Macro Monthly Report: U.S. Stock Earnings Season Begins, Crypto Market Significantly Warms Up in October

In October, the U.S. economy showed a stable operating trend, easing market concerns about the macro economy. However, the upcoming U.S. elections have become a key factor dominating market trading. The earnings season for U.S. stocks has begun, and tech stocks faced a significant decline at the end of the month. Meanwhile, the crypto market has become a safe haven to avoid the uncertainty of the elections, with Bitcoin prices approaching an all-time high, signaling that a new round of encryption asset uptrend may have already started.

In terms of economic data, the U.S. non-farm payrolls increased by 254,000 in September, exceeding expectations; the unemployment rate dropped to 4.1%. Both manufacturing and services PMIs hit a two-month high, indicating an improvement in economic activity. However, inflationary pressures remain: the CPI in September rose 2.4% year-on-year, although it has slowed compared to the previous value, it is still above expectations. The core CPI rose 3.3% year-on-year, slightly exceeding expectations. These data have led the market to generally expect a 25 basis point rate cut in November, while the possibility of a 50 basis point cut has been ruled out.

The latest Beige Book released by the Federal Reserve depicts a mild economic picture with steady economic operations and easing inflation, essentially confirming that the U.S. economy is moving towards a soft landing. However, the report also repeatedly mentions the uncertainty brought by the upcoming U.S. elections, believing that this may lead consumers and businesses to delay investment, hiring, and procurement decisions.

With the economic fundamentals considered to be improving, political factors have become the main variable influencing the short-term market trends. However, on the last trading day of October, the US stock market suffered a heavy blow. The three major indexes collectively declined, with technology stocks generally falling. The Dow Jones dropped by 0.90%, the Nasdaq fell by 2.76%, and the S&P 500 index decreased by 1.86%. Tech giants like Apple, NVIDIA, and Microsoft all experienced varying degrees of decline. This sudden adjustment erased the gains made in October, reflecting a shift in market sentiment.

Nevertheless, from the latest financial reports of the "Seven Sisters" of the US stock market, Tesla's performance remains impressive. In the third quarter, although Tesla's revenue growth fell short of expectations, its profits exceeded expectations, and its gross margin increased year-on-year. Tesla's investments in the AI field have also become one of the important factors driving its stock price.

It is worth noting that political factors are gradually surpassing macroeconomic ones to become the core logic of trading. Certain politically related stocks have surged this month, reflecting traders' expectations regarding the election results. This "political trading" is becoming the main theme of the current U.S. stock market.

In the crypto market, Bitcoin has finally seen a significant rise after experiencing seven months of consolidation, with prices approaching historical highs. The Bitcoin ETF in the United States welcomed a surge of capital inflow in October. Both the Republican and Democratic parties have shown a friendly attitude towards cryptocurrencies, making crypto assets one of the choices for capital hedging before the elections.

In contrast, Ethereum's performance has been relatively weak, remaining in a sideways trend for the past two months. This may partly be due to competitive pressure from other public chains like Solana, as well as the current market's enthusiasm for meme tokens. However, these short-term factors may not affect Ethereum's long-term trend.

As economic concerns fade, the market refocuses on technology themes such as AI. Despite the uncertainty brought by the US election, the crypto market unexpectedly becomes a popular choice for investment at present. This may reflect the increasing recognition of Bitcoin as a safe-haven asset. With the conclusion of the US election and the clarification of the global macro situation, the market may refocus on technology themes such as AI, and the crypto market is expected to remain active, potentially even replicating the prosperous scene of "stocks and coins soaring" seen in the first half of the year.