Monday's Markets Update (October 21, 2024)

22 Oct 2024 by rate3

On Monday, stocks declined after their longest weekly rally of the year, as investors prepared for a busy earnings week, while Treasury yields rose, impacting consumer and homebuilder shares. Major earnings reports are anticipated from Tesla, Coca-Cola, and GE Aerospace, with 79% of companies exceeding expectations so far. Gold reached a new ATH as the yuan stabilized after monthly devaluation due to the CCP's stimulus package, despite the PBOC's recent monetary easing. BTC retreated sharply after yet another attempt to reach an ATH. It appears there is a significant sell wall built at the psychologically important level of $70K, which some major players are defending in order to accumulate as much BTC as they can before a historic breach attracts new buyers. ETH remains stuck at $2.6K, with low interest from investors.

Crypto

Most crypto users get their blockchain information from social media, with Twitter leading at 41.7%. Telegram follows with 21.5%, and YouTube with 20.8%. Crypto news websites lag behind at 5%. Telegram has 950 million users, with 58% aged 25-44 and 53.2% male. With the rise of TON blockchain and in-app transactions, Telegram has grown as a home for crypto enthusiasts. TON Blockchain supports 7,734,371 transactions daily on average. (source)

Currencies

The Japanese yen dropped below 149.5 per dollar, approaching the critical 150 level that could trigger intervention by authorities. Last week, it reached an 11-week low of 150.32 as the dollar strengthened due to positive economic data. Japan's inflation rates also slowed to five-month lows of 2.5% and 2.4%. The nation's top currency diplomat warned against excessive volatility, and markets are closely monitoring the 150 threshold for potential intervention. 1Y trend: "Down, Appreciating "
The Mexican peso fell to 20 per USD, its lowest in six weeks, due to both domestic and external pressures prompting calls for looser borrowing. Concerns over the automotive sector intensified due to Trump's threats of steep (3x) tariffs on Mexican cars. An IMF report projected a 1.5% growth this year, while the Bank of Mexico indicated a potential rate cut. Rising US rate expectations have also reduced interest in emerging markets amid limited Chinese stimulus efforts. 1Y trend: "Up, Depreciating "
The offshore yuan stabilized at 7.13 per dollar amid subdued market reactions to the PBC's recent monetary easing, which lowered interest rates to record lows. The one-year and five-year LPRs were both cut by 25 basis points. This followed hints from PBOC Governor Pan Gongsheng about potential further reductions. Despite a slight GDP growth of 4.6% in Q3 and a drop in the unemployment rate to 5.1%, new home prices fell for the 15th month, decreasing 5.7% year-on-year. 1Y trend: "Side"

Commodities

Gold prices surged to new ATH (~$2,730) due to rising demand for safe-haven assets amid escalating Middle East tensions, along with upcoming presidential elections. Additionally, looser monetary policies from major central banks, including rate cuts by the PBoC and ECB, support gold, although strong economic data hints at a potentially less dovish Fed. 1Y trend: "Up"