Yields Surge Again, Stocks Down

Macroeconomic/ geopolitical developments

• Middle East war sustains market hesitancy, as Biden and Sunak visit Israel
• US yields hit multi year highs, as the yield on the 10-year Treasury just broke the 5% barrier
for the first time since 2007, whilst the 30-year fixed mortgage rate has hit 8%, its highest
since 2000.
• US earnings coming in solid, with the financials/ banking sector overall positive, and Netflix
saw a substantial growth in subscribers, though Tesla disappointed.
• US Retail Sales data outpaced the consensus, climbing 0.7% in September, with August's
data revised up to 0.8% from reported 0.6%
• Fed Chair Powell spoke at the Economic Club of New York on Thursday saying “inflation is
still too high”.

Global financial market developments

• US and global equity index futures sold off, surrendering the early October rebound,
damaging basing efforts, and are technically vulnerable.
• US and global yields moved significantly back higher, with USTs again hitting multi-year high
yields in mid-October.
• The US Dollar Index consolidated last week having previously dipped back from multi-month
highs.
• Gold futures accelerated still higher last week after the prior Friday’s +5-sigma surging rally
(the largest one-day move since Covid).
• Oil futures posted a positive consolidation last week, keeping alive bullish forces.

Key this week

Central Bank Watch: The Fed is in its blackout period ahead of the November 1st interest rate
decision. We get the Bank of Canada (BoC) and European Central Bank (ECB) interest rate
decisions, statements and press conferences on Wednesday and Thursday respectively.
Macroeconomic data Watch: Key to watch this week will be Global Flash PMI from S&P Global on
Tuesday, US Durable Goods and GDP Thursday and the Fed’s preferred inflation measure, US
PCE (Mom, YoY) on Friday.
Earnings Watch: US earnings season enters a very busy phase, with the Big Tech behemoths the
standouts releasing their numbers this week, with Microsoft plus Alphabet (Google) on Tuesday,
Meta Platforms on Wednesday, and Amazon Thursday.

Date Key Macroeconomic Events

10/23/2023 EU Consumer Confidence
10/24/2023 Global Flash PMI from S&P Global, UK Employment report
10/25/2023 Australian CPI, German IFO survey, BoC interest rate decision, statement and press
conference
10/26/2023 ECB interest rate decision, statement and press conference, US Durable Goods, US GDP,
US PCE (QoQ)
10/27/2023 US PCE (Mom, YoY), Michigan Consumer Sentiment Index

Date Key Macroeconomic Events

10/23/2023 Nothing of note
10/24/2023 Microsoft, Alphabet (Google), Texas Instruments, Verizon, General Electric
10/25/2023 Meta Platforms, IBM, Boeing
10/26/2023 Amazon, Intel, Caterpillar
10/27/2023 Exxon Mobil, Chevron