Nasdaq 100 Erases October Gains After META and MSFT Earnings Guidance
Nasdaq 100 Erases October Gains After META and MSFT Earnings Guidance
Also, 10-year T-note, gold, crude oil and Japanese yen futures
- Nasdaq 100 E-mini futures (/NQ): -1.82%
- 10-year T-note futures (/ZN): -0.45%
- Gold futures (/GC): -1.35%
- Crude oil futures (/CL): +1.33%
- Japanese yen futures (/6J): +0.09%
Strong topline numbers weren’t enough to overcome weaker guidance from tech giants Meta (META) and Microsoft (MSFT), sparking the Nasdaq 100 to a near 2% loss yesterday. U.S. equity markets have now erased their month-to-date gains. The continued bounce in oil prices may be spilling over to the bond market, which remains under pressure despite a spate of cooler-than-expected U.S. economic data this week (JOLTs, GDP). Elsewhere, a stronger U.S. dollar may finally be coming to collect its debts from precious metals: Fold is down over 1%, and silver is down over 3%.
Symbol: Equities | Daily Change |
/ESZ4 | -1.22% |
/NQZ4 | -1.82% |
/RTYZ4 | -0.76% |
/YMZ4 | -0.70% |
U.S. equity futures declined this morning as investors digested results from Microsoft and Meta Platforms, which both disappointed investors’ expectations. Alas, there is still hope for equity bulls, with Apple (AAPL) and Amazon (AMZN) set to report after the bell today. Nasdaq futures (/NQZ4) remain above a trendline set in place from mid-September, carved out by a series of higher lows over the last six weeks.
Strategy: (29DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 19800 p Short 19900 p Short 20500 c Long 20600 c | 20% | +1565 | -435 |
Short Strangle | Short 19900 p Short 20500 c
| 53% | +15220 | x |
Short Put Vertical | Long 19800 p Short 19900 p | 59% | +670 | -1340 |
Symbol: Bonds | Daily Change |
/ZTZ4 | -0.12% |
/ZFZ4 | -0.32% |
/ZNZ4 | -0.45% |
/ZBZ4 | -0.66% |
/UBZ4 | -0.57% |
Treasuries fell, echoing price action in Europe overnight where European bonds slipped after inflation data for the Euro Zone rose above expectations for October. The personal consumption expenditures index rose 2.1% from a year ago in September, matching expectations. Core inflation—a measure that strips out energy and food prices—rose 2.7% over the same time frame. 10-year T-note futures (/ZNZ4) fell about 0.27% ahead of the New York open.
Strategy (57DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 109 p Short 109.5 p Short 111.5 c Long 112 c | 28% | +359.38 | -140.63 |
Short Strangle | Short 109.5 p
| 55% | +1937.50 | x |
Short Put Vertical | Long 109 p Short 109.5 p | 69% | +171.88 | -328.13 |
Symbol: Metals | Daily Change |
/GCZ4 | -1.35% |
/SIZ4 | -3.40% |
/HGZ4 | +0.11% |
Gold prices pulled back from a record high, dropping about 0.90% this morning despite a weaker dollar. The metal remains on track to record a fourth monthly gain as October trading ends. Election uncertainty has boosted the appeal for precious metals, and Tuesday’s election results might alter the calculus for the metal.
Strategy (56DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 2745 p Short 2750 p Short 2835 c Long 2840 c | 19% | +400 | -100 |
Short Strangle | Short 2750 p Short 2835 c | 56% | +10340 | x |
Short Put Vertical | Long 2745 p Short 2750 p | 61% | +220 | -280 |
Symbol: Energy | Daily Change |
/CLZ4 | +1.33% |
/HOZ4 | +1.38% |
/NGZ4 | -2.88% |
/RBZ4 | +0.86% |
Crude oil prices (/CLZ4) rose over 1% this morning to extend yesterday’s rally after reports suggested that OPEC+ could delay production cut rollbacks. The move also comes after a surprise drop in U.S. gasoline stocks, which led to higher crack spreads. The signal for investors is that demand for fuel might be increasing in the United States, which provides a tailwind for oil prices. The gains this week took oil prices positive for the month, putting the commodity on track to break a three-month losing streak.
Strategy (46DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 67 p Short 67.5 p Short 71.5 c Long 72 c | 20% | +380 | -120 |
Short Strangle | Short 67.5 p Short 71.5 c | 53% | +4270 | x |
Short Put Vertical | Long 67 p Short 67.5 p | 56% | +210 | -290 |
Symbol: FX | Daily Change |
/6AZ4 | -0.58% |
/6BZ4 | -0.69% |
/6CZ4 | -0.10% |
/6EZ4 | -0.15% |
/6JZ4 | +0.09% |
Japanese yen futures (/6JZ4) rose after the Bank of Japan left interest rates unchanged. The policy statement supported further rate hikes on the horizon, which helped to lift sentiment in the currency. That, along with some strength in the Euro, helped to push the dollar lower this morning. Industrial production figures are expected to rise in October after a slight increase in September.
Strategy (46DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 0.00645 p Short 0.0065 p Short 0.00665 c Long 0.0067 c | 30% | +425 | -200 |
Short Strangle | Short 0.0065 p Short 0.00665 c | 57% | +1812.50 | x |
Short Put Vertical | Long 0.00645 p Short 0.0065 p | 67% | +225 | -400 |
Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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