Currency Market Overview - The dollar index (DXY) is up by +0.30%, reaching a four-session high, driven by weakness in the yen and easing US-China trade tensions [1] - The yen has fallen to a one-week low against the dollar, influenced by expectations that new Japanese Prime Minister Takaichi will maintain an expansionary fiscal policy [1][5] - The euro is down by -0.26% due to the strength of the dollar and negative sentiment from S&P Global Ratings cutting France's sovereign debt credit rating [3] Economic Indicators - The October Philadelphia Fed non-manufacturing business activity survey fell by -9.9 to a four-month low of -22.2, indicating a slowdown in business activity [2] - Markets are pricing in a 99% chance of a -25 basis point rate cut at the next FOMC meeting on October 28-29 [2] Japanese Economic Developments - Japan's September machine tool orders were revised upward to +11.0% year-on-year, marking the largest increase in six months [6] - The yen is under pressure as Takaichi's policies favor increased deficit spending and expanded financial stimulus, alongside a rise in the Nikkei Stock Index to a new record high [5]

Market Performance - The Dow Jones Industrial Average reached a record high, increasing by 0.8% to an intraday all-time high, setting it on track for a record close [1] - The S&P 500 saw a slight increase of 0.1%, while the Nasdaq Composite experienced a decline of 0.2% [1] Earnings Reports - Major earnings reports are being closely monitored, with Netflix and General Motors being highlighted [2] - General Motors raised its full-year profit outlook, leading to a surge in its stock price [2] - Positive earnings reports from Coca-Cola and 3M also contributed to their stock price increases [2] Trade Relations - Concerns regarding US-China trade tensions have diminished as negotiations are set to resume [3] - A rare earths deal was signed between the US and Australia, aimed at countering China's influence [3] - President Trump expressed optimism about reaching a "fair deal" with President Xi of China [3] Government Shutdown - The US government shutdown is now the third-longest in history, with no plans to end it despite growing economic pressures [4] - The situation has heightened interest in Federal Reserve communications regarding interest rates ahead of an upcoming policy meeting [4] Federal Reserve Insights - Fed Governor Christopher Waller is scheduled to speak, coinciding with the release of the September Consumer Price Index report [5] - The inflation data from the report could influence market expectations for a potential quarter-point rate cut [5]

Market Overview - US stock futures paused as Wall Street focused on quarterly results from major companies like General Motors and Coca-Cola [1] - The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite remained around the flatline at market open [1] Company Earnings - Investors are anticipating significant earnings reports, particularly from Netflix and General Motors [2] - General Motors raised its full-year profit outlook, leading to a surge in its stock price [2] - Coca-Cola's earnings exceeded estimates, resulting in a positive market reaction [2] - Netflix's upcoming results are being closely watched for insights into its advertising business and live programming [2] Trade Relations - Concerns regarding US-China trade tensions have diminished as negotiations are set to resume [3] - President Trump signed a rare earths deal with Australia, indicating a strategic move against China [3] - Trump expressed optimism about reaching a "fair deal" with President Xi of China during their upcoming meeting [3] Government Shutdown - The US government shutdown is now the third-longest in history, with no plans to end it despite growing economic pressures [4] - The shutdown has shifted focus to Federal Reserve speakers for insights on interest rate policies ahead of the upcoming meeting [4] Federal Reserve Insights - Fed Governor Christopher Waller is scheduled to speak, coinciding with the release of the September Consumer Price Index report [5] - The inflation data from the report could influence market expectations for a potential quarter-point rate cut [5]

Market Overview - US stock futures paused as Wall Street shifted focus from trade war and government shutdown to quarterly earnings reports, particularly from General Motors (GM) and Netflix [1] - Major indices including Dow Jones, S&P 500, and Nasdaq 100 remained around the flatline, with tech stocks boosted by Apple reaching a new record high [1] Company Earnings - General Motors raised its full-year profit outlook, leading to a pre-market stock jump [1] - Coca-Cola's earnings exceeded estimates, resulting in a positive market reaction [1] - Investors are particularly interested in Netflix's upcoming results, which will provide insights into its advertising business and live programming [2] Trade Relations - US-China trade tensions have receded in focus as negotiations are set to resume, with President Trump optimistic about reaching a "fair deal" with President Xi [3] Government Shutdown - The US government shutdown is now the third-longest in history, with no plans to end it despite increasing economic pressures [4] - The shutdown has heightened attention on Federal Reserve communications regarding interest rates, especially with a policy meeting approaching [4][5] Federal Reserve Insights - Fed Governor Christopher Waller is scheduled to speak, coinciding with the release of the September Consumer Price Index report, which could influence market expectations for a potential rate cut [5]

Group 1: Dollar Index and Trade Tensions - The dollar index rose by +0.15% due to easing US-China trade tensions, which are seen as positive for global growth and the dollar [1] - President Trump expressed optimism regarding US-China relations, stating, "I think we're going to be fine with China" [1] - Alleged loan frauds affecting Zions Bancorp and Western Alliance Bancorp appear to be contained, providing additional support for the dollar [1] Group 2: Stock Market and Government Shutdown - Gains in the dollar were limited as a rally in stocks reduced liquidity demand for the dollar [2] - The ongoing US government shutdown is viewed as bearish for the dollar, with potential negative impacts on the US economy if prolonged [2] Group 3: Euro and ECB Policy - The EUR/USD fell by -0.09% due to easing price pressures in the Eurozone, which are dovish for ECB policy [4] - A weaker-than-expected German producer price report contributed to the euro's decline [4] - S&P Global Ratings downgraded France's sovereign debt credit rating from AA- to A+, citing elevated budget uncertainty [5] Group 4: Japanese Yen and Economic Developments - The USD/JPY rose by +0.06% as the yen faced modest losses following a +3% surge in the Nikkei Stock Index [6] - Concerns about increased debt supply due to the new coalition government in Japan, supporting expanded financial stimulus, pressured the yen [6] - Hawkish comments from a BOJ board member suggested that the time may be right for raising the BOJ's policy interest rate, limiting losses in the yen [6]

By Howard Schneider WASHINGTON (Reuters) -The Federal Reserve will go into a policy meeting next week with its view of the economy obscured by a U.S. government shutdown that has suspended the release of key data, a less-than-ideal situation for policymakers divided over which risks deserve the most attention. Official employment data hasn't been released since the shutdown of the federal government began on October 1, but what information that remains available points to still-weak job growth. The Fed's ...

