A daily market update from FS Insight — what you need to know ahead of opening bell
“Pain is nothing compared to what it feels like to quit. Give everything you got today for tomorrow may never come.” ~ Dan Gable
Overnight
China announces trillion-dollar bailout as debt crisis looms SEM
Israel to evacuate citizens after attacks in Amsterdam WSJ
Fed meeting recap: Powell ‘feeling good’ about economy, says Trump can’t legally fire him CNBC
Risk assets rally but bond market views Donald Trump’s victory with caution FT
Hurricane Rafael moves across Gulf of Mexico as a rare major November storm while Cuba recovers CNBC
CFPB warns employees about phone use amid ongoing China hack WSJ
US backs Argentina’s fight against asset seizures in $16bn court case FT
Archer Aviation gets another big order for its futuristic air taxis, this time from Japan VRG
Barnes & Noble opens dozens of new stores as industry rebounds SEM
AI-created artwork of Alan Turing sells for $1m BBC
John Kinsel Sr., one of the last Navajo Code Talkers from World War II, dies at 107 CBS
Richard Cash, whose rehydration therapy saved millions of lives, dies at 83 WSJ
Chart of the Day
| Overnight |
| S&P Futures -9
point(s) (-0.1%
) Overnight range: -10 to +6 point(s) |
| APAC |
| Nikkei +0.3%
Topix -0.03% China SHCOMP -0.53% Hang Seng -1.07% Korea -0.14% Singapore +1.39% Australia +0.84% India -0.21% Taiwan +0.62% |
| Europe |
| Stoxx 50 -1.08%
Stoxx 600 -0.71% FTSE 100 -0.72% DAX -0.97% CAC 40 -1.13% Italy -0.99% IBEX -0.25% |
| FX |
| Dollar Index (DXY) +0.04%
to 104.55 EUR/USD -0.31% to 1.0772 GBP/USD -0.25% to 1.2954 USD/JPY -0.44% to 152.26 USD/CNY +0.29% to 7.1642 USD/CNH +0.37% to 7.1746 USD/CHF -0.16% to 0.871 USD/CAD +0.26% to 1.3897 AUD/USD -0.66% to 0.6635 |
| Crypto |
| BTC +0.2%
to 76111.99 ETH +0.8% to 2917.03 XRP -0.86% to 0.5503 Cardano +8.78% to 0.4363 Solana +3.21% to 202.73 Avalanche +2.01% to 27.95 Dogecoin +2.02% to 0.1972 Chainlink +2.32% to 12.9 |
| Commodities and Others |
| VIX +0.26%
to 15.24 WTI Crude -1.63% to 71.18 Brent Crude -1.35% to 74.61 Nat Gas +0.71% to 2.71 RBOB Gas -1.23% to 2.028 Heating Oil -1.27% to 2.257 Gold -0.69% to 2688.02 Silver -1.94% to 31.41 Copper -2.27% to 4.331 |
| US Treasuries |
| 1M +0.4bps
to 4.5632% 3M -1.3bps to 4.5214% 6M -1.5bps to 4.3957% 12M -2.6bps to 4.2297% 2Y -2.9bps to 4.1703% 5Y -3.0bps to 4.1405% 7Y -3.4bps to 4.2136% 10Y -3.1bps to 4.2946% 20Y -3.0bps to 4.5998% 30Y -2.7bps to 4.5029% |
| UST Term Structure |
| 2Y-3
M Spread narrowed 1.6bps to -36.7
bps 10Y-2 Y Spread narrowed 0.2bps to 12.2 bps 30Y-10 Y Spread widened 0.6bps to 20.6 bps |
| Yesterday's Recap |
| SPX +0.74%
SPX Eq Wt +0.1% NASDAQ 100 +1.54% NASDAQ Comp +1.51% Russell Midcap +0.31% R2k -0.43% R1k Value -0.28% R1k Growth +1.67% R2k Value -1.12% R2k Growth +0.24% FANG+ +2.3% Semis +2.44% Software +2.51% Biotech +0.56% Regional Banks -3.62% SPX GICS1 Sorted: Comm Srvcs +1.92% Tech +1.83% Cons Disc +1.37% REITs +1.19% SPX +0.74% Healthcare +0.64% Materials +0.5% Cons Staples +0.37% Utes +0.15% Energy -0.36% Indu -0.6% Fin -1.62% |
| USD HY OaS |
| All Sectors +2.6bp
to 315bp All Sectors ex-Energy +2.8bp to 296bp Cons Disc +1.5bp to 265bp Indu +3.4bp to 240bp Tech +8.0bp to 321bp Comm Srvcs +1.2bp to 512bp Materials +2.6bp to 292bp Energy +2.4bp to 298bp Fin Snr +2.6bp to 280bp Fin Sub -1.2bp to 198bp Cons Staples +4.7bp to 295bp Healthcare -1.1bp to 348bp Utes +5.8bp to 208bp * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 11/8 | 10AM | Nov P UMich 1yr Inf Exp | 2.7 | 2.7 |
| 11/8 | 10AM | Nov P UMich Sentiment | 71.0 | 70.5 |
| 11/12 | 6AM | Oct Small Biz Optimisum | 91.8 | 91.5 |
| 11/12 | 11AM | Oct NYFed 1yr Inf Exp | n/a | 3.0 |
| 11/13 | 8:30AM | Oct CPI m/m | 0.2 | 0.2 |
| 11/13 | 8:30AM | Oct Core CPI m/m | 0.3 | 0.3 |
| 11/13 | 8:30AM | Oct CPI y/y | 2.6 | 2.4 |
