ADDX GO Market Morning Wrap - 23rd Oct

Stock Market

 

On Wednesday Eastern Time, escalating trade tensions led to a collective decline in the three major U.S. indices, with the Nasdaq falling nearly 1%, leading the losses among major indices.  

 

(Intraday Chart of Major Indices, Source: TradingView)

  

At the close, the Dow Jones Industrial Average fell 0.71% to 46,590.41 points, the S&P 500 dropped 0.53% to 6,699.40 points, and the Nasdaq declined 0.93% to 22,740.40 points.  

 

The previous trading day, the Dow hit a record high, briefly surpassing 47,000 points intraday, driven by strong earnings from Coca-Cola and 3M.  

 

Texas Instruments’ stock plunged 5.6% on Wednesday after reporting weaker-than-expected earnings and issuing soft Q4 guidance.  

 

Texas Instruments’ performance dragged down the semiconductor sector, with ON Semiconductor falling nearly 6%, AMD dropping over 3%, and both Micron Technology and the VanEck Semiconductor ETF declining ~2%.  

 

Netflix also weighed on the market, with the streaming platform’s stock tumbling 10% due to earnings missing expectations amid a tax dispute with Brazilian authorities.  

 

Thierry Wizman, global FX and rates strategist at Macquarie Group, said in a report: “While U.S. corporate Q3 earnings have generally beaten expectations, as the earnings season expands to more companies and sectors, markets may worry about management’s forward guidance.”  

 

He added: “A few high-profile companies like Netflix and Texas Instruments have issued relatively pessimistic earnings tones.”  

 

Gold prices continued their decline, following the previous day’s largest single-day drop in over a decade. Analysts noted that gold’s strong rally this year made a correction nearly inevitable.

Global Hotspots

Trump Cancels Budapest Meeting with Putin  

 

On October 22, U.S. President Trump said he deemed a meeting with Russian President Putin “inappropriate” and canceled their planned meeting in Budapest. Trump stated it was time to impose sanctions on Russia but hoped they wouldn’t last long.

 

Media Claims U.S. Allows Ukraine to Use Long-Range Missiles on Russia, Trump Calls It Fake News  

 

On October 22, Trump posted on social media that a *Wall Street Journal* report claiming the U.S. approved Ukraine’s use of Western-supplied long-range missiles to strike deep into Russian territory was “fake news.” Trump said the U.S. has no involvement, regardless of the missiles’ origin or use by Ukraine.

 

EU Member States Approve 19th Round of Sanctions on Russia  

 

On October 22, Denmark, the EU’s rotating presidency, announced that EU member states approved a 19th round of sanctions on Russia, including a ban on Russian LNG imports. The sanctions also impose travel restrictions on Russian diplomats and list 117 vessels in Russia’s “shadow fleet.”

 

U.S. Treasury to Sanction Two Major Russian Oil Companies  

 

On October 22, the U.S. Treasury announced sanctions on two major Russian oil companies, Rosneft and Lukoil, including their Russian subsidiaries and any entities directly or indirectly owned 50% or more by them.

 

Zelenskyy Says Ukraine to Receive at Least 100 Gripen Fighters from Sweden  

 

On October 22, Ukrainian President Zelenskyy visited Linköping, Sweden, and met with Swedish Prime Minister Kristersson. Zelenskyy posted on social media that the two countries signed a letter of intent on air capability cooperation, with future contracts expected to deliver at least 100 Gripen fighters to Ukraine, which plans to receive and deploy them next year.

 

U.S. Government Shutdown Continues as Senate Rejects Funding Bill for 12th Time  

 

On October 22, the U.S. Senate failed to pass a Republican-proposed temporary funding bill, prolonging the government shutdown. This marks the 12th Senate rejection of the bill since the shutdown began.

 

“Fed Whisperer”: Fed Loses Access to ADP Employment Data  

 

Nick Timiraos, known as the “Fed Whisperer,” reported that Fed officials recently lost access to third-party employment data from ADP. Sources say ADP stopped providing the data after Fed Governor Waller’s late-August speech drew public attention to the Fed’s long-term use of ADP data. The reason for the change remains unclear.

