The cooling job market and the end of interest rate hikes have stabilized the situation! The US stock and bond markets are in a frenzy, with major stock indices achieving their best weekly performance in a year on Wednesday. Chinese concept stocks are also surging.

The heavyweight non-farm payroll report showed an unexpected cooling of the strong labor market, giving the Federal Reserve more reason to keep interest rates at their current high level and not raise them further. The US stock and bond markets welcomed the confirmation of the end of the interest rate hike cycle and both continued to rise.

The US non-farm payroll employment data for October released on Friday slowed down more than expected to 150,000, 30,000 less than expected, only half of September's increase, and a downward revision of 101,000 for the combined increase in August and September. The unemployment rate in October did not stabilize as expected, but instead rose for two consecutive months to 3.9%, reaching a new high since January last year. Average weekly hours and labor force participation rate also did not stabilize, but instead showed a slight decline, reflecting signs of weakness.

Subsequently, the October US ISM non-manufacturing index was unexpectedly lowered to a five-month low of 51.6, with the employment index showing the largest decline since April last year, reflecting a slowdown in the service sector activities that contribute to the majority of the US GDP and a cooling of employment.

Commentators have pointed out that Friday's series of data highlights the economy being in the best moderate state, neither too hot nor too cold, which is exactly the result that investors who were previously concerned about an overheating economy wanted to see.

The data reinforced market expectations that the Federal Reserve has completed its interest rate hikes, while the market is increasingly betting that the Fed will start cutting rates as early as June next year. The trading price of swap contracts shows that investors expect only a 25% probability of another rate hike by the Fed in January next year, and have fully priced in the expectation of a rate cut in June next year, one month earlier than previously expected in July.

After the non-farm payroll report was released, US stocks opened higher, the US dollar index extended its decline, and prices of US bonds across all maturities jumped while yields fell. The yield on the benchmark 10-year US Treasury bond fell by more than 10 basis points for the third consecutive day, breaking below 4.50% intraday for the first time in a month, and the yield on the more rate-sensitive 2-year US Treasury bond also quickly widened its decline to more than 10 basis points, nearly 20 basis points at one point, reaching a two-month low, far from the 5.0% threshold.

After the release of the ISM services data, US stock indices hit new daily highs, with both the Nasdaq and S&P rising more than 1%, the US dollar index accelerating its decline, and falling below 105.00 for the first time since late September. Chinese stocks accelerated their rise, with related indices outperforming the broader market, continuing the momentum of outperforming the market on Thursday. On the other hand, Apple, which announced a greater-than-expected decline in sales in the Chinese market in the third quarter and forecasted zero year-on-year revenue growth for the fourth quarter, fell against the trend.

The bad news in the economic data turned out to be good news for the stock market. The MSCI global index showed that global stock markets had their largest five-day gain since early January this Friday. MSCI Global Index achieved its largest five-day increase in ten months this week.

In a week where the central banks of the United States, the United Kingdom, and Japan all announced their monetary policy decisions, both the Bank of England and the Federal Reserve decided to pause their interest rate hikes. For the first time, the Federal Reserve acknowledged in its decision that the tightening financial environment is impacting the economy and inflation. Federal Reserve Chairman Powell reiterated the need for caution. Market expectations for the end of the interest rate hike cycle in Europe and the United States have significantly increased, leading to a rise in both stocks and bonds. The three major U.S. stock indices achieved their best weekly performance in at least a year, and long-term bonds performed even better. The yields of 10-year and 30-year U.S. Treasury bonds experienced their largest three-day decline since the early stages of the COVID-19 pandemic in 2020. In addition to Powell's speech, the lower-than-expected quarterly long-term bond issuance announced by the U.S. Department of the Treasury also contributed to the decline in U.S. bond yields.

As of Friday, the yield of the 10-year U.S. Treasury bond experienced its largest three-day decline since the early stages of the COVID-19 pandemic in 2020. Excluding the period of the pandemic, it achieved its largest three-day decline in twelve years.