| 11/13 | 8:30AM | Oct Core CPI y/y | 3.3 | 3.3 |
| 11/14 | 8:30AM | Oct PPI m/m | 0.2 | 0.0 |
| 11/14 | 8:30AM | Oct Core PPI m/m | 0.3 | 0.2 |
MORNING INSIGHT
Good morning!
Today’s Nov FOMC rate decision was largely as expected with a -25bp cut. The key takeaway is the Fed continues to be dovish and this coupled with the positive seasonality, supports stocks into year-end.
Click HERE for more.
TECHNICAL
- SPX pushes up to near channel resistance at 6000.
- Breadth indicators have shown some weakness over the last month which bears watching.
- AXON’s 3Q revenue, earnings and guidance are all quite positive.
Click HERE for more.
CRYPTO
Although there remain some potential risks for crypto, the growing possibility of a red sweep likely means the market is going to reprice the impact of regulatory risk for crypto, so in our view, going long and strong with our core portfolio recommendations still makes sense.
Click HERE for more.
First News
To a significant extent, the recent advances in artificial intelligence have to do with improved pattern recognition – a critical ability that also underlies much of what we think of as human intelligence. Pattern recognition doesn’t just come into play when it comes to problems that require logical reasoning and spatial awareness. It is critical to many of the creative activities that humans – and increasingly, machines – engage in.
Well before the recent AI revolution, scientists had figured out that music composition – with all due respect to masters like Bach, Mozart, and Coltrane – was largely a matter of mixing and matching harmonic patterns and rhythms according to certain rules. At least as early as 2010, computer-composed music was good enough to pass muster for many casual listeners, and the efforts have only improved. To be sure, there have been critics who claimed that they noticed the absence of some ineffable, human “soul” in computer-composed works, but these claims often failed when put to a blind test – even some professional musicians were fooled.
Years later, and boosted by many iterative advances in computing power and machine learning, we now have generative AIs that can convincingly “write” copy in the styles of Dashiell Hammett or William Shakespeare (or a blend of the two) and generate songs that sound like they were both written and performed by artists like Drake and the Weeknd. This led to philosophical questions about artistry and human creativity – what makes us human. Now club DJs in Berlin and tattoo artists around the world are wrestling with the same conundrum: whether it’s art when AI assists or even completely takes over during the creative process – or whether it’s just cheating.
Nevertheless, there’s more to intelligence than just pattern recognition. Perhaps that’s why even the most advanced AIs still lag in problems that require abstract thinking. At Germany’s prestigious Technische Universität Darmstadt, scientists recently tested various models – among them Open AIs GPT-4o, Anthropic’s Claude, and Google’s Gemini – on their ability to solve visual Bongard problems. The models displayed a lack of basic abstract visual skills (for example distinguishing between vertical and horizontal lines or determining whether a spiral is rotating clockwise or counterclockwise) that impeded their ability to solve such problems, but even after.
Yet this is merely a snapshot in time. In a study published in August 2023, scientists found that AI models at the time had problems extrapolating or reasoning out implications based on known facts, even simple ones with which most humans would have no problem. Yet when the BBC subjected the OpenAI’s experiment GPT-01 model to the same tests last month, it performed flawlessly.
P.S. For those looking for some recreational brain teasers this weekend, here is a repository of the Bongard problems mentioned above.