A daily market update from FS Insight — what you need to know ahead of opening bell
“If you have something to say of any worth then people will listen to you.” – Oscar Peterson
Overnight
Dozens killed as Spanish region hit by year’s worth of rain in eight hours BBC
Eli Lilly stock tumbles 10% after missing estimates and slashing profit guidance CNBC
Dutch regulator works to develop better algo controls to prevent market abuse BBG
The EU will impose duties on electric vehicle imports from China from Thursday AP
Investors are showing limited demand for options protection against big tech post-earnings selloffs BBG
Election anxiety is stalling the housing market, agents and mortgage lenders say YF
TSMC Chips Ended Up in Devices Made by China’s Huawei Despite U.S. Controls NYT
Alphabet’s strong third quarter earnings see boost from cloud computing business SEM
Volkswagen profit plunges 42% in third quarter amid sweeping overhaul plans CNBC
Novo’s main Ozempic plant cited for quality lapses by FDA BBG
Apple announces new and smaller Mac Mini with first redesign since 2010 CNBC
Goldman Sachs, Morgan Stanley CEOs see more dealmaking in 2025 RT
Florida Accidentally Banned Banks From Doing Business in Sunshine State WSJ
PhD student finds lost city in Mexico jungle by accident BBC
Chart of the Day
| Overnight |
| S&P Futures -1
point(s) (-0.0%
) overnight range: -1 to +22 point(s) |
| APAC |
| Nikkei +0.96%
Topix +0.81% China SHCOMP -0.61% Hang Seng -1.55% Korea -0.92% Singapore -0.88% Australia -0.84% India -0.51% Taiwan -0.46% |
| Europe |
| Stoxx 50 -1.34%
Stoxx 600 -1.24% FTSE 100 -0.51% DAX -1.07% CAC 40 -1.59% Italy -1.30% IBEX -0.96% |
| FX |
| Dollar Index (DXY) -0.03%
to 104.29 EUR/USD +0.06% to 1.0825 GBP/USD -0.35% to 1.2969 USD/JPY +0.18% to 153.09 USD/CNY +0.09% to 7.1228 USD/CNH +0.09% to 7.1363 USD/CHF -0.06% to 0.8678 USD/CAD -0.08% to 1.3926 AUD/USD +0.24% to 0.6577 |
| UST Term Structure |
| 2Y-3
M Spread narrowed -0.0bps
to -50.4bps
10Y-2 Y Spread narrowed -1.4bps to 14.0bps 30Y-10 Y Spread narrowed -0.2bps to 24.1bps |
| Yesterday's Recap |
| SPX +0.16%
SPX Eq Wt -0.30% NASDAQ 100 +0.98% NASDAQ Comp +0.78% Russell Midcap -0.23% R2k -0.27% R1k Value -0.55% R1k Growth +0.82% R2k Value -0.42% R2k Growth -0.12% FANG+ +1.72% Semis +2.27% Software +1.68% Biotech +0.07% Regional Banks -0.59% SPX GICS1 Sorted: Utes -2.13% Energy -1.44% Cons Staples -0.96% REITs -0.94% Materials -0.67% Fin -0.61% Healthcare -0.29% Cons Disc -0.20% Indu -0.14% SPX +0.16% Tech +1.12% Comm Srvcs +1.56% |
| USD HY OaS |
| All Sectors -1.2bps
to 336bps All Sectors ex-Energy -1.1bps 313bps Cons Disc -2.3bps 288bps Indu -0.4bps 250bps Tech +0.6bps 328bps Comm Srvcs -1.0bps 536bps Materials -1.2bps 309bps Energy -1.0bps 323bps Fin Snr -0.4bps 295bps Fin Sub -2.8bps 206bps Cons Staples +0.1bps 320bps Healthcare -1.8bps 376bps Utes -1.7bps 217bps * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 10/30 | 8:30 AM | 3Q A GDP QoQ | 2.9 | 3 |
| 10/31 | 8:30 AM | Sep PCE m/m | 0.2 | 0.1 |
| 10/31 | 8:30 AM | Sep Core PCE m/m | 0.26 | 0.13 |
| 10/31 | 8:30 AM | Sep PCE y/y | 2.1 | 2.2 |
| 10/31 | 8:30 AM | Sep Core PCE y/y | 2.6 | 2.67847 |
| 10/31 | 8:30 AM | 3Q ECI QoQ | 0.9 | 0.9 |
| 11/1 | 8:30 AM | Oct AHE m/m | 0.3 | 0.4 |
| 11/1 | 8:30 AM | Oct Unemployment Rate | 4.1 | 4.1 |
| 11/1 | 8:30 AM | Oct Non-farm Payrolls | 110 | 254 |
| 11/1 | 9:45 AM | Oct F S&P Manu PMI | 47.8 | 47.8 |
| 11/1 | 10:00 AM | Oct ISM Manu PMI | 47.6 | 47.2 |
| 11/4 | 10:00 AM | Sep F Durable Gds Orders | n/a | -0.8 |
