Market Report.
🔧 China’s steel exports are expected to hit 109 million tons this year, the highest since 2016, before declining to 96 million tons in 2025 due to anti-dumping measures. Steel exports have surged this year amid a domestic glut from China’s property crisis and manufacturing slowdown. Top destinations include Thailand, India, Brazil and Vietnam, though more are imposing tariffs on Chinese steel. Vietnam’s probe could significantly impact China’s exports as it consumes 10% of the total. Domestic demand is expected to account for less than half of global steel demand this year versus property downturn. Infrastructure investment is unlikely to replace construction, and most mills are losing money. Production is falling as Beijing may crack down on alleged tax evasion in the industry.
🚗 Tesla’s stock jumped 21.9%, marking its highest level since 2013. Elon Musk, the CEO, was praised by investors for his estimate of 20% to 30% “vehicle growth” in 2025, which was greater than the 15% predicted by FactSet’s survey of analysts. However, analysts at Morgan Stanley and Deutsche Bank are sceptical that such a high goal can be achieved. In our pre-results report published on ATFX channels this week, we indicated that despite possible price advances, there is significant resistance ahead at $260 and a high risk of a price channel towards $180.The price correction could start today after this whiplash into resistance.
✈️ Major global airlines are reducing services and withdrawing from China altogether due to higher operational costs from longer routes avoiding Russian airspace and lower demand. Virgin Atlantic completely withdrew from China, ending its 30-year presence in Hong Kong. A report showed 7 major airlines retreated from China in 4 months. British Airways has downgraded plane sizes on China routes to cut capacity while retaining routes on maps. Load factors increased when it reallocated planes from China to Cape Town. European carriers face higher fuel costs from longer routes avoiding Russian airspace bans, while Chinese airlines can still use shorter routes. Extended flight times also increase crew costs.
Market View:
📉 Yesterday, Tesla’s more than 20% rise after the results gave a boost to the S&P 500 and the Nasdaq 100. However, not being listed in the Dow Jones 30, the Dow Jones 30 missed out on its share of the pie. Mini S&P 500 futures, however, have yet to regain the 5900 level, currently trading at 5860. The Nasdaq 100, meanwhile, manages to reach 20,305 points.
💵 The dollar calms down and cools down after its impressive rise this month. After reaching 104.50, the dollar index DXY makes support at 104. The EUR/USD has taken the opportunity to regain 1.08 and is now trading above 1.0820. US 2-year and 10-year bonds continue to yield above 4%.
🇪🇺 European equities are sideways and struggling to maintain a positive session. The DAX 40 tries to approach the 19,500 level, but is currently trading at 19,455 points, retreating. The Eurostoxx 50 still fails to reach 5000 points and is currently down at 4930 points.
🛢️ Brent crude oil remains close to 75 dollars per barrel and is unchanged. The price of gold has fallen back some 30 dollars to the 1735 dollar per ounce area, but remains extremely strong. Bitcoin continues to struggle with the 69,000 barrier, currently down to 67,885 dollars.
Geopolitics:
🇷🇺 Putin claims that ‘There is still a NordStream 2 pipeline, but Germany does not implement it for political reasons. So whole industries are moving to the United States.
🇮🇱 Israeli airstrike on hotel housing journalists kills several reporters in Hasbaiyya, Lebanon – Al Mayadeen. However, there will be no international sanctions for the moment. Israel will not be banned from the Olympics, Eurovision or other international events as was done with Russia.
💻 Linux bans a dozen programmers for being Russian, following US sanctions. They have said they will be able to rejoin in the future.
🇺🇸 Hillary Clinton claimed yesterday on CNN that Donald Trump is holding his rally in Madison Square Garden to mimic the Nazi rally of 1939. The desperation of the Democratic Party is leading to a considerable verbal escalation.
🇺🇦 Ukraine claimed that the first North Korean soldiers have already arrived in Russia’s Kursk region.
🛰️ According to the WSJ Russia provided satellite targeting data for Houthi rebels as they attacked Western ships in the Red Sea with missiles and drones earlier this year. In line with Putin’s threat after US satellite systems facilitated the Ukrainian HIMARS missile attack on civilians on a Crimean beach this summer, ‘We will arm your enemies’.
