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’. I’ll be off until next report on 19/10/23.
A positive market Q3 earnings reality check
A Q3 end to the US earnings recession could be a positive ‘reality check’ for depressed markets. Tech-related sector to lead S&P 500 earnings up, whilst commodities lag. Big tech has seen some of the strongest earnings upgrades, alongside homebuilders and autos. The drivers of the earnings resilience is from tech to profit margins, the economy, and a low base. European earnings set to trough this quarter, with heavy-weight financials sector leading growth. See Page 4
The global bond rout fixates markets
Soaring global bond yields spook markets, hitting valuations and tightening financial conditions. Uncertainty deepened as US House speaker McCarthy fired with shutdown clock reset to Nov. 17. Oil plunged and JPY hit 150. WMT warned of weight loss drug impact on its business. XOM eyeing huge $60bn PXD deal. ALO.PA profit warning plunge. See NEW Q4 Markets Outlook HERE and at twitter @laidler_ben. See Page 2
Dash-for-cash has further to go
$1 trillion flowed to US money markets this year as interest rates risen. Out of bank deposits and stocks. This double headwind will last with cash the most popular asset class. See Page 2
We don’t need oil as much as we used to
OPEC may be overplaying its hand as high oil prices start to cannibalise demand and further encourage the dramatic 60% improvement in global energy efficiency seen. See Page 2
Can the autos sweet-spot last?
Car stocks outperformed with volumes and pricing surprisingly strong, giving the ‘big 3’ flexibility in the ongoing UAW strike. See Page 2
Retail investors are human too
Our latest retail investor survey shows many are using personal experience and emotion in investing and seeing sentiment and technicals as driving the markets. See Page 2
Crypto bucks the stocks sell off
BTC and ETH gained after Q3 losses, dodging global markets volatility, with correlations low. SOL soared on rising TLV and FTC overhang relief. SEC denied appeal against Ripple lawsuit win. BTC long-term holders hits a record 76%. Van Eck launched first ETH futures ETF. See latest Weekly Crypto Roundup. See Page 3
Brent oil plunges under $85/bbl.
Oil prices plunged on signs high prices driving less demand and higher inventories and Russia lifting its diesel export ban, even as OPEC kept its deep supply cuts. Precious metals weaker on bond yield and dollar vice, and palladium on ICE outlook. Uranium rally continued and the hottest ever Sept. driving ag disruption. See Page 3
The week ahead: Q3 earnings and inflation
1) JPM kicks of Q3 earnings season (Fri). 2) Est. new 4.1% low for core US inflation (Thu). 3) Stressed US bond markets closed (Mon) for Columbus day, plus IMF/WB annual meetings. 4) Also, AMZN Prime Big Deals day and coming NZ and Poland general elections. 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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