The week on Wall Street was a tale of two stories: soaring highs and unexpected dips. Strong bank earnings and a robust US economy propelled the S&P 500 and Dow Jones Industrial Average to record highs. The September retail sales report surprised analysts with its strength, further reinforcing the perception of a healthy US economy. This optimism led some economists to question the need for further interest rate cuts from the Federal Reserve, suggesting that the economy is running at full throttle.
However, this momentum was met with a twist in the housing market. The recent upswing in Treasury yields led to a surge in mortgage rates, significantly impacting demand for home loans. Mortgage applications saw the sharpest weekly drop since the pandemic’s peak in April 2020, as homebuyers pulled back in the face of higher borrowing costs.
The commodities market experienced a volatile week, with oil prices plummeting below the $70-per-barrel mark, marking their worst weekly performance since December 2022. This selloff was triggered by a slight easing of tensions in the Middle East, although the geopolitical landscape remains fragile.
While oil took a dip, gold shone brightly. Tracked by the SPDR Gold Trust GLD, the precious metal soared to an all-time high above $2,700 per ounce, logging four consecutive days of gains. This surge cemented gold’s status as a safe-haven asset, particularly in anticipation of the upcoming US presidential elections. Bank of America is bullish on gold’s prospects, predicting further upside to $3,000 per ounce.
In the world of streaming, Netflix Inc. NFLX delivered impressive third-quarter earnings, surpassing both revenue and EPS forecasts. The streaming giant provided bullish guidance for the fourth quarter, anticipating a significant subscriber boost driven by the popularity of “Squid Game” and its ongoing global content expansion.
The cryptocurrency market also saw strong momentum this week. BlackRock’s iShares Bitcoin Trust IBIT witnessed substantial inflows, exceeding $1 billion in just a week. This surge reflects the growing institutional interest in Bitcoin. Fidelity, meanwhile, leads Ethereum ETFs with $31 million in assets, demonstrating the increasing demand for cryptocurrency exposure within traditional investment vehicles.
In the tech sector, Apple Inc. AAPL saw a 20% increase in iPhone 16 sales in China. This strong performance was fueled by robust demand for the latest iteration of the iconic device. However, the lack of AI capabilities led to early price cuts, highlighting the competitive pressures within the smartphone market and evolving consumer expectations for advanced features.
Overall, this week’s market performance reflects a mix of optimism and uncertainty. While Wall Street soared on the back of a strong US economy, the housing market faced headwinds from rising mortgage rates. Gold solidified its safe-haven appeal, while Bitcoin and Ethereum attracted substantial institutional interest. The tech sector saw strong demand for Apple’s iPhone 16, although the lack of AI features led to early price cuts. These dynamics highlight the complexities of the global market landscape, where growth and volatility often coexist.