Weekly Market Recap & Outlook

Market Recap - Last Week

This past week, the U.S. stock market experienced significant volatility, driven by rising oil prices, Treasury yields, and corporate earnings reports. Early on, the Dow Jones, S&P 500, and Nasdaq all posted losses as oil prices surged above $77 per barrel, spurred by heightened international tensions in the Middle East. Meanwhile, the 10-year Treasury yield crossed 4%, stoking fears of persistent inflation and putting pressure on investor sentiment.

Adding to global market reactions, China’s National Development and Reform Commission (NDRC) held a briefing on October 8, outlining a modest stimulus plan aimed at reigniting its economy. While the NDRC announced the front-loading of 200 billion yuan ($27.5 billion) in infrastructure spending, market participants had hoped for more aggressive measures. Initially, Chinese stock markets surged, with the Shanghai Composite Index jumping over 10% before closing the day up just 4.8%. This underwhelming response added to global uncertainty, as U.S. markets remained cautious amid concerns about the broader economic impact of China's fiscal efforts.

Midweek, tech stocks led a recovery, with the Nasdaq gaining 1.45% on Tuesday as oil prices cooled and optimism around the sector increased. However, this rebound was short-lived. Fresh inflation data for September revealed a 0.2% rise in the Consumer Price Index (CPI), reigniting concerns about inflation. This caused another market sell-off, pushing the S&P 500 and Dow back into negative territory by week’s end.

Corporate earnings also played a critical role in shaping market moves. Delta Air Lines dropped 1% after missing earnings expectations due to high costs from a major IT outage in July. First Solar fell 9% after being downgraded by analysts due to project delays. On the other hand, energy stocks continued to outperform, benefiting from the rise in oil prices.

With earnings season in full swing, investors are keeping a close eye on corporate guidance and economic data to better gauge the market's direction moving forward.

Market Outlook - Next Week

The stock market is gearing up for a potentially volatile period as earnings season kicks off in full swing. Several major sectors, including healthcare and consumer staples, are expected to attract attention due to their historical resilience during periods of Federal Reserve interest rate cuts. With another potential rate reduction looming by year’s end, investors will be closely watching how these sectors perform amid shifting economic dynamics.

Optimism remains cautiously high, supported by strong Q3 GDP growth, which suggests the U.S. economy may achieve the much-anticipated "soft landing" — controlling inflation without triggering a recession. However, inflation continues to hover above comfortable levels, which could create additional waves of volatility if economic data or Fed policy actions diverge from current market expectations. This uncertainty could prompt sudden market shifts, providing both risks and opportunities for investors.

In terms of sectors, value and small-cap stocks have recently outperformed large-cap growth stocks, signaling a potential broadening of the market rally. This shift could present compelling opportunities for those looking to diversify away from the dominant tech sector, while mid-cap stocks are also showing signs of strength. Overall, while market conditions remain fluid, strategic investors can find potential growth by balancing high-quality defensive plays with selective growth investments.

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Crypto Market Recap - Last Week

Bitcoin (BTC) displayed notable volatility, dropping below $60,000 before recovering to around $62,000. This rebound was driven by growing institutional interest in Bitcoin ETFs, adding optimism to the market. Ethereum (ETH) saw modest gains of around 2.8%, although its performance was overshadowed by concerns over inflation and continued ETH sales by the Ethereum Foundation.

A significant story this week involved the U.S. government potentially selling $4.4 billion worth of Bitcoin confiscated from the Silk Road case. While the market reaction has been muted so far, the possibility of such a large sell-off looms, which could introduce downward pressure on Bitcoin prices if the assets are liquidated too quickly.

Among altcoins, Solana (SOL) surged by 12%, bolstered by partnerships with Citibank and Franklin Templeton, reflecting growing confidence in the platform’s ecosystem. Avalanche (AVAX) also had a strong week, gaining over 20%, driven by its Avalanche9000 upgrade and a $40 million developer grant. Other key movers included XRP, up 9.1% following positive news regarding the SEC case, and Dogecoin (DOGE), which climbed nearly 15% after another social media mention by Elon Musk.

Meanwhile, the NFT market continued its decline, with total sales volume dropping by 21.2%. Although interest in NFTs is waning, the cryptocurrency market remains vibrant, with institutional interest and new developments across various chains providing support.

As we look ahead, investors are closely monitoring regulatory developments and upcoming ETF options that could further influence market sentiment in the weeks to come.

Crypto Market Outlook - Next Week

Cryptocurrency markets are expected to experience a mix of bullish trends and potential headwinds in the coming days. Bitcoin remains a focal point, with strong institutional interest fueled by continued inflows into newly launched spot Bitcoin ETFs. These ETFs have enhanced market confidence, and as more financial institutions offer cryptocurrency-related products, Bitcoin’s price may see upward momentum.

However, risks are still present. One major concern is the potential liquidation of $4.4 billion in seized Bitcoin by the U.S. government, which could significantly increase supply and put downward pressure on prices. Additionally, broader global tensions, such as conflicts in the Middle East, along with shifts in monetary policies, could introduce market volatility.

Among altcoins, Solana and Cardano stand out for their growth potential. Solana's high-speed, low-cost infrastructure, particularly in decentralized finance (DeFi) and NFTs, is expected to continue attracting developers and projects, boosting its value. Meanwhile, Cardano’s developments in smart contracts and its commitment to sustainability position it as a strong competitor in the blockchain space, offering further opportunities for expansion.

While these growth opportunities are notable, market participants should remain cautious of external factors, including regulatory developments and global economic shifts, that could disrupt the market. Staying informed on these broader dynamics will be essential for making well-timed investment decisions.

Risk Management

• Focus on long-term investing first; trade for passive income once you're experienced.

• You can't consistently time the market, which is why many traders fail.

• Generate passive income by trading stocks that hit buy zones.

• Start with long-term investing, then move to multi-day trades, and with experience, options and day trading.

• Always practice risk management: never go all in on a single play, and have funds ready to average down or for other opportunities.

• Be cautious with options trading; understand the risks before diving in.

• Dollar-cost averaging is key: buy in small increments rather than all at once.

• Avoid using margin until you have significant experience, as it can be very risky.

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