SignalPlus Macro Research Report (20231027): US macro data far exceeded expectations, and the encryption market performed steadily
U.S. gross domestic product (GDP) in the third quarter far exceeded market expectations, growing at 4.9%, double the previous quarter and the fastest growth since 2021. The near-collapse of regional banks, ongoing geopolitical conflicts, soaring mortgage rates and persistent inflation have failed to slow down the U.S. consumer. Among them, personal consumption increased by 4%, expenditure on goods increased by 4.8%, expenditure on services increased by 3.6%, final sales increased by 3.5%, residential investment rebounded by 3.9%, and government and federal expenditure increased by 4.6% and 6.2% respectively. Inventory rebuilding added $66 billion to GDP in the third quarter, while core PCE slowed to 2.4% from 3.7% in the previous quarter. Clearly this is a comprehensive and robust report.
Other data releases also coincided with the strong GDP data, with durable goods orders rebounding 4.7% from -0.1% in August, and pending home sales rebounding to 1.1% from -7.1% the previous month, while as of October 21 That week, initial jobless claims remained steady, increasing by just 10,000 (210,000 total).
On the interest rate front, while Thursdays scenario is similar to Wednesdays market sell-off (ECB on Thursday (hawkish on pause) vs Bank of Canada on Wednesday (hawkish on pause)), there is strong GDP data on Thursday vs Wednesdays German IFO data and new home sales numbers beating expectations, etc.), the interest rate market has taken the complete opposite stance because... Most of the time, markets exist to inflict maximum pain on traders. Opposite positioning and short-covering pressure may have also pushed bond prices higher, pushing mid-term yields around 10 basis points lower, reversing much of yesterdays moves.
The ECB meeting left a largely hawkish impression, with President Lagarde acknowledging that long-term interest rates had clearly risen but not making it clear that the Governing Council was unhappy with the development. In the United States, the response to the 7-year government bond auction was enthusiastic (not deviating from market expectations), with a subscription ratio of 2.7 times, the strongest performance since March 2020, and only 11% of the government bonds were held by brokers, which was far lower than That helped Treasury yields close at the days lows.
On the stock market front, share prices were never able to rebound to the previous days closing price as the market could not shake off its dissatisfaction with Alphabet and Metas poor performance, with the Nasdaq falling as much as -2.3% before the close, and ultimately Down -1.7%, the SP 500 (SPX) fell 1%. It is worth noting that despite the recovery in bond yields, the SP 500s value stocks still surprisingly outperformed growth stocks (a gap of about 2%). We may be witnessing a minor rotation away from large-cap tech and growth stocks and back into value stocks, as the market becomes increasingly convinced that the rise in term premia is here to stay.
On the cryptocurrency front, cryptocurrency prices have remained flat over the past 24 hours, although we are starting to see some research institutions predict the emergence of a new bull market. The volatility market seems to have relatively high prices, but there is almost no interest in Gamma and spot selling in the market. This seems to indicate that the proportion of currency holders in the market is still not high, so it is more likely that currency prices will continue to rise in the future. When the price During a brief dip, investors may buy on dips to provide support. Not surprisingly, the option smile curve shows a clear right skew (see Signalplus software), and it is obvious that participants are naturally positioning themselves for ETF approval between now and the first quarter of early next year.
Finally, for those of you paying attention, SBF is testifying today without a jury as the judge considers whether to allow Sam to present his own defense testimony and conduct cross-examination on his own without the need for his attorney. This might provide ample fodder for a shockingly long-running Netflix series one day...
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