In the US market on Tuesday (October 24), the stock market rose, investors focused on a series of new earnings reports, and traders focused on the latest trend of US treasury bond yield.
As of press release, the Dow Jones Industrial Average rose 0.79%. The Standard&Poor's 500 Index rose 0.74%, while the Nasdaq Composite Index rose 0.89%.
But David Bahnsen, Chief Investment Officer of Barnson Group, stated that even if the list of technology companies reporting profits this week exceeds Wall Street's expectations, the valuations of these companies in a wider range of areas are still too high.
Bahnsen said, "No matter what results we see in the financial reports of large technology companies this week, they cannot prove that their bizarre valuations are reasonable." "Despite the price decline of large technology stocks in the past three months, stocks are still too expensive, and this dynamic is unlikely to have good results
About 150 S&P 500 index companies are scheduled to release reports this week. So far, this season has had a good start. According to FactSet data, approximately 23% of S&P 500 companies have already reported earnings, with 77% exceeding analysts' expectations.
The yield of the US 10-year treasury bond bond rose to the 5% mark first and then fell below that level. Investors' continued focus on rising yields has raised concerns about the overall economic situation and has put pressure on the stock market in recent weeks. On Tuesday, the benchmark interest rate rose by approximately 3.6 basis points to 4.8737%.
Affected by the strengthening of the US dollar and the rising yield of treasury bond bonds, gold prices continued to fall, further away from the five month high hit last week, while traders paid close attention to US economic data and tensions in the Middle East.
As of press release, spot gold fell 0.50% to 1962.64 US dollars per ounce.
Due to preliminary US economic data showing better than expected economic activity in October, with both manufacturing and service industries expanding, the gold market may face further selling pressure.
The initial PMI of the Markit service industry in the United States in October reached 50.9, a new high since August 2023.
The initial response of the gold market to positive economic data has not undergone significant changes. However, due to some traders taking profits, precious metals are facing some technical selling pressure.
After the data was released, the dollar index rose 15 points in the short term to 106.13, up 0.51%, making gold more expensive for other currency holders, and the yield of benchmark 10-year US treasury bond bonds also rose.
The two sides of Palestine and Israel have reached an agreement that may temporarily alleviate a crazy war. Of course, the fighting is expected to continue, but Israel may be willing to delay the ground attack to safely return more hostages.
Therefore, the gold market takes this opportunity to avoid some risks and reassess the next trend.
But Jim Wyckoff, senior analyst at Kitco Metals, said: "Today's strengthening of the US dollar and rising yields are not conducive to gold, but geopolitical risks will provide support for gold prices. There is still a possibility of exceeding $2000 in the short term, and if the Middle East crisis escalates, it may even reach new highs
In the past two weeks, gold prices have risen by about 9%, reaching a five month high of $1997.09 on October 20th. The increase in gold prices is mainly due to concerns that the war between Israel and Hamas will spread, leading to the inflow of safe haven funds.
However, Marios Hadjikyriacos, a senior investment analyst at foreign exchange brokerage XM, stated in a report that the inability of gold to rebound is a signal that "as the market learns to adapt to the tensions in the Middle East, safe haven demand has begun to weaken.
The market is paying attention to the US Q3 GDP data released on Thursday and the US PCE price index released on Friday, which may affect the interest rate outlook of the Federal Reserve.
According to the CME FedWatch tool, traders generally expect the Federal Reserve to maintain interest rates unchanged in November.