Market Overview - The escalation of trade tensions between the US and China, along with the ongoing US government shutdown and concerns about credit quality, has led to increased demand for precious metals, with gold and silver reaching all-time highs before experiencing a decline due to easing trade tensions and stabilization in bank stocks [1] - Stock indexes saw support as trade tensions eased, with President Trump stating that current tariffs on China are "not sustainable" and expressing intentions to meet with Chinese President Xi Jinping [3] - The S&P 500 Index closed up +0.53%, the Dow Jones closed up +0.52%, and the Nasdaq 100 closed up +0.65% on Friday [5] Earnings Reports - The Q3 earnings season is underway, with 78% of S&P 500 companies that have reported so far beating forecasts. However, Q3 profits are expected to rise by only +7.2% year-over-year, the smallest increase in two years [7] - American Express reported Q3 EPS of $4.14, exceeding the consensus of $3.99, leading to a +7% increase in its stock [15] - Truist Financial reported Q3 non-interest income of $1.56 billion, better than the consensus of $1.49 billion, resulting in a +3% increase in its stock [16] Sector Performance - Most of the Magnificent Seven technology stocks rallied, with Tesla closing up more than +2% and Apple up more than +1% [14] - Mining stocks fell sharply after gold prices dropped by more than 1% and silver prices sank by over 5%, with Kinross Gold down more than -9% and Newmont down more than -7% [19] - Chipmakers and AI infrastructure stocks experienced declines due to long liquidation, with Oracle down more than -6% and Super Micro Computer down more than -3% [18] Interest Rates and Economic Indicators - The markets are anticipating a 100% chance of a -25 basis point rate cut at the next FOMC meeting on October 28-29 [8] - The ongoing US government shutdown is delaying key economic reports, with an estimated 640,000 federal workers expected to be furloughed, potentially increasing jobless claims and raising the unemployment rate to 4.7% [6][11]

The central bank's quarterly business-outlook survey and September's consumer-price index data are slated for release next week. ...

Economic Environment - The US government shutdown is impacting market sentiment and delaying key economic reports, including unemployment claims and payroll reports [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 - Escalating trade tensions between the US and China have led to increased demand for precious metals, with gold and silver reaching all-time highs [2] - President Trump indicated that current tariffs on China are "not sustainable," which has eased some trade concerns [3] Stock Market Performance - Stock indexes are showing slight recovery, supported by better-than-expected Q3 earnings from regional banks like Truist Financial and Regions Financial [4] - The S&P 500 Index is up +0.14%, the Dow Jones is up +0.43%, and the Nasdaq 100 is up +0.07% [5] Earnings Season - The Q3 earnings season is underway, with 78% of S&P 500 companies that have reported so far beating forecasts [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 and Bonds - The market is anticipating a 100% chance of a -25 basis point rate cut at the next FOMC meeting [7] - The 10-year T-note yield has increased to 3.992%, rebounding from a recent low [8][9] Sector Movements - Chipmakers and AI infrastructure stocks are experiencing declines, with Oracle down more than -5% [12] - Cryptocurrency-exposed stocks are also falling as Bitcoin prices drop, affecting companies like Coinbase and Riot Platforms [13] Company-Specific News - American Express reported Q3 EPS of $4.14, exceeding consensus estimates, leading to a +3% increase in stock price [16] - Truist Financial's Q3 non-interest income of $1.56 billion was better than expected, contributing to a +3% rise in its stock [16] - Micron Technology plans to stop supplying server chips to data centers in China, leading to a decline in its stock price [15]

Core Viewpoint - The recent increase in bad bank loans is expected to prompt the Federal Reserve to consider lowering interest rates, a move that investors are anticipating [1][2]. Group 1: Market Reactions - Wall Street experienced a decline, with the Dow Jones Industrial Average dropping nearly 0.7%, the S&P 500 losing 0.6%, and the Nasdaq Composite finishing down 0.5%, primarily driven by fears regarding the health of regional banks [2]. - Concerns about lending practices intensified following the bankruptcies of two auto industry-related companies, Tricolor and First Brands, alongside Zions Bancorporation reporting a $50 million loss on two commercial loans [3]. Group 2: Implications for the Federal Reserve - The emergence of bad loans serves as an early warning signal for the Federal Reserve to consider easing monetary policy, as these credit losses indicate a weakening economy [4]. - Lower borrowing rates are expected to stimulate the economy and reduce the likelihood of borrower defaults, which could benefit the overall market [4]. Group 3: Broader Market Impact - Despite the credit issues, it is suggested that these problems may not adversely affect the broader market, as the negative impact is likely to be contained primarily to the banks [5][6]. - The notion that bad loans are akin to "cockroaches," as stated by JPMorgan CEO Jamie Dimon, implies that there may be more underlying issues, but the overall market may remain resilient [5].