In nine days the US goes to the midterms, and this is when it counts. The White House wants oil prices down and stocks up before 3 November, but it faces headwinds: only 31% approve of Trump’s performance according to Reuters/Ipsos, the lowest of either of his terms. Brent rose 6.4% to 116.8 dollars, its highest close since April, and the Nasdaq 100 sits 7.6% below its ATH.
For me it was a hard week to trade. I went into it with a short position and a bearish bias to catch the trend down, but the intraday moves were big and went both ways. It felt like a lot of manipulation. The Nasdaq 100 ended the week only 0.6% lower.
1Headlines that could not be verifiedThe Revolutionary Guards claimed that seven tankers were damaged overnight into Thursday and that two supertankers hit mines on Friday. UKMTO has confirmed a single hit. Trump replied that Iran is trying to push oil prices up before the election with “fake hits, mines, and everything else”.
What could be confirmed was still enough to lift Brent: a deadly attack on the airport in Dammam, Aramco evacuating its headquarters in Dhahran and the US ordering staff home from Saudi Arabia.
2The White House is trying to bring the diesel price downWTI closed above 100 dollars, and diesel at the pump rose 1.6% in a week according to the EIA. The White House lent out oil from the reserve, now at its lowest since 1982, and made oil and refining a defense matter. The first Russian diesel since the 2022 import ban reaches New York only after the election.
3Meta showed the AI billMeta brought in more than expected, but invested more than the company earned, and free cash flow turned negative for the first time since its 2012 IPO. The stock fell 7% on Thursday.
The same day, all three of the hedge funds’ broad equity strategies fell more than 1% according to Goldman, the first time since Covid. The losses were not record-sized, but they were broad, and more than two-thirds of funds ended the day in the red. They lost both ways: AI stocks fell, and in the afternoon the short sellers were squeezed. That says something about why the week was hard to trade.
Money fled into Treasuries, but gold fell, despite lower yields and a weaker dollar. My reading: the funds cut risk after the losses, as Reuters describes, and sold whatever could be sold quickly, gold included.
The previous hypothesis held, and we are somewhat closer to the 10% level from the ATH, around 28,200.
Be waterWhen the headlines are in charge I take fewer trades, cut size and wait for the chart to confirm. The bias has to give way to what price is actually doing. Patience pays: I want powder left when it really goes off, not to be tilted the wrong way.
The week ahead- Wednesday 19:00 CET: the Fed decision, six days before the election. The market expects no change and a hike in December. In the evening Microsoft and Alphabet report.
- Thursday 13:30 CET: GDP and PCE. Amazon reports in the evening.
- Thursday: registration opens for Vanto’s November competition, which runs 2–6 November.
My hypothesis: the White House has a week to bring oil down, but Brent is driven by headlines from the Gulf, where several parties have their own interests. I expect big intraday moves to continue, and the Nasdaq 100 will struggle to turn up as long as the AI companies invest more than they bring in. If Microsoft, Alphabet and Amazon show that the investments are producing revenue, it can turn before the election.