Overnight US Stocks: Indices Rise, Nvidia Jumps 4%, Dollar Hovers Near 8-Week High
On Tuesday, the three major indices rose, and crude oil prices continued to fall. This week, the market is focusing on the Federal Reserve's meeting minutes, September CPI inflation data, and the upcoming earnings season.
**U.S. Stocks**: As of the close, the Dow Jones Industrial Average increased by 126.13 points, a gain of 0.30%, to 42,080.37; the Nasdaq Composite rose by 259.01 points, a gain of 1.45%, to 18,182.92; the S&P 500 index gained 55.19 points, a gain of 0.97%, to 5,751.13. Nvidia (NVDA.US) climbed 4%, and Apple (AAPL.US) rose by 1.8%. The Nasdaq Golden Dragon China Index closed down by 6.8%, with Alibaba (BABA.US) falling by 6.6%. U.S. Treasury yields held above 4%, the dollar hovered near an eight-week high, gold fell for five consecutive days, silver dropped nearly 5% at one point, and copper in London fell nearly 2%.
**European Stocks**: The German DAX 30 index fell by 21.11 points, a decrease of 0.11%, to 19,073.25; the UK's FTSE 100 index fell by 113.44 points, a decrease of 1.37%, to 8,190.18; the French CAC 40 index fell by 54.70 points, a decrease of 0.72%, to 7,521.32; the Euro Stoxx 50 index fell by 20.06 points, a decrease of 0.40%, to 4,949.65; the Spanish IBEX 35 index rose by 21.10 points, a gain of 0.18%, to 11,738.60; the Italian FTSE MIB index fell by 83.52 points, a decrease of 0.25%, to 33,731.00.
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**Asia-Pacific Stocks**: The Nikkei 225 index fell by 1%, the Jakarta Composite Index in Indonesia rose by 0.71%, and the VN30 Index in Vietnam increased by 0.27%.
**Cryptocurrencies**: Bitcoin rose by 0.06%, trading at $63,126.5 per coin; Ethereum increased by 0.12%, trading at $2,442.07 per coin.
**Crude Oil**: The November delivery of West Texas Intermediate (WTI) crude oil futures on the New York Mercantile Exchange fell by $3.57, a decrease of 4.63%, to close at $73.57 per barrel. The December delivery of Brent crude oil futures on the Intercontinental Exchange in Europe closed down by $3.75, a decrease of 4.63%, to close at $77.18 per barrel.
**Metals**: Metals in London fell, with nickel dropping over 1.2%, copper falling 1.95%, and aluminum and zinc both falling over 3%.
**Macro News**:
The yield on the 3-year U.S. Treasury note was higher than the pre-auction trading level. The U.S. Department of the Treasury auctioned $58 billion in 3-year notes with a yield of 3.878%, the highest since July, compared to the pre-auction trading level of 3.871% at 1:00 PM Eastern Time. The previous rise pushed its yield down by about 2.5 basis points. The market barely reacted to the auction results, and the yield curve steepened during the day. The primary dealer allocation ratio was 19.2%, higher than the previous three, the indirect bidder allocation ratio fell to 56.9%, while the direct bidder allocation ratio rose to 24%, the highest in ten years; the bid-to-cover ratio was 2.45 times, with an average of 2.57 times over the previous six auctions.
The U.S. trade deficit narrowed significantly in August, but may still drag on economic growth. Institutional analysis points out that the U.S. trade deficit narrowed significantly in August due to increased exports and decreased imports. Trade may still slightly drag on third-quarter economic growth. The U.S. Department of Commerce announced on Tuesday that the trade deficit shrank by 10.8% from the revised $78.9 billion in July to $70.4 billion. U.S. trade has dragged on GDP for two consecutive quarters. The current expectation for the annualized growth rate in the third quarter is as high as 3.2%. In the April-June quarter, the U.S. economy grew at a rate of 3.0%.Bridgewater Associates founder Ray Dalio does not believe the Federal Reserve will make a "significant" interest rate cut. The billionaire investor does not anticipate that the Federal Reserve will make a substantial reduction in the benchmark interest rate after lowering it by 0.5 percentage points last month. Dalio stated, "The economy is currently in a relatively good balance." The Federal Reserve made its first interest rate cut in four years last month, but the subsequent release of a strong jobs report opened the door for policymakers to slow down their pace of action. Dalio also discussed the policies of U.S. presidential candidates Trump and Harris and expressed concerns about the bond market. Dalio noted that the supply and demand in the U.S. Treasury market are in an unusual state. U.S. Treasuries have a high proportion in the investment portfolios of institutional investors, giving a sense of over-allocation. Geopolitical uncertainty is also one of the issues facing the U.S. Treasury market.
