🚨 China's Economic Tsunami: $1.4T Stimulus Unleashed

Good Morning!

Asian shares took a hit, with China's woes taking center stage despite a massive $1.4T stimulus package in the works. Meanwhile, gold stole the spotlight, climbing to a dazzling $2,784.82 - a fresh all-time high. Not to be outdone, Bitcoin's flirting with its peak at $72,479, riding high on potential Trump-friendly crypto policies. The tech scene's heating up too. After Alphabet's knockout earnings, all eyes are on Meta, Microsoft, Apple, and Amazon's upcoming reports. And let's not forget the packed economic calendar - we've got ADP employment data, Q3 GDP estimates, and Friday's nonfarm payrolls that could shake up Fed policy expectations.

In today’s email:

• China: Massive $1.4T fiscal stimulus unleashed!

• Bitcoin: We’re so back! Eyeing $73k 🚀

• Earnings: Alphabet reported knockout earnings. All eyes on MAG7

• Gold: Another new ATH, now $2780+! 🚀

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THE BIG IDEA

China's mammoth $1.4T fiscal package aims to stabilize rather than supercharge growth, focusing on addressing local government debt and property sector woes

Here's the truth about China's latest $1.4T fiscal package – it's more financial band-aid than economic rocket fuel. Unlike the 2008 crisis response where Beijing showered money on infrastructure and real estate, this time they're taking a more surgical approach to heal some deep economic wounds.

The lion's share – about $840B – is earmarked for helping local governments dig out from their mountain of hidden debt. Another $560B will go toward rescuing developers drowning in unsold properties and buying back idle land. It's like financial triage for China's economic emergency rooms.

This isn't your typical stimulus sugar rush though

While the numbers sound massive (we're talking 8% of GDP here), the impact won't hit like an espresso shot. Think slow-release medicine instead. The real effects might not show up until late 2025, and that's assuming everything goes according to plan.

The elephant in the room? Chinese households still aren't spending enough. Consumer spending sits below 40% of GDP – a full 20 percentage points under the global average. Sure, there's talk about appliance subsidies coming down the pipeline, but that's barely a drop in the consumer spending ocean.

Markets seem to be catching on to this reality check. Chinese stocks dipped on the news, dragging Asian markets along for the ride. The message is clear: while this package might stop the bleeding, it won't cure China's long-term economic ailments overnight. The real question remains: can Beijing transform this financial band-aid into a bridge toward sustainable growth?

MARKETS AT A GLANCE

TOP NEWS

Nasdaq hits record close at 18,712 as tech earnings season heats up, with Alphabet's strong performance leading the charge

The tech-heavy Nasdaq just hit a fresh peak, powered by Alphabet's knockout earnings. While the S&P 500 edged up, the Dow took a breather. This week's spotlight is on Big Tech's report cards – especially the "Magnificent Seven" – as markets weigh whether AI enthusiasm can keep driving stocks to new heights.

UBS posts impressive $1.4B Q3 profit, more than doubling analyst expectations as Credit Suisse integration begins to bear fruit

UBS just crushed it this quarter, with profits hitting $1.4B – more than double what analysts predicted. The Swiss banking giant's investment arm led the charge with a 36% revenue jump, though wealth management took a 6% hit. CEO Ermotti's not sweating potential rate cuts, noting only 20% of revenue comes from interest income.

Oil prices recover slightly after two-day slump, with markets weighing Middle East tensions and OPEC+ production plans

Crude's inching back up after a steep 6% tumble, with Brent hovering near $72. While Israel signals plans to wrap up the Hezbollah conflict, their warning to Iran keeps tension simmering. Markets are split on OPEC+'s next move, especially with China's demand still lukewarm and US stockpiles shrinking.

CRYPTO

BlackRock's spot Bitcoin ETF leads massive $870M single-day inflow surge, marking the highest since June, while Bitcoin approaches $73K

BlackRock's IBIT is stealing the show, pulling in a whopping $643M in a single day – its biggest haul in seven months. The crypto ETF market's heating up with total trading volume hitting $4.75B, up from $3B yesterday. Meanwhile, Bitcoin's flirting with $73K while Ethereum ETFs join the party with modest gains.

Treasury's new financial inclusion strategy largely ignores crypto's potential, mentioning it only once as a risk – contrasting with VP Harris' campaign embrace of digital assets

Talk about mixed signals from D.C. The Treasury's new financial inclusion roadmap practically ghosted crypto, dropping just one mention – and it wasn't friendly. This puts Yellen's team at odds with VP Harris, who's warming up to digital assets on the campaign trail. Meanwhile, Trump's gone from crypto-critic to cheerleader.

Lido now uses Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to offer seamless staking on Arbitrum, Base, and Optimism

This integration allows users to directly stake ETH on these layer-2 networks and receive wrapped staked ETH (wstETH) without third-party platforms or bridges. Chainlink’s Data Feeds and Automation support reliable redemption rates and efficient liquidity management, simplifying staking while boosting DeFi accessibility and cross-chain interoperability.

Analysts caution that while a Trump win could boost crypto prices, traders should be wary of election volatility despite Bitcoin nearing all-time highs

Markets are buzzing about crypto's election prospects, with Bitcoin hovering near record highs at $72.4K. While a Trump victory might deliver a quick high, analysts warn traders to play it cool – the market's already pricing in major swings, and fundamentals, not politics, could drive Bitcoin toward $100K.

GOLD

Gold surged to a new high near $2,770 per ounce, with silver topping $34 amid heightened demand driven by U.S. election uncertainty and Fed rate-cut expectations

Investors are favoring metals as safe havens, spurred by persistent inflation concerns and strong central bank gold purchases, which have lifted prices by 28% year-to-date. Goldman Sachs projects gold could reach $2,900 by early 2025 as momentum builds in the precious metals market.

DAILY ECONOMIC CALENDAR (ET)

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