Company News

Meta to Cut ~600 Jobs in AI Division to Boost Decision-Making Efficiency  

 

Meta is reportedly cutting ~600 jobs in its “Super Intelligence Lab” AI division, which houses thousands of roles. The layoffs will affect the Facebook AI Research (FAIR) unit, product-related AI teams, and AI infrastructure teams, but the newly formed TBD lab will be unaffected.

 

An internal memo cited by Meta’s Chief AI Officer Alexandr Wang said the cuts aim to streamline decision-making and enhance the scope, responsibility, and impact of remaining roles.

 

Google’s Willow Chip Achieves Quantum Computing Breakthrough  

 

Google announced a breakthrough in quantum algorithms published in *Nature*, achieving the first verifiable quantum advantage with its Willow chip. The “Quantum Echoes” algorithm runs 13,000 times faster than the world’s best supercomputers.

 

Tesla Q3 Adjusted Earnings Fall, Shares Drop Over 2% After Hours  

 

Tesla’s Q3 revenue was $28.1 billion, above estimates of $26.36 billion; Q3 EPS was $0.39, down from $0.62 last year; adjusted EPS was $0.50, below estimates of $0.54; Q3 gross margin was 18%, above estimates of 17.2%; free cash flow was $3.99 billion, far exceeding estimates of $1.25 billion.  

 

Tesla shares fell over 2% after hours.

 

IBM Q3 Revenue at $16.33 Billion  

 

IBM’s Q3 revenue was $16.33 billion, above estimates of $16.1 billion; Q3 free cash flow was $2.37 billion, above estimates of $2.21 billion. IBM projects full-year free cash flow of $14 billion, above estimates of $13.48 billion.  

 

IBM shares fell over 5% after hours.

 

Southwest Airlines Q3 Adjusted EPS at $0.11  

 

Southwest Airlines’ Q3 adjusted EPS was $0.11, beating analyst expectations of a $0.032 loss; passenger revenue was $6.3 billion, slightly above estimates of $6.28 billion.

Forex & Commodities  

COMEX gold futures rose 0.22% to $4,118.2/oz; COMEX silver futures gained 1.03% to $48.195/oz.  

 

International crude futures settled over 2% higher. WTI crude futures rose 2.20% to $58.50/barrel; Brent crude futures gained 2.07% to $62.59/barrel.  

 

At the New York close, the dollar index fell 0.06% to 98.91, with most non-U.S. currencies declining.

Key Events

U.S. National Debt Surpasses $38 Trillion for the First Time  

 

On October 22, the U.S. Treasury reported that the federal government’s total debt exceeded $38 trillion for the first time, just over two months after reaching $37 trillion in mid-August.

Cryptocurrency  

Bitcoin fell 0.60% in 24 hours to $107,584.  

 

Ethereum (ETH-USD) dropped 1.22% to $3,811.74.  

 

XRP (XRP-USD) fell 2.16%, BNB (BNB-USD) rose 1.44%, and Solana (SOL-USD) dropped 2.61%.  

 

Dogecoin (DOGE-USD) fell 1.95%, and Cardano (ADA-USD) dropped 2.82%.

Key Events  

Arthur Hayes Predicts Bitcoin Could Hit $1 Million as Japan’s New PM Orders Stimulus  

 

Japan’s new Prime Minister Sanae Takaichi announced a stimulus package on Tuesday to ease inflation’s impact on households. Some crypto observers believe this could drive capital into Bitcoin.  

 

The stimulus includes subsidies for electricity and gas bills and regional grants to alleviate price pressures and encourage SMEs to raise wages.  

 

BitMEX co-founder Arthur Hayes said the move signals further money printing by the Bank of Japan, potentially pushing Bitcoin to $1 million.  

 

Hayes posted on X Tuesday: “Translation: we’re printing money to give to everyone to help with food and energy costs.” He added that this could drive Bitcoin to $1 million while the yen may also strengthen.