Brazil sets the tone
The week's biggest move came on its first day. Brazil voted on Sunday, and the first-round result put Flávio Bolsonaro ahead of President Lula, a stronger showing than most polls had expected. Investors read it as a sign of friendlier policy ahead, and on Monday Brazil's Bovespa jumped 7.7%, an 8.1σ day by its own standards and the largest move against its own habit of any market on the board.
It kept going. The Bovespa finished the week up 8.8% at a record 209,067. Elsewhere the week followed a more nervous arc: the risk dial read 65 on Tuesday, sank to 28 on Thursday as crypto and chip stocks sold off, and climbed back to 70 by Friday. In all, 97 of the 194 markets Kinzan tracks ended the week higher.
Payments shine, crypto lurches
In the US the action was in payments. Visa and Mastercard both rose almost 7%, with Visa closing at its highest level in Kinzan's window ahead of its earnings later this month; for two stocks that usually move slowly, both were weeks of more than 3σ. Palantir did better still, up 10.75% to its highest close in Kinzan's window. The broader market was steadier: the S&P 500 rose 1.15% and the Nasdaq 100 just 0.24%.
Crypto had the most dramatic week, and not in one direction. Kinzan's daily reads tracked a liquidation wave on Tuesday and Thursday, and the coins Kinzan follows finished down 3.6% on average: Uniswap lost 18.2% and Shiba Inu 16.7%, while the bitcoin miners Riot Platforms and MARA Holdings each fell more than 14%. Then on Friday a handful of coins broke out, and Cosmos finished the week up 25%.
Commodities had a good week, up 2.1% on average. Oil firmed as attacks on tankers around the Strait of Hormuz reached a record, lifting Brent 2.4%. Copper gained 2.3%, the best of the metals, and gold added 1.3% as yields eased, with the 10-year down 3 basis points to 5.24%.
The weak spots were in Asia and in chips. South Korea's KOSPI fell 5.4%, the worst of the indices, and Arm Holdings lost 13.4% as semiconductors sold off on Thursday.
Seven big days
Seven single days cleared the 3σ bar. Besides the Bovespa's Monday, Caterpillar dropped 5.75% on Wednesday as industrial stocks broke down, and BNB fell 4.81% on Thursday at the height of the crypto selling. Friday brought the rebound: Cosmos jumped 17.24% and Polkadot 13.52% in a session, and Palantir rose 5.17%.
The brief reads Nvidia right
The Alpha Brief got Nvidia right. Its short call on Nvidia, written on Thursday for the next session, settled in its favour at Friday's close of 229.28, a 0.52% move the brief's way, in a week when the stock finished down 2%.
A lopsided crowd
Positioning heading into next week is lopsided. By the CFTC's Tuesday snapshot, speculators are at the very top of their range in Nasdaq 100 futures and at the very bottom in the euro, with sterling, the Australian dollar and the Mexican peso all near their most crowded shorts. Futures positioning is a level, not a signal, but a crowd this one-sided can make a surprise travel faster.
Inflation week
Next week brings the data that matters most to a market this focused on rates. US consumer prices land on Wednesday, followed on Thursday by US producer prices and retail sales, UK GDP and Australia's jobs report.
With yields above 5% and speculators this long tech, an inflation surprise in either direction will be felt well beyond the bond market. And with Brazil's runoff on 25 October, the Bovespa's record will be tested again before the month is out.
That's the week, dug out. The Dig is back next Sunday. Follow The Dig by RSS.
Background checked against CNBC, The Rio Times, CNN, StockCharts, Kinzan market reads. Every figure is Kinzan's own; see the methodology.
Analysis, not investment advice: nothing in The Dig is a recommendation or an offer to trade.