Weekly News 2023/10/02-2023/10/06

 U.S. stocks closed higher on Friday, led by technology stocks. The Dow rose 288.01 points, or 0.87%, to 33407.58 points; the Nasdaq rose 211.51 points, or 1.60%, to 13431.34 points; the S&P 500 rose 50.31 points, or 1.18%, to 4308.50 points. The Dow fell 0.3% this week, the S&P 500 rose 0.48%, and the Nasdaq rose 1.6%. Investors are assessing strong job market data and its impact on Federal Reserve policy. The market on Friday ushered in the closely watched U.S. non-farm payrolls report for September. The U.S. Department of Labor reported that non-farm payroll employment increased by 336,000 in September after seasonally adjusting, the largest increase since January 2023, far exceeding the average economist's expectation of 170,000. U.S. non-farm payrolls data in September far exceeded expectations, strengthening the Federal Reserve's reasons for raising interest rates this year and maintaining high interest rate policies for a long time.

Many market participants had been looking for a slightly softer jobs report to break the surge in U.S. Treasury yields. However, strong September non-farm payrolls data showed that the U.S. labor market remains tight, reinforcing expectations that the Federal Reserve will raise interest rates again this year and maintain high interest rate policies for a longer period of time, pushing U.S. Treasury yields to continue to rise on Friday.

After the non-farm payrolls data was released, the U.S. 10-year Treasury bond yield once rose to 4.887%, setting a new high since 2007. The 30-year Treasury bond yield rose to 5.04%, the highest level since 2007. When U.S. stocks closed on Friday, gains in U.S. bond yields narrowed, with the 10-year Treasury yield falling back to 4.79%.Seema Shah, chief global strategist at Principal Asset Management, said that the surge in non-farm payrolls data may not be good news for the market.

 Tesla (NASDAQ: TSLA) has also lowered the price of the Model 3 high-performance version in the United States from $53,240 to $50,990, and the price of the Model 3 long-range version in the United States from $47,240 to $45,990. Tesla investor and Future Fund managing partner Gary Black believes that price cuts will have a negative impact on Tesla's earnings. The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Musk on Thursday. The latter responded on Friday that there is an urgent need to comprehensively reform institutions like the SEC. The SEC alleges in the lawsuit that Musk failed to comply with a subpoena related to his 2022 purchase of Twitter stock. The SEC said Musk's refusal to testify hindered the SEC's investigation into possible violations of federal securities laws.

Amazon (NASDAQ: AMZN) will launch its first-ever satellite on Friday. The company has launched a space Internet service plan called “Project Kuiper” in the hope of connecting with space exploration technology companys “Starlink” plan.

Microsoft (NASDAQ: MSFT) will announce the completion of the US$69 billion acquisition of Activision Blizzard (NASDAQ: ATVI) on October 13. This means that after more than 20 months of hard work, Microsoft is finally close to successfully acquiring Activision Blizzard. Whether Microsoft can make this announcement depends on the UK's antitrust regulator, the Competition and Markets Authority (CMA). The CMA blocked the deal earlier this year, but Microsoft recently resubmitted its takeover proposal, gaining preliminary approval from the CMA.

South Korea's telecoms regulator said on Friday that Apple (NASDAQ: AAPL) and Alphabet's Google (NASDAQ: GOOGL) abused their dominant position in the app market and warned that the two companies may Facing fines totaling 68 billion won (approximately US$50.47 million).

 Bitcoin fell 1.3% to $27,369 on Friday following the U.S. jobs report. The world's largest economy added 336,000 jobs in September, far exceeding initial expectations of 170,000, raising concerns that interest rates will remain high for an extended period.

Bitcoin has been trading below $30,000 since July after some of the world's largest asset managers, including BlackRock and Fidelity, applied to a series of Bitcoin spot exchanges Exchange-traded fund (ETF) application, Bitcoin price surges below $30,000.

Grayscale Investments‘ legal victory in August further boosted hopes that the SEC would approve a spot Bitcoin ETF. The court sided with the company, challenging the SEC’s rejection of the fund managers application to convert its Bitcoin fund into an ETF. But this week, Ethereum-based financial products stole the show.

Bitwises Ethereum futures ETF launched on Monday, joining seven other Ethereum ETFs from the likes of Valkyrie, VanEck, ProShares and VolShares. Ethereum briefly rose to a weekly high of $1,736 on Monday before falling below the psychological $1,700 mark on the day. The world's second-largest cryptocurrency was trading at $1,621 fell 0.8% within an hour of the U.S. jobs report on Friday.

“The recent approval of the Ethereum ETF officially establishes that Ethereum, like Bitcoin, is not a security under U.S. law. This non-security classification will help drive increased institutional and retail investment traffic,” StealthTest, Web3 Attorney and Web3 Software Company President Collin Woodward told Forkast. “The first spot Bitcoin ETF is inevitable. Its just a matter of time, and this approval actually paves the way for more Ethereum ETFs, including an eventual spot Ethereum ETF.” Woodward added road.

