ADDX Go Morning Market Wrap - Oct 4th

Market Key Focus

Equities: The S&P 500 declined by 0.2% following a significant beat in ISM services data.

Crypto: The overall crypto market experienced moderate volatility

US Treasury Bonds:  The 10-year yield reaches its highest level since early September.

FX: The British pound dropped sharply following dovish remarks from the Bank of England Governor.

Gold and oil: WTI crude oil jumps 5%, reaching its largest rise in almost a year.

Smart Money Tracking

ARKK Investment Holdings Update:

1. Reduced its holdings of Tesla by 28,180 shares, a decrease of 0.82% from the previous period, and currently accounts for 15.77% of the total holdings. （Oct 2nd)
2. Reduced its holdings of Roku Inc by 67,380 shares, a decrease of 0.82% from the previous period, and currently accounts for 10.87% of the total holdings.

Stocks to Focus

1. US regulators say Eli Lilly's weight loss drug is no longer in short supply, Hims & Hers, a "substitute" manufacturer, fell more than 10% during tradingTesla deliveries fall short of expectations
2. Nvidia executives and directors have collectively sold nearly 11 million shares of Nvidia stock this year, the largest amount in a single year after factoring in the impact of stock splits.

Market events

Nonfarm Payroll(Sep)

Previous: 142K

Forecast: 148K

Unemployment Rate(Sep)

Previous: 4.2%

Forecast: 4.2%

Average Hourly Earning(Sep)

Previous: 0.4%

Forecast: 0.3%

FOMC Member Williams Speaks

Macros

1. The US ISM Services PMI showed a significant increase, with the headline figure rising to 54.9 from 51.5, surpassing all analyst forecasts. This increase was driven by a surge in New Orders and Business Activity, which jumped to 59.4 (previously 53.0) and 59.9 (previously 53.3), respectively. However, the inflation measure, Prices Paid, increased to 59.4 from 57.3, and the Employment component fell into contractionary territory. Additionally, inventory sentiment decreased.
2. Initial Jobless Claims rose to 225,000 from 219,000, exceeding the forecast of 220,000, while continued claims for the previous week remained relatively unchanged at 1.826 million, below the consensus of 1.832 million. The four-week average of initial claims fell to 224,250 from 225,000, and the unadjusted numbers totaled 181,000, down from the prior 182,000.
3. Looking ahead to the Non-Farm Payroll (NFP) report, US jobs data is crucial to monitor, especially as the Federal Reserve has shifted its focus to the labor market, with cyclical disinflation providing some reassurance. Consensus expects a headline payroll growth of 150,000 from 142,000 in August, with the unemployment rate remaining steady at 4.2%. Leading payroll indicators have been mixed, with the employment sub-index of ISM PMIs showing weakness, while JOLTS job openings and August ADP survey data have been stronger. Good data could negatively impact markets, as there has been resistance to easing expectations from Chair Powell this week, possibly leading to a more hawkish adjustment in markets. Conversely, weaker data would increase the likelihood of a 50 basis point rate cut at the November Fed meeting. The market remains divided, with 35 basis points of easing currently priced in.

Earnings

Before Open: Apogee

US Equities

On Thursday, all three major US indexes closed in the red as investors became apprehensive about rising Middle East tensions prior to the September payroll report. The S&P 500 decreased by 0.2%, the Dow Jones fell by 185 points, and the Nasdaq 100 ended nearly unchanged. Market sentiment turned negative following President Biden's suggestion of supporting Israel in striking Iran’s oil facilities, which raised concerns about potential disruptions to global energy supplies. As a result, oil prices surged by over 5%, boosting energy stocks, with Valero Energy Corp increasing by 6% and Occidental Petroleum rising by 2.5%. On the US economic data front, ISM services data indicated expansion in September, comfortably surpassing estimates ahead of the Non-Farm Payroll data expected tonight. In earnings news, Levi Strauss dropped by 7.6% due to a revenue forecast miss, and Tesla declined by 3.3% after halting orders for its cheapest Model 3.