Housekeeping: Good Morning.
“The Gold reset is a process, not an event”
Today:
Discussion:
1- JPM: US MARKET INTELLIGENCE ELECTION UPDATE NOVEMBER 3, 2024
The Election and Gold:
Debasement trades are likely to perform well under any administration, though could get further supercharged under a Republican sweep. Gold stands out as the commodity of choice for hedging the US elections. While an election surprise could prompt a near-term correction, structurally bullish drivers for gold, like growing concern on complacency over the rise in fiscal debt, tariffs, and trade retaliations as well as supportive Fed rates cycle should benefit the metal.
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2- BOA: Heading into the US election CTAs are long equities, short bonds, long USD, long Gold
In commodities, trend followers are expected to grow their small Oil short and shrink copper longs on all projected paths. Gold longs remain elevated with a stop loss coming in a 2% decline. Trend followers look to be sellers of US equities. US Tsy futures shorts continue growing
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3- CITI: A fundamental framework for gold
3Q’24 update - $3000/oz in sight
Gold has rallied 35% over the year to date to trade around $2,780/oz at present The rally over the course of this year cannot be explained by traditional frameworks for gold pricing such as real rates and currencies, with the former model breaking down spectacularly over the past 2 years. Gold prices have re-rated higher over the past 3-4 months.
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News/Analysis:
Equity Recap:
US equities rallied on Friday as investors largely attributed the poor jobs report to hurricanes and a Boeing strike. Large caps and small caps advanced: S&P 500 (+0.41%) vs. Russell 2000 (+0.61%). MSCI Emerging Markets (EEM) and MSCI EAFE (EFA) added 0.09% and 0.20% respectively.
Market News:
"Federal Reserve officials are expected to cut interest rates by a quarter percentage point at their meeting Thursday because inflation has continued to make progress toward their 2% goal. WSJ
"Nvidia is replacing Intel in the Dow Jones Industrial Average, a shakeup that reflects a massive change in the semiconductor industry.CNBC
"Job growth slowed sharply last month, with workers sidelined by hurricane effects and the Boeing strike... WSJ
"Berkshire Hathaway’s monstrous cash pile topped $300 billion in the third quarter as Warren Buffett continued his stock-selling spree and held back from repurchasing shares. CNBC
"Saudi Arabia and other members of Opec+ have delayed a plan to begin raising oil production until the end of the year Source: FT
"U.S. energy regulators rejected an amended interconnection agreement for an Amazon data center connected directly to a nuclear power plant in Pennsylvania, a filing showed on Friday.Reuters
"Elon Musk is betting that robot cars will propel Tesla into a lucrative new era... Musk’s plans center on what he has called end-to-end artificial intelligence. WSJ
"The new Mac mini could become Apple’s long-awaited answer to the PlayStation and Xbox. Bloomberg
"The world’s largest producer of transformers has warned its industry is “overwhelmed” and unable to meet exploding demand for grid equipment, threatening delays to vital infrastructure projects that would boost the share of renewable energy across the globe." Source: FT
Politics/Geopolitics:
Iran’s Supreme Leader Khamenei said the US and Israel should know they will undoubtedly receive a crushing response for what they do against Iran and the resistance front
US warned Iran that it won’t be able to restrain Israel if Iran attacks, according to Axios.
Israel's Channel 12 quoting a senior official noted expectations of reaching an agreement to end the war in Lebanon within two weeks at most, according to Sky News Arabia.
Hamas senior official Hamdan said dialogue among Palestinian factions in Cairo is positive but added that he didn’t want to jump to any conclusions
Political adviser to Iraqi Prime Minister Fadi al-Shammari told Sky News Arabia that an Israeli strike on Iraq cannot be ruled out
Yemen’s Houthis said it will continue the maritime blockade against Israeli vessels
Russia’s Deputy Chairman of the Security Council Medvedev said the US is mistaken if it thinks that Russia will not use nuclear weapons in case of a threat to its existence, according to TASS.
Russian forces took over Vyshneve village in Ukraine’s Donetsk region, as well as captured Pershotravneve and Kurakhivka in eastern Ukraine, according to the Russian Defence Ministry.
North Korea and Russia reaffirmed a commitment to implement the strategic partnership reached in June and their foreign ministers agreed to hold more dialogues going forward, according to KCNA.
India’s Foreign Ministry spokesperson said India and China have commenced verification patrolling on mutually agreed positions in both Demchok and Depsang.
Data on Deck: FOMC Decision
MONDAY, NOV. 4 10:00 am Factory orders
TUESDAY, NOV. 5 10:00 am ISM services
WEDNESDAY, NOV. 6 9:45 am S&P final U.S. services PMI
THURSDAY, NOV. 7 2:00 pm FOMC interest-rate decision + conference
FRIDAY, NOV. 8 10:00 am Consumer sentiment
***FINAL MARKET CHECK***
