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Friday, October 3

Noteworthy macro moves today: Ethereum +3.5%. Bitcoin +2.0%. Oil (WTI) -2.0%. Noteworthy US mega-cap moves today: UnitedHealth Group Inc (UNH) +1.6%. 

The ongoing U.S. government shutdown has significantly impacted market sentiment, leading to the postponement of key economic data releases such as the Nonfarm Payrolls report and ISM Services PMI for September. Treasury Secretary Scott Bessent warned that this situation could adversely affect GDP growth by approximately $15 billion per week if it continues, raising concerns about its implications for monetary policy decisions from the Federal Reserve.

In Europe, stock markets are experiencing a positive trend driven by optimism surrounding artificial intelligence advancements and expectations of further interest rate cuts from central banks. The Eurozone services sector showed signs of improvement with PMIs indicating modest expansion; however, France's service activity remains in contraction territory due to weak consumer confidence and declining exports.

Asian equity markets have also reacted positively amid these developments, particularly Japan’s Nikkei 225 index which reached record highs fueled by tech stocks benefiting from AI momentum. Meanwhile, crude oil prices remain under pressure amidst fears of oversupply linked to geopolitical tensions affecting demand forecasts globally.

Bitcoin (BTC/USD) [+2.0%]
Bitcoin is currently trading above 120,000, reflecting ongoing concerns regarding a potential U.S. government shutdown that has delayed key economic data and introduced uncertainty in financial markets. This volatility has led to speculation about potential short-term upside for Bitcoin, with some traders eyeing new all-time highs. Recently, Bitcoin ETFs experienced an inflow of 676 million, reversing a prior outflow trend and marking the strongest single-day performance since early September. Notably, BlackRock's iBIT fund contributed significantly to this influx, acquiring nearly 4,000 BTC worth approximately 466.5 million. Additionally, Michael Saylor announced that his company’s Bitcoin holdings have reached an all-time high of 77.4 billion, up from an initial investment of 250 million. Bitcoin has also reclaimed its position as the 7th-largest asset globally, surpassing Amazon in market capitalization.

iShares MSCI Japan ETF (EWJ) [+1.7%]
The au Jibun Bank Japan Services Purchasing Managers' Index for September was reported at 53.3, exceeding both the estimate of 53.0 and the previous month's figure of 53.1, indicating continued expansion in the services sector. Political uncertainty is present as the ruling Liberal Democratic Party prepares to elect a new leader this weekend, which may influence fiscal policy and the Bank of Japan’s monetary stance. Additionally, Japan's unemployment rate rose to 2.6% in August, higher than expected. These factors coincide with the iShares MSCI Japan ETF (EWJ) experiencing a daily return of 1.8%. Among the ETF's holdings, significant contributors included TM, SONY, and HMC, all registering positive returns.

AMAT | -2.3% | -4.2B
Applied Materials Inc | Semiconductor Materials & Equipment
Applied Materials Inc. has disclosed that new U.S. export restrictions, specifically the BIS Affiliates Rule from the Bureau of Industry and Security, will significantly impact its revenue. The company anticipates a reduction of approximately $110 million in fourth-quarter revenue for fiscal 2025 and about $600 million for fiscal 2026 due to these restrictions. This rule expands the list of companies subject to export controls, further limiting Applied's ability to export certain products and provide services to specific China-based customers without a license. Following this announcement, shares of Applied Materials dropped significantly in after-hours trading, reflecting market reactions to the anticipated revenue decline of around $710 million, which includes the expected impacts for both the fourth quarter and fiscal year 2026.

RDDT | +4.5% | +1.6B
Reddit Inc | Interactive Media & Services
Reddit Inc. experienced a premarket price increase of 4.5%, following a report that noted a previous uptick of 3.7% within the last 24 hours. This rise comes despite an 18% decline in share value over the past week, attributed to ChatGPT traffic reports. Citizens analysts reiterated a Market Outperform rating with a price target of 300, emphasizing expectations for logged-in ad monetization. Andrew Boone from Citizens highlighted that logged-in U.S. users monetize at over ten times the rate of logged-out users. He also remarked that the impact of SEO noise is less significant compared to the strong momentum in Reddit's advertising business, which is anticipated to drive earnings growth.

GME | -4.8% | -384.6M
GameStop Corp | Computer & Electronics Retail
GameStop Corp is experiencing a pre-market decline of 4%, influenced by broader movements within the Computer & Electronics Retail sector. Recently, the company filed an automatic mixed securities shelf, encompassing various security types, although the size of this offering remains undisclosed. Additionally, insider trading activity was noted, with Daniel William Moore, a PFO and PAO at GameStop, selling over 6,500 shares at a price of $27.58. Social media discussions highlighted a recent closing above a consolidation area, suggesting some stability, while also noting Ryan Cohen's declaration of a $32 ceiling on GME shares, which may lead to dilution if exceeded. The stock's sensitivity to macroeconomic events, particularly Non-Farm Payrolls and Unemployment Rate reports, has been established, indicating potential volatility in response to economic data.

RBLX | -4.9% | -4.0B
Roblox Corp | Interactive Home Entertainment
Roblox Corp experienced a pre-market decline of 4.9%, following a report from M Science indicating a slowdown in bookings growth in the U.S., with a predicted deceleration of at least 10 points in September compared to the Q3 average. This news was released approximately 24 hours prior and coincided with an earlier premarket drop of 2.5%. Additionally, a regulatory filing disclosed that director Anthony Lee sold 66,000 shares for $9.0 million on October 1st. In the options market, there was notable activity in put options for Roblox ahead of their expiration date scheduled for tomorrow.

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