The market overview for October 28 - November 1, 2024, has been prepared by analysts at BCC Invest.
The rise of 10-year U.S. Treasury bonds continues
The current yield situation in the U.S. government bond market shows volatility: the yield on 10-year Treasury bonds has increased to 4.2% from 3.6% at the beginning of the year. In the coming months, a short-term rise to 4.5% is possible. In the medium term, as soon as the Federal Reserve shifts to a looser monetary policy, yields should return to the range of 3.5%-4.0%.
Mega-cap tech giants and market trends
The earnings reports of major tech companies, such as Google, Microsoft, Meta, Apple, and Amazon, were generally positive; however, forecasts for the next quarter caused some volatility in the market. Results and predictions—most companies exceeded revenue and profit expectations, but some, like Microsoft and Apple, provided forecasts below analysts' expectations, raising concerns in the market. Meta and other companies announced increased spending on artificial intelligence, which alarmed investors expecting concrete financial results from AI projects. Currently, AI technologies are in the early stages of development, and it will take time for them to be widely implemented across various sectors. Short-term volatility is expected to persist in the wake of fluctuations surrounding the U.S. elections, but we see long-term potential in tech giants that can successfully harness AI potential and improve their performance amid stable demand for digitalization and innovation.
Chart of the week
Let’s consider the U.S. presidential elections of 2008, 2012, 2016, and 2020 and their impact on the market. Barack Obama came to power during the height of the global financial crisis. However, thanks to extensive stimulus and support programs, the U.S. economy began to recover, which was reflected in market growth. Donald Trump actively stimulated the economy through tax cuts and deregulation, leading to significant growth in the S&P 500 index. However, the end of his term was overshadowed by the COVID-19 pandemic, creating substantial market volatility. Joe Biden took leadership of the country amidst the pandemic and recovery measures. Despite current economic challenges, the market continues to rise, reflecting the stimulus and economic recovery.