Market Overview - U.S. equity markets are showing a cautious upward trend in premarket trading amid a prolonged government shutdown and anticipation of crucial economic data [1] - Major indices futures indicate a modest positive open, with Dow Jones Industrial Average futures rising by approximately 0.06% to 0.11%, S&P 500 futures up between 0.08% and 0.12%, and Nasdaq 100 futures leading with a gain of around 0.2% to 0.14% [2] - Asian markets presented a mixed picture, with South Korea's KOSPI hitting a record high while Japan's Nikkei 225 experienced a drop [3] Major Market Index Performance - The S&P 500 fell 0.28% to 6,735.10, and the Nasdaq Composite slipped 0.08% to 23,024.63, both retreating from recent intraday records [4] - The Dow Jones Industrial Average posted the largest decline, dropping 0.52% to 46,358.42, with the S&P 500 and Nasdaq on track for modest weekly gains while the Dow is set for a 0.9% weekly loss [4] Upcoming Economic Events - Key focus for investors includes the release of the University of Michigan's consumer sentiment index, with preliminary data indicating a greater-than-expected deterioration in consumer sentiment [5] - The week will conclude with the highly anticipated U.S. Non-Farm Payrolls and Unemployment Rate data, alongside Canada's employment figures [5] Corporate Developments - Applied Digital shares surged 25% to 25.74% in premarket trading after reporting better-than-expected quarterly revenue of $64.2 million, an 84% year-over-year increase, and finalizing a new lease agreement with CoreWeave for an additional 150 megawatts [7] - Intel shares climbed 1.7% in premarket after TD Cowen raised its price target from $20 to $35, signaling renewed optimism in Intel's AI and data center strategies [7] - Nvidia shares reached an all-time high and are up nearly 1% further before the bell, with a market capitalization of approximately $4.7 trillion [12] - Qualcomm experienced a dip of 1.5% in premarket trading due to an antitrust probe initiated by Chinese regulators [12] - Levi Strauss & Co. saw its stock plunge 7.7% despite reporting better-than-expected Q3 results with a 7% year-over-year increase in net revenues to $1.5 billion [12] - Delta Air Lines surged 4.3% following a report of record third-quarter revenue and a positive outlook for Q4 [12] - PepsiCo's stock rose 4.2% after surpassing analyst estimates in Q3 results and announcing a new chief financial officer [12]

Inflation & Monetary Policy - The Federal Reserve Bank of Boston indicates that the recent surge in inflation expectations presents a greater challenge to the US central bank's ability to control price pressures compared to previous instances [1]

Federal Reserve Insights - The Federal Reserve is in a difficult position due to a lack of data, with upcoming earnings seasons expected to provide insights into company pricing and margins, which are crucial for inflation expectations [2][4][5] - There is a discussion on whether the Fed should reconsider its 2% inflation target, as it may be outdated in the current economic climate [4][5] - Long-term interest rates are emphasized as critical for market performance, with a suggestion that if these rates decrease, it could lead to a market rally [6][7] Nvidia and OpenAI Partnership - Nvidia's CEO Jensen Wong indicated that OpenAI lacks the necessary funds to deploy 10 gigawatts of AI data centers, which could require around $50 to $60 billion for each gigawatt [10][11] - The financing for OpenAI's plans will likely come from its growing revenues, equity, or debt, highlighting a potential catch-22 situation where companies need to borrow to generate revenue [11][12] - There is a cautionary note regarding the high expectations set for Nvidia and OpenAI's plans, suggesting that while Nvidia has strong products, the realization of these plans may take time and should be part of a diversified investment strategy [13][15]

Federal Reserve & Interest Rates - The Federal Reserve faces a dilemma due to a lack of clear data, relying on publicly available information [2] - Upcoming earnings seasons, starting with Delta and followed by financials, will provide insights into pricing strategies, profit margins, and growth, which are crucial for assessing inflation expectations [2][3] - High consumer inflation expectations are driving inflation, necessitating a decrease for the Federal Reserve to consider rate cuts [4] - The current 2% inflation target, set in 2010, may be outdated due to changes in globalization, tariffs, and immigration [4][5] - Lower long-term interest rates (10, 15, 30-year) are crucial for DCF models, mortgages, corporate borrowing, and reducing the budget deficit [6][7] - The bond market's reaction to Federal Reserve rate cuts depends on the reason for the cuts; cuts driven by inflationary pressure could lead to higher long-term rates, negatively impacting the stock market, dollar, and deficits [8] AI, Nvidia & OpenAI - OpenAI plans to deploy 10 gigawatts of AI data centers using Nvidia systems, requiring approximately $50-60 billion per gigawatt for land, power, shell, computing, and networking [10][11] - OpenAI currently lacks the necessary funds and will need to raise capital through revenue growth, equity, or debt [11][12] - Vendor financing, while common in retail, raises concerns about overvaluation and potential risks if plans don't materialize, suggesting a need for diversified exposure [14][15]

Inflation Expectations - One-year inflation expectations increased by 0.2 percentage points to 3.4%, the highest since April 2025 [2] - Five-year inflation expectations also rose, up 0.1 percentage points to 3%, reaching the highest level since May 2024 [2] - Inflation expectations are increasing for essential goods and services, including food, gas, medical care, and rent [2] - The Fed is closely monitoring the five-year inflation outlook, concerned about the potential for a shift in long-term inflation expectations [7] Labor Market - Expectations for earnings growth decreased by 0.1 percentage points to 2.4%, marking the lowest level since May 2021 [3] - Expectations for higher unemployment increased by 2 percentage points to 41.1%, the highest since April 2025 [3] - Expectations for job loss increased by 0.4 percentage points to 14.9%, reaching the highest level since April 2025 [4] - Expectations for finding a job increased by 2.5 percentage points, rebounding from a series low [4] Spending and Monetary Policy - Spending growth expectations declined by 0.3 percentage points to 4.7% [5] - A Fed governor suggests the neutral rate may be higher than previously thought, influenced by supply-side policies [5]

