Group 1: Dollar Performance - The dollar index (DXY00) fell by -0.24% as it reversed its overnight gains due to positive comments from ECB President Lagarde, which boosted the euro and negatively impacted the dollar [1] - The ongoing US government shutdown is bearish for the dollar, with potential economic repercussions if the shutdown persists [1] - Expectations for a rate cut by the Fed at the upcoming FOMC meeting on October 28-29 were reinforced by dovish comments from Fed Chair Powell, leading to accelerated losses in the dollar [1][4] Group 2: US-China Trade Tensions - The US-China trade conflict escalated with China sanctioning five US units of South Korean shipbuilder Hanwha Ocean Co., reflecting ongoing tit-for-tat actions between the two nations [4] - The imposition of special port fees on each other's vessels has significant implications for the global economy, as vessels account for over 80% of international trade [4] Group 3: Euro Performance - The euro (EUR/USD) rose by +0.30% after recovering from early losses, driven by positive remarks from ECB President Lagarde about the Eurozone economy [5] - The German October ZEW expectations of economic growth survey exceeded expectations, providing additional support for the euro [5] - Political uncertainty in France, particularly regarding a potential no-confidence vote for Prime Minister Lecornu, has created downward pressure on the euro [6]

Core Insights - U.S. consumer sentiment remained stable in October at a reading of 55, despite economists expecting a decline to 54.2, indicating persistent concerns about the labor market and inflation amid a government shutdown [1][2][7] Consumer Sentiment - The University of Michigan's preliminary consumer sentiment survey showed little change from September's reading of 55.1, with the index holding steady at 55 for October [1][7] - Consumers expressed ongoing worries about high prices and weakening job prospects, with inflation expectations for the next year slightly decreasing from 4.7% to 4.6% [2][5] Labor Market Concerns - The labor market showed signs of softening, with job growth nearly stalling in the three months leading up to August, contributing to consumer pessimism regarding personal finances and buying conditions for durable goods [5][10] Economic Outlook - The survey was conducted during a period of government funding lapse, and historical data suggests that consumer sentiment typically declines during government shutdowns. Economists anticipate a potential downgrade in the final sentiment data for October unless the shutdown is resolved quickly [7] - Despite high inflation expectations, economists predict that the Federal Reserve will implement another interest rate cut at its upcoming meeting on October 28-29, following a previous cut in September [10]

The dollar index (DXY00) today is up by +0.21% and posted a new 1.75-month high.  Political risks in France and Japan are undercutting the euro and yen, respectively, to the benefit of the dollar.  Higher bond yields today and weakness in stocks are also supporting the dollar.  However, gains in the dollar are limited by dovish comments from New York Fed President John Williams, who said he would back "lower rates this year" if the economy evolved as expected. The ongoing shutdown of the US government is ...

Core Insights - SoFi Technologies Inc. (NASDAQ:SOFI) has seen a significant increase in share prices, rising 6.75% to close at $28.14, as investors anticipate benefits from an expected interest rate cut [1][3]. Company Performance - SoFi Technologies is positioned to benefit from a potential rate cut, which typically enhances borrowing volumes [3]. - The company is expected to release its third quarter earnings results at the end of the month, aligning with its historical reporting dates [3]. Financial Targets - For the full year 2025, SoFi Technologies aims to achieve $370 million in net income and $3.375 billion in revenues, indicating a projected 30% year-on-year growth [4]. Market Context - The upcoming Federal Open Market Committee meeting is anticipated to result in another rate cut, with investors already making significant bets based on recent inflation data [2].

Economic Data and Federal Reserve - The week is expected to be uneventful for economic data, with a delayed Trade Deficit and postponed Weekly Jobless Claims and Inventories numbers due to the federal government shutdown [1] - The Federal Open Market Committee (FOMC) is set to release minutes from its mid-September meeting, where the Fed lowered the Fed funds rate by 25 basis points to a range of 4.00-4.25%, the first cut since December of the previous year [2][3] - Inflation levels have increased from +2.3% in April to +2.9% in August, but moderating economic growth and a slowdown in the labor market influenced the Fed's decision to lower rates [3] NVIDIA and AI Industry - NVIDIA CEO Jensen Huang has been actively discussing the ongoing AI buildout, which has been a significant driver of the stock market [5] - Huang emphasized that substantial investments and partnerships are being formed in the AI sector, distinguishing it from the previous dot-com bubble [6] - NVIDIA's current market capitalization stands at $4.5 trillion, with a P/E multiple of 41.6x forward earnings, which, while elevated, is not comparable to the over 100x multiples seen during the dot-com era [7] Stock Market Outlook - The upcoming Q3 earnings report from Delta Air Lines marks the start of the earnings season, with expectations that the September Fed minutes may provide insights into the FOMC's future direction [9] - Current market indexes show positive movement, with the Dow up 133 points, S&P 500 up 11 points, Nasdaq up 35 points, and Russell 2000 up 10 points, indicating potential for new all-time high closing levels [10]