Mohamed El-Erian: The guessing game around the Federal Reserve's monetary policy path has thrown the market into chaos. The renowned columnist and Dean of Queens' College at the University of Cambridge, Mohamed El-Erian, stated that the current guessing game regarding the Federal Reserve's monetary policy path is causing market volatility. U.S. Treasuries have already experienced a significant sell-off, with the previously strong September non-farm employment report prompting traders to quickly reduce bets on substantial future interest rate cuts by the Federal Reserve. The decline since Friday has pushed the benchmark 2-year and 10-year U.S. Treasury yields to exceed 4% for the first time since August. Swaps traders now estimate that the probability of the Federal Reserve cutting interest rates by only 25 basis points at the November meeting is 80%. Over the past 15 days, the probability of a 50 basis point rate cut in November has dropped from over 60% to zero. El-Erian added that the Federal Reserve's communication since 2021 has "amplified" market volatility, even though the policy guidance should have had the opposite effect.
EIA lowers oil price forecasts for both U.S. and Brent crude for this year and next. EIA Short-Term Energy Outlook report: The forecast for Brent prices in 2024 is $81 per barrel, previously expected to be $83 per barrel. The forecast for Brent prices in 2025 is $78 per barrel, previously expected to be $84 per barrel. The forecast for WTI crude oil prices in 2024 is $77 per barrel, previously expected to be $79 per barrel. The forecast for WTI crude oil prices in 2025 is $73 per barrel, previously expected to be $80 per barrel.
**Stock News**
Nvidia (NVDA.US) rises for the fifth consecutive day. The global leader in computing chips, Nvidia, saw its stock price rise for the fifth day in a row, with the share price just a step away from its historical closing high of $135.58 in June. The well-known technology manufacturing company Foxconn held its annual Technology Day on Tuesday (October 8th), during which it revealed that the company is building a large artificial intelligence server manufacturing facility in Mexico to meet the "crazy" global demand for Nvidia's latest GB200 system. Foxconn Chairman Liu Yangwei stated at the conference, as Huang Renxun said, the demand for Blackwell chips is very crazy, and the production capacity of the company's Mexican factory will be huge. The company is also using Nvidia's Omniverse software to build a highly automated Mexican factory, which is to use AI to create a factory for producing AI chips. At the same time, Microsoft's Azure cloud service, a tech giant, also "showed off" on Tuesday, stating that the company has received servers equipped with GB200 chips. Azure emphasized that the company is the first cloud service provider in the world to use the Blackwell system, and the tech giant's new servers are also equipped with Infiniband interconnect technology and innovative closed-loop liquid cooling technology.
The Federal Aviation Administration issues a safety alert for Boeing (BA.US) 737 rudder issues. On October 8th local time, the Federal Aviation Administration (FAA) stated that it had issued a safety alert to airlines, warning that the rudder movement of some Boeing 737 models may be restricted or stuck. Previously, on September 30th, the National Transportation Safety Board stated that more than 40 foreign operators of Boeing 737 aircraft may be using aircraft with potential safety risks in their rudder control system components. The FAA stated that the alert issued on the 8th provided information on the existing automatic rudder system check, which will identify restricted or stuck rudder movement before landing.
Tesla (TSLA.US) launches the new Model 3 Long Range in the UK. Tesla has launched the new Model 3 Long Range in the UK, with WLTP range increasing from the standard range of 363 miles to 436 miles (approximately 701 km). The UK price is £44,990 (approximately 414,900 RMB), which is £5,000 higher than the standard range rear-wheel-drive version, and the new car will start delivery in November. Compared with the current Model 3, the new Long Range version has no changes in appearance and interior, but the vehicle's energy consumption and range have been further optimized and improved. Tesla introduced that the new car's energy efficiency has reached 4.96mp/kWh (equivalent to 1 kWh of electricity allowing the car to travel 7.98 km), and the new car is also the most energy-efficient model in Tesla's history. Currently, Tesla also has three models for sale in China, namely the Standard Range Rear-Wheel Drive, the Long Range All-Wheel Drive, and the Performance All-Wheel Drive.
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