Core Insights - October, typically a strong month for Bitcoin, has seen a significant downturn, breaking a six-year streak of gains with a 3.69% drop from the start to the end of the month [2] - Bitcoin's price recently fell to $109,820, approximately 13% below its record high of $126,080 set on October 6, and has declined over 8% in the past 30 days [1][2] Market Conditions - The decline in Bitcoin's value occurred amidst challenging macroeconomic conditions, including concerns about liquidity and the reduced likelihood of a third interest rate cut, as indicated by U.S. central bank Chair Jerome Powell [3] - The market experienced a significant sell-off, with investors liquidating over $19 billion in positions, predominantly long positions, following escalated trade tensions between the U.S. and China [4] Contributing Factors - The negative performance in October is attributed to three main factors: a macroeconomic shock, a fragile internal market structure, and a lukewarm monetary policy signal [5] - Analysts noted that tightening liquidity conditions are impacting Bitcoin more acutely than other assets, as it is primarily driven by sentiment rather than fundamental factors like earnings or economic growth [5]

Core Viewpoint - The Federal Reserve's recent decision to lower interest rates has sparked dissension among its members, reflecting potential political influences and raising concerns about the Fed's independence in the face of presidential pressure [2][3][10]. Group 1: Federal Reserve Actions - The Federal Reserve has lowered its benchmark interest rate to between 3.75% and 4%, marking the second rate cut of the year [6]. - A third rate cut is not guaranteed, and the Fed's policy is not predetermined, indicating potential for further debate among members [2]. - The end of the Fed's balance sheet run-off on December 1 may signal a shift towards liquidity and quantitative easing, aligning with President Trump's economic preferences [2][6]. Group 2: Dissension Among Fed Members - Recent meetings have seen dissent from members, including Stephen Miran, who has called for a half-point rate cut, while others, like Kansas City Fed President Jeffrey Schmid, advocate for maintaining current rates [4][5]. - The last instance of multiple dissents occurred in 2019, making the current situation notable and raising questions about the political dynamics within the Fed [3][4]. Group 3: Political Influences - President Trump has publicly criticized Fed Chair Jerome Powell, labeling him "incompetent" and suggesting that future leadership will better reflect his economic vision [6][10]. - The appointment of Miran, a Trump appointee, and the nomination of Kevin Hassett as a potential successor to Powell, highlight concerns regarding the Fed's independence and the influence of political considerations on monetary policy [9][10]. Group 4: Market Implications - The ongoing dissension and potential politicization of the Fed could lead to increased market volatility and cautious behavior from consumers and investors regarding borrowing and investment decisions [7][8]. - The Center for American Progress emphasizes the importance of data-driven decisions for maintaining market stability, warning against the risks of political influence on the Fed's operations [8].

10 YEAR YIELDS JUST FLAT HERE, AROUND 4.1%. TURNING TO THE FED, KANSAS CITY PRESIDENT GIVING HIS REASON FOR THE REASON WHY HE DESCENTED. MICHAEL MCKEE IS WITH US NOW.MICHAEL: THE FED'S BLACKOUT PERIOD ENDING LAST NIGHT AND SCHMIDT DISAGREES WITH THE FED LUGS AT THE BALANCE OF RISK. HE SAID I DO NOT THINK THE POLICY RATE WILL NOT MUCH STRESS NECESSARY LABOR MARKET THAT ARISES FROM STRUCTURAL CHANGES. HOWEVER, A CUT COULD HAVE LONGER LASTING INFLATION IF THE FED'S COMMITMENT TO ITS 2.% OBJECTIVE COMES INTO QU ...

Core Viewpoint - The Federal Reserve lowered interest rates by 25 basis points on October 29, but Chairman Jerome Powell's comments suggested that further rate cuts in December are not guaranteed [1] Summary by Relevant Sections - **Interest Rate Decision** - The Federal Reserve has reduced interest rates by 25 basis points [1] - **Market Commentary** - Chairman Jerome Powell indicated uncertainty regarding additional rate cuts in December, signaling a cautious approach moving forward [1]

Group 1: Global Equity Funds - Global equity funds attracted a net inflow of $10.58 billion in the week to October 29, marking the sixth consecutive week of inflows [1] - Asian equity funds experienced the largest weekly inflow since January 2024, totaling $7.19 billion, with Japan receiving approximately $5.46 billion [3] - U.S. and European equity funds saw inflows of $1.81 billion and $137 million, respectively [3] Group 2: Federal Reserve and Economic Factors - The Federal Reserve reduced interest rates by 25 basis points, citing easing inflationary pressures, but indicated that another rate cut in December is unlikely due to insufficient data [2] - U.S. President Trump announced a tariff reduction on Chinese imports in exchange for actions from Beijing regarding the fentanyl trade and agricultural purchases [2] Group 3: Bond Funds and Money Market - Global bond funds recorded inflows for the 28th consecutive week, with a net gain of $11.84 billion [4] - Euro-denominated bond funds attracted nearly $3.14 billion, while government and high-yield bond funds saw net purchases of $2.84 billion and $1.66 billion, respectively [4] - Investments in money market funds decreased to $3.26 billion from $13.56 billion in the previous week [4] Group 4: Commodity Funds - Gold and precious metals commodity funds experienced a net outflow of $4.17 billion, marking the first net sale in 10 weeks [5] - In emerging markets, equity funds saw inflows of $2.23 billion, the highest weekly total since September 24, while bond funds faced outflows of $437 million [5]

