Fearmongers are in an uproar as Bank of America reported $131.6 billion in unrealized losses on its securities portfolio in Q3, up from $106 billion in Q2. However, the bank says these paper losses on government-guaranteed bonds are unlikely to materialise. BofA's strong balance sheet, ample deposits, and BTFP allow it to avoid collapse even if another bank run occurs. While the concern that it limits profitability is true, it provides much-needed stability. Other major banks, like JPMorgan and Citi, have also reported similar unrealized losses. While challenging, the rate environment does not threaten the fundamentals of these banking giants.

EQUITY

Major stock indexes fell sharply on Wednesday as banks say commercial real estate loans are in distress, while tech stocks like Nvidia dropped on sanctions. Though United Airlines' profit beat expectations, its grim outlook on higher costs sent shares down nearly 9.67%. Procter & Gamble topped estimates and held to optimistic guidance, pushing its stock up 2.58%.  UBS warns that hedge fund selling is bound to vacuum tens of billions from equity as a market downturn triggers algorithmic trades.

GOLD

As geopolitical tensions see no end in the Middle East, gold prices have rallied nearly 19% over the past year, outperforming the S&P 500. It has reached its highest level since late August as investors flock to the precious metal for safety, though further gains may be limited by a stronger dollar as rising bond yields increase the opportunity cost. 

OIL

As oil prices touched $96 last month, an easing of US sanctions on Venezuela could be deployed to incrementally boost output; however, long-term investment is vital to resuscitate production as infrastructure has deteriorated. Conversely, an embargo on Israel called by Iran was unlikely as OPEC has no plans for action, and prices retreated from Wednesday highs as the dollar strengthened despite bullish inventory data.

CURRENCY

The greenback's rise belied undervaluation signals, such as the gap between rising yields and its sluggishness, hinting potential for a rejuvenated dollar as the Fed battles inflation and geopolitical tensions simmer. Though strides are made towards a digital euro, the ECB faces delays over anonymity concerns for small transactions raised by the European Data Protection Board, emphasising the need to balance innovation with privacy.