The Bank of Japan made a slight adjustment to its yield curve control policy (YCC) and removed the 1% upper limit on Japanese bond yields. The magnitude of the adjustment disappointed investors, causing the Japanese yen to plummet on Tuesday. Subsequently, officials from the Japanese Ministry of Finance issued one of the most stern warnings to date, stating that they are "on standby at any time." As a result, the Japanese yen rebounded slightly and further strengthened on Friday when the U.S. dollar weakened, reclaiming the key level of 150 that triggered Japanese government intervention last year and successfully holding onto it. It was a thrilling turnaround for the entire week. Riding on the tailwind of the accelerating decline of the U.S. dollar, the Chinese yuan accelerated its rise on Friday, breaking through 7.29 against the U.S. dollar during intraday trading for the first time in three weeks, achieving a comfortable cumulative increase for the week.

In the commodity market, international crude oil futures rebounded briefly on Thursday but quickly returned to a downward trend. Both U.S. oil and Brent oil approached the lows set on Wednesday, with U.S. oil coming close to the $80 mark. Concerns about the supply side of the Middle East geopolitical situation eased, reducing the premium from the recent Israel-Palestine conflict. Sayyed Hassan Nasrallah, the leader of Hezbollah in Lebanon, made his first speech since the Israel-Palestine conflict, warning that the conflict in the Middle East could escalate but not committing to opening another front on the Israel-Lebanon border. Some commentators believe that the market is calmly responding to this conflict because it does not appear to be a significant disruption to demand or supply.

Gold received support from the accelerating decline of the U.S. dollar and continued to rebound. New York gold futures briefly rose above $2,000 after the release of the U.S. employment report, closing slightly below this level. It approached the high point since the end of July when it broke through this level on Monday. This week, it barely maintained its momentum of continuous weekly gains since the outbreak of the Israel-Palestine conflict. However, considering the sharp decline of the U.S. dollar, the performance of gold's marginal increase appears weak.

The Nasdaq achieved its fifth consecutive increase and rose more than 6% for the week. In the past two days, chip stocks, AI stocks, and Chinese concept stocks outperformed the broader market. After Apple's earnings report, the Nasdaq experienced a slight decline. The three major US stock indexes opened higher for the fifth consecutive day and maintained their gains in the morning session. About half an hour after the opening, the S&P 500 and Nasdaq Composite indexes expanded their gains to over 1%. In less than an hour after the opening, the Dow Jones Industrial Average rose more than 230 points, or nearly 0.7%. The gains later narrowed, with the S&P and Nasdaq rising less than 1% and the Dow rising more than 100 points. At midday, the S&P and Nasdaq once again rose more than 1%, and the Dow had previously risen more than 300 points.

In the end, the three major indexes closed higher for the fourth consecutive day. The Nasdaq closed higher for the fifth consecutive day, with a gain of 1.38%, rising more than 1% for three consecutive days, reaching 13,478.28 points, a new high since October 17. The S&P closed up 0.94% at 4,358.34 points, reaching a new high since October 17 for two consecutive days. The Dow closed up 222.24 points, or 0.66%, at 34,061.32 points, reaching a new high since September 21.

Small-cap stocks, mainly value stocks, represented by the Russell 2000, closed up 2.71%, outperforming the broader market for two consecutive days and rising for four consecutive days to a new high since October 17. The tech-heavy Nasdaq 100 index closed up 1.21%, rising for five consecutive days and reaching a new high since October 17 for two consecutive days.

The major US stock indexes have collectively risen this week. The Nasdaq, which had fallen for three consecutive weeks, rose 6.61% in total; the S&P rose 5.85%, the Dow rose 5.07%, and the Nasdaq 100 rose 6.48%. They all rebounded after two weeks of decline. The Dow achieved its largest weekly gain since October 28 last year, and the S&P, Nasdaq 100, and Nasdaq all achieved their largest weekly gains since November 11 last year. The Russell 2000 rose 7.56%, achieving its largest weekly gain since June 24 last year, reversing the four-week downward trend.

The major US stock indexes have all risen significantly this week, with the Dow, which has the smallest increase, rising slightly more than 5%.

