Morning Reads
- Citi wants most of its 40,000 coders to experiment with AI.
- China’s ex-Premier Li Keqiang dies at 68 from a heart attack.
- A video explaining how Taylor Swift became a billionaire.
- Elon Musk is preparing to challenge YouTube and LinkedIn.
- Some $27 billion of structured products are at risk in China.
- A UK bank is having its worst day since the 2016 Brexit vote.
- Get up to speed with the Bloomberg Daybreak Europe podcast.
Open Interest Changes
PREMIUM
Prepper
Scrutiny is rising on the role of cryptocurrency in financing terror in the wake of the Oct. 7 attack by Hamas on Israel. In a speech set to be given in London this morning, U.S. Deputy Treasury Secretary Wally Adeyemo will warn crypto firms against allowing their platforms to be used to finance or support terrorist organizations, as geopolitical tensions heat up across the globe. Cryptocurrencies have also gone on a rip in recent weeks, with Bitcoin (BTC-USD) soaring a total of 30% to as high as $35,000, though many have attributed the big run-up to short squeezes and growing optimism for the approval of a spot ETF.
Quote: "There are those in the digital asset space who wish to innovate without regard to consequences instead of doing so responsibly, including protecting against illicit financing," Adeyemo will say in his prepared remarks. "Let me be clear: We will use every tool available to go after any person or platform that is facilitating the movement of resources for terrorists. Our expectation is that financial institutions, digital asset companies and others in the virtual currency ecosystem will take steps to prevent terrorists from being able to access resources. If they do not act to prevent illicit financial flows, the United States and our partners will."
Crypto research firms Elliptic and BitOK estimate that Gaza-based terror groups have raised over $130M in crypto since May 2021, including $41M by Hamas and $93M by Palestinian Islamic Jihad, though at times they have paused campaigns due to "hostile efforts" against donors. Over the past few weeks, the cyber branch of the Israeli Police also froze several crypto accounts belonging to Hamas, which sought to garner more funds on social media following its brutal assault. Decentralized finance ((DeFi)) had once touted the ability to send or receive funds without relying on intermediaries, but enforcement authorities might see a silver lining in being able to pinpoint transactions, addresses and wallets on a ledger that creates permanent public records.
Elsewhere: More U.S. Treasury officials are in Qatar this week to explore ways to crack down on international financial support for terrorist groups. U.S. forces have repeatedly come under fire in Iraq and Syria over the past two weeks, resulting in 19 troops being diagnosed with traumatic brain injuries, as well as the death of an American contractor who died of a heart attack while trying to shelter during a drone strike. In response, the U.S. launched airstrikes last night on two weapons and ammunition facilities in eastern Syria that were being used by Iranian-linked groups. (4 comments)
GDP reaction
The first reading of U.S. GDP for Q3 blew every analyst estimate out of the water, especially when most economists had expected the country to be mired in a recession by this time in 2023. The American economy expanded at an annualized rate of 4.9% to reflect the strongest quarter since Q4 2021, exceeding the +4.2% expected and powering up from the 2.1% advance in Q2. The increase was driven by strong consumer spending, among other variables, with SA users quick to comment on what the fresh data might mean for the Federal Reserve: "Based on this strong growth, another interest rate hike by year-end is a sure thing," wrote Investing Group and Premium subscriber Value Digger. "I think you're getting ahead of yourself," countered 2MuchDebt. "November Fed meeting is currently a 100% chance of no hike and December Fed meeting is currently a 75.5% chance of no hike according to Fed Fund futures." (152 comments)
Speed bumps
After suspending operations in San Francisco, General Motors' (GM) Cruise self-driving vehicle unit is pausing the operations of its entire autonomous vehicle network. Things started to spiral after the California DMV froze Cruise's permits after an Oct. 2 incident in which one of the company's AVs was involved in a hit-and-run. "The most important thing for us right now is to take steps to rebuild public trust," Cruise said in a statement. "In that spirit, we have decided to proactively pause driverless operations while we take time to examine our processes, systems, and tools." Besides San Fran, Cruise has operations in Austin, Dallas, Houston, Phoenix and Miami. (3 comments)
Prime earnings
Stock index futures were higher Friday as the broader market faces a second-straight down week, but the direction could change as the September core PCE price index arrives along with income and outlays. Helping boost sentiment following a mixed bag of tech earnings was Amazon (AMZN), which reported quarterly profits that tripled to nearly $10B. AMZN shares rose 5.3% AH on Thursday to $126 with cost cuts and strong sales brushing aside any concerns. Generative AI is also being seen as worth tens of billions of dollars in revenue, according to CEO Andy Jassy, who is "very optimistic about it." (90 comments)
Today's Markets
In Asia, Japan +1.4%. Hong Kong +2.1%. China +1%. India +1%.
In Europe, at midday, London +0.3%. Paris -0.6%. Frankfurt +0.4%.
Futures at 6:30, Dow +0.1%. S&P +0.5%. Nasdaq +0.9%. Crude +2.2% to $85.00. Gold -0.2% to $1993.70. Bitcoin -0.4% to $34,123.
Ten-year Treasury Yield +2 bps to 4.87%
Today's Economic Calendar
8:30 Personal Income and Outlays
9:00 Consumer Sentiment
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count
Companies reporting earnings today »
What else is happening...
Ford (F) follows GM (GM) in withdrawing outlook for 2023.
PC rebound at Intel (INTC) helps Q3 results blow past expectations.
Mastercard's (MA) quarterly gross dollar volume misses consensus.
Federal Reserve ends enforcement action against Citigroup (C).
Enphase Energy (ENPH) plunges on revenue miss, weak guidance.
UFC (TKO) taps AB InBev (BUD) in largest-ever sponsorship deal.
Trouble for Marlboro maker Altria's (MO) smokeable products segment.
Global economic uncertainty is weighing on this shipping giant.
Higher prices help Chipotle (CMG) top earnings estimates.
Google (GOOGL) doesn't want to follow Yahoo down the path to 'roadkill.'