Group 1: Market Overview - Global financial markets are facing challenges due to a US government shutdown, tech sector upgrades, and central bank commentary [2][4] - US Dollar Index (DXY) is experiencing downward pressure while European and US futures show firmness [2] Group 2: Technology Sector - Morgan Stanley has raised price targets for Apple (AAPL) to $298.00 from $240.00 and for Alphabet (GOOGL) to $270.00 from $210.00, maintaining an 'Overweight' rating for both [3][8] - The upgrades are driven by factors such as iPhone upgrades and services revenue for Apple, along with advancements in AI and cloud computing for Alphabet [3] Group 3: Economic Data and Central Bank Insights - The US government shutdown has led to the cancellation of the Nonfarm Payrolls (NFP) report, affecting market activity and focus on alternative indicators like ISM Services PMI [4][8] - Central bank officials, including ECB's Pierre Wunsch and NY Fed's John Williams, provided insights on monetary policy, indicating a stable outlook for the Eurozone and emphasizing the importance of robust policy in managing inflation expectations [5][8] Group 4: Energy Sector - European LNG imports rose 15% month-on-month to 8.7 million tonnes in September, marking a 37% increase compared to September 2024, primarily due to increased supply from the US [6][8] Group 5: Geopolitical Tensions - Ongoing geopolitical tensions are highlighted by reports of Russian military strikes on Ukrainian infrastructure, which may impact global energy supplies and stability [9]

Core Insights - Equity benchmark indices experienced a significant rebound after an eight-day decline, with the Sensex rising by 715.69 points or 0.89% to close at 80,983.31 [1][3] - The Reserve Bank of India (RBI) maintained key interest rates and revised its growth forecast for the current fiscal year to 6.8% from 6.5% [5][9] Market Performance - The 50-share NSE Nifty increased by 225.20 points or 0.92% to reach 24,836.30 [4] - Tata Motors led the gains among Sensex firms, surging by 5.54%, while Bajaj Finance and State Bank of India were among the laggards [4] RBI's Monetary Policy - The RBI's monetary policy committee unanimously decided to keep the repurchase rate unchanged at 5.5% and adopted a "neutral" policy stance [6] - The RBI's optimistic outlook on GDP growth and inflation expectations provided reassurance to investors amid concerns over US tariff impacts [7][8] Economic Indicators - The RBI's growth forecast for FY26 was raised to 6.8%, with inflation expectations trimmed to 2.6%, the lower bound of its target range [6][9] - Trade-related headwinds are expected to slightly lower forward-looking projections for Q3 and beyond, despite some offset from GST rate rationalization [9] Market Activity - Foreign Institutional Investors (FIIs) sold equities worth ₹2,327.09 crore, while Domestic Institutional Investors (DIIs) purchased equities worth ₹5,761.63 crore [10] - In the previous eight trading days, the BSE benchmark fell by 2,746.34 points or 3.30%, and the Nifty dropped by 812.5 points or 3.19% [10]

Consumer Sentiment - University of Michigan's final Consumer Sentiment Index 下降至 55.1，低于上月的 58.2 [1] - 44% 的受访者表示高物价损害了他们的财务状况 [1] Inflation Expectations - 一年期通胀预期小幅下降至 4.7% [1] - 长期通胀预期上升至 3.7% [1]

Monetary Policy and Economic Outlook - The People's Bank of China (PBOC) is focusing on significant adjustments to its financial strategy, recommending improvements in money policy changes and tightening control over money regulation, which may impact global markets and trade [2][10] - Canada's Carney describes the current global economic climate as a rupture rather than a transition, indicating profound economic shifts [3] Corporate Strategy - RBC's CEO McKay has announced an aggressive growth strategy to acquire U.S. companies, aiming to enhance their wealth adviser team and expand in the U.S. wealth management sector [4][10] - JPMorgan has lowered its target price for CarMax (KMX) from $65 to $50, reflecting a more cautious outlook on the company's future performance [5][10] Trade Relations - The European Union and Vietnam are advancing their Free Trade Agreement (FTA), with a task force set to address outstanding issues and anticipated investments in renewable energy and semiconductors, aiming for more balanced commerce [6][10] Inflation and Domestic Policy - A Citi/YouGov Poll indicates that UK short-term inflation expectations remain unchanged at 4.0% in September, while longer-term expectations have increased to 4.1% from 3.9%, suggesting persistent inflationary concerns [7][10] - Sir Keir Starmer announced that a new, free-of-charge digital ID will be mandatory in the UK by the end of the current Parliament, emphasizing that individuals will need this ID to work [8]

Now that we've heard from the president of the UN, let's start on the next big focus for the market and that will be the Fed chair's speech this afternoon that follows the Fed's quarterpoint rate cut just last week. Joining us this morning, chief economics correspondent of the Wall Street Journal, Nick Timos is with us. Nick, good to have you.Welcome back. >> Thanks for having me, Carl. >> We always sort of have I don't know when pal speaks expressor kind of low expectations.His remarks might not get to mon ...