Among the major sectors of the S&P 500, only the energy sector, which was affected by the fall in crude oil, closed down by about 1%. Real estate, which is sensitive to interest rates, rose more than 2% and continued to lead the gains. Materials, finance, IT, non-essential consumer goods, and communication services all rose more than 1%. All sectors have seen gains this week, with energy, which had the lowest increase, rising more than 2%, and real estate leading the gains with an increase of more than 8%. Finance and non-essential consumer goods, including Amazon, both rose more than 7%, while IT, which includes chip stocks, and communication services, which includes Netflix, rose more than 6%. Materials, industrials, and utilities all rose more than 5%.

Most of the leading tech stocks continued to rise, with Tesla rising more than 3% in early trading and closing up nearly 0.7%, rising for four consecutive days and reaching a new high since October 19, thanks to a more than 6% increase on Thursday and a 6.1% increase for the week.

Among the six major FAANMG tech stocks, Netflix closed up 1.8%, rising for five consecutive days and reaching a new high since September 12 for three consecutive days. Alphabet, the parent company of Google, closed up nearly 1.3%, rising for two consecutive days and reaching a new high since October 24 for three consecutive days. Microsoft rose 1.3%, marking its sixth consecutive day of gains to a high since July 19th. Meta, the parent company of Facebook, rose 1.2%, rebounding to a high since October 18th. Amazon rose nearly 0.4%, continuing its six-day rally and reaching a high since September 18th. However, Apple, which announced its earnings report after the market closed on Thursday, initially fell nearly 2.4% and closed down 0.5%.

These tech stocks have all seen significant gains this week, with Netflix up about 8.7%, Amazon up 8.5%, Microsoft up about 7%, Meta up about 6%, Alphabet up nearly 5.7%, and even Apple, with the smallest increase, up 5%.

Overall, chip stocks have risen for four consecutive days, outperforming the broader market for two consecutive days. The Philadelphia Semiconductor Index and the Semiconductor Industry ETF SOXX both rose about 2.6%, reaching a high since October 17th. They have risen about 7% this week. At the close, AMD, which rose nearly 10% on Wednesday after strong sales of AI chips in the fourth quarter and next year, rose over 4% and has risen over 16% this week. Nvidia rose over 3%, Intel and Arm rose over 1%, and Qualcomm, which surged nearly 6% on Thursday after better-than-expected earnings, rose 1.8%. Qualcomm has risen over 12% this week, while both Qualcomm and AMD have accumulated gains of over 10% this week ahead of their earnings reports.

Several AI concept stocks that surged on Thursday also outperformed the broader market for the second consecutive day. At the close, BigBear.ai (BBAI) rose nearly 10%, SoundHound.ai (SOUN) rose about 7%, C3.ai (AI) rose 4.9%, and Palantir (PLTR), which surged 20% after announcing its earnings report on Thursday, rose over 5%. Adobe (ADBE) rose nearly 0.9%.

Chinese concept stocks as a whole have risen for two consecutive days. The Nasdaq Golden Dragon China Index (HXC) rose over 3.5% in early trading and closed up 3%, outperforming the broader market for the second consecutive day. It has risen about 2.7% this week. Among individual stocks, Bilibili rose about 6%, NIO rose over 5%, Pinduoduo and Tencent Music rose about 5%, JD.com rose over 4%, XPeng rose over 3%, Li Auto rose nearly 3%, and Alibaba, Baidu, and NetEase all rose over 2%.

Despite a series of disappointing earnings reports, solar stocks in the US generally rose. JinkoSolar, a Chinese solar stock, rose 7.6%, Ascent Solar Technologies rose over 4.48%, and SolarEdge Technologies rose over 3.8%. They have fallen 1.9% this week, hitting an intraday low of $63.250 on November 2nd, the lowest since August 16th, 2019. Shoals Technologies Group rose over 3.1%, First Solar rose over 2.9%, Array Technologies rose about 2.8%, and ADR of ATS Solar rose over 2.7%. Chinese concept stock Daqo New Energy rose about 2.5%, FTC Solar rose over 2.4%, Enphase Energy, a producer of solar inverters, rose about 2.4%, SunPower rose over 2.2%, Maxeon Solar Technologies rose over 1.4%, iSun rose about 0.6%, and NextEra Energy Partners fell over 1.9%. Banking stocks have risen for five consecutive days, outperforming the broader market for two days. The overall banking industry index, the KBW Bank Index (BKX), closed up nearly 3.1%, reaching a new high since September 20th, with a weekly gain of over 11%; the regional banking index, the KBW Nasdaq Regional Banking Index (KRX), closed up 3.1%, and the regional bank stock ETF, the SPDR S&P Regional Banking ETF (KRE), closed up 3.6%, both reaching new highs since September 15th, with cumulative gains of 10.7% and 12.2% respectively.

