To The Moon

Wall Street remains stable during earnings season; Hong Kong markets perform strongly due to robust housing sales.

🇺🇸 S&P 500 Index: 0.41% 📈

🇺🇸 Nasdaq Index: 0.80% 📈

🇪🇺 Stoxx 600 Index: 1.09% 📈

🇯🇵 Nikkei 225 Index: -2.63% 📉

🇭🇰 Hang Seng Index: 0.93% 📈

🇨🇳 CSI 300 Index: -0.02% 📉

🇸🇬 Straits Times Index: -0.08% 📉

U.S. stock markets rebound, with the S&P 500 and Nasdaq Composite rising 0.4% and 0.8% respectively, driven by strong earnings from Amazon, whose shares climbed 6.2%, partially offsetting pessimism regarding a significant decline in U.S. job growth in October.

Non-farm payrolls in the U.S. fell to 12,000 in October, far below the forecast of 106,000 and down from 223,000 the previous month. Hurricanes and labor strikes have left the airline and manufacturing sectors vulnerable, considered key reasons for the temporary shortfall.

The unemployment rate aligned with expectations at 4.1%, while wages increased by 0.4% month-on-month, surpassing the expected 0.3% growth.

U.S. manufacturing PMI has contracted for the fourth consecutive month, reaching 48.5, lower than the expected 47.8. Uncertainty before the presidential election is seen as a major factor behind the continued decline in new orders, though the rate of decline has slowed, with production contracting at the smallest rate in three months.

Asia-Pacific markets showed mixed performance, with the Hang Seng Index up 0.9% and the CSI 300 unchanged. This was driven by a reversal in housing sales growth among 22 major Chinese property developers, which rose 66% month-on-month in October, boosting market sentiment following strong policy stimulus and interest rate cuts last month.

Japan's Jibun Bank Manufacturing PMI contracted for the fourth month in a row, further declining to 49.2, though slightly above the preliminary 49, affected by weak domestic and external demand. Manufacturing performance was also hindered by stagnation in employment levels, a decline in procurement activity, and a significant reduction in backlogged orders.

China's Caixin Manufacturing PMI entered an expansion phase in October, reaching 50.3, exceeding the expected 49.7 and up from September's 49.3, with new orders increasing and production accelerating at the fastest pace in four months.

💡 Upcoming Events: 💡

On Monday, we will release the final value of Eurozone Manufacturing PMI.

On Tuesday, we will report on the U.S. elections, ISM Services PMI, and Caixin Services PMI.

On Wednesday, we will announce the final value of U.S. Services PMI, final value of Eurozone Services PMI.

On Thursday, we will release the U.S. unemployment claims.

At the end of the week, we will announce the U.S. Federal Funds Rate, FOMC statement, and preliminary Michigan Consumer Sentiment Index, preliminary Michigan Inflation Expectations and unemployment rate.

💡 Things to Know Today: 💡

1. OPEC+ has agreed to delay the plan to increase December production by 180,000 barrels per day for a month, in an effort to limit supply. This is the second delay following October, aimed at restoring supply amid weak demand prospects, particularly due to slow economic recovery in China and Europe, which could suppress oil prices.

OPEC+

2. Berkshire Hathaway $Berkshire Hathaway(BRK.A)$  cut its stake in Apple $Apple(AAPL)$  by about 25% last quarter, following a nearly 50% reduction in the previous quarter, citing tax considerations for the first quarter's sales. Recent reports indicate that Apple's sales growth for this quarter is expected to be in the low to mid-single digits, below expectations for the upcoming holiday season.

Apple by Berkshire Hathaway

3. Nvidia $NVIDIA Corp(NVDA)$  will replace Intel $Intel(INTC)$  in the Dow Jones Industrial Average (DJIA), which Intel has topped for 25 years. This change highlights a shift in the chip manufacturing market and may damage Intel's reputation, exacerbating its already challenging transition and loss of confidence.

Nvidia replaces Intel

4. Amazon's third-quarter profits and sales exceeded expectations, with retail sales growing robustly by 7%. Operating margin rose from 0.9% last quarter to 3.6%. The company expects this momentum to continue into the holiday season, thanks to shorter shipping times, improved efficiency, and a shift towards low-cost inventory.

Amazon

5. China has released revised regulations allowing foreign individuals to invest in its listed companies, expanding eligibility criteria and relaxing financial requirements to attract more foreign investment. The asset threshold for non-controlling foreign investors has been lowered to $50 million from $100 million.

✅ Key Points: 

Job growth in October slowed more than expected compared to September, partly due to election uncertainty, recent labor strikes, and the impact of hurricanes in the Southeast. Following the data release, market expectations for a 25 basis point rate cut by the Federal Reserve in November rose to 98%.

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