Market Overview - U.S. markets opened with declines: Nasdaq down 0.83%, S&P 500 down 0.56%, Dow down 0.26%, and Russell 2000 down 0.53% [2] Earnings Reports - Alphabet reported its first $100 billion revenue quarter, indicating strong performance [5] - Microsoft’s earnings met expectations but showed signs of slowdown in its Azure cloud business, raising concerns [5] - Meta faced significant challenges, taking a nearly $16 billion one-time charge, which negatively impacted its stock [5] Federal Reserve Commentary - Fed Chair Jerome Powell announced a quarter point interest rate cut but indicated that a further cut in December is not guaranteed, which unsettled investors [4] - The mixed reactions to earnings reports and Fed statements contributed to a decline in equities [4][6] Upcoming Earnings - Thursday is expected to be a busy day with 386 companies scheduled to report earnings, including Eli Lilly, Mastercard, and Shell [7] Economic Events - Limited economic data and events are scheduled for today, with speeches from Fed Governors Michelle Bowman and Lorie Logan [8]

Earnings Reports - 173 S&P 500 companies are reporting earnings this week, with Apple and Amazon.com reporting after Thursday's close [1] - 84% of the S&P 500 companies that have reported so far have beaten forecasts, indicating a strong Q3 earnings season [1] - Q3 profits are expected to rise by 7.2% year-over-year, the smallest increase in two years, while sales growth is projected to slow to 5.9% year-over-year from 6.4% in Q2 [1] Market Reactions - US stock indexes are mixed, with Meta Platforms down over 10% and Microsoft down over 2% due to disappointing earnings, while Alphabet is up over 4% after beating Q3 earnings [4][5] - Chipmakers are experiencing declines, led by Nvidia's 2% drop after comments from President Trump regarding sales approvals [13] - Sprouts Farmers Market reported Q3 net sales of $2.20 billion, below the consensus of $2.23 billion, leading to a decline of over 24% in its stock [15] Economic Indicators - The US government shutdown is ongoing, affecting market sentiment and delaying the release of key economic reports, with an estimated 640,000 federal workers furloughed [7] - Eurozone Q3 GDP rose by 0.2% quarter-over-quarter and 1.3% year-over-year, exceeding expectations [11] Interest Rates - Markets are pricing in a 70% chance of a 25 basis point rate cut at the next FOMC meeting on December 9-10, with an overall expected cut of 81 basis points by the end of 2026 [3] - The 10-year T-note yield has risen to a 2.5-week high of 4.11%, influenced by reduced safe-haven demand and rising inflation expectations [9][10]

Group 1 - The Federal Reserve's recent decision and potential interest rate cuts may lead to lower mortgage rates, providing relief for homebuyers [1] - The average rate for a 30-year fixed-rate mortgage is currently 6.3%, the lowest since October 2024, but still significantly higher than the under-3% levels at the pandemic's onset [2] - High mortgage rates, elevated home prices, and economic uncertainty have kept many potential buyers from entering the market [2] Group 2 - Adjustable-rate mortgages (ARMs) offer lower initial rates compared to fixed-rate loans, with the current ARM rate nearly one percentage point lower than the 30-year fixed rate [3] - The average interest rate for a 5/1 ARM is 5.66%, according to recent data from the Mortgage Bankers Association [3] - ARMs are considered an "underappreciated opportunity" by industry experts, suggesting potential advantages for borrowers [4]

Interest Rate Changes - The Federal Reserve has cut interest rates for the second time in 2023, lowering the federal funds rate to a range of 3.75%-4% [1][14] - Fed Chair Jerome Powell has expressed uncertainty about the possibility of another rate cut in December [1][15] Impact on Borrowers and Savers - The rate cut is beneficial for borrowers, potentially leading to lower loan and mortgage rates [2] - For savers, the lower rates signify a turning point, making it harder to earn strong returns from savings accounts and fixed-income products [2] Investment Strategies - Experts recommend maintaining emergency funds and short-term savings in safe, low-risk places [3] - Money not needed immediately could be invested in higher-return options like stocks, which historically tend to rise when interest rates fall [4][5] - Since the September rate cut, stock prices have continued to climb [7] Investment Vehicles - Exchange-traded funds (ETFs) are suggested as a way to invest in a broad range of companies, spreading risk while capturing market growth [8][17] - Acorns, a micro-investing app, allows users to invest spare change into ETFs based on their risk level [9][17] Real Estate Investment - Real estate is highlighted as an alternative investment path, with Homeshares offering accredited investors exposure to a portfolio of owner-occupied homes through its US Home Equity Fund [11][17] - The fund targets homes with strong equity and aims for risk-adjusted target returns of 14% to 17% [13][17] - A balanced investment portfolio is suggested, comprising 50% stocks, 30% bonds, and 20% alternative assets like real estate [12][17]

Interest rate cut.China agreement.The market is now cleared for takeoff. ...