US stocks gained Friday morning as investors digested a crucial inflation report that could shape expectations for the Federal Reserve’s next policy moves. The Dow Jones Industrial Average (^DJI) rose 0.5%. The S&P 500 (^GSPC) gained 0.7%, while the Nasdaq Composite (^IXIC) jumped 1%. All eyes on Friday were on September’s inflation data, delayed for more than a week by the ongoing government shutdown. The CPI report came in cooler than expected, with headline CPI rising 3% on an annual basis, the highe ...

Core Insights - US inflation increased to 3% in September, slightly below the expected 3.1%, indicating potential for Federal Reserve rate cuts [1][2][5] - The Consumer Price Index (CPI) rose 0.3% month-over-month, marking the fastest annual rate since the beginning of the year [2][4] - Core inflation, excluding food and energy, also rose to 3%, down from 3.1% the previous month, contrary to expectations of remaining flat [4][5] Economic Context - The CPI report was delayed due to the federal government shutdown, which is now the second-longest in history [5] - There are concerns regarding the accuracy of the inflation report due to the ongoing government shutdown [7] - The Federal Reserve is expected to cut interest rates at its upcoming policy meeting, following a quarter-point cut last month [7][9] Market Reactions - Wall Street showed a positive response, with the Dow Jones Industrial Average rising by 66 points, or 0.1%, in premarket trading [6] - Analysts suggest that if unemployment data weakens significantly, a 50 basis point cut could be anticipated in December [6] Federal Reserve Dynamics - There is internal dissent among Federal Reserve officials regarding the pace of rate cuts, with some advocating for a half-point cut while others prefer a quarter-point cut [8] - Economists are monitoring the impact of tariffs on prices as part of the broader inflation discussion [8]

Inflation & Interest Rate - Headline inflation estimate is 31%, highest since February [1] - The market has largely priced in an interest rate cut at the upcoming Fed meeting [2] - The key focus is whether tariffs are being passed on to higher goods prices, and what happens with services inflation [2][3] - There's a divide among Fed officials regarding concerns about the labor market versus the stickiness of inflation [5][6] - The Fed's guidance on future rates is expected to be limited due to a lack of comprehensive data [9] - A December rate cut is anticipated, especially if the government reopens and data becomes available [14][15] Economic Outlook - Workforce reductions are occurring across different parts of the economy [4] - AI investments are significantly powering the market, with the Atlanta Fed GDP tracker indicating almost 4% growth for the quarter [10] - The economy may be bifurcated, with growth driven by a few sectors and higher-income consumers, making it prone to shocks [11][12][13] - The labor market is expected to weaken, potentially driving more rate cuts into Q1 of the following year [15]

Core Insights - The upcoming release of September's consumer price index (CPI) report is expected to be a significant market event due to the lack of recent economic data caused by the government shutdown [2][3] - Economists predict a monthly increase of 0.4% in the all-items CPI, maintaining a 12-month inflation rate of 3.1%, which is 0.2 percentage points higher than August [4] - The focus will be on any deviations in inflation readings and the impact of tariffs on prices, with expectations of upward pressure in certain categories [5][7] Economic Context - The CPI report is the last major economic reading before the Federal Reserve's policy meeting, where another interest rate cut is anticipated [6][10] - Despite the uncertainty from the government shutdown, the economy has shown resilience, with GDP tracking close to 4% for the third quarter [11] - Geopolitical uncertainties, particularly regarding tariffs, are raising concerns about potential impacts on economic growth [9] Market Reactions - Investors are currently experiencing volatility, with major stock market averages nearing record levels [8] - A higher-than-expected CPI number could lead to increased market volatility, but it may also present buying opportunities given the strong economic fundamentals [12]

