Market Observations - Oct 23

Scores so Far:?Crypto 35.1%, Stocks 10.4%, Oil 10.0%, gold 7.1%, Commodities 5.7%, H.Y. bonds 3.9%, Cash 3.8%, U.S. dollar 2.9%, I.G. bonds -0.7%, Gov’t bonds -5.4% YTD.

US Friday Market Wrap:?The bullish year that wasn’t!

The U.S. stock market indexes closed the week on their lows, with the S&P below its 200-day moving average for the first time since March. Investors remain hesitant to take on risk ahead of the weekend, with “safe haven” assets like gold catching a bid. The S&P lost 1.3%, closing the week down 2.4%, the Nasdaq was off 1.5%, and the Dow gave up 286 points or 0.9%. Both were down for the week. All the eleven S&P sectors closed green. Consumer staples -0.39% led, and technology -1.69% lagged.

Shares of identity and access management company Okta plunged 12% after revealing that its hacked login credentials breached its system. It’s an ironic turn of events that we’ll likely hear much more about next week.

Tesla shares attempted to stabilize after falling sharply due to Wednesday’s earnings report. Meanwhile, Toyota and Lexus are the latest to adopt Tesla’s North American Charging Standard (NACS), leaving Stellantis and V.W. as the last major holdouts.

The United Auto Workers (UAW) union and General Motors are reportedly inching toward a tentative deal, with the automaker matching Ford’s wage hike.

China escalates the global tech war by restricting graphite exports.?Beijing officially unveiled plans to limit the export of a mineral crucial to manufacturing batteries for electric vehicles (E.V.), citing national security grounds. The escalation comes days after the U.S. imposed additional limits on the types of semiconductors that American companies can sell to Chinese firms. The two countries continue to go tit for tat in implementing new laws as broader protectionist measures spread throughout the globe.

Gold peaked near $1997 before the weekend and pulled back to about $1964 today before steadying.

December WTI peaked in front of $90 a barrel at the end of last week and fell to about $86.85 today, but has also steadied.

The dollar is firmer against the G10 currencies, with the Scandis and Antipodeans the weakest (off ~0.25%-0.65%). Emerging market currencies are also mostly softer. The Mexican peso is the heaviest, off about 0.7%.

The MSCI Asia Pacific Index fell 2.7% last week, the most in two months, and is off to a poor start this week. China’s CSI 300, Taiwan’s Taiex, and India’s main benchmarks are off more than 1% today.

Europe’s SXXP fell 3.4% last week, the most since March. It is extending its losses today and is posting the 5th consecutive decline. The S&P 50 fell 2.4% last week, and the NASDAQ was off almost 3.2%. Both are poised to gap lower. These gaps have extra technical significance if they remain open, given that they will appear on the weekly bar charts, not just the dailies.

Bonds are also selling off. The 10-year JGB yield reached a new high above 0.86% amid talk that the BOJ may consider adjusting the Yield Curve Control and raising its inflation forecasts at next week’s meeting. European benchmark yields are mostly 6-8 bps higher, though we note the peripheral yields, including Italy, are up a little less. The 10-year U.S. Treasury yield is up nearly 10 bps to breach the 5.00% threshold.

The global crypto market cap is $1.14T, a 0.52% increase over the last day. Bitcoin is well above the $30,000 mark this Monday, currently trading around $30,616 on Uphold Ascent.