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𝐌𝐄𝐓𝐀: 𝐌𝐞𝐭𝐚 𝐒𝐭𝐨𝐜𝐤 𝐓𝐮𝐦𝐛𝐥𝐞𝐬 𝐚𝐬 𝐙𝐮𝐜𝐤 𝐅𝐥𝐞𝐱𝐞𝐬 𝐒𝐭𝐫𝐨𝐧𝐠 𝐄𝐚𝐫𝐧𝐢𝐧𝐠𝐬 𝐛𝐮𝐭 𝐏𝐫𝐨𝐣𝐞𝐜𝐭𝐬 𝐑𝐢𝐬𝐢𝐧𝐠 𝐂𝐨𝐬𝐭𝐬

Social media giant posted a huge profit of $15.7 billion but bumped up expected costs as it seeks to corner the AI market.

Meta stock META floated under the flatline during Thursday’s trading session after the social media titan released earnings Wednesday after the bell. It was a solid quarter for Meta. The company earned $6.03 a share against expectations of $5.20 and pulled in revenue of $40.59 billion, up 19% from the year-ago quarter and surpassing analysts’ estimates for $40.29 billion. Net income? That one jumped 35% year-over-year to a hefty $15.7 billion.

Meta CEO Mark Zuckerberg praised the results and — as any other tech boss during earnings season — couldn’t emphasize enough on how important AI is for future growth. “We had a good quarter driven by AI progress across our apps and business,” the recently cool tech bro said in a statement. “Our AI investments continue to require serious infrastructure, and I expect to continue investing significantly there, too.” And that’s what toppled shares.

Rising AI expenses weighed on the stock as investors worried that too much spending on AI won’t convert to profits any time soon. Meta raised capital expenditures guidance for the 2024 fiscal year to the range of $38 billion to $40 billion, up from $37 billion to $40 billion. Looking ahead, more of that is coming in 2025 — Zuck projects spending to grow significantly next year as the company builds out the infrastructure layer for artificial intelligence.

IXIC: Nasdaq Composite Snatches Fifth Day of Gains as Index Peers Waver Again

Technology-heavy stock average powered through broad-based bearishness to secure another upside day as traders gird up for tech earnings.

The Nasdaq Composite extended its winning streak to five consecutive days on Tuesday with tech bros anticipating tech things. Corporate America is getting ready to see how the technology space fared in the past three months. The majority of the Magnificent Seven club will report earnings data next week and stakes couldn’t be higher — what’s the bill for AI spending and is there enough revenue to justify all the cash splashed out?
In the meantime, there wasn’t much action to spark anything exciting over at the S&P 500 and the Dow Jones Industrial Average. Both Wall Street benchmarks slipped under the flatline for the day with some of the smallest moves — 3 points and 6 points, respectively. A sweeping sense of anxiety spanned across the stock market as investors started getting antsy over the looming October jobs report and the 2024 election.
No big news is scheduled for release until the end of the week, and largely, until the end of the month. This gives traders some room to breathe more easily — stocks have cooled their enthusiasm after notching record after record and are set to close out a winning month. The Nasdaq Composite is up roughly 3.7% since the start of October. The S&P 500 and the Dow have added 2.5% and 1.8%, respectively.

XAU/USD: Gold Blasts Above $2,700 to Set New Record High. What’s Behind the Surge?

Gold prices soared to a new record high Friday morning with traders and investors seeking safety amid a flurry of factors. The shiny metal rose to the never-before-seen level of $2,715 per ounce, confidently breaking the psychological barrier of $2,700 and marching toward the fourth straight day of gains. But what’s actually driving all that buying momentum? A bunch of things.