Economic Impact - The US government shutdown is in its fourth week, affecting market sentiment and delaying key economic reports, including unemployment claims and the September payroll report [1] - Bloomberg Economics estimates that 640,000 federal workers will be furloughed, potentially increasing jobless claims and raising the unemployment rate to 4.7% [1] Market Focus - Markets are closely monitoring US-China trade talks, with President Trump threatening to increase tariffs on Chinese goods if no deal is reached by November 1 [2] - The upcoming meeting between President Trump and Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation conference is anticipated [2] Mortgage Applications - US MBA mortgage applications decreased by 0.3% for the week ending October 17, with the purchase mortgage sub-index down 5.2% and refinancing up 4.0% [3] - The average 30-year fixed mortgage rate fell by 5 basis points to 6.37% from 6.42% [3] Stock Market Performance - Stock indexes are under pressure, particularly chipmakers, following Texas Instruments' Q4 revenue forecast below expectations [4] - Netflix shares dropped over 9% after reporting weaker-than-expected Q3 EPS, while Intuitive Surgical shares rose over 16% after increasing its growth forecast [4][15] Earnings Season - The Q3 earnings season shows rising corporate earnings expectations, with 85% of S&P 500 companies that reported so far beating forecasts, indicating the best quarter since 2021 [6] - Q3 profits are expected to rise by 7.2% year-over-year, the smallest increase in two years, while sales growth is projected to slow to 5.9% year-over-year [6] Interest Rates - Markets are pricing in a 97% chance of a 25 basis point rate cut at the next FOMC meeting on October 28-29 [7] - The ongoing government shutdown may lead to additional job losses and reduced consumer spending, potentially allowing the Fed to continue cutting interest rates [8] European Market Insights - European government bond yields are mixed, with the 10-year German bund yield up by 1.6 basis points, while the UK gilt yield dropped to a 6.5-month low [9] - UK September CPI rose by 3.8% year-over-year, unchanged from August and below expectations [9] Corporate Movements - Intuitive Surgical's stock rose over 16% after boosting its growth forecast, while Capital One Financial's stock increased over 3% after reporting better-than-expected Q3 adjusted EPS [16] - Netflix and Texas Instruments faced significant declines in their stock prices due to disappointing earnings reports [11][12]

Economic Impact - The US government shutdown is in its fourth week, affecting market sentiment and delaying key economic reports, including unemployment claims and the September payroll report [1] - Bloomberg Economics estimates that 640,000 federal workers will be furloughed, potentially increasing jobless claims and raising the unemployment rate to 4.7% [1] Trade Relations - Markets are focused on US-China trade talks, with President Trump threatening to increase tariffs on Chinese goods if no deal is reached by November 1 [2] Mortgage Applications - US MBA mortgage applications decreased by 0.3% for the week ending October 17, with the purchase mortgage sub-index down 5.2% and refinancing up 4.0% [3] Stock Market Performance - Stock indexes are experiencing modest losses, particularly in chipmakers after Texas Instruments forecasted Q4 revenue below expectations [4] - The S&P 500 Index is down 0.02%, the Dow Jones down 0.14%, and the Nasdaq 100 down 0.18% [5] Earnings Season - The Q3 earnings season shows rising corporate earnings expectations, with 85% of S&P 500 companies reporting so far beating forecasts, indicating the best quarter since 2021 [6] - Q3 profits are expected to rise by 7.2% year-over-year, the smallest increase in two years, while sales growth is projected to slow to 5.9% year-over-year [6] Interest Rates - Markets are pricing in a 97% chance of a 25 basis point rate cut at the next FOMC meeting on October 28-29 [7] - The 10-year T-note yield is up 0.8 basis points to 3.963%, with supply pressures from upcoming Treasury auctions [8] European Market Trends - European government bond yields are mixed, with the 10-year German bund yield up 0.9 basis points and the UK gilt yield dropping to a 6.5-month low [9] Company-Specific Movements - Netflix shares are down over 7% after reporting Q3 EPS of $5.87, below the consensus of $6.94 [11] - Texas Instruments shares are down over 7% after forecasting Q4 revenue of $4.22 billion to $4.58 billion, below consensus [12] - Intuitive Surgical shares are up over 16% after raising its worldwide Da Vinci procedure growth forecast for the year [15] - Capital One Financial shares are up over 3% after reporting Q3 adjusted EPS of $5.95, exceeding expectations [16]

