ADDX GO Market Morning Wrap - 16th Oct

Stock Market

On Wednesday Eastern Time, driven by strong earnings from financial giants like Morgan Stanley and Bank of America, the S&P 500 closed higher amid volatile trading. Meanwhile, investors continued to monitor the latest developments in international trade tensions.  

 

Most popular tech stocks rose, with AMD surging over 9%, Intel up over 4%, Google and Broadcom up over 2%, and Tesla up over 1%. Precious metals, semiconductor, and storage stocks rallied significantly, with Gold Resource up over 10%, Americas Silver up over 8%, Western Digital up over 6%, KLA up nearly 6%, Pan American Silver up over 3%, and ASML up over 2%.  

 

This week’s bank earnings kicked off the Q3 earnings season, highlighting the resilience of major U.S. firms and providing clues about the broader economy’s health. Due to the partial U.S. government shutdown, several key economic data releases have been delayed.  

 

CFRA Research Chief Investment Strategist Sam Stovall commented that the banking sector’s performance was nearly flawless, with profits and revenues far exceeding expectations, signaling a robust U.S. economy. Combined with widespread expectations of another Fed rate cut by month-end, these factors bolstered investor confidence.  

 

GLOBALT Senior Portfolio Manager Thomas Martin said: “Consumer spending remains solid, and overall consumption is holding up, which is a key takeaway from bank earnings. The labor market hasn’t deteriorated sharply, and both inflation and employment are in a reasonably balanced range.”  

 

U.S. Treasury Secretary Bessent stated he plans to submit three to four Fed chair candidates to Trump for interviews after Thanksgiving.  

 

Fed Governor Stephen Milan suggested two more rate cuts this year sound reasonable, noting the labor market has weakened noticeably. Fed Chair Jerome Powell also hinted at potential further cuts on Tuesday.  

 

However, risk factors driving recent market volatility persist. As global trade tensions escalate, investors have remained cautious in recent days.  

 

The VIX, Wall Street’s “fear gauge,” climbed in Wednesday’s afternoon trading, closing at 20.6, near its highest since late May.  

 

Additionally, the Fed’s Beige Book, released Wednesday, indicated that tariffs imposed by the Trump administration are driving up overall inflation, with businesses struggling to balance absorbing costs or passing them to customers.

 

The report noted that since the September 3 Beige Book, U.S. economic growth “changed little.” The labor market remained broadly stable, but demand stayed subdued in most Fed districts.  

 

Interactive Brokers Senior Economist Jose Torres noted: “Until more earnings and trade signals emerge, capital is clearly hesitant to chase highs. Elevated volatility suggests any minor trigger could spark sharp two-way swings.”

Global Hotspots

Trump Confirms CIA Authorized to Operate in Venezuela  

 

On October 15, President Trump stated the U.S. is considering ground operations to strike drug cartels and confirmed the CIA has been authorized to conduct operations in Venezuela. Media reports earlier indicated the U.S. had secretly authorized CIA covert actions in Venezuela.

 

The new authorization allows the CIA to conduct lethal covert operations alone or with the U.S. military, which is also preparing for potential strikes in Venezuela.

 

U.S. Judge Temporarily Halts Federal Employee Layoffs During Shutdown  

 

A U.S. judge ordered the Trump administration to pause plans to lay off thousands of federal employees during the government shutdown. San Francisco District Judge Susan Illston issued the ruling on Wednesday. Since last week, over 4,100 federal employees received layoff notices.

 

The order is not a final ruling on the case’s merits. It prevents over 20 federal agencies named in the lawsuit from issuing new layoff notices for projects involving union members and halts actions on existing notices while the judge considers a longer-term injunction.

 

Fed Beige Book: Economic Activity Largely Unchanged, Employment Stable  

 

The Fed reported that U.S. economic activity changed little in recent weeks, with employment levels broadly stable. According to Wednesday’s Beige Book, based on surveys of business contacts across Fed districts, overall consumer spending slightly declined.

 

Prices continued to rise, with several districts reporting faster input cost increases. The Fed noted, “Tariff-driven input cost increases were reported in many districts, but the pass-through to final prices varied.”

Company News

Meta Invests $1.5 Billion in New Texas Data Center to Bolster AI Strategy  

 

On Wednesday, Meta announced a $1.5 billion investment to build its 29th global data center in Texas to expand infrastructure for AI computing. The El Paso facility, Meta’s third in Texas, is set to be operational by 2028, scalable to 1 gigawatt, enough to power a San Francisco-sized city daily, making it one of the largest planned U.S. data center campuses.

