Welcome to the Forward Guidance newsletter, brought to you by Casey Wagner and Ben Strack. Here’s what you’ll find in today’s edition:

• Trump and Harris have a week left to campaign. Ben checks in on crypto markets and  the potential upcoming election-driven movements.

• Five of the Magnificent 7 report earnings this week. Casey has the latest. 

• As if it wasn’t a busy enough week, inflation and employment reports are coming up.

BTC hits $69k again 8 days from election. What’s next?

As the work week kicks off, bitcoin clocked another Monday surge — this time to $69,000. 

We had reported on BTC eclipsing $69k earlier this month, before retreating. Similarly to a week ago, the asset dropped today following its breach of that mark. It settled at roughly $68,980 by 2 pm ET — flat over the week, but up 1.5% from 24 hours ago. 

VanEck crypto research head Matthew Sigel noted this morning on CNBC that bitcoin, which had lagged with low volatility before the 2020 election, is doing the same now. Four years ago, there was a high-vol rally for BTC after the election.

Forward Guidance’s own Felix Jauvin briefly weighed in on those thoughts via X:

“What we think is that once the election result is finalized, Moody’s is going to downgrade US sovereign debt and that could be a catalyst for bitcoin to catch up,” Sigel said.

Those wanting to know who will win probably won’t get much help from the polls.

Two polls published Sunday showed VP Kamala Harris with a slight edge over challenger Donald Trump (51% to 47% among likely voters in an ABC News poll, and 50% to 49% in one by CBS News). 

We previously noted how various polls last week (by CNBC, the Wall Street Journal and HarrisX/Forbes) had Trump leading by two percentage points. Going by the New York Times’s polling average, Harris’s less than one-percentage-point lead is her smallest since mid-August.

Republican poll gains could account for some of the big net inflows bitcoin ETFs have seen of late (roughly $3.4 billion since Oct. 11), according to CoinShares.  

“All else equal, BTC is likely to run higher into the election to front-run a potential Trump win,” said GSR research head Brian Rudick.

While he expects a crypto price surge if Trump is indeed elected, longer-term post-election BTC price gains will depend on whether the former president delivers on his crypto promises. 

The market “knee-jerk reaction” is likely lower if Harris wins, but downside could be limited (and the market may even move up) for several reasons, Rudick explained. Two of those are that the uncertainty of the winner will no longer exist and Harris appears set to be more crypto-friendly than the current administration. 

“And third, prices are roughly around the levels as [they were] when politicians first began to embrace crypto, suggesting there isn't too much priced in for a more positive US stance,” Rudick said.

For Ledn CIO John Glover, the focus remains on BTC’s technical levels. 

“If it breaks $73,000, I anticipate upward momentum regardless of immediate political outcomes,” he told me.

Not far off from Rudick, Glover views a Trump-spurred lift or Harris-driven pullback as more likely temporary responses, given what he expects to be insubstantial crypto policy differences from the administrations. 

He expects BTC to aim for $80k after the election dust settles, with a possible retreat below $70k before pushing toward $100k in late Q1/early Q2 2025. 

Glover added: “BTC’s trajectory is driven more by the increase in overall demand as investors continue to add bitcoin to their investment mix than by political changes in the 6- to 12-month horizon.”

— Ben Strack

The year-to-date net inflows for digital asset investment products, according to CoinShares data. The sum is nearly triple the previous record set in 2021.  

Bitcoin products drove the roughly $900 million worth of net inflows last week, data shows. The US spot bitcoin ETFs reeled in $402 million of assets on Friday alone, bringing the category’s total to $22 billion since those January launches. 

It’s a big week for stocks, with five of the Mag 7 companies slated to report earnings this week: Alphabet (Tuesday), Microsoft (Wednesday), Meta (Wednesday), Apple (Thursday) and Amazon (Thursday). 

The Qs will be a good proxy to watch this week, as about 32% of QQQ’s holdings are in the above five stocks. The fund has lagged the Nasdaq Composite over the past 30 trading days (1.8% returns for QQQ vs. the Nasdaq’s 2.4%), but strong earnings reports from these tech giants could be enough to bring the index out of this resistance zone. 

Corporate earnings generally have a packed schedule this week, with 169 companies in the S&P 500 due to publish quarterly results. Ford, Visa, Uber, Exxon and Mastercard are among the big names also sharing reports in the coming days. 

Of the roughly one third of S&P 500 companies that have already reported, 75% published earnings per share that were above analysts’ estimates, FactSet data shows. Meanwhile 59% have reported better-than-anticipated revenue for the third quarter. 

“Q3 earnings season is thus far marginally better than the recent past in terms of revenue and earnings beat amounts, but it still lags long-run averages by a considerable margin,” DataTrek Research co-founder Nicholas Colas said. “Even still, earnings are good enough to support current S&P levels since they support expectations for further improvement in Q4 and into 2025.”

We’ll have to wait and see if this rally can last.

— Casey Wagner

Happy Monday! Beyond the packed earnings schedule, there’s also a lot on tap in terms of economic data. Coupled with this being the last full week ahead of the election, we are bound to see some significant market moves.

Here’s what we’re watching: 

• The Fed’s preferred inflation gauge, the PCE index, will be published Thursday. With markets all but certain (99.7%, according to CME Group data) that central bankers will opt for another 25-basis point cut in November, it would take a major surprise to shift that. Analysts are calling for a slight increase in month-over-month inflation in September (+0.2%) and a slight decrease in annual inflation (+2.1%). 

• The second, and arguably most important major report, will come on Friday with the latest employment numbers. Remember, September’s report was a massive shock, and analysts are expecting moderate figures for October (an increase of 110,000 nonfarm payrolls vs. last month’s 254,000). Anything that strays too far from estimates could spook central bankers (no Halloween pun intended) and get them off their “two more 25bps cuts” track.

— Casey Wagner

• Oil futures slid almost 6% midway through Monday’s trading session amid signs of geopolitical tensions easing after Israel’s airstrikes in Iran avoided energy sites. 

• The staked ETH market continues to decline as analysts from Kaiko report the ETH validator queue has averaged less than a day throughout 2024. This follows the peak of 45 days in June 2023. 

• The application for speakers for the 2025 Blockworks Digital Asset Summit in New York City is officially open. Think you or a client would be a good fit for the institutional event of the year? Apply today.