SignalPlus Volatility Column (20231025): The crypto market is expected to continue until early next year

The market continued Mondays bond duration demand, with the U.S. yield curve flattening in the mid- and long-term parts, with short-term yields rising by 6 basis points and long-term yields falling by 3 basis points; in Europe, the euro zone The PMI came in below expectations, with the manufacturing PMI clearly in recession territory (43), while accompanying commentary noted that headcounts fell for the first time since the pandemic lockdowns in early 2021, sending yields lower and the ECBs quarterly lending survey It was pointed out that net demand for loans fell sharply due to falling fixed investment and rising financing costs.

Similar to the Fed, Eurozone interest rates appear to have peaked, and at subsequent ECB meetings, the focus will turn to balance sheet reduction.

On the other hand, U.S. economic data continued to perform well, with PMI survey results noting that the fourth quarter started with positive news, with future output expectations rising, climbing to the highest level in nearly 18 months, despite rising geopolitical tensions. , In addition, inflationary pressures continue to weaken, and price indicators are now close to pre-epidemic levels and heading towards the Feds 2% target; after the data was released, the yield curve continued to flatten, and the bond auction at 1 p.m. was also uneventful Its been a relatively quiet day for fixed income markets.

In the stock market, after a relatively weak early session, China-related indexes rose 3% after hours as China announced a rare mid-year budget adjustment and President Xi Jinping unexpectedly visited the Peoples Bank of China; China plans to increase its deficit ratio to 3.8% of GDP, well above the 3% target set in March and the upper limit generally accepted in the past, and will be financed by a new issuance of 1 trillion yuan in government bonds. It is worth noting that China rarely revise its budget mid-year. , did not do so even during the Lehman crisis, so it is understandable why the market reacted so strongly to the apparent U-turn by Chinas leadership.

In the United States, the performance of technology giants was mixed, dragging down the performance of large technology stocks. However, the U.S. stock market still rose again by 0.5% -1%; Alphabets third-quarter results were generally in line with expectations, but cloud revenue slowed down, causing the stock price to fall by about 6% after hours. %; Microsofts revenue exceeded expectations, driving the stock price up, but then fell back during the management conference call due to a more conservative outlook; Old industrial stocks performed much better yesterday, including GE, 3M, RTX (Aerospace Defense Systems), Verizon and Coca-Cola significantly outperformed the rest of the pack.

On the cryptocurrency side, prices have largely managed to hold on to gains, with many futures ETFs and CMEs BTC open interest at all-time highs; BTC prices fluctuated throughout the trading day, especially with rumors of Blackrocks ETF The news was briefly removed from the DTCC website, but it still closed at recent highs above $34,000.

Although it sounds ironic to use the participation of traditional fields as the hope of a bull market, it is an indisputable fact that capital flow drives prices. Market sentiment seems to have reached a turning point. I hope this excitement can continue until the end of the year and next year!

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