- Yesterday's session on Wall Street was one of the very successful ones. The Dow Jones gained 1% and approached historic highs, while the S&P 500 recorded its 44th record close, this year. U.S. index contracts are also gaining slightly this morning
- Markets await the U.S. CPI report for September at 1:30 PM BST.; expectations point to 2.3% y/y (the lowest reading since 2021) and 0.1% m/m, as well as 3.2% y/y and 0.2% in the core inflation reading.
- Among BigTech companies, Alphabet (Google) shares were the weakest performers yesterday, falling 1.5% amid the risk of an unfavorable business split as a result of a US Department of Justice investigation.
- Taiwanese semiconductor giant TSMC reported monthly sales estimates above expectations (13% q/q growth vs. 8-12% own forecasts and 39% y/y), company pointed to strong AI demand as major catalyst; expects another 9-10% q/q growth in Q4 2024; we can expect a flood of optimism in chip sector today
- Yesterday's Fed minutes did not cause any surprise in the markets. The U.S. dollar continued to strengthen, and yields on 10-year Treasury bonds rose to 4.07%, up about 5 basis points
- Statements by Fed members indicate that the Federal Reserve is prepared to slow the pace of cuts if necessary. It recognizes higher inflation risks, but remains inclined that inflation will steadily slide to the 2% target while the economy and labor market remain in solid shape
- The Fed's Mary Daly indicated that one or two rate cuts are likely this year, while U.S. businesses point to circumstances favoring a moderate improvement in sentiment
- China's Hang Seng Index is rebounding nearly 4% today, after China announced bond buying as one method of stimulating economic growth. The PBoC also created special swap facilities for banks, insurers and funds
- Due to the rebound in China, Australia's ASX rose 0.5%, although gains in Asia were decidedly muted as market attention focused on the rebound in China. The Nikkkei rose 0.3%, while the KOSPI rose by 0.15%
- Japan's PPI inflation in September rose 2.8% y/y vs. 2.3% forecast and 2.5% in August. The month-on-month increase turned out to be flat, a -0.3% decline was expected. Bank lending in the country rose 2.7% y/y. The yen is far from strengthening, however, and is trading around 149.4, gaining 0.11%
- Gold and silver are gaining slightly in the 0.2-0.3% range, while palladium and platinum are trading close to a 1.5% rebound. Agricultural commodities are mostly trading higher, with wheat gaining more than 1.7% and cotton a symbolic 0.4%. Tomorrow, investors will learn the updated USDA WASDE supply and demand estimates report, which could raise volatility in the agricultural commodities market.
- Brent crude oil, supported by gains in China gains 0.6% above $77 per barrel. Crypto market sentiment is consistently weak, with bitcoin trading below $62k.
- Yesterday's reports indicate that Joe Biden with Israeli President Netanyahu had a constructive and important conversation on the response to Iran and escalation in the Middle East; moments after, Washington indicated that a repeat of the Gaza tragedy, in the Lebanese area will not happen, which we can perceive as an attempt to de-escalate
- OpenAI expects to reach profitability in 2029, but by then expects total losses to be more than $44 billion
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