1. Moving the market

Early in the trading session, bullish sentiment dominated despite a flood of mixed earnings results, with more reports expected from major tech companies.

However, this optimism was short-lived, as the major indexes eventually succumbed to bearish pressures, relinquishing their gains, and closing in the red.

Alphabet set a positive tone by surpassing expectations, boosting its share price by approximately 6%. In contrast, chipmaker AMD disappointed investors, leading to a 10% drop in its stock. Super Micro had an even worse day, with its stock plummeting by 32%, while Caterpillar also underperformed, losing 4% of its value.

As the market closed, anticipation grew for the earnings reports from tech giants Meta and Microsoft, with Apple and Amazon scheduled to release their results the following afternoon.

On the economic front, the latest third-quarter GDP figure showed a 2.8% annualized increase, falling short of economists’ expectations of a 3.1% rise.

However, the ADP payroll report provided a silver lining, revealing the highest level of private job creation in a year. Additionally, pending home sales surged by 7.4% month-over-month, marking the largest jump since June 2020.

Despite the mixed market environment, gold remained resilient, briefly touching the $2,800 level before retreating. Bond yields experienced another turbulent session, with some traders viewing the Fed’s 0.5% rate cut as a potential policy misstep.

The dollar had a volatile day, ultimately closing lower, while Bitcoin, despite coming off its highs, found solid support around $72,000. Oil prices rebounded but continued to drift below recent highs.

It was a volatile session, and I expect to see more of that as we approach election time.

1. Moving the market

As we approach a series of major corporate earnings releases in the coming days, bond yields continued their upward trajectory, reaching their highest levels since July.

Despite this, the major indexes showed little movement early this morning. With only five trading days remaining before the US presidential election, market volatility could increase, potentially leading to more choppiness. Today, the Dow slipped into the red, while the S&P 500 and Nasdaq managed to close in the green.

Bond yields showed significant fluctuations, with the 10-year yield pulling back slightly by the close, yet still rebounding to its July highs.

Gold surged, gaining 1.05% and setting a record, while Bitcoin also reached a new all-time high. The MAG7 stocks closed higher ahead of their earnings reports, whereas the most shorted stocks declined after three consecutive days of gains. The dollar remained unchanged.

The global money supply appears to be supporting Bitcoin’s potential for further gains, as indicated by recent charts.

Could we be on the verge of seeing Bitcoin reach the much-anticipated $100,000 mark?

1. Moving the market

This morning, crude oil prices plummeted by over 5% following an Israeli airstrike on Iran that notably avoided sensitive oil and nuclear facilities.

This unexpected development contributed to a jump in the major indexes, buoyed by the easing geopolitical tensions and the anticipation of upcoming mega-cap technology earnings. These earnings, coupled with the steadily improving Citi Economic Surprise Index, are expected to sustain the market’s upward momentum.

Traders are gearing up for the busiest week of the third-quarter earnings season, which coincides with the Presidential election on November 5. Five of the MAG7 companies—Alphabet, Microsoft, Meta, Apple, and Amazon—are set to release their earnings reports. Given their high valuations, these companies must meet expectations to prevent a potential sell-off.

On the economic front, this week is packed with significant events, including the PCE index release on Thursday, a preliminary reading of the third-quarter GDP, and the potentially market-moving jobs report on Friday.

Last week’s short squeeze continued to drive Small Caps higher, although the MAG7 basket saw minimal gains. Bond yields experienced volatility, with the 10-year yield surpassing the 4.27% mark.

Meanwhile, the dollar and gold ended the session unchanged, but Bitcoin found support and raced towards the $70,000 mark.

Despite the prevailing uncertainty surrounding the election, bond yields appear to have settled on an outcome, as indicated by the latest charts.