Market Overview - US stocks experienced a decline on Wednesday, with the Dow Jones Industrial Average falling by over 400 points, approximately 1%, and the S&P 500 losing around 1.2%. The Nasdaq Composite led the losses, down about 1.8% [1]. Earnings Reports - Wall Street reassessed its position as the first wave of megacap tech earnings was released, with Tesla's quarterly report expected after the market close. Shares of Tesla fell around 2.5% leading up to the results [2]. - Netflix's stock dropped more than 10% after the company missed earnings expectations, partly due to a tax dispute in Brazil. This decline negatively impacted other tech stocks [3]. - Mattel's shares also retreated as the company's North American sales fell short of expectations [3]. Commodity and Trade Developments - Gold prices continued to decline after experiencing the largest one-day drop in over a decade. Market participants remain cautious regarding trade-war developments, particularly with renewed tensions between the US and China. Additionally, reports indicate that the US and India are nearing an agreement to reduce tariffs on Indian exports from 50% to as low as 15% [4]. Economic Indicators - Official economic releases are currently on hold due to the US federal shutdown. The upcoming September Consumer Price Index report is anticipated to be a significant data point for the markets, influencing expectations ahead of the Federal Reserve's meeting next week, where a 25 basis point interest rate cut is widely expected [5].

Group 1: Unicredit - Unicredit reported a net profit of €2.6 billion, exceeding expectations, driven by strong performance in its trading division with net revenue growth of 6.1% [11][12] - CEO Andrea Orchell expressed optimism about the bank's future, indicating a record third quarter and a focus on beating key performance indicators [13][14] - The bank plans to continue investing to accelerate performance in 2026 and 2027, while also considering shareholder returns [16][24] Group 2: Barclays - Barclays reported a pre-tax profit of £2.1 billion for Q3, with credit impairment charges of £0.6 billion [8][27] - The bank upgraded its guidance for 2025, targeting a net income of over £12.6 billion and a return on tangible equity of 10.6% for Q3 2025 [9][25] - Barclays' UK income increased by 16% year-on-year, with a notable 19% increase in its US consumer bank income [26][28] Group 3: Heineken - Heineken's sales fell less than expected in Q3, but the company cut its full-year volume guidance due to challenging market conditions [38][39] - The company highlighted strong growth in premium brands in Vietnam, although markets in Brazil and the US remained weak [40][42] - Heineken is undergoing restructuring, including job reductions, and is focusing on cost-cutting measures while exploring growth opportunities in emerging markets [46][48]

Group 1 - US stock futures showed little change after a record-setting session for the Dow, with the Dow and S&P 500 futures stable while Nasdaq 100 futures declined by approximately 0.2% [1] - Wall Street is optimistic about earnings reports, particularly after strong blue-chip results propelled the Dow to an all-time high, with Tesla's quarterly report expected to influence market sentiment [2] - Netflix's stock fell over 7% in premarket trading due to earnings that missed expectations, partly attributed to a tax dispute in Brazil, while Mattel's shares also declined as North American sales fell short [3] Group 2 - Gold prices continued to decline after experiencing the largest one-day drop in over a decade, with markets currently downplaying trade-war concerns despite renewed tensions with China [4] - The US and India are reportedly nearing an agreement to reduce tariffs on Indian exports from 50% to as low as 15%, which could impact trade dynamics [4] - The upcoming Consumer Price Index report is anticipated to guide market expectations ahead of the Federal Reserve's meeting, where a 25-basis-point interest-rate cut is widely expected [5]

Market Overview - Markets were mixed, with the Dow up +0.47% and the small-cap Russell 2000 down -0.49% [1] - Bond yields decreased slightly, with the 10-year at +3.96% and the 2-year at +3.46%, influenced by expectations of an interest rate cut [2] Q3 Earnings Summary - Netflix (NFLX) reported earnings of $5.87 per share, missing expectations of $6.89, despite being above last year's $5.40. Revenues were $11.51 billion, slightly below the estimate of $11.52 billion [4] - Texas Instruments (TXN) reported earnings of $1.48 per share, beating the consensus by a penny, with revenues of $4.74 billion, exceeding the anticipated $4.65 billion, but lowered guidance affected stock performance [6] - Mattel (MAT) reported earnings of 89 cents per share, missing the $1.05 consensus, with quarterly sales of $1.74 billion, below the expected $1.81 billion. Adjusted gross margins fell year over year [7] Future Earnings Expectations - Upcoming earnings reports include AT&T (T), GE Vernova (GEV) before the market opens, and Tesla (TSLA), IBM (IBM), and Southwest Airlines (LUV) after the close [8]