First off, central banks are easing their monetary policies, making money more affordable through lowering interest rates. The European Central Bank on Thursday performed the third cut to interest rates for the year and the Federal Reserve is looking to do its second trim to borrowing costs in November. Lower rates reduce the opportunity cost of holding gold, which doesn’t pay dividends or yield any interest.
There’s also the uncertain outlook of the presidential election in the US. And, last but not least, Middle East tremors worsened Thursday when Israeli officials announced Hamas leader Yahya Sinwar was killed by Israel Defense Forces. Sinwar was the mastermind of the Oct. 7 terror attacks, which set off the ongoing war.

𝐃𝐉𝐈: 𝐃𝐨𝐰 𝐉𝐨𝐧𝐞𝐬 𝐓𝐨𝐩𝐬 𝟒𝟑,𝟎𝟎𝟎 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐅𝐢𝐫𝐬𝐭 𝐓𝐢𝐦𝐞 𝐢𝐧 𝐇𝐢𝐬𝐭𝐨𝐫𝐲. 𝐒&𝐏 𝟓𝟎𝟎 𝐀𝐥𝐬𝐨 𝐏𝐮𝐦𝐩𝐬 𝐭𝐨 𝐑𝐞𝐜𝐨𝐫𝐝.

Pair of heavyweight indexes are hand in hand in record territory as the first full week of third-quarter earnings unfurls.

The Dow Jones Industrial Average DJI powered to a fresh record high Monday with investors adding more than 200 points, or 0.5%. The 30-stock index cracked 43,000 for the first time in history, closing at 43,065.22. The S&P 500 also delivered a stellar performance, pumping to a new closing record as well — up 0.8% to 5,859.85. The tech-heavy Nasdaq climbed 0.9% and is less than 1% away of its record high.

Markets are excited about the third-quarter earnings season, especially after JPMorgan JPM delivered solid financials and Wells Fargo WFC followed right up with another optimistic reading. Now the focus shifts to the first full week of earnings data with more banking giants lined up to deliver their September-quarter results. Bank of America BAC, Goldman Sachs GS and Citigroup C are up next.

After the banks on Wall Street reveal how businesses and consumers spent in the past three months, tech giants will move in and shed light on AI adoption and infrastructure build-out. AI-linked stocks are expected to gather the most attention with the usual suspects — the Magnificent Seven — being front and center for investors looking to gauge how well Wall Street is warming up to AI.

𝐗𝐀𝐔/𝐔𝐒𝐃: 𝐆𝐨𝐥𝐝 𝐉𝐮𝐦𝐩𝐬 𝟏.𝟓% 𝐀𝐟𝐭𝐞𝐫 𝐈𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧 𝐂𝐨𝐦𝐞𝐬 𝐈𝐧 𝐒𝐥𝐢𝐠𝐡𝐭𝐥𝐲 𝐇𝐨𝐭𝐭𝐞𝐫 𝐓𝐡𝐚𝐧 𝐄𝐱𝐩𝐞𝐜𝐭𝐞𝐝

Precious metal surged to levels near $2,650 per ounce following September’s consumer price report. Record isn’t far away.

Gold prices XAUUSD turned up early Friday, extending gains from Thursday when investors digested a hotter-than-expected inflation report. The precious metal is higher by 1.5%, gravitating toward $2,650 per ounce with gold bulls charging toward the ultimate record high of just under $2,700 per ounce. The latest leg up was mostly based on looming uncertainty in the aftermath of the inflation data release.

For September, consumer prices, as measured by the CPI index, rose 2.4% on an annualized basis, beating expectations for a 2.3% increase. While price growth did shrink from the 2.5% clip the month before, price pressures revitalized and put investors on the defensive. Hence the rush to safe-haven assets with gold demand picking up. The US dollar pulled back after an initial sprint, and so did treasury yields.

What’s the bigger picture? This year’s flurry of market-moving events have propelled gold to unseen heights. Geopolitical tensions and fears that a surprise escalation in the Middle East conflict might dent the global economy are keeping investors on edge, ready to hit the ‘Buy’ button and pull in more of the shiny stuff. With the fresh upside swing, gold snapped a six-day losing streak.

