The super earnings report week of U.S. stocks is coming, and the crypto market shows significant recovery in October

In October, the U.S. economy showed a stable operating trend, easing market concerns about the macroeconomy. The U.S. election became the main logic driving market trading. Tech stocks experienced a significant drop at the end of the month, while the crypto market became a safe haven hotspot, with Bitcoin prices approaching historic highs. A new round of encryption asset price increases may have already begun.

The U.S. economic data for November is mixed. Non-farm employment rose by 254,000 in September, exceeding expectations; the unemployment rate fell to 4.1%. Both the manufacturing and services PMIs reached a two-month high. However, inflationary pressures remain, with the CPI rising 2.4% year-on-year in September and the core CPI rising 3.3% year-on-year, both surpassing expectations. This has led the market to generally anticipate a 25 basis point rate cut by the Federal Reserve in November, with the expectation of a 50 basis point cut having completely disappeared.

The latest Beige Book released by the Federal Reserve depicts a moderate picture of a stable economy with easing inflation, essentially confirming that the U.S. economy is undergoing a soft landing. However, the report also repeatedly mentions the uncertainty brought about by the November U.S. elections, suggesting that this could lead consumers and businesses to delay important decisions. Currently, the approval ratings of the presidential candidates from both parties are close, and the election situation is subject to change.

As economic risks diminish, political factors have become the main variable affecting the short-term trend of the market. However, on the eve of Halloween, US stocks experienced an unexpected setback. On the last trading day of October, the three major indices collectively fell, with technology stocks generally declining. The Dow Jones fell by 0.90%, the Nasdaq by 2.76%, and the S&P 500 index by 1.86%. Most tech giants saw a significant drop in their stock prices.

Nevertheless, based on the latest financial reports from the "Seven Sisters" of the US stock market, Tesla has performed remarkably. The report shows that its third-quarter profits exceeded expectations, gross margins increased year-on-year, and the AI training computation volume has grown significantly. AI has become one of the core driving forces behind Tesla's stock price.

It is worth noting that this month, the U.S. stock market has seen an interesting shift where political factors have surpassed macroeconomic ones, becoming the core logic of trading. Some stocks related to Trump have surged, seemingly indicating that traders are broadly betting on Trump's victory. This "Trump trade" has become the main theme of the current U.S. stock market and has also driven up the stocks of domestic American companies.

In the crypto market, Bitcoin has experienced a strong surge after seven months of consolidation, approaching its historical high. The U.S. Bitcoin ETF has seen a significant influx of funds in October. Both Trump and the Democratic candidates have shown a friendly attitude towards cryptocurrencies, making the crypto market a popular choice for capital hedging ahead of the election.

However, compared to Bitcoin, Ethereum's performance has been relatively weak, remaining in a sideways trend for the past two months. This is partly due to competition from other public chains like Solana, as well as the current hot "meme trading" trend diverting funds. It is expected that after the U.S. elections, Ethereum may emerge from the gloom and welcome a return of funds.

As economic concerns subside, the market is refocusing on the AI narrative. Despite the U.S. election keeping investors on the sidelines, the crypto market has unexpectedly become a current investment hotspot. This may affirm the growing recognition of Bitcoin as a quality safe-haven asset. With the dust settling from the U.S. election and the global macro situation gradually clarifying, the market may refocus on the AI narrative, and the crypto market is expected to remain active, potentially even recreating the prosperous scene of "stocks and coins soaring together" seen in the first half of the year.