Image Souce: Krish Capital Pty Ltd

Index Update

U.S. stocks closed lower on Wednesday as investors digested corporate earnings amid signs of a cooling economy. The S&P 500 fell 0.3%, Nasdaq 100 dropped 0.6%, and the Dow lost 91 points.

Market Movers

Chipmakers struggled, with AMD down 10.6% and Super Micro Computer plunging 32.7% after an auditor's resignation. Alphabet (+2.8%) lifted spirits with strong cloud growth, while GDP growth slowed to 2.8% in Q3, raising concerns about Fed rate cuts.

Commodity Update

Brent crude oil futures rose to $72.6/barrel, up over 2% on unexpected US stockpile drawdowns. EIA data revealed a 0.5M barrel decline, defying a projected 2.3M build. Geopolitical tensions in the Middle East loom large, while weak Chinese demand keeps the outlook cautious. Meanwhile, gold stays strong above $2,780/oz, driven by safe-haven demand amid US election uncertainties and mixed economic data. Traders eye upcoming PCE and payroll figures as they anticipate Fed easing.

Macro Update

In October 2024, US employers announced 55,597 job cuts, down from September's 72,821 but up 50.9% from last year. Aerospace/Defense led with 18,465 cuts, driven by Boeing's 17K layoffs. Year-to-date cuts hit 664,839, the highest since 2020. Companies are in a holding pattern as they await election outcomes.

Futures Update

U.S. stock futures weakened Thursday following disappointing earnings from tech giants Meta and Microsoft, alongside key inflation data. Meta fell 2.9% due to rising AI costs despite strong ad growth, while Microsoft dropped 3.7% after forecasting slower Azure growth. eBay slid 9% on weak holiday guidance, and Robinhood lost 10% despite doubling crypto revenue. In contrast, Mobileye rose 8.7% on strong demand for driver-assistance tech, Peloton gained 7.5% with a new CEO, and Comcast climbed 6% after beating revenue estimates.

Stocks displayed a lack of clear direction throughout much of Wednesday's session, ultimately coming under pressure during the later part of the trading day. After hitting a record intraday high in early trading, the tech-heavy Nasdaq dropped 104.82 points, or 0.6 percent, closing at 18,607.93. The S&P 500 also declined by 19.25 points, or 0.33 percent, finishing at 5,813.66, while the Dow slipped 91.51 points, or 0.2 percent, to settle at 42,151.54. From a technical analysis standpoint, the S&P 500 appears to be forming a rising wedge pattern, raising concerns over the potential for significant price volatility amid this upward trend. In addition, the 14-period RSI indicates a bearish divergence relative to the price movement, suggesting a potentially negative outlook. Traders should monitor key price levels, noting resistance around 5,855 and support near 5,740.

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