𝐒𝐌𝐂𝐈: 𝐒𝐮𝐩𝐞𝐫 𝐌𝐢𝐜𝐫𝐨 𝐒𝐭𝐨𝐜𝐤 𝐒𝐨𝐚𝐫𝐬 𝟏𝟔% 𝐚𝐬 𝐁𝐚𝐭𝐭𝐞𝐫𝐞𝐝 𝐀𝐈 𝐒𝐞𝐫𝐯𝐞𝐫 𝐌𝐚𝐤𝐞𝐫 𝐏𝐨𝐬𝐭𝐬 𝐒𝐨𝐥𝐢𝐝 𝐒𝐡𝐢𝐩𝐩𝐢𝐧𝐠 𝐍𝐮𝐦𝐛𝐞𝐫𝐬

𝑲𝒆𝒚 𝒑𝒐𝒊𝒏𝒕𝒔:

- Super Micro shares pop 16%
- Company ships 100K GPUs a quarter
- AI server maker battles strong headwinds

Super Micro released highly surprising shipment data, saying it’s delivering more than 100,000 GPUs per quarter to some of the largest AI factories out there.

Shares of Super Micro Computer surged 16% on Monday after the company delivered a surprise announcement. The maker of servers for artificial intelligence said it ships more than 100,000 GPUs with liquid cooling each quarter. The destination? Some of the biggest data centers that are building out the infrastructure layer for the AI industry.

If these chips are anything like Nvidia’s NVDA bad boys, a single unit could carry the price tag of about $30,000 with unofficial estimates pointing to about $3 billion in potential revenue. For the July quarter, Super Micro pulled in $5.31 billion from sales, landing just above expectations. More interestingly, a sizable batch of these chips could have gone to xAI, the AI company founded by Elon Musk that has pitted its chatbot Grok against OpenAI’s ChatGPT.

The share-price jump comes amid elevated doubts over the company’s internal practices and relations with investors. Internally, Super Micro is under investigation by the Justice Department for alleged accounting violations and fraudulent activities. Externally, the company is nine weeks past the due date for releasing its annual report. All that led to some serious damage to the company’s stock valuation — shares are down 50% in the past six months.

𝐄𝐔𝐑/𝐔𝐒𝐃: 𝐄𝐮𝐫𝐨 𝐄𝐱𝐭𝐞𝐧𝐝𝐬 𝐃𝐫𝐨𝐩 𝐭𝐨 $𝟏.𝟏𝟎 𝐀𝐡𝐞𝐚𝐝 𝐨𝐟 𝐒𝐞𝐩𝐭𝐞𝐦𝐛𝐞𝐫’𝐬 𝐔𝐒 𝐉𝐨𝐛𝐬 𝐑𝐞𝐩𝐨𝐫𝐭

Forex is about to get volatile with the nonfarm payrolls slated for release today — traders, brace yourselves.

The EURUSD pair extended its losses into the fifth consecutive session on Thursday and opened for trading to the downside on Friday. The euro touched a three week low of $1.10 before paring back some of the decline as anxious forex speculators were getting ready to seize trading opportunities — September’s nonfarm payrolls report is slated for release today. The figure is usually associated with increased volatility.

The dollar gained momentum as traders and investors expected to see a fairly weak jobs number — analysts are calling for 145,000 jobs added in September, 3,000 more than in August. If materialized, the figure will solidify the Federal Reserve’s plan to continue cutting interest rates in November, following the super-sized 50-basis-point trim in September. Unemployment is projected to stay flat month-on-month at 4.2%.

