Recap –
Last week the S&P 500 was up 0.85%, the Nasdaq climbed 0.79% and the Dow Jones increased 0.96%. In the US Retail Sales data came in higher than expected and the dollar continued to strengthen. The European Central Bank cut interest rates by 25 basis points. Stock prices rose with the S&P 500 hitting an all-time high, amid a positive earnings season so far with Netflix on Friday being the latest to announce a beat. Better than expected Chinese industrial production figures saw Palladium prices rising sharply, while Platinum prices hit a three month high and Silver recorded a twelve year peak of over $33.70. Gold prices hit all-time highs.
This Week–
This week US Manufacturing and Services PMI will be among the main economic data releases, but markets will watch the earnings season which is moving into high gear. Coca Cola and Tesla are set to declare on October 23rd, while Amazon is scheduled to post its earnings on October 31st. Geopolitically, traders will remain focused on developments from the Middle East, while the BRICS group of countries that includes China, Russia and India will hold its first summit.
Stocks –
MICROSOFT
Microsoft’s stock price climbed 0.4% by close of business last Friday. The tech behemoth still dominates the industry and is currently the third most valuable company in the world, with Apple in first place. Microsoft has been bolstered by its association with OpenAI, the owner the leading AI language platform ChatGPT. The company will declare its earnings on October 30th and has exceeded expectations on 7 of the past 8 earnings seasons.
COINBASE
Coinbase jumped 21% by the end of trading last week to record a more than two month peak. The cryptocurrency trading platform’s price is closely linked to that of Bitcoin since much of the company’s revenue is made from transaction fees. There is growing optimism in the crypto industry, driven by hopes that either a Trump or Harris presidency could create a framework in which cryptocurrencies are allowed to flourish. Coinbase will release its earnings report on October 30th.
Commodities
Crude Oil
Crude oil prices slipped 7.9% last week to close at 68.81 in a torrid week for the commodity. Earlier in the week OPEC published its monthly report and cut its world oil demand forecast for both 2024 and 2025, mainly due to a weaker Chinese economy. Reports which suggested that Israel was not expected to attack oil targets in Iran in response to an earlier attack upon its territory also suggested that conflict in the region could not negatively impact oil supplies as much as previously feared. However, US weekly data suggested that oil demand in the country remains strong.
Gold
Gold prices increased sharply by 2.8% and hit repeated record highs last week, peaking on Friday at $2722. The metal was underpinned by geopolitical events including rising tensions over Taiwan. Last week China surrounded the island territory to carry out war games, awakening fears of a potential invasion. Meanwhile, North Korea blew up roads close to its border with South Korea and sent soldiers to Russia to fight in Ukraine, marking a serious escalation in the conflict. In the Middle East, Hamas leader Yahya Sinwar, mastermind of the October 2023 attacks upon Israel, was killed in Lebanon.
Silver
Silver prices surged 8.2% leaping to a twelve year high, as the metal mirrored Gold’s upward movement by close of business on Friday. While gold and silver typically move together, silver's increase in price was also driven by better than expected Industrial Production data from China and in line with expectations GDP figures. Silver benefits from industrial demand due to its usage in electronics and electric cars and many such products are assembled and sold in China.
EUR/USD
The EUR/USD pair fell by 0.5% and recorded a more than two-month low on Thursday. The Euro was under heavy pressure early in the week as expectations grew that the European Central Bank would cut interest rates by twenty-five basis points. The ECB did so and suggested that more rate cuts were in the pipeline. The dollar also grew against its rivals last week, but the greenback appeared to weaken on Friday as traders look ahead towards the Fed interest rate decision on November 5th.