8%, Bitcoin hits $94K. Walmart soars, Target tumbles 20%. UK inflation rises to 2.3%; yields climb.
U.S. Markets: Tech and Retail Dynamics Dominate
Wall Street showed mixed performances as anticipation for Nvidia’s earnings dominated the sentiment. The S&P 500 dropped 0.8%, the Nasdaq 100 declined 1.1%, and the Dow Jones Industrial Average edged down 0.3%. Nvidia, valued at $3.6 trillion, experienced a 2.2% decline ahead of its results, with options markets anticipating an 8.5% swing in stock value, translating to a potential $300 billion market cap shift. Rival chipmaker Super Micro Computer surged 30% following positive developments on its Nasdaq compliance.
Retailers painted a contrasting picture: Target fell over 20% after weak Q3 results and flat sales projections, while Walmart hit a record high with a 3% gain, bolstered by optimistic holiday forecasts. Williams-Sonoma jumped 23.3% after exceeding profit expectations and revising its fiscal sales forecast upward.
U.S. Treasury yields rose modestly, with the 10-year yield at 4.42%, recovering from September’s sub-3.70% levels. The Federal Reserve’s next steps remain pivotal, with current market pricing suggesting a 50% chance of a December rate cut. Meanwhile, speculation around the next Treasury Secretary is heating up, with Kevin Warsh and Marc Rowan leading contenders, and Howard Lutnick confirmed for the Commerce Department.
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Europe: Inflation and Markets
The FTSE 100 rose 0.1% after UK inflation data revealed a 2.3% annual increase in October, exceeding the Bank of England’s target. This may delay further rate cuts, with money markets now projecting a March adjustment. British gilt yields climbed to 4.47%, echoing similar moves across Europe.
The Stoxx Europe 600 remained steady, though Germany’s 10-year bond yield stayed unchanged at 2.34%. European Central Bank President Christine Lagarde is set to address economic conditions later this week, which could provide additional market direction.
Asia: Mixed Markets
Japan’s Nikkei 225 slipped 0.2%, impacted by a reported October trade deficit—its fourth consecutive monthly shortfall. However, exports grew faster than expected, driven by demand for chip equipment from China, possibly reflecting pre-emptive activity ahead of potential trade tensions under Trump’s administration.
Chinese markets saw moderate gains despite lingering tariff concerns, as optimism over trade activity buoyed investor sentiment.
Cryptocurrencies: Record-Breaking Bitcoin
Bitcoin climbed 2.7%, reaching $94,782, fueled by deregulation optimism tied to Trump’s presidency. Reports of Trump’s social media company considering the acquisition of crypto trading firm Bakkt further lifted sentiment. Ether saw a modest 0.5% increase, trading at $3,109.
Currencies and Commodities
The U.S. Dollar Index advanced 0.4%, pressuring other major currencies. The euro dropped 0.6% to $1.0533, the British pound fell 0.2% to $1.2660, and the Japanese yen weakened by 0.4% to 155.22 per dollar.
Commodity markets showed marginal gains. West Texas Intermediate crude rose 0.3%, settling at $69.60 per barrel, while gold edged up 0.5% to $2,645.60 an ounce.
Global Trends: Earnings, Policy, and Data
Global markets are closely monitoring economic indicators and corporate earnings. Key reports this week include Eurozone consumer confidence, U.S. jobless claims, and manufacturing and services PMIs. Fed officials, including Vice Chair Michael Barr, and ECB leaders like Christine Lagarde, are also expected to deliver critical remarks.
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