Against that backdrop, the strength of the US dollar could be attributed to traders seeking safety not just to protect from economic jitters. Geopolitical tensions are at play, too. US President Joe Biden said Thursday his administration is “discussing” possible Israeli operations to attack Iran’s oil industry in retaliation for the roughly 180 ballistic missiles fired at Israel on Tuesday

𝐓𝐒𝐋𝐀: 𝐓𝐞𝐬𝐥𝐚 𝐒𝐭𝐨𝐜𝐤 𝐓𝐮𝐫𝐧𝐬 𝐆𝐫𝐞𝐞𝐧 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐘𝐞𝐚𝐫, 𝐒𝐞𝐭 𝐭𝐨 𝐄𝐱𝐢𝐭 𝐌𝐨𝐧𝐭𝐡 𝐰𝐢𝐭𝐡 𝟐𝟒% 𝐆𝐚𝐢𝐧. 𝐖𝐡𝐚𝐭’𝐬 𝐀𝐡𝐞𝐚𝐝?

Elon Musk’s EV maker is looking into exciting times — deliveries update, Robotaxis and China stimulus are keeping investors bidding.

Tesla stock TSLA logged a hefty 2.5% gain on Friday and is en route to close out a bumper month with a 24% gain so far. Ahead of the opening bell on the final trading day of September, Tesla appears to be in good shape even for the (challenging) year — up about 5% since January. It’s an impressive feat considering that the EV maker was down more than 40% at one point, battered by heavy blows on many fronts.

But not today. Today Elon Musk’s electric car manufacturer is riding on positive flows of good news. The highly hyped robotaxi event — coming October 10 — is buoying shares as eager investors await to see whether Tesla’s self-driving cabs will be a game changer. In China, the government unleashed a massive stimulus program in efforts to meet its 2024 growth target. Tesla generates about one-third of its revenue from China.

On an even shorter time frame, traders will be watching for the latest delivery figures, slated for Wednesday. Wall Street is looking for 460,000 cars delivered over the three months to the end of September. If materialized, the result will mark a quarterly growth rate of 3.6%. Tesla shipped about 831,000 cars in the first half of 2024. While the number may sound grand, it was actually 7% lower than the same period last year.

𝐁𝐓𝐂/𝐔𝐒𝐃: 𝐁𝐢𝐭𝐜𝐨𝐢𝐧 𝐇𝐢𝐭𝐬 𝟐-𝐌𝐨𝐧𝐭𝐡 𝐇𝐢𝐠𝐡 𝐨𝐟 $𝟔𝟔,𝟎𝟎𝟎 𝐚𝐬 $𝟖.𝟏 𝐁𝐢𝐥𝐥𝐢𝐨𝐧 𝐢𝐧 𝐎𝐩𝐭𝐢𝐨𝐧𝐬 𝐓𝐫𝐢𝐠𝐠𝐞𝐫 𝐁𝐮𝐲𝐢𝐧𝐠

Markets anticipate $8.1 billion of options expirations on Friday and the bullish camp seems to be winning the trade so far, staring at a windfall of $1 billion.

Bitcoin prices BTCUSD were on the run to higher grounds Thursday and early Friday ahead of a nail-biting moment for crypto enthusiasts. A total of $8.1 billion in options contracts expire today, triggering not only investors’ anxiety but also a pump that shook the markets and propelled the OG coin to a two-month high of $66,000. Bitcoin is up about 4.5% since yesterday but more volatility might be looming.

The $8.1 billion of Bitcoin options expirations show that about $4.9 billion is sitting in call options — contracts that allow the trader to buy Bitcoin at a set price. The other part — $3.2 billion — is held in put options that grant the holder the option to sell the asset at a set price. Here’s where it gets interesting — at current market prices, about 28% of call options and 9% of put options are in the money.

Roughly 55% of call options are carrying strike prices of $70,000 or higher, meaning that about $2.7 billion are likely to expire worthless if Bitcoin’s settlement price stays under that mark. On the other end, 69% of put options sit at $56,000 or lower, meaning that $2.2 billion are likely to expire worthless. At current market prices, bulls stand to gain about $1 billion when the options contracts expire.

