Please see this week’s market views from eToro’s global analyst team. The full 5-pager includes latest market data, the house investment view, and a weekly ‘special’.
Retail investors numerous and important
We spotlight five keys from our quarterly survey of 10,000 self-directed investors across 13 markets from US to Australia. They are more worried about recession, but more upbeat about markets. They are focused on the US market and tech stocks, but contrarian positive from crypto, to banks and China. The number of new DIY investors is still structurally growing quickly and being led by women. Retail investors are more important than ever to markets. See Page 4
The bond yield and oil vice grips markets
4th down week with S&P 500 closing a miserable September -5%, squeezed by $95 oil prices, 4.5% US 10-yr bond yields and government shutdown uncertainty. Dollar soared to a 9-mth high and VIX volatility hit 19. German inflation plunged. The FTC filed suit against AMZN. PTON surged on LULU deal, NKE on results, and GME named Ryan Cohen CEO. See Q3 Markets Outlook HERE and at twitter @laidler_ben. See Page 2
The sunnier uplands of October
Expect markets summer fever to break in Oct. as macro ‘wall of worry’ pressures, from bond yields to oil ease, Q3 earnings see end of profit’s recession and seasonality is positive. See Page 2
What the bond ‘bear steepening’ tells us
US bond yield curve seen sharply rising long-term yields, hitting stocks. But we see yields ultimately contained and ‘self-correcting’ by the GDP growth and inflation slowdown. See Page 2
The Fed ‘put’ is coming back
Fed getting policy flexibility back to cut interest rates if needed by a sharply slowing economy. This is a markets insurance policy. See Page 2
The boom in US cross-border listings
US increasingly attractive for foreign company IPO’s, from ARM to Birkenstock, promising more investors and higher valuations, but it dies have often-overlooked disadvantages. See Page 2
Crypto benefits being out of sight and mind
Crypto assets side-stepped the big pick up in cross-asset volatility, with trading volumes and correlations low, and held on to its leading YTD return. ETH and LINK rose with AVAX a rare loser. MSTR bought $147 million more BTC to add to its $4.7 billion holding. Binance exited Russia. See latest Weekly Crypto Roundup. See Page 3
Brent oil hits $95 on falling inventories
High oil prices were supported by sharp fall in US inventories and Russia fuel export ban, ahead of the OPEC meeting. Uranium to Orange Juice saw even bigger price gains with supplies tight and demand firm. Biggest loser was precious metals, on the stronger dollar and higher bond yields, with gold prices at a six-month low. See Page 3
The week ahead: Shutdown, OPEC, and jobs
1) Oct. 1 US shutdown averted and student loan payment restart. Jobs report (Fri) with est. 150k slowdown. 2) OPEC meets (Wed) with oil surging. 3) STZ, MKC, LEVI, TSCO.L, earnings ahead of Oct. 13 Q3 start. 4) China ‘golden week’ holiday and seasonally better October and Q4. See Page 3
Our key views: Stronger months ahead
See a stronger Q4 and 2024 as summer breather and wall-of-worry fades, and investors look ahead to lower inflation and coming rate cuts as growth slows, firming earnings outlook. Focus on defensive growth and long duration assets from healthcare to big tech. Cautious growth exposed cyclicals, commodities, and banks.See Page 5
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