The Week Ahead
Volume 116 - SPX 6K, Gold 2800 and an update on the FXI short...
Last Week…
Last week was largely characterised by continued upward momentum in the broader markets, driven by strong earnings results from financials, but the spotlight was undoubtedly on Netflix. NFLX reported a solid Q3, with better-than-expected operating income and revenue guidance for Q4 and 2025. Subscriber growth was a bit softer than anticipated in Latin America, but the strength in other areas offset this. NFLX's growing focus on live sports content and its expanding advertising business provided key tailwinds, showing how the company is evolving its revenue streams beyond traditional subscription growth. Earnings response was positive, and NFLX shares rose over 10%, reinforcing the view that NFLX is well-positioned to navigate its increasingly competitive landscape. Financials also played a notable role in supporting the market, Goldman Prime reported that they saw the biggest demand for US bank stocks in three full years. I closed the week +2.81% vs SPX +0.85%/NDX +0.26%.
Commodities, particularly gold, remained a critical focus for many amidst the uncertain geopolitical environment. Gold stayed well-supported above 2700, reflecting ongoing demand for assets that can hedge against geopolitical risk, inflationary pressures, and market volatility. Talking of geopolitical risk… it does appear that the geopolitical risk premium has come out of oil prices for now. After top-ticking the exit on my risk reversal, I am starting to watch oil again.
SPX - All eyes on 6K
Looking ahead, all eyes are on the SPX’s attempt to break through the 6000 barrier. With earnings season in full swing and buyback windows reopening, multiple catalysts could propel spooz higher. But when?