Top Trade Ideas - October 7th
Planning for the week ahead.
The Middle East was centre stage last week as tensions between Israel and Iran escalated. Stocks saw a drop following Tuesday’s news, but strong manufacturing and payroll data on Friday saw US equities close the week with buyers in control. Oil continued to rally for the week, with crude closing above $74.
In G10 FX, the focus was on JPY, GBP, and USD as the new Japanese PM surprised traders with his comments about monetary policy, while Governor Bailey expressed the potential for faster-than-expected rate cuts in the UK. The bumper US payrolls report saw the DXY spike higher and rate markets price out 50bps cuts from the Fed.
The Week Ahead
Mainland Chinese markets reopen on Tuesday after a long holiday closure.
The Reserve Bank of New Zealand is due to announce its rate decision on Wednesday. Economists estimate that policies will decline by 50bps. In the U.S., crude oil inventories, a 10-year treasury note auction and FOMC minutes are on the agenda.
U.S. Inflation data takes the headlines on Thursday, with forecasts expecting YoY figures to fall to 2.3%. We also have IJCs data and a 30-year auction on the cards. In the equities world, Tesla CEO Elon Musk is expected to present a Hollywood-style spectacle, as he will lead the highly anticipated “Robotaxi Event” at the Warner Brothers studio backlot.
U.K. GDP, German CPI and U.S. PPI will be out on Friday, while Hong Kong markets are closed.
Equities
Snowflake (NYSE: SNOW) was one of the tech sweethearts in our portfolio to start the year. A change of CEO saw a big decline in the share price post-announcement that kicked off a struggling trend for the stock to shake off.
Down about 50% from YTD highs, we feel this could be the bottom for Snowflake. The company is a next-layer Gen-AI winner, and the new CEO is focused on accelerating product innovation. We think there’s an upside opportunity from this level over both the short-term and long-term.
TRADE IDEA - SNOWFLAKE FALLING
Entry: 114.80
Stop Loss: 106.00
Take Profit: 135.00 / 168.00
Guidewire (NYSE: GWRE) will host its annual Investor Day on October 10. The company is expected to provide an update on the market dynamics in P&C insurance, including TAM, product and platform improvements (particularly regarding the cloud transition), and updated medium-term targets for growth and profitability.
We feel this offers an opportunity via options to catch a potential move higher following positive announcements.
TRADE IDEA - OPTIONS PLAY
GWRE Oct-24 $185 calls
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Onto the rest of the ‘Week Ahead’ plan.