| 11/5 | 8:30 AM | Sep Trade Balance | -72.7 | -70.431 |
| 11/5 | 10:00 AM | Oct ISM Srvcs PMI | 53 | 54.9 |
MORNING INSIGHT
Good morning!
With 2024 Presidential election only 6 days away, we caution against SMDS, or “Stock Market Derangement Syndrome,” as we believe markets should fare well under either future President. However, the results will likely have significant sectoral implications.
Click HERE for more.
TECHNICAL
- SPX is choppy near-term but likely pushes up into early November before a peak.
- Technology has shown minor breakouts on a relative and absolute basis in the last week.
- GOOGL could break out of a reverse Head and Shoulders pattern after earnings.
Click HERE for more.
CRYPTO
Bullish momentum is returning to crypto markets, influenced by key macro updates from the JOLTs report and China’s stimulus plans.
Click HERE for more.
First News
In 2021 and 2022, Iceland began a broad experiment in shortening the country’s work week. About 59% of workers, in both the public and private sectors, were offered the option of a reduction in hours worked (without any reduction in compensation). In many cases (the precise percentage was not available), those offers led to a 4- or 4.5-day work week.
Unsurprisingly, two years later, many of those employees (42%) view the change positively, reporting benefits such as lower stress and better work-life balance. (Interestingly, a small but significant 6% of those surveyed said the reduced work week had actually raised stress in their private/personal lives and 3% said working fewer hours had caused a “significant” increase in stress in their private lives.)
There had been previous experiments along these lines. After a six-month experiment in 2022 involving 2,900 workers at 61 UK companies, 56 opted to continue with a four-day workweek at least temporarily, and 18 decided to make the change permanent right away. The participating companies largely reported the same or better revenues and earnings during the period. While full results from Germany‘s six-month trial of a four-day work week have yet to be compiled, the overwhelming majority of companies that participated seem to be willing to continue with the new schedule. Iceland itself had run smaller trials in 2015 and 2019. But those experiments were extremely limited in scope.
Iceland’s latest experiment was longer and involved reduced working hours for a much broader swath of its population. Yet last year, Iceland’s GDP grew at 5%, making Iceland one of the strongest economies in Europe. Its unemployment was 3.4%, lower than the EU’s 6.1%. Notably, the country achieved these targets after the experiment had begun. It’s not clear whether this achievement is because of this change, or in spite of it. The possible effect of the post hoc propter hoc fallacy must be considered, and it’s also important to remember that correlation does not equal causation. Nevertheless, these numbers from the so-called “Land of Fire and Ice” have advocates for the global adoption of the four-day work week feeling quite satisfied with themselves.
There is understandable wariness about whether (or how) that will work in other countries, of course. But with the growing adoption of AI and the resulting increase of productivity, some believe that for most, it’s not a matter of if, but of when. As JPMorgan CEO Jamie Dimon told Bloomberg a year ago, thanks in large part to AI, “your children are going to live to 100 […] and literally they’ll probably be working three-and-a-half days a week.” (CNN, BBC)