Last week was spectacular in itself, the return of Tesla, the collapse of McDonalds under the blows of the E.Coli bacteria, Roche which finally published news a little less rotten than usual, the yield of the 10-year which is still too high and Nvidia is returning to monstrous levels of market capitalization. And then always this ability to see the glass half full. We have not seen the deteriorating employment figures, nor the exploding US debt, while all eyes are turning towards a momentous week. Week which begins with the 95th anniversary of the stock market crash of 1929 and which will end with Halloween and the employment figures.
The Audio of October 28, 2024
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Hope, always hope
We therefore hope that there will be no link and no way to draw parallels between the crash of 1929 and the Halloween party. That would be way too easy. Still, the week that begins this morning should still be impressive and if we get through it without fear or harm, it will truly be an achievement. A feat which will demonstrate once again that this market is completely indestructible and that nothing can happen to it. Well, for now.
We will still have all day this Monday to ask the right questions and implement our combat strategy. And tomorrow morning, we will have to rush because there will be no more time to think, we will have to act. The slightest piece of news is likely to make us change our minds and momentarily change the state of mind of the market. At the moment, I remain personally amazed that we continue to show such an impressive desire to rise while the macro-economic-geo-political environment continues to systematically deteriorate. Between the geopolitical instability which could get even worse with the official announcement of a new President in Washington, the Iranians and the Israelis who play ping-pong with cheap drones and the Russians who involve the North Koreans in a war which is not theirs, while the Chinese are circling Taiwan, we are not badly served at that level.
Oil and those who know
Oil is also the first victim of these political issues. Friday evening, there were probably people who “knew” better than others because they bought the barrel just before “the Israeli response” and those who knew EVEN better were able to take advantage of it to short the barrel, since they KNEW that Israel would not touch the refineries. Because of money, probably. This morning and night, the barrel was destroyed almost as if IDF missiles were aimed at it. The barrel is at $68.38 on the WTI, after ending the week at almost $72 while we were already planning the response of drones, drones which would – of course – only attack unimportant targets. Surgical attacks bordering on diplomacy.
That was for this weekend. Now we will have to tackle the coming week. A week which will bring us its share of information, whether economic, macro-economic or micro-economic with the BIGGEST week of quarterly publications, since 37% of the S&P500 will be released, including 5 of the Magnificent Seven. Suffice to say that anything can happen, because beyond these 5 who have the power to turn the market in one direction or the other, we will also have: Ford today, as well as Philipps and ON Semi’s. And starting tomorrow: Alphabet, Visa, Advanced Micro Devices, McDonald’s, Pfizer, Stryker, Chubb, Mondelez International, PayPal, Chipotle, Super Micro Computer. Then on Wednesday we will have: Microsoft, Meta, Eli Lilly, AbbVie, Caterpillar, Amgen, Booking Holdings, Automatic Data Processing. Then we will continue with Apple, Amazon, Mastercard, Merck, Linde, Uber, Comcast, Eaton, ConocoPhillips, Bristol-Myers Squibb, Regeneron, Intel and Altria which will be released on Thursday. Before concluding the week with Exxon and Chevron, just to bring the oil theme back to the table before the weekend. Without forgetting that in Europe we will have Novartis, UBS, Saint-Gobain, Volkswagen, AXA and even Airbus. In summary, more than enough to make a trip worthy of a weekend at Europa Park in terms of thrills and destruction of the wallet.
And the economy in all this
And as if all that wasn’t enough, we are inundated with polls that suggest Trump can win and then the next thing we know Kamala is leading and despite the fact that she has the IQ of a “fence post” according to Mel Gibson, she should become the first American President. In short, instability is everywhere and even if doubt does not cross (for the moment) the investor’s head, we will still have to survive the avalanche of economic figures that await us in the days to come . Economic figures which will not be the easiest to understand, knowing that they will probably be manipulated and left to the free interpretation of those who calculate them.
From tomorrow we will have consumer confidence which was calculated on a representative sample of 1,000 Americans who live in a house of more than 800 m2 in the districts of Beverly Hills in California and Palm Beach in Florida. There will also be the JOLTS who we can make say what we want as long as we have the means to publish bogus job offers everywhere and the day will end with the prices of the American real estate, which is always very scary if you plan to buy a house and you don’t earn $50,000 per month. The week will then continue to unfold in a very sporty manner with the ADP employment figures, then the PCE which will put us all in agreement on the subject of inflation, before concluding the day after the Halloween party with the figures for Non Farm Payrolls which will not fail to surprise us massively on the rise, just to convince the last undecided voters to vote for Dame Kamala who will surely change the destiny of the planet when she realizes that it exists other countries outside the USA.
Un grand show
All this to tell you that if I sound a little disillusioned – it is also because I always have the feeling that the greater the global instability, the more the markets continue to rise. As we saw last week, the sanctions during quarterly publications are violent. Whether it’s up or down, we just have to hope that the numbers will all be on the side of the Jedi and that the dark side of the force will not win and rock the markets while the records have been falling for months. Whatever happens, caution will remain in order – on my side in any case – and we will have to take the days one after the other, just like the news that will fall like the liters of water that will fall on us. have been falling on your face for months, as if the sun was no longer a realistic option.
For the moment, the week is starting relatively well since most Asian markets are up. Concerns about the Israeli-Iranian conflict having been allayed by a less severe Israeli attack than expected, while Japanese stocks are up almost 2% while everyone is not giving a damn about the local electoral aspect of the moment. The ruling Liberal Democratic Party having lost its parliamentary majority. Investors are betting that increased political uncertainty will lower the chances of an interest rate hike from the Bank of Japan. It goes to show that we don’t need much to be happy. China and Hong Kong are much more timid this morning, but still on the rise. Gold is at $2,749 – waiting for 3,000 – and Bitcoin is trying to climb back above $68,000.
Today’s news
In today’s news, we note that France escaped a new downgrade from Moody’s, but that the note published by the rating body leaves no doubt about the future of the French rating during the next revision; It would take a miracle for analysts not to cut the fat. Boeing wants to do a capital increase of 15 billion, Volkswagen wants to cut costs again and again and Porsche is banking on “new models” to compensate for the weakness of recent figures. When we see Renault’s figures, we wonder if Porsche shouldn’t consider developing its next Cayennes with Dacia.
And then, to finish, we will remember that this weekend we changed the time that we were able to benefit from an extra hour of sleep and that the Americans have not yet done so. This week Wall Street will open at 2:30 p.m. and we will be able to go to bed earlier. For the moment futures are up because everyone seems happy to see oil falling, Iranian refineries still standing and we are counting a lot on the Magnificent Seven to show us this week that everything is fine. In any case, everything is fine if you are rich, beautiful and healthy and you live in the right place on the planet. The rest is another story.
Take advantage of this rather calm Monday, because the rest of the week will not spare us! Be strong and motivated and see you tomorrow!
Have a nice day everyone.
Thomas Veillet
Investir.ch
“Never let the fear of striking out keep you from playing the game.” – Babe Ruth
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