Weekly Market Update

Author : The BlackSummit Team
Date : November 4, 2023

The BlackSummit Team | November 4, 2023

Global Market News

Global equities rebound

Global equities made gains this week amid expectations that the Fed has ended its cycle of raising rates. The Dow Jones and S&P 500 gained 5.07% and 5.85%, respectively, while the Nasdaq rose 6.61%. The US 10-year Treasury dropped several basis points to end the week at 4.57%. The price of a barrel of West Texas Intermediate crude fell more than 5% to $80.87. Volatility, as measured by the CBOE Volatility Index, fell to 14.91.

Fed holds rates steady

The US Federal Reserve held rates steady on Wednesday, leading many investors to believe that the rate hiking cycle has peaked. US jobs data released this week seemed to cement the belief that the Fed has finished its tightening cycle. The US created fewer jobs than expected in October and the unemployment rate rose to 3.9%. Markets are now pricing in rate cuts in mid-2024.

Updated Market Figures

International Developments

Israel-Hamas Conflict Updates

The Israel-Hamas war continues to develop politically and militarily. Israeli actions in Gaza have caused Israel to become increasingly isolated on the world stage as Bolivia, Chile, and Colombia have all recalled their ambassadors from Tel Aviv. Jordan has followed suit, telling the Israeli ambassador to leave immediately. These events have taken place amidst the backdrop of expanded Israeli operations into Gaza, which prompted Hezbollah’s leader to speak publicly on Friday. In his speech, Hassan Nasrallah threatened potential escalation on the Lebanese-Israeli border from Iran-backed Hezbollah’s forces, sparking fears that the conflict would widen. Meanwhile, the humanitarian crisis in Gaza continues to worsen and thousands of Gazan civilians have been killed in the fighting, with the death toll rising daily since October 7th.

A record 6.9 million people are internally displaced in the DRC

Violence continues to escalate in the DRC’s eastern province of North Kivu between the M23 rebels and those militias loyal to the DRC’s government. The M23 rebel group has pressed an offense that has seen the capture of new territories, resulting in almost 200,000 people to flee their homes in Rutshuru and Masisi territories since October 1. That brings the total number of internally displaced in the DRC to a record 6.9 million, per United Nations reporting.

US Social & Political Developments

Biden meets with Latin American & Caribbean leaders at White House

US President Joe Biden hosted Latin American and Caribbean countries at the Americas Partnership for Economic Prosperity initiative summit yesterday. Ten Latin American and Caribbean countries have joined the initiative to date. At the top of the agenda were economic efforts, with the US International Development Finance Corporation and the Inter-American Development Bank set to channel billions into infrastructure investment. The leaders pledged to strengthen supply chains in clean energy, medical supplies, and semiconductors, among other areas. Migration was also an important issue, though the major countries from which immigration into the US is occurring, such as Cuba, Venezuela, Nicaragua, and Haiti, were not in attendance.

House passes $14.3 billion package for Israel

The US House of Representatives has passed a $14.3 billion aid package for Israel without funding additional Ukraine aid. To offset the funding for Israel, the bill lops off $14.3 billion in IRS funding. Upon passing, Senate Democrats reacted negatively to the bill, with Majority Leader Chuck Schumer stating that the Senate will not take it up. House Speaker Mike Johnson, commenting on the bill, committed to additional Ukraine funding coupled with border funding after the Israeli package has been settled, setting up a potential showdown between the House and Senate as the interim funding bill is set to expire soon.

Corporate/Sector News

FTX Founder Found Guily

Sam Bankman-Fried was found guilty of stealing billions of dollars from customer accounts of his crypto exchange, FTX. The firm was once a prominent name in crypto, which attracted millions of users before its dramatic collapse in 2022, which left around 1 million customers facing potential losses. The collapse was triggered by a leaked internal document that implied financial dealings between FTX and another firm owned by Bankman-Fried. The sentencing hearing is scheduled for March 28, 2024, where he faces up to 110 years in prison.

GM, United Auto Workers reach tentative deal

A tentative deal between GM and the United Auto Workers has been struck, as the last of the three automakers (Ford and Stellantis being the other two) comes closer to ending the six-week strikes by the union. The agreement, which must still be ratified by the automakers, includes a 25% wage increase for workers and other benefits based on cost-of-living adjustments. The strikes are estimated to have cost the three automakers billions of dollars – Ford alone reported that they lost $1.3 billion. These strikes stand out for the union’s confrontational manner with the automakers, as well as President Biden’s presence on a picket line.

Disney buys the rest of Hulu from Comcast

Walt Disney Co. announced that it would purchase the remaining 33% stake in Hulu from Comcast in an $8.6 billion deal. However, the two companies must agree on a fair market value for Hulu, an agreement which may not be completed until next year. Disney has run Hulu since gaining majority control of the business after its acquisition of 21st Century Fox in 2019. Since then, it has bundled Hulu with its other streaming services. As streaming firms have come under financial pressure from overexpansion and password-sharing, Disney, among other companies, have begun to crack down on such practices. Disney claimed that the full acquisition of Hulu would further the company’s streaming objectives.

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Video of the Week
How Russia Is Restructuring Wagner Group’s Africa Operations
Source: Wall Street Journal