Economic Indicators - The University of Michigan's US Nov 1-year inflation expectations rose unexpectedly to +4.7%, surpassing the expected +4.6% [1] - The Nov 5-10 year inflation expectations decreased to +3.6%, below the anticipated +3.8% [1] - The US Nov consumer sentiment index fell by -3.3 to a nearly 3.5-year low of 50.3, weaker than the expected 53.0 [1] Stock Market Performance - US stock indexes initially declined but recovered later, closing mixed as Senate Democrats proposed a one-year extension of health care subsidies [3] - The S&P 500 Index closed up +0.13%, the Dow Jones Industrials Index up +0.16%, while the Nasdaq 100 Index fell -0.28% [4] - Semiconductor stocks faced pressure, contributing to broader market weakness, with significant job cuts announced by US companies [2] Corporate Earnings - Q3 corporate earnings season showed strong results, with 81% of S&P 500 companies beating forecasts, indicating the best quarter since 2021 [8] - Q3 profits are projected to rise by +7.2% y/y, the smallest increase in two years, while sales growth is expected to slow to +5.9% y/y [8] International Trade - China's October exports unexpectedly fell -1.1% y/y, the largest decline in 8 months, while imports rose +1.0% y/y, weaker than expectations [5] Government and Monetary Policy - The US government shutdown, now the longest in history, is impacting market sentiment and the economy, with a 66% chance of a -25 bp rate cut at the next FOMC meeting [6] - Fed Vice Chair Philip Jefferson's comments on interest rates being "somewhat restrictive" have contributed to a cautious market outlook [2][11] Notable Company Movements - Globus Medical (GMED) shares rose over +35% after reporting Q3 net sales of $769 million, exceeding expectations [13] - Expedia Group (EXPE) closed up more than +17% after reporting Q3 adjusted EPS of $7.57, significantly above consensus [13] - Microchip Technology (MCHP) shares fell over -5% after forecasting weaker-than-expected Q3 net sales [16]

Core Insights - U.S. consumer sentiment has declined to its lowest level in over three years, with a preliminary reading of 50.3 for November, significantly below the expected 53.2 [1][2] - The decline in consumer sentiment is attributed to concerns over the economic impact of the ongoing government shutdown, with a notable 6% drop in sentiment this month [3] Consumer Sentiment Breakdown - The decline in sentiment was widespread across demographics, including age, income, and political affiliation, with the exception of consumers in the top tercile of stock holdings, who saw an 11% increase in sentiment [5] - Current personal finances saw a 17% drop, while expectations for business conditions a year ahead fell by 11% [3] Inflation Expectations - Consumers' expectations for inflation increased slightly from 4.6% to 4.7%, although this remains lower than earlier readings [5] - Longer-term inflation expectations decreased from 3.9% to 3.6%, now below the midpoint of previous year's readings and the peak in April 2025 [6] Economic Context - Recent inflation trends have been influenced by rising tariffs, with the September consumer price index showing inflation at 3%, exceeding the Federal Reserve's target of 2% [7] - The Federal Reserve is focused on maintaining longer-term inflation expectations near its target as it considers interest rate adjustments [10]

The dollar index (DXY00) on Friday fell to a 1-week low and finished down by -0.15%.  The dollar moved lower on Friday due to some carryover pressure from Thursday, when a report from Challenger showed US job cuts in October surged by 175% y/y, the most in 22 years, bolstering the outlook for the Fed to keep cutting interest rates.  The dollar fell to its lows on Friday after the University of Michigan's US Nov consumer sentiment index fell more than expected to a nearly 3.5-year low. The dollar is still ...

Consumer Sentiment - U.S. consumer sentiment declined significantly in November, with the University of Michigan's preliminary reading at 50.3, down from 53.6 the previous month and below the estimated 53.0, indicating growing consumer pessimism [2][10] - The sub-indices showed a decrease in current conditions to 52.3 from 58.6, missing the estimate of 59.2, while consumer expectations fell to 49.0 from 50.3, also below the forecast [3][10] Inflation Expectations - Short-term inflation expectations for the next year increased slightly to 4.7% from 4.6%, exceeding the previous estimate of 4.6% [4][10] - In contrast, longer-term inflation expectations for five years decreased to 3.6% from 3.9%, falling short of the 3.8% estimate, suggesting a potential moderation in inflation over a longer horizon [5][10] Market Reaction - Following the release of the disappointing consumer sentiment data, major U.S. stock indices opened lower, with the Nasdaq down 173.93 points (0.75%), the Dow Jones down 210.30 points (0.45%), and the S&P 500 down 33.09 points (0.49%) [6][10] Corporate News - UBS raised its price target for AbbVie (ABBV) to $220 from $195, coinciding with the peak week of Q3 earnings season, where over 2,700 companies are scheduled to report [7][10]

Core Insights - The narrative of investors fleeing the dollar due to fears of currency debasement is contradicted by actual market data, particularly in the bond and foreign exchange markets [1][3]. Group 1: Market Performance - Precious metals have seen significant gains this year, with gold increasing by 50%, while silver and platinum have experienced even larger increases [2]. - Despite the rise in precious metals, the bond market shows stability, with the benchmark 10-year Treasury yield falling to 3.93%, its lowest level in over a year, and down nearly 60 basis points for the year [4]. Group 2: Inflation Expectations - The 10-year TIPS breakeven rate, indicating long-term inflation expectations, dropped to 2.275%, the lowest since June, while the 30-year TIPS breakeven rate reached 2.21%, its lowest since May [5]. Group 3: Currency Stability - The U.S. dollar, despite a poor first-half performance in 2025, has remained stable since April, with the dollar index ending last week close to its six-month average and outperforming G10 currency peers over the past month [5].

