Monday's Markets Update (October 28, 2024)

29 Oct 2024 by rate3

On Monday, stocks closed higher while investors await job openings and labor turnover data. Apple, Amazon, Meta, Microsoft, and Alphabet are set to report earnings. Gold is up due to geopolitical factors. Japan's unemployment rate dropped to a two-year low. BTC surged above $70K, driven by strong inflows into BTC ETFs and expectations of a Trump victory. ETH, still at $2.6K, is drastically underperforming.

Details

Texas manufacturing improved in October, with production, capacity utilization, and shipments rising. However, new orders weakened, and labor market conditions softened. Price and wage pressures persisted. 1Y trend: "Up" (DFed)

Crypto

Microsoft shareholders will vote on December 10th to consider adding BTC to their investments. Despite the proposal, Microsoft's board recommends voting against it. This comes as major shareholders like Blackrock embrace crypto, while Vanguard remains cautious. (source)

World Markets

Japan's unemployment rate dropped to a 20-month low of 2.4% in September. Joblessness decreased, while the labor force participation rate increased. However, the number of employed individuals also declined. The jobs-to-applications ratio slightly improved to 1.24. 1Y trend: "Down" (JP)
Spain's retail sales surged 4.1% YoY in September, driven by strong growth in non-food products. This marks the highest increase since March 2023. Monthly sales also rose 1%, the biggest gain in nearly a year. However, e-commerce sales declined 8.2%. 1Y trend: "Side" (ES)

Currencies

The dollar index surged, hovering near a three-month high. Investors are awaiting key economic data releases this week, including GDP, PCE inflation, and payrolls. Market expectations for a 25bps Fed rate cut is above 90%. 1Y trend: "Side"

Commodities

Gold prices surged above $2,750, fueled by expectations of a potential Fed rate cut and economic uncertainty. Lower interest rates typically boost gold's appeal as a non-interest-bearing asset. Meanwhile, China's gold demand has weakened this year. 1Y trend: "Up"

Comment: What's Up With Future?

As the current global economic and political landscape evolves, the contours of the future world order are becoming increasingly apparent.

In the next two to three decades, after an initial period of economic and political readjustment marked by instability and conflict, the world will likely bifurcate based on inherent limitations and historical trajectories. One part will maintain its technological and social advantage, fueled by open, highly competitive markets built on cutting-edge advancements. However, this region will face growing social pressures due to aging populations, decreased immigration, and increased government intervention, leading to tighter regulations and higher taxes. The rise of inequality, exacerbated by a rise of AI, market restrictions and reduced entrepreneurial opportunities, will further complicate the situation.

The other part of the world will stabilize within a more patriarchal, heavily regulated framework, reliant on government initiatives and investments. While unlikely to match the first world in high-tech innovation, this region may experience rapid economic growth due to its lower starting point and untapped potential for regional cooperation, bolstered by significant government support. However, it will remain dependent on the first world for high-tech goods and services. This region will also exhibit significant social disparity, with more pronounced extremes. Despite these challenges, it may offer better profitability and growth opportunities for businesses, albeit constrained by bureaucratic hurdles and high transaction costs.

A third category of countries will emerge, aiming to position themselves as intermediaries between the first and second worlds. These countries will export food, natural resources to one side, and high-tech goods to the other one, serving as conduits between the two.

Finally, a fourth category of micro-economies will strive for complete independence. By leveraging geographical or technological advantages, these economies will cater to wealthy individuals, offering unique, exclusive products and services that are inaccessible in the larger world. Freedom, both political and economic, may become a rare commodity in this scenario, as it is increasingly curtailed by governments in all three major economic models.

In this context, decentralization and cryptocurrencies will play a crucial role, attracting talent and facilitating borderless trade, offering a potential escape from the constraints imposed by traditional economic systems of the 1st, 2nd and 3rd Worlds.