U.S. Indexes finished lower on Wednesday in relatively broad-based weakness, with the Russell 2000 and equal-weight S&P 500 underperforming the major Indices. The Dow also lagged, while the S&P and NDX saw more modest losses. Sectors were predominantly lower, with Industrials, Materials and Real Estate lagging, while Health Care outperformed; Consumer Discretionary and Staples also outperformed but were flat. Treasuries recovered from earlier weakness to finish mixed-to-firmer, with the curve bull steepening as the front end led the rally while the long end was little changed. T-notes initially tracked weakness in European government bonds amid renewed French fiscal concerns, before recovering as crude reversed from its highs and following another stellar US 10-year auction. The auction stopped through by 1.7bps with strong B/C and indirect demand alongside an exceptionally low dealer takedown. FOMC Minutes generated little reaction and revealed little new information. In FX, the Dollar firmed despite the recovery in Treasuries, with DXY around 102.27 driven by a weaker Euro. The Euro underperformed as French fiscal concerns persisted, while the Japanese Yen was the relative outperformer, supported by narrower rate differentials and risk-off trade. AUD, NZD and GBP were also weaker against the Dollar. Crude settled lower following choppy trade as participants digested conflicting US/Iran developments alongside supply updates. Oil came under pressure after IEA members expressed support for accelerating previously announced stock releases, potentially bringing around 100 million barrels to market, while France announced a 10 millio barrel diesel reserve release. US inventory data saw an unexpected crude draw, although production rose to 13.979mln BPD. Post-settlement, the Atlantic reported that Trump could resume attacks on Iran ahead of the election, resulting in some fleeting upside in oil. Meanwhile, earlier reports suggested mediation efforts between the US and Iran have stalled. Meanwhile, both Gold and Silver sold off sharply despite the fall in yields. The FOMC Minutes revealed that all members – even the non-voters – supported the 25bps rate hike in September, and most assessed another would likely be appropriate by year-end. Participants generally emphasised inflation remained elevated, while the job market appeared near full employment. Participants generally saw inflation risks skewed to the upside, with some seeing those risks becoming more skewed in recent months. Almost all participants saw inflation risks tilted to the upside, while job market risks were broadly balanced. Some participants saw AI buildout possibly causing aggregate demand to outpace supply over the medium term, putting upward pressure on inflation. Regarding Treasury yields, many noted that despite the recent climb in long-term Treasury yields, financial conditions appeared supportive of economic growth. Meanwhile, a few observed that the Treasury market had been functioning smoothly but noted the importance of planning for market stress. Within the development in Financial Markets section, the minutes noted that changes in real rates contributed to most of the net increase in longer-maturity Treasury yields. Part of the increase reflected the higher expected path of monetary policy and the strength of economic data. Market commentary pointed to geopolitical developments, uncertainty related to the US Treasury’s announcement and implementation of the buyback program, and competition for capital from heavy private debt issuance to finance the development of AI infrastructure as also contributing to higher term premiums and Treasury yields. Meanwhile, regarding Japanese intervention, it acknowledged that the desk, acting purely as fiscal agent for the U.S. Treasury, intervened in the currency market using U.S. Treasury funds; the System Open Market Account portfolio was not involved. Median inflation expectations among consumers ticked higher for the 1- and 3-year to 3.9% (prev. 3.6%) and 3.3% (prev. 3.2%), respectively. The 1yr figure is the highest level since May 2023. 5yr expectations remained at 3.0%. The mean unemployment expectations fell 0.5% to 43.9%. The mean perceived probability of losing one’s job in the next twelve months dropped to 13.5% (prev. 13.8%), the lowest reading since December 2024. Elsewhere, expected growth in household income rose 3.1% (prev. 3.0%), the highest level since February 2025. Perceptions and expectations about households’ financial situations both deteriorated, with households expecting a worse financial situation a year from now. Elsewhere, Oil closed lower by 1% while Gold ended Wednesday’s session with a fall of 1.75%.
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For anyone following my Platinum Service it made 105 points yesterday and is now ahead by 1498 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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