Good morning, Bull Sheeters.
U.S. futures are gaining this morning, looking to extend the modest equities winning streak to three straight (and four positive sessions in the past five). The big concerns looming over markets—namely, the debt ceiling standoff and soaring energy prices—have subsided for now, and that’s sending global stocks higher too. Even tech is jumping.
The big gainer though is crypto. Bitcoin is up nearly 8% in the past 24 hours, extending its impressive October bull run, pushing its market cap above $1 trillion again.
Let’s see what else is moving the markets.
- The major Asia indexes are bouncing back with the Hang Seng up 3% in late-afternoon trading, helped by tech stocks.
- Adding to investor optimism is news of a possible thaw in China-U.S. relations. The White House reports President Joe Biden will hold a virtual meeting with Chinese President Xi Jinping by year-end.
- Spiking crude prices has been a boon for Saudi Aramco investors. Shares in the oil giant have soared more than 6% in the past month—if you follow Aramco, you know that’s a big deal. That run, coinciding with a slide in tech stocks, means Aramco is closing in on Apple and Microsoft as the world’s most valuable company.
- The European bourses were jumping out of the gates this morning, with the Stoxx Europe 600 up 1.2%. Banks, utilities, and tech stocks were the big gainers at the open.
- Investors (and homeowners) are cheering an apparent easing of Europe’s energy crunch. U.K. natural gas futures prices have fallen more than 20% in the past 24 hours. One reason: Energy giant Russia says it will step in to stabilize prices.
- Royal Dutch Shell warned investors the Hurricane Ida shutdown will tear a $400 million hole in its bottom line. Even still, shares were up 0.2% at the start of trading.
- The U.S. futures point to a solid open. That’s after a wild Wednesday that saw all three major averages rebound from steep morning lows to finish in the green.
- Stocks jumped on news that Democrats and Republicans were close to a deal on a temporary fix to the debt-ceiling time-bomb hanging over the country—and the markets.
- We have the big jobs report tomorrow, which is why yesterday’s ADP payrolls data was such welcome news. ADP says private jobs rose by 568,000 in September, well above economists’ estimates.
- After Wednesday’s rally, gold is up again. It now trades above $1,760/ounce.
- The dollar is down, a good sign for equities.
- Crude is down with Brent trading below $80/barrel.
- Bitcoin is booming. It’s trading above $54,000—25% above last week’s levels.
🐛Kicking the can of worms🐛
Goldman Sachs warning to investors: we may have dodged the bullet on debt-ceiling drama, but we’re hardly out of the woods. “This should not be interpreted as a compromise and it might not change the situation,” writes Goldman’s Alec Phillips, chief political economist.
Natural gas to lumber: hold my 🍺
Europe’s natural gas prices have eased in the past 24 hours. But zoom back over the past year, and you’ll see natural gas futures have been one of the most explosive of commodities. The closely watched Dutch TTF gas futures are up nearly six-fold year-to-date. And it’s not even winter yet! Meanwhile, here’s the latest on lumber.
Tomorrow’s jobs report is being called one of the most consequential of 2021. A strong number and we can expect the Fed’s tapering and tightening strategy to move to the next stage.
Have a nice day, everyone. I’ll see you here tomorrow… Until then, there’s more news below.
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PepsiCo CFO: No way we’d park cash in Bitcoin—Fortune
Bitcoin’s price unlinks from falling stocks, reviving the promise of cryptocurrency as a hedge—Fortune
For the global traveler in the age of COVID, here’s your elusive golden passport—Fortune
Memo to countries going green: don’t be like the UK—Financial Times
China is Rocked by Uncertainty. Why is Wall Street Bullish?—New York Times
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Let's not lose sleep over stocks...just yet. The benchmark S&P 500 is actually trading in positive territory so far in October—a mere 0.09% higher, but still, higher. Energy, utilities and financials are the big reason. But even tech is holding its own, up nearly a half-percentage point after a whopping four trading sessions.
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