Several individual stocks that have released earnings reports have experienced significant volatility. Among them, online travel company Expedia (EXPE), which reported higher-than-expected earnings and revenue for the third quarter, closed up 18.8%; sports betting company DraftKings (DKNG), which reported a 57% increase in revenue for the third quarter and a 40% year-on-year growth in monthly active payers, closed up 16.5%; Paramount Global (PARA), which reported earnings per share (EPS) far exceeding expectations due to lower-than-expected losses in its streaming media business Paramount+, closed up 15.4%; financial technology company Square (SQ), whose third-quarter performance exceeded expectations due to strong revenue growth in its Cash App and Square businesses, closed up approximately 10.7%; Icahn Enterprises (IEP), a company owned by Wall Street "wolf king" Carl Icahn, which reported a 2.9-fold year-on-year increase in adjusted EBITDA for the third quarter, closed up 13.1%; medical device company Insulet (PODD), which reported higher-than-expected revenue for the third quarter and fourth-quarter guidance roughly in line with expectations, closed up 15.8%; pet insurance company Trupanion (TRUP) and consulting company Gartner (IT), both of which reported higher-than-expected revenue for the third quarter, closed up 14.3% and 14.6% respectively.

On the other hand, software company Bill Holdings (BILL) fell 25.2% after KeyBanc downgraded its rating to "hold" and believed that it lacked near-term catalysts and faced macro headwinds after announcing full-year revenue and earnings guidance below expectations. In addition, cosmetics giant Estée Lauder (EL), which rebounded on Thursday, fell 3% as it fell nearly 19% on Wednesday after lowering its full-year profit and revenue growth guidance, marking the largest daily decline since its listing in 1995, and fell nearly 11% for the week.

In Europe, the pan-European stock index has risen for five consecutive days, although the momentum has eased compared to Thursday, it continues to reach new highs in over two weeks. The STOXX Europe 600 Index has closed at a new high since October 18th for two consecutive days. The major European country stock indices failed to rise for a third consecutive day, with German, French, and Italian stocks rising for five consecutive days, and British stocks rising for two consecutive days.

In terms of sectors, interest rate-sensitive real estate stocks rose by more than 3%, continuing to lead the gains after a sharp rise of over 5% on Thursday, while the automotive sector rose by nearly 1.7%. Volvo, benefiting from a 10% year-on-year increase in October sales, closed up nearly 3.7%, and BMW, with a third-quarter pre-tax profit margin in its automotive business exceeding expectations at 9.8%, rose by approximately 2%. After announcing the evaluation of a share buyback plan, lowering capital expenditure expectations for the next two years, and laying off 10,000 employees, Danish-listed shipping giant Maersk fell 16.9%, leading the decline in the STOXX 600 index.

The STOXX 600 index rose more than 3% this week, marking the largest weekly gain since March 31st, ending a two-week decline. However, due to a decline of more than 3.4% in the previous week, it failed to offset the losses of the previous two weeks. Major European stock indices have all risen, with the German, French, and Italian stock indices rebounding after six weeks of decline and three weeks of decline, respectively.

Due to a sharp rise on Thursday and Friday, the real estate sector rose more than 12% this week, far ahead of other sectors. The automotive sector, which fell more than 4% last week, rose more than 6%, taking the lead in terms of gains. The basic resources sector, which rose nearly 4% last week, saw a rise of nearly 3% in the mining stocks sub-sector, while the oil and gas sector fell more than 1%, performing the worst and experiencing a three-week decline.