 

Meta’s total Texas investment exceeds $10 billion, employing over 2,500 people statewide.

 

BlackRock, Nvidia, Others in $40 Billion Acquisition of Data Center Operator Aligned  

 

On Wednesday, a consortium including BlackRock, Microsoft, and Nvidia, under AIP, announced a ~$40 billion acquisition of global data center operator Aligned to secure AI computing resources. Formed last year, AIP is backed by Abu Dhabi’s MGX and Musk’s xAI.

 

BlackRock CEO and AIP Chairman Larry Fink said: “By investing in Aligned, we advance our goal of providing critical AI infrastructure while offering attractive investment opportunities.” Post-transaction, Aligned will remain led by CEO Andrew Schaap, headquartered in Dallas, with completion expected in H1 2026.

 

Apple Launches M5 Chip, Debuts in Three New Products  

 

On Wednesday, Apple released its fifth-generation M-series chip, debuting in three devices. Like the A19 Pro chip launched in September, the M5 uses TSMC’s third-generation 3nm process (N3P).

 

Apple said the M5’s 10-core GPU, with neural engine accelerators in each core, significantly boosts AI workload performance—GPU peak computing power is over four times that of the M4, with overall graphics performance up to 45% higher.

 

Unified memory bandwidth rose nearly 30%, from 120GB/s in the M4 to 153GB/s. The M5 debuts in the 14-inch MacBook Pro, iPad Pro, and Vision Pro, available for pre-order starting October 17 and on sale October 22.

Forex & Commodities  

WTI crude futures fell 0.73% to $58.27/barrel. Brent crude futures dropped 0.77% to $61.91/barrel.  

 

COMEX gold futures surged 1.48% to $4,224.9/oz, and COMEX silver futures jumped 3.76% to $52.525/oz, both hitting record closing highs.  

 

At the New York close, the dollar index fell 0.39% to 98.67, with most non-U.S. currencies rising.

Key Events

Gold Surges Past $4,200! How Should Investors Respond?  

 

Gold prices continued their rally, breaking above $4,200/oz on October 15.  

 

Analysts suggest monitoring key events by month-end. The APEC summit on October 31 may include U.S.-China talks on trade and tariffs, while the Fed’s rate decision is set for October 30. Investors should also track the U.S. government shutdown.

 

Over the medium to long term, global debt cycles and geopolitical tensions support further upside for precious metals.  

 

Investment strategies include holding gold as a core portfolio asset. Given record highs, analysts advise against chasing rallies, recommending buying on dips or dollar-cost averaging into gold.

 

India’s Central Bank Fights Currency Speculators  

 

On Wednesday, India’s central bank aggressively intervened, pushing the USD/INR rate from a three-week high of 1:89 to around 88, marking the rupee’s largest single-day gain in four months. Sources say the bank sold dollars in onshore and offshore markets to counter “speculative attacks by international fund managers.”

Cryptocurrency  

Bitcoin fell 2.22% in 24 hours to $110,464.  

 

Ethereum (ETH-USD) dropped 3.68% to $3,983.01.  

 

XRP (XRP-USD) fell 3.31%, BNB (BNB-USD) declined 3.30%, and Solana (SOL-USD) dropped 3.91%.  

 

Dogecoin (DOGE-USD) fell 3.60%, and Cardano (ADA-USD) declined 3.73%.

Key Events

Crypto Whales Ramp Up Short Positions on Bitcoin and Major Altcoins  

 

Arkham Intelligence data shows crypto whales are increasing short positions on Bitcoin and major altcoins. The entity dubbed “Trump Insider Whale” is particularly aggressive, adding $150 million in Bitcoin short positions, bringing its total short exposure to $485 million, with ~$22 million in unrealized profits amid the current downturn.

 

Reports previously noted this entity shorted $340 million in Bitcoin and $350 million in Ethereum before last week’s crypto crash, netting $200 million in profits.  

 

Other whales are also shorting major altcoins. Wallet 0x9eec9, with $31.8 million in profits, holds $98 million in short positions on Dogecoin, Ethereum, Pepe, XRP, and Aster. Whale 0x9263, with $13.2 million in profits, has $84 million in short positions on Solana and Bitcoin.