1. On Sunday, Israeli airstrikes killed at least 31 Palestinians in Gaza, including 13 in northern areas such as Beit Lahia and Jabaliya, and health officials reported a tank fire near Kamel Adwan Hospital, injuring a child.
2. The Israeli Air Force launched an airstrike in the Sudan Yah area in southern Lebanon, killing Riad Ridda Ghazawi, the commander of the anti-tank missile unit of the Radwan Force of Hezbollah. It was reported that the operation was carried out based on intelligence from the Military Intelligence Agency.
3. China is considering a bill to raise the local government debt ceiling to replace hidden debts and reduce the fiscal burden that affects economic growth. The proposed debt swap plan can solve China's real estate downturn and heavy debt burden. It is expected that more than 10 trillion yuan of new bond issuance announcements will be released on Friday.
4. The U.S. elections and #Federal Reserve meetings along with Powell holding the key to this week's market direction, are expected to make the coming week turbulent. Remember these key time points.
Tuesday - Election Day.
U.S. October #ISM Services #PMI Data
Thursday.
Federal Reserve interest rate decision
Additionally, about 10% of #标普500 index companies reported their earnings for the third quarter.
All eyes will be on the U.S. presidential election and Federal Reserve meeting. As labor market data continues to weaken, the Fed is expected to lower interest rates by 0.25% on Thursday (having already lowered them by 0.50% in September). This is the second rate cut of the year, marking another wild start for the market.
5. Following point 4, the latest data from the labor market: In October, #美国经济 manufacturing jobs decreased by 46,000, with 4 out of the past 5 months seeing a reduction of 88,000 manufacturing jobs. In fact, manufacturing employment has reached its lowest level since July 2022 and is on a clear downward trend.
Meanwhile, the total number of private job positions plummeted by 28,000, the largest drop since December 2020. Interestingly, government positions have been increasing, currently up by 40,000 during the same period (where is the promised efficiency department from the Musk government?), while employment market data continues to weaken.
6. 37% of the S&P 500 index comes from the top 10 stocks, which will impact your crypto portfolio (Figure 1).
7. Large technology stocks have not performed well for most of this year, and small technology stocks have underperformed for 18 consecutive months. I think this hasn't been discussed enough. I don't know why the breadth of tech stocks remains bleak, with only 58% of members trading above the 200-day MA (Figure 2).
8. About macro:
Business cycle setup based on real economic data.
Leading (LEI) indicator
Consensus (COI) indicator
Lagging (LAG) indicator.
LEI sets the direction for the future.
COI refers to the real economy = labor market and housing as well as GDP and production.
LAG = Inflation and market yields.
Currently, LEI has been declining for over 24 months, comparable only to the situation before the global financial crisis. COI is starting to move (as predicted by LEI), LAG will follow, and inflation and yields will plummet (Figure 3).
9. As increasingly debt-laden local governments seek to increase revenue through harsh criminal enforcement, private enterprises in China are in an unstable position. The only issue worse than weak domestic demand is the predatory actions taken by local governments to find new sources of revenue, as local governments cannot hold state-owned enterprises accountable, resulting in small and medium enterprises suffering.
10. VIX has been on a declining trend over the past few years, having touched lows around 12, but has recently started to rise significantly. Typically, when #VIX rises, the market tends to fall, as larger volatility usually occurs during market downturns, leading option traders to increase their bets, pushing up the volatility index.
11. Let's talk about Bitcoin: Regardless of who wins, Bitcoin's performance in election years ranges from 100% to 300%. According to the power law equation, the current price of $BTC is still $10,000 below its fair value, with a deviation from the power law line of -16%, indicating that there is no excessive expansion; a value of +70% indicates excessive extension (Figure 4).
12. Following the previous point, Bitcoin #BTC☀️ from the cycle bottom to the top indicates it is on the right track, just needing the spark of quantitative easing (QE) and sudden increases in election or global liquidity M2.
On-chain and off-chain risk indicators since October 13 show that Bitcoin's risk is low, with no signs of extreme pullbacks, laying the groundwork for potential explosions in Q4 2024 and 2025 (Figure 5).