Market Sentiment - The CNN Money Fear and Greed index declined to a reading of 52.7, moving into the "Neutral" zone from a previous reading of 56.7 [6] - U.S. stocks closed lower, with the Nasdaq Composite dropping over 150 points and the S&P 500 ending a seven-day winning streak [1][4] Company Performance - Oracle Corp. shares fell by 2.5% due to reported financial struggles related to renting Nvidia chips [2] - Advanced Micro Devices Inc. saw a continued rally, increasing by 3.8% after a significant 23.7% surge following a deal with OpenAI, with price targets raised by Bank of America and Goldman Sachs to $250 and $210 respectively [2] Economic Indicators - Despite the U.S. government shutdown causing a blackout in economic data, market expectations remain high for a 25-basis-point interest rate cut at the Federal Reserve's meeting on October 30, with a 95% probability priced in [3] Sector Performance - Most sectors in the S&P 500 closed negatively, with industrials, consumer discretionary, and communication services experiencing the largest losses, while consumer staples and utilities stocks performed better, closing higher [4]

Core Points - The Reserve Bank of New Zealand (RBNZ) cut benchmark interest rates by 50 basis points to 2.5%, the lowest since July 2022, due to growth concerns [1] - RBNZ expects inflation to return to its 2% target by the first half of next year, while weak economic activity is anticipated in mid-2025 [2] - New Zealand's GDP contracted by 1.1% year on year in the second quarter, worse than the 0.9% drop expected, attributed to domestic supply constraints and global economic uncertainty [3] - Growth forecasts for New Zealand's trading partners, especially China and Taiwan, have improved, with the World Bank projecting China's economy to grow by 4.8% in 2025 [4] - Domestic inflationary pressures are moderating, with headline inflation at 2.7% for the second quarter, near the RBNZ's target band of 1%-3% [5]

U.S. stock futures rose on Monday following Friday’s mixed moves. Futures of major benchmark indices were higher.The federal government shutdown will continue into this week after a Senate procedural vote failed again on Friday. The measure did not secure the 60 votes needed to advance, with only 54 senators voting in favor. Meanwhile, Bitcoin (CRYPTO: BTC) broke $125,000 per coin mark to set a new all-time high, with trading volume more than doubling in the last 24 hours to a whopping $76 billion. The 10-y ...

Market Reaction - Japan's Nikkei stock index surged nearly 5% following the election of ultra-conservative Sanae Takaichi as the leader of the ruling Liberal Democratic Party, likely making her the first woman prime minister [1][2] - The Nikkei 225 index rose 4.7% to 47,924.52, while the yen weakened against the U.S. dollar, reflecting expectations of increased spending under Takaichi's leadership [6] Political Context - Takaichi, an ally of the late Prime Minister Shinzo Abe, is expected to continue his market-friendly policies, which have historically supported investor confidence [2][4] - The Liberal Democratic Party holds the most seats in the lower house, positioning Takaichi to become prime minister despite not having a majority [3] Investor Sentiment - Investors, particularly non-Japanese ones, reacted positively to Takaichi's election, with significant stock movements led by foreign investors [4][5] - Automakers' shares, including Toyota and Honda, saw notable increases, attributed to unconfirmed reports of potential tariff reductions by the U.S. government [5] Economic Challenges - Takaichi faces significant challenges, including enhancing Japan's economic competitiveness, addressing the impacts of an aging population, and managing a substantial public debt burden [4] Oil Market Update - U.S. benchmark crude oil prices increased by about $1 per barrel, with Brent crude also rising, following an OPEC+ decision to slightly boost oil production [11][12]

Group 1 - The Federal Reserve has cut the federal funds rate to a range of 4%-4.25%, with expectations for further cuts potentially lowering the rate to 3.25%-3.50% by 2026 [1] - The easing cycle initiated by the Federal Reserve is expected to benefit borrowers, while savers and lenders may face challenges in generating high returns [1] - High-yield savings accounts are still offering attractive rates, with some online banks providing yields of up to 5% as of October 2 [3] Group 2 - Certificates of deposit (CDs) offer fixed rates for those willing to lock in their cash, with the highest available CD rate at 4.45% for an eight-month term from LendingClub [5] - Longer-term CDs are also available with rates just over 4%, which may be suitable for those anticipating aggressive rate cuts in the next two years [5]