𝐈𝐍𝐓𝐂: 𝐈𝐧𝐭𝐞𝐥 𝐒𝐭𝐨𝐜𝐤 𝐆𝐚𝐢𝐧𝐬 𝟑.𝟑% 𝐚𝐬 𝐀𝐬𝐬𝐞𝐭 𝐌𝐚𝐧𝐚𝐠𝐞𝐫 𝐀𝐩𝐨𝐥𝐥𝐨 𝐒𝐞𝐞𝐤𝐬 𝐭𝐨 𝐂𝐡𝐢𝐩 𝐈𝐧 $𝟓 𝐁𝐢𝐥𝐥𝐢𝐨𝐧

Struggling chip maker was also approached by rival chip company Qualcomm about a possible takeover. Intel shares are down 53% this year.

Intel stock INTC advanced 3.3% on Monday after a report said that the battered chip manufacturer has received a generous offer from asset manager Apollo Global Management. Apollo is looking to inject as much as $5 billion into Intel in exchange for equity in the $100-billion-worth company, Bloomberg reported over the weekend. Both sides declined to comment and the news is more of a rumor than a confirmed, official statement.

There’s more good developments for Intel this month. Last week, chip-making rival Qualcomm showed interest in taking it over in one scoop, The Wall Street Journal reported. Both moves — the investment and the acquisition — could be interpreted as strong signs of confidence in Intel. The company not only missed out on the powerful AI run that swept technology stocks — its shares are down 53% this year thanks to a wave of bad news.

Early August was the time when things went really wrong. Intel suspended its dividend, causing fuming investors to ditch the stock, and cut 15,000 jobs in efforts to reduce costs. To top it off, it issued disappointing quarterly figures, including earnings and revenue, and provided even weaker forward-looking guidance. All that prompted CEO Pat Gelsinger to start praying publicly on X on August 4, citing verses from the Bible.

𝐆𝐁𝐏/𝐔𝐒𝐃: 𝐒𝐭𝐞𝐫𝐥𝐢𝐧𝐠 𝐑𝐢𝐬𝐞𝐬 𝐭𝐨 𝟐.𝟓-𝐘𝐞𝐚𝐫 𝐇𝐢𝐠𝐡 𝐨𝐟 $𝟏.𝟑𝟑𝟑𝟎 𝐨𝐧 𝐁𝐚𝐧𝐤 𝐨𝐟 𝐄𝐧𝐠𝐥𝐚𝐧𝐝 𝐑𝐚𝐭𝐞 𝐃𝐞𝐜𝐢𝐬𝐢𝐨𝐧

British currency soared against US dollar after UK central bank kept rates steady in marked shift from the Fed’s course.

The GBPUSD pair shot sharply higher on Friday, extending an impressive three-day run fueled by developments on both sides of the Atlantic. In the UK, the Bank of England decided on Thursday to keep the interest rate flat at 5%, pushing back against expectations of a trim. The sterling rose to its highest level against the dollar in two and a half years, hitting $1.3330 this morning, up 180 pips, or 1.4%, in the past three sessions.

Stateside, the Federal Reserve kicked off its rate-cutting campaign after raising rates to a 23-year high and keeping them there for a few months. Jay Powell, Fed boss, announced on Wednesday that the US central bank has decided to cut rates by half a point and is looking to chop them by a further half-point cut by the end of 2024. Once markets realized the implications on the US currency, they moved to offload their dollar holdings.

The British pound is having a good year. It’s up more than 5.5% against a weakening greenback since the start of trading in January. What’s the outlook? The sterling’s moves largely hinge on the direction of interest rates in the UK. Bank of England Governor Andrew Bailey is optimistic that rates will continue to move lower, after the first cut in August. “It’s vital that inflation stays low, so we need to be careful not to cut too fast or by too much,” Bailey said.

𝐑𝐞𝐚𝐝 𝐚 𝐫𝐞𝐯𝐢𝐞𝐰 𝐚𝐛𝐨𝐮𝐭 𝐮𝐬 𝐨𝐧 𝐌𝐞𝐝𝐢𝐮𝐦 🤗⚡

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