Russell Shor

The US 10-year Treasury yield is trading at 4.97%, just shy of the psychological 5% level. This is likely to weigh on the stock market. In effect, the higher interest rates mean that yields on risk-free treasuries have increased making them compelling to investors. Even those sitting in cash will feel the benefit of the higher yields. Moreover, with these type of returns from yielding assets, it will discourage investing…

Tesla is the world’s most valuable auto stock. It will release its Q3 earnings today, and a key focus will be on gross margins. The company has cut its prices multiple times recently to drive sales, combat a slowing economy and fight the increase in competition. Wall Street is looking for an EPS of 72c and turnover of $23.9bn, however not at the expense of much poorer margins.

Last week’s movement by gold has changed its technical position. The candlesticks have moved above the 30-week EMA and the EMA has bullishly turned up. Moreover, the weekly RSI has popped above 50 (green rectangle) which is the bullish side of the indicator. The longer it maintains above 50, the greater the momentum support for the yellow metal. Another positive is that gold’s candlesticks have broken out above the green…

The US 10-year real yield is moving higher. Its green 5-day EMA is pulling away from its orange 10-day EMA (black circle) and the RSI is moving higher and away from 50 (green rectangle). As yields appreciate, they tend to act as a headwind to the risk side of the market.

Apple shares have begun the week on the backfoot as reports indicate that the iPhone15 may be seeing some weakness in China. According to analysts at Jefferies, iPhone sales have experienced a significant decline in the double-digit range when compared to the iPhone 14 Pro. This drop can be attributed, at least in part, to the launch of Huawei's latest offering, the Mate 60 Pro, which hit the market in…

FXCM’s US.AUTO basket is under pressure as the UAW strike continues. The basket has dropped into its bearish channel between the lower blue and red bands and the RSI has dipped below 50 (green rectangle). The longer the RSI remains below 50, the more pressure the basket will be under.

As Q3 earnings season kicks off the SPX500 is looking subdued. It has charted a lower peak followed by a lower trough. This puts the weekly chart into downtrend. The black 30-week EMA is showing signs of support, but the candlesticks will need to break above the green down sloping trendline to show conviction.

Banks kicked off earnings season last week. JPMorgan Chase (JPM.us), Citigroup (C.us) and Wells Fargo (WFC.us) beat earnings estimates. They posted better than anticipated net interest income, with lending outpacing payments to depositors. Also contributing to earnings was better business from capital markets.

Capital is rotating into havens such as gold and bonds and pushing the price of crude higher, as Israel seemingly prepares for its ground offensive against Hamas. Israel’s military told Palestinians today to start evacuating northern Gaza and move to the southern part of the territory. Consequently, market participants are on edge as the conflict looks to escalate, following Israel’s retaliation for the brutal Hamas attack that took place in…

UKOil retraced significantly towards its end-of-August low (green dashed horizontal) before finding support. Monday saw significant upside when the market opened following Saturday’s brutal attack by Hamas on Israel and the start of a new Middle East conflict. Nerves still abound that the conflict may spread in the region affecting supply lines, and risk premiums are keeping the oil price supported.

UK regulators have approved Microsoft’s $69bn acquisition of Activision Blizzard, which removes the last hurdle for the deal. However, the Competition and Markets Authority said the deal won’t include cloud gaming rights and said in a statement today that, “The new deal will stop Microsoft from locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers.”