SVET Reports
Wednesday's Markets Update (November 6, 2024)
On Wednesday, stock futures remained steady following a significant rally spurred by Trump's victory. Major indices reached record highs, with the Dow, S&P, and Nasdaq gaining 3-4%. The small-cap Russell 2000 surged over 5%. Investor optimism centered on anticipated pro-business policies under a second Trump administration, bolstering sectors like financials, energy, and industrials. Meanwhile, megacap tech stocks thrived, while renewable energy and Chinese companies lagged. The dollar is up, while gold, silver, and oil are down. Brazil's Central Bank hiked its rate for the second time this year amid resurging inflation. BTC has continuously reached new ATHs as more money poured into risk-on assets, driven by traders' anticipation of Trump's pro-crypto reforms. Even ETH outperformed, surging more than 10% to $2.7K.
Details
The average interest rate for 30-year fixed-rate mortgages rose to 6.81% for the week ending November 1, 2024, marking the highest rate since late July. This increase is attributed to rising Treasury yields and expectations that the Federal Reserve will delay lowering interest rates. Additionally, the likelihood of a Trump victory in the presidential election is also influencing rates. Jumbo loan rates reached 6.98%, while FHA-backed mortgage rates decreased to 6.75%. 1Y trend: "Side" (MBA)
Crypto
The number of BTC millionaires surged from 121,061 on October 7 to 132,842 by November 6, adding 11,487 new millionaires. (source)
World Markets
The Eurozone private sector stagnated in October, with manufacturing contracting and services growing at a slower pace. Germany and France experienced shrinking activity, while Spain, Ireland, and Italy saw growth. Demand weakened, and employment fell sharply. Price pressures eased, and business confidence declined. 1Y trend: "Up" (SP)
Eurozone producer prices declined in August, driven by lower energy costs. While some goods categories saw price increases, overall, producer inflation eased. Month-over-month, prices fell significantly, indicating softening inflationary pressures. 1Y trend: "Up" (EU)
German factory orders surged in September, driven by large-scale orders for transportation equipment. Both domestic and foreign demand increased, with a significant boost from the Eurozone. While some sectors saw declines, overall, the data points to a recovery in manufacturing activity. 1Y trend: "Side" (DE)
France's private sector activity contracted at the fastest pace in nine months in October. Both manufacturing and services sectors declined, driven by falling new orders, especially exports. Employment decreased, and business confidence weakened. While input costs rose at a slower pace, output prices remained relatively stable. 1Y trend: "Up" (SPG)
The Central Bank of Brazil raised its interest rate by 50 basis points to 11.25% to combat persistent inflation. The decision was influenced by concerns about inflation expectations, resilient service sector inflation, and global economic uncertainties. While the domestic economy remains strong, the bank aims to balance inflation control with economic growth. 1Y trend: "Down" (BR)
Commodities
WTI crude oil futures remained stable above $72, recovering from an earlier drop of over 3%. Investors are evaluating the effects of Trump’s policies and recent EIA data on the energy market. A second Trump term is expected to boost economic growth and consumption, but concerns about trade tariffs hurting China's economy may reduce oil demand. Meanwhile, the EIA reported a larger-than-expected increase in U.S. crude inventories, and Gulf oil producers began evacuating workers due to Tropical Storm Rafael. 1Y trend: "Side"
Gold prices fell below $2,670, down from the October 30 peak of $2,758, as Trump's presidential win bolstered the dollar and led investors to sell gold. The election outcome was less competitive than expected, with no contest anticipated. Markets are adjusting to expectations of higher Fed interest rates, reducing demand for gold. The Fed is expected to announce a 25bps rate cut, addressing inflation risks amid a weakening job market. 1Y trend: "Up"
Silver prices fell below $32, the lowest in nearly a month, as Donald Trump's presidential win boosted the dollar and led investors to retract safe-haven positions. The election outcome was less competitive than expected, and market sentiment anticipated higher Fed interest rates, reducing gold demand. Trump's campaign promises of tax cuts and tariff increases raised concerns about inflation and deficits. The Fed is expected to announce a 25bps rate cut while addressing inflation and job market risks. 1Y trend: "Up"