10-year US Treasury yield falls more than 10 basis points for three consecutive days, hitting a one-month low

European government bond prices continued to rise, with yields following the downward trend of US Treasury bonds. At the end of the bond market session, the yield on the UK 10-year benchmark government bond was 4.28%, down 10 basis points intraday for two consecutive days. The yield on the 10-year benchmark German government bond was 2.64%, down 7 basis points intraday.

European bond yields have fallen for two consecutive weeks, with the yield on UK bonds experiencing the largest decline among European bonds after the Bank of England paused its interest rate hikes. The yield on the UK 10-year bond has fallen by approximately 26 basis points, more than double the decline of the previous week. The yield on the 10-year German bond, which fell by approximately 6 basis points last week, has fallen by approximately 19 basis points.

The yield on the 10-year benchmark US Treasury bond reached a daily high of nearly 4.68% in early European trading, but fell during European trading. After the release of the US non-farm payroll report, the decline accelerated, breaking below 4.60%. The yield on the US Treasury bond briefly fell below 4.48% in early US trading, the first time since September 27th that it fell below 4.50% intraday. It fell by approximately 18 basis points intraday, marking the third consecutive day of a decline of more than 10 basis points. At the end of the bond market session, it was approximately 4.57%, down approximately 9 basis points intraday, and has fallen for three consecutive days. It has fallen by approximately 26 basis points this week, far exceeding the decline of approximately 8 basis points in the previous week.

US stocks and bonds portfolio achieves best weekly performance since November last year. The 2-year US Treasury yield, which is more sensitive to interest rate prospects, briefly rose above 5.0% in early European trading, hitting a daily high. After the US employment report was released, it quickly fell below 4.90%, and in early US trading, it tested as low as 4.80%. After hitting a two-month low for two consecutive days, it hit a new low for two months, dropping nearly 19 basis points during the day, to about 4.84% at the end of the bond market. It fell about 15 basis points during the day, erasing the rebound on Thursday, and fell about 16 basis points this week, more than twice the decline of last week, along with the 10-year US Treasury yield, which has fallen for two consecutive weeks.

Trends of US Treasury yields at various maturities this week

The US Dollar Index fell more than 1% during the day, hitting a six-week low, and offshore RMB rose above 7.29 during the day for the first time in three weeks

The ICE US Dollar Index (DXY), which tracks the exchange rates of the US dollar against six major currencies such as the euro, hit a daily high above 106.20 in early Asian trading, rising nearly 0.1% during the day. After a brief decline in early Asian trading, it continued to fall overall. European stocks turned higher before and at the beginning of trading, with European stocks falling below 106.00 in early trading. After the US employment report was released, the decline quickly expanded, with US stocks falling below 105.30 before the market opened. After the ISM non-manufacturing data was released, it fell further during the afternoon session, falling below 105.00 at one point, breaking through the 105.00 level for the first time since September 22, and falling 1.1% during the day.

By the close of US stocks on Friday, the US Dollar Index was slightly above 105.00, down about 1% during the day, falling for two consecutive days. It fell 1.4% this week, the third consecutive weekly decline in the past 16 weeks. The Bloomberg Dollar Spot Index, which tracks the exchange rates of the US dollar against ten other currencies, fell about 0.8% during the day, reaching a low since September 20, and fell for the third consecutive day after Powell's press conference. It fell nearly 1.5% this week, along with the US Dollar Index, both falling back after last week's rebound, marking the largest weekly decline since July.

The Bloomberg Dollar Spot Index fell to the level of the September Fed monetary policy meeting, marking the largest three-day decline this year