 Spot gold closed at $1,831.82 per ounce on Friday, up $11.72 or 0.64%. It's down $16.87, or 0.91%, for the week, putting it on track for its second straight weekly loss. Since the Federal Reserve kept interest rates unchanged on September 20, the price of gold has fallen for days. Friday's non-farm payrolls report once pushed spot gold to a seven-month low of $1,810.39 per ounce, but it soon rebounded sharply from the low to over $20, hitting a new daily high of $1,834.88 per ounce. Although gold prices halted their longest one-day decline in nearly a decade, they still ended the week down nearly 1%.

Some analysts believe disappointing wage growth and an unchanged unemployment rate give the Fed room to keep rates on hold next month. It's been a tough week for gold, with the market experiencing its longest single-day decline in seven years and prices hovering near their lowest levels since March. While gold prices are still likely to fall further in the near term, some analysts say there may be some light at the end of the tunnel.

Meanwhile, many analysts soaring long-term bond yields remain the biggest driver of gold's rise. Gold's sell-off this week came as the U.S. 30-year Treasury yield rose to 5% for the first time since 2007, while the 10-year Treasury yield hit a 16-year high of 4.8%. Some analysts point to rising prices for long-term Treasury bonds as another strong indicator that the U.S. economy is heading toward recession. Inflation data will be the focus in the coming week. U.S. September PPI and CPI will be released next Wednesday and next Thursday respectively. These two data should give the market a better understanding of the Fed's next move.

 International oil prices rebounded slightly amid signs that the economy and demand remain strong, but concerns about U.S. interest rate hikes dragged oil prices to their biggest weekly decline since March. The settlement price of November 2023 West Texas Light crude oil futures on the New York Mercantile Exchange was US$82.79 per barrel on Friday, up US$0.48, or 0.58%, from the previous trading day, and the December 2023 Brent crude oil futures on the London Intercontinental Exchange The settlement price was US$84.58 per barrel, an increase of US$0.51, or 0.61%, from the previous trading day, with a trading range of US$83.44-84.95.

A surge in Chinese holiday travel means demand remains strong. According to calculations by the data center of the Ministry of Culture and Tourism, during the eight-day holiday, the number of domestic tourist trips in China was 826 million, a year-on-year increase of 71.3% on a comparable basis, and an increase of 4.1% on a comparable basis compared with 2019. The U.S. economy is also recovering. The U.S. Department of Labor said the U.S. economy added 336,000 jobs in September, far exceeding economists' forecast of 170,000. However, Friday's U.S. jobs report stoked concerns among investors that the Federal Reserve will need to keep interest rates higher for longer to curb inflation. In response to the data, the benchmark 10-year Treasury yield jumped more than 12 basis points, approaching the 16-year high set earlier this week.

Analysts believe that good news about U.S. employment is bad news for the market, and traders predict that the probability of the Federal Reserve raising interest rates again this year is about 29%. A stronger dollar typically has a negative impact on oil demand, making the commodity relatively more expensive for holders of other currencies.

 The 10-year and 30-year Treasury yields calmed down after hitting 2007 highs of nearly 4.9% and 5.1%, respectively, as global bonds sold off for a fifth straight week. The unexpected surge in hiring has swap traders pricing in a roughly 50% chance of a rate hike in December. The nonfarm payrolls report showed that U.S. employers accelerated their hiring pace, adding 336,000 new jobs in September, more than double economists' expectations.

EURUSD fell to test the key target of 1.0483 before reversing back above the 100 and 200 hour moving averages at 1.0507 and 1.05297 respectively. New highs were set as traders looked for exits, with prices rising above the 38.2% retracement of the September 12 high at 1.05709 and extending to just below 1.0600 levels.

GBP/USD initially fell, testing correction lows from Wednesday's session, having hit the day's low of 1.21056 from Thursday's session. Today's low reached 1.21053, as EUR/USD moved back above its broken 100 hourly moving averageand 200 hourly moving average. This turns sellers into buyers. The price then broke above the 38.2% retracement of the decline from the September 11 high of 1.22316. It then hit a new high of 1.2258 this week.

The bond selloff has been hitting risk assets from stocks to corporate credit amid concerns that central banks will keep interest rates high for longer than expected.

Markets have been rocked this week by conflicting U.S. labor data: job vacancies exceeded expectations, while ADP's private employment indicator was weaker than expected. In the coming week, all eyes will be on Thursday's consumer price data and quarterly earnings reports from some of Wall Street's biggest banks, including JPMorgan Chase, Wells Fargo and Citigroup.

OnePro Special Analyst

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