Please see this week’s market overview from eToro’s international analyst staff, which incorporates the most recent market knowledge and the home funding view.
S&P 500, Dow Jones, Bitcoin and gold all proceed to comply with a optimistic development
In an eventful week, the S&P 500 hit its forty seventh document excessive of the yr, whereas the Dow Jones reached its fortieth. Bitcoin gained 9%, whereas oil dropped 7%. In the meantime, gold steadily climbed above $2,700, bringing its year-to-date return to 31%.
US equities had been boosted by robust earnings from main corporations, starting from top-tier banks to Netflix, together with stable retail gross sales figures. Fee-sensitive sectors like healthcare, supplies, and industrials led the best way, as a disappointing outlook from Dutch chip machine maker ASML pushed some tech traders towards safer choices. Nevertheless, robust earnings from TSMC reignited optimism round AI shares.
Trying forward, 112 S&P 500 corporations, together with 7 of 30 Dow Jones constituents, are set to report their Q3 leads to the upcoming week. On Thursday, the US, Eurozone, and UK will launch new PMI knowledge, providing a snapshot of the manufacturing sector in every area. With simply two weeks till the US presidential election, expectations about potential coverage modifications might introduce vital market volatility. Within the meantime, Russia will host the sixteenth BRICS Summit.
Bitcoin hodlers see themselves confirmed
After months of consolidation, Bitcoin is gaining bullish momentum. Final week, its value surged by 9%, climbing above $68,000—simply 8% shy of its all-time excessive of $73,835, set on March 1, 2024. For a lot of holders, Bitcoin continues to function a hedge in opposition to fiat foreign money devaluation, particularly as rate of interest cuts enhance the cash provide and drive inflation. Institutional traders are additionally turning to Bitcoin, which has risen 60% for the reason that begin of the yr. The rising acceptance of Bitcoin ETFs stays a big tailwind for the main cryptocurrency, probably pushing it to new document highs (see chart). As Bitcoin typically rallies as soon as key ranges are breached, FOMO (concern of lacking out) could set in on the subsequent peak.
A thought experiment: What if each investor allotted simply 1% of their portfolio to Bitcoin?
Chart: Bitcoin is testing a key resistance zone between $68,000 and $73,000
Russia hosts sixteenth BRICS Summit in Kazan
Talks of a brand new world order are set to accentuate this week because the BRICS nations convene for his or her sixteenth Summit in Kazan, Russia, from October 22 to 24. The founding nations, Brazil, Russia, India, China, and South Africa, will likely be joined for the primary time by new members Egypt, Ethiopia, Iran, and the UAE, together with representatives from two dozen different nations contemplating membership. BRICS goals to ascertain an alternative choice to the G7 and IMF (assembly this similar week), specializing in sanction-proof financing by selling commerce in native currencies fairly than counting on the US greenback. Whereas speedy change shouldn’t be anticipated, momentum is constructing that might finally problem the dominance of the US greenback and the worth of US Treasury bonds, elements that partly clarify the current rise in gold costs. Nevertheless, the BRICS nations typically have conflicting pursuits and don’t all the time see eye-to-eye.
US, UK and Eurozone to launch PMI knowledge for October
Why does it matter? Manufacturing on either side of the Atlantic faces fierce competitors from China, which is trying to export its means out of a property disaster. Every area has its personal challenges: Europe is attempting to revive its financial system, whereas the US goals to keep away from a tough touchdown. In each instances, traders are eager to keep away from additional declines within the PMI Composite, notably in manufacturing. Consensus estimates put the Eurozone PMI Composite at 49.7, marginally up from 49.6 in September. Within the US, PMI Manufacturing is anticipated to recuperate to 48.2 from 47.3 the earlier month. Disappointing outcomes might reignite recession fears, although rate of interest cuts in each areas present some cushion in opposition to worsening financial circumstances. Alternatively, stronger-than-expected knowledge may cut back the chance of additional fee cuts.
Earnings and occasions
Tesla will likely be in focus after a lacklustre robotaxi occasion with out numbers. Normal Motors and Mercedes-Benz will present one other take a look at the automotive sector. Hermès and Kering will likely be watched particularly after the disappointing LVMH figures final week.
Earnings releases:
21 Oct. SAP
22 Oct. GE Aerospace, Danaher, Verizon, Texas Devices, RTX, Normal Motors, L’Oreal
23 Oct. Tesla, Coca Cola, IBM, ServiceNow, NextEra Vitality, AT&T, Boeing, Iberdrola, Kering
24 Oct. Unilever, RELX, Unicredit, Hermes, Honeywell
25 Oct. Mercedes-Benz
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