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Week in Review: 7-11 October 2024

Financial Markets

For the week, the main stock market indices were up, with the S&P500 gaining 1.1% and the NASDAQ 100 up by 1.2%. The small cap index (Russel 2000) rose 0.9% but seems to be on a downward trend.

Gold is unchanged and seems to be consolidating around the 2600$/oz level. Silver fell 2.1% and will likely continue in the 30-32$ range in the near future.

The barrel of WTI gained 1.4% and hit the 75$ level, which could be resistance - this would send oil lower over the next weeks.

Bitcoin was unchanged this week and is close to the middle of the 53-66k$ range it has been trading in for the past months.

The relative strength of the US dollar (DXY) was up slightly but still holds the 102 level. The EUR/USD is around 1.09$, while the USD/JPY is at 149 JPY.

US M2 money supply metrics have not been updated since the 26th of August.

The national financial conditions index (NFCI) for the week of 30th September 2024 loosened by 2.1% and doesn't translate signs of financial stress in the markets (this data is delayed).

US bond yields rose in the long end, and now sit at 3.96% for the 2-year and 4.104% for the 10-year.

The VIX rised slightly and now is around 20.5, showing that the perception of risk is rising progressively, as investors and speculators seek put options expiring in the next 30 days.


Comment Section

 
This week, the month-over-month US inflation rate metrics came 0.1% above expectation. In the meanwhile, the US job market might me weakening - the jobless claims number surprised the markets in a negative way (258k vs 227k forecasts). After all, the FED started cutting rates because they see more risk related to recession than to inflation.
 
Long-term expectations of inflation have risen, as the long end of the yield curve corrected up.
 
We believe the markets are at a near-term all-time high. Any weakness or stress will bring it down. This is the time to start preparing prepared. Don't be greedy!

Take care, and good luck.


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