As the US dollar further weakened, non-US currencies rose across the board. The yen once again regained the 150 level and held onto it, despite experiencing the largest daily decline since April on Tuesday. It ended the week with a slight cumulative increase, not falling for two consecutive weeks. In early Asian trading, the USD/JPY was above 105.50 when it hit a daily high, and after the US employment report was released, it quickly fell below 150.00 before the US stock market opened. The US stock market hit a daily low of nearly 149.20, falling more than 0.8% during the day, and closed below 149.50. It fell about 0.1% this week. The EUR/USD approached 1.0750 during the US stock market's midday trading, hitting a high since September 14, rising more than 1.1% during the day. The GBP/USD approached 1.2390 during the US stock market's midday trading, hitting a high since September 20, rising more than 1.5%. The offshore renminbi (CNH) against the US dollar hit a new daily low of 7.3309 in the early Asian session. After a rebound in the early session, it maintained its upward momentum. The US stock market extended its gains after the release of the US employment report before the market opened, with the offshore renminbi rising to 7.2862 at one point during the day, up 404 points. It was the first time since October 12 that it rose above the key levels of 7.30 and 7.29 during trading hours. At 4:59 am Beijing time on November 4, the offshore renminbi against the US dollar was quoted at 7.2888 yuan, up 378 points from the New York closing on Thursday. It has risen for three consecutive days and has accumulated a gain of 446 points this week, except for a decline on Tuesday, ending a four-week decline.

Bitcoin (BTC) approached $35,000 in the early Asian session, hitting a new daily high, but then continued to fall. It briefly fell below $34,200 in the European stock market, down more than $800 or more than 2% from the daily high. It rebounded slightly later, with the US stock market approaching $34,900 in the early session and then falling back during the afternoon session. It closed above $34,600 in the US stock market. It has fallen by about 1% in the past 24 hours, but has risen by more than 2% in the past seven days. It is still far from the high of nearly $36,000 reached in intraday trading on Thursday, the highest level since May last year.

Crude oil fell back after a three-week decline, briefly rebounding in the early session after a decline before the US stock market opened, but the decline expanded during the afternoon session. When it hit a new daily low, US WTI crude oil approached the $80 mark and fell to $80.1, down nearly 2.9% during the day. Brent crude oil fell to $84.56, down more than 2.6% during the day.

WTI December crude oil futures closed down $1.95, or 2.36%, at $80.51 per barrel, approaching the closing low since August 28, which was set for two consecutive days on Wednesday. Brent January crude oil closed down $1.96, or 2.26%, at $84.89 per barrel, close to the low since October 6, which was set on Wednesday.

US gasoline and natural gas futures continued to fluctuate. NYMEX December gasoline futures, which rebounded on Thursday, closed down 2% at $2.2 per gallon, approaching the low since October 12, and fell 4.1% this week, declining for two consecutive weeks. NYMEX December natural gas futures, which fell for two consecutive days, closed up 1.2% at $3.52 per million British thermal units, not far from the high since October 13, and rose 0.9% this week, rising for two consecutive weeks. London copper hit a new monthly high, while gold rebounded and approached a three-month high. Since the conflict between Israel and Palestine, it has risen for four consecutive weeks.

London base metal futures rose across the board on Friday. Lead led the gains, rising more than 2% and reaching a high not seen since the end of September. Copper and tin both rose for two consecutive days, with copper continuing to hit new highs since the end of September, and tin breaking away from its lows since early October. Nickel and aluminum, which had fallen for three consecutive days, rebounded, with tin halting its two-day trend of hitting new lows since October 2021, and aluminum not continuing to fall from the high it reached on Monday since early October. Zinc erased the decline from Thursday and rose to a high not seen since early October.

Most of these base metals have risen this week. Aluminum, zinc, and lead have all risen more than 2% for three consecutive weeks. Copper has risen nearly 1% for two consecutive weeks. However, tin has fallen more than 2% and nickel has fallen by about 0.8% for two consecutive weeks.

New York gold futures rose during the trading session after the release of the US employment report, quickly expanding the gains and surpassing the $2,000 mark, reaching as high as $2,011.9 at one point, with an intraday increase of over 0.9%. However, it fell below this level during the trading session.

In the end, COMEX December gold futures closed up 0.29%, rising for two consecutive days, at $1,999.2 per ounce, approaching the highest closing price since July 31 when it first rose above $2,000.

Gold has risen by about 0.04% this week, rising for four consecutive weeks. Since the outbreak of the conflict between Israel and Palestine, it has continued to rise on a weekly basis, but the increase has been significantly milder compared to the first week of the conflict, with an increase of about 5.22%, the largest weekly increase since March 17.