Breadth reversed on Friday, with Tech seeing a slight rebound after Thursday’s 3% sell-off. Meanwhile, higher oil prices on an increased geopolitical risk premium weighed on cyclical names via higher yields, while benefiting energy names. Earnings continue to show largely beats; however, reception has remained poor in terms of price action. Western Digital’s strong results helped its peers; however, WDC capex concerns and Toshiba competition worries remained (WDC -3.0%). Industrials was briefly the worst-performing sector at the open before paring some losses, as Bloom Energy (BE -11.3%) and Comfort Systems USA (FIX -9.3%) sank on margin concerns. US yields tracked the move higher in oil prices, as Brent futures flirted with USD 117/bbl, around USD 2/bbl shy of the post-Iran war high in March. Gains are a function of an added geopolitical risk premium on growing bets that US-Iran strikes will resume, as a deal remains absent and US President Trump continues to refrain from ruling out strikes after the midterms, saying “we may do another operation against Iran” and that he doubts Iran will say “let’s get down to business”. In FX, the Dollar benefited from the inflationary environment. This week is filled with key events: the FOMC (hold expected, December hike priced), PCE inflation data and the advance Q3 GDP release; the ECB meeting (hold expected, 66% chance of a December hike priced in) and weekend French protest action; the RBNZ decision (25bps hike ~85% priced), ten days before the general election; and the UK’s Autumn Budget. Gold was weighed on by higher nominal yields and a strong buck, with the yellow metal dipping back below USD 4,000/oz to lows of USD 3,976/oz, but it failed to break below the June low of USD 3,943/oz. US data had little bearing on price action. S&P Global flash PMIs were mixed (a sharper-than-expected services decline offset a slight manufacturing uptick, dragging the composite lower), though the survey still showed robust demand fuelling inflationary pressures. Meanwhile, University of Michigan Consumer Sentiment was essentially flat, while year-ahead and long-run inflation expectations rose for a second month to 4.7% and 3.5%, respectively, their highest since May. Higher energy prices come amid an increasing consensus that the US-Iran conflict will return to direct strikes, a matter of when, not if. US President Trump maintains ambiguity over his plans for Iran: “do we want to finish it or let it within is the question”, and said “we could take all of the oil in Iran”. Separately, the modest rebound in tech stocks, a rotation back into AI names, was another factor behind higher yields, although breadth was poor across equities given the risk higher rates pose to cyclical names. Elsewhere, Oil closed higher by 4% while a volatile trading session saw Gold end Friday with a loss of 0.62%.
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For anyone following my Platinum Service it made 130 points on Friday and is now ahead by 3928 points for October after ending September with a nice gain of 7767 points, after ending the month of August with a gain of 2645 points after closing July with a gain of 8031 points, after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a previous record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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