Weekly Market Recap: Gold Nears $2,800, Treasury Yields Hit 4.25%, and Bitcoin Gains Traction

This week gold jumped to almost $2,800 an ounce as central banks and investors bought in the face of geopolitical tensions.

The rise is a sign of caution as investors move to safe-haven assets as uncertainty grows, particularly in the Middle East.

Bank analysts at Citi and J.P. Morgan are now calling for further gold upside with some forecasting prices to $3,000.

Treasury yields also hit a high, with the 10-year yield at 4.25% – its highest since July.

This is a sign that investors are worried about the Fed’s rate path as recent economic data shows the economy is stronger than expected and makes the case for rate cuts less compelling.

Rising yields are drying up liquidity and putting pressure on housing and equity markets that need lower borrowing costs.

• Gold Price: Surged close to $2,800 due to demand from central banks and investors
• Treasury Yield: Reached 4.25%, reflecting investor caution and Fed rate uncertainties
• Geopolitical Influence: Ongoing tensions in the Middle East add to gold’s appeal

Big Tech Earnings and Sector Performance Trends

Earnings season is in full swing and Big Tech is reporting. Qualcomm had a tough time as Arm Holdings pulled a critical chip design license, supply chain worries.

Consumer Discretionary was the top performer, despite McDonald’s briefly tumbling on an E. coli scare. Utilities were up as AI driven energy demand boosted the sector.

Growth stocks got hammered by rising yields and bad tech earnings while value stocks held steady as investors sought less volatile assets.

Small-cap value beat small-cap growth as we may be seeing a rotation from growth to value as lower rates make stable earnings stocks more attractive.

• Sector Performance: Consumer Discretionary and Utilities lead, while Industrials and Materials lag
• Growth vs. Value: Value stocks gain appeal in an uncertain economic landscape
• Big Tech Impact: Earnings reflect supply chain concerns and AI-driven energy demands

Cryptocurrency and Currency Markets: Bitcoin Rises Amid Volatility

Cryptocurrency markets were up big, with Bitcoin at almost $70,000 as investors see it as “digital gold.” Bitcoin’s rally was driven by $560 million in ETF inflows and speculation on future regulation.

Robinhood’s acquisition of Bitstamp for $200 million means they are serious about expanding their crypto offerings and are a player to watch in the exchange space.

In the currency markets, the US dollar hit a 3 month high against the yen as Treasury yields rose and economic data was strong.

The Canadian dollar fell as the Bank of Canada cut rates 50 basis points.

• Bitcoin Price: Approaching all-time highs, with $560 million in recent ETF inflows
• Robinhood Acquisition: Buys Bitstamp for $200 million to expand crypto services
• Currency Market: U.S. dollar strengthens, while Canadian dollar weakens due to rate cuts

Stock Performance and Economic Indicators Update

Five out of six stocks beat earnings this quarter. The portfolio built on data is up 151% since inception. Modine Manufacturing Company is up over 500% since we added it. The strategy looks for stocks with growth potential through data.

Economic indicators are mixed. The FOMC meets in November and the market is expecting a 25 basis point cut. The Fed’s Beige Book says economic activity is flat across the US, modest job growth and no layoffs. Inflation is below its recent highs and continues the disinflation trend.

• Stock Performance: Portfolio achieved a 151% return, with multiple stocks outperforming earnings expectations.
• Economic Outlook: Inflation is under control; modest job growth and minimal layoffs noted in Fed reports.
• Interest Rate Projections: Markets anticipate a 25-basis-point cut in the upcoming FOMC meeting.

Conclusion

Last week was a wild ride with gold up, Treasury yields up, Big Tech earnings and Bitcoin up. With the US debt ceiling, geopolitical tensions and interest rate uncertainty, diversification has never been more important.