Summary of PBOC Q3 Surveys Industry Overview - The report focuses on the banking and financial sector in China, specifically the People's Bank of China (PBOC) and its quarterly surveys of bank loan officers, enterprises, and urban depositors [1][3]. Key Findings 1. **Loan Demand and Approval** - Loan demand increased slightly in Q3 2025, with the index rising to 58.0 from 56.2 in Q2 2025 [6] - Loan approval index remained stable at 53.9 in both Q3 and Q2 2025 [6] - Bankers anticipate a slightly less accommodative monetary policy in the next quarter, with the sentiment index dropping to 73.5 from 75.5 [6] 2. **Business Conditions** - The business conditions index for enterprises improved to 50.1 in Q3 2025 from 49.3 in Q2 2025, indicating a marginal recovery [9] - Export orders index rose to 44.7 from 43.2, while domestic orders remained unchanged [9] - Price indices for raw materials and sales increased, suggesting inflationary pressures [9] 3. **Urban Depositors' Sentiment** - Urban depositors reported a decline in inflation expectations and employment sentiment, with the net share expecting rising property prices slightly decreasing to -13.6% from -13.5% [6][9] - The willingness to consume decreased to 19.9% from 22.4%, while the desire to invest rose to 18.7% from 13.5% [9] - The share of households wanting to save more decreased from 64.1% to 61.2%, likely influenced by a recent stock market rally [9] Additional Insights - The surveys included responses from 5,000 enterprises and 20,000 urban depositors across 50 cities, providing a comprehensive view of economic sentiment [3] - The mixed signals from the surveys indicate a cautious optimism in loan demand and business conditions, but persistent bearish sentiment in the property market and consumer spending [1][9] Conclusion - The PBOC's Q3 surveys reflect a complex economic landscape in China, with slight improvements in loan demand and business conditions, but ongoing challenges in consumer sentiment and property market expectations [1][9]

Market Overview - The Consumer Price Index (CPI) for September is set to be released at 8:30 AM Eastern, which is expected to significantly influence monetary policy expectations and could lead to market volatility if it deviates from forecasts [1] - Updated readings on Manufacturing, Services, and Composite PMIs for October will be released at 9:45 AM Eastern, providing insights into economic momentum following the Federal Reserve's policy stance [2] SPDR S&P 500 ETF Trust (SPY) - SPY opens at 673.75, with potential upward movement towards 675.00, 676.20, and possibly 677.40 if bullish momentum continues [4] - If SPY falls below 673.75, it may decline to 672.45, with further downside risks reaching 671.15 and 669.95 [5] Invesco QQQ Trust Series 1 (QQQ) - QQQ starts at 613.75, with upward targets at 614.90, 616.05, and 617.20 if bullish sentiment prevails [6] - A drop below 613.75 could lead to declines towards 612.50 and 611.30, with further weakness potentially reaching 610.10 [7] Apple Inc. (AAPL) - AAPL opens at 260.50, with potential upward movement towards 261.45, 262.40, and 263.35 if the stock holds above its recent higher base [8] - If AAPL slips below 260.50, it may decline to 259.55, with further downside risks reaching 258.60 and 257.65 [9] Microsoft Corp. (MSFT) - MSFT begins at 521.75, with upward targets at 522.95, 524.20, and 525.40 if bullish momentum continues [10] - A break below 521.75 could lead to declines towards 520.55 and 519.35, with heavier downside risks reaching 518.10 [11] NVIDIA Corporation (NVDA) - NVDA opens at 183.25, with potential upward movement towards 184.30, 185.35, and 186.40 if accumulation continues [12] - If NVDA loses 183.25, it may decline to 182.20, with further downside risks reaching 181.15 and 180.10 [13] Alphabet Inc Class A (GOOGL) - GOOGL starts at 256.25, with upward targets at 257.20, 258.15, and 259.10 if the stock maintains its positive tone [14] - A failure to hold above 256.25 could lead to declines towards 255.25 and 254.20, with deeper selling risks reaching 253.15 [15] Meta Platforms Inc (META) - META opens at 737.50, with potential upward movement towards 739.70, 741.85, and 744.00 if bullish sentiment remains strong [16] - If META falls below 737.50, it may decline to 735.35, with further downside risks reaching 733.20 and 731.10 [17] Tesla Inc. (TSLA) - TSLA begins at 446.25, with upward targets at 447.85, 449.45, and 451.00 if buyers build a firmer base [18] - A drop below 446.25 could lead to declines towards 444.65 and 443.05, with heavier downside risks reaching 441.50 [19]

Group 1: Dollar Index and Economic Indicators - The dollar index (DXY00) is up by +0.07% and is just below a one-week high, supported by a rise in US existing home sales to a 7-month high of 4.06 million, reflecting a +1.5% month-over-month increase [1][2] - Higher T-note yields have strengthened the dollar's interest rate differentials, while weakness in the yen has also benefited the dollar as it fell to a 1.5-week low [1][6] - The ongoing US government shutdown is limiting dollar gains, with potential implications for the US economy and Federal Reserve interest rate decisions [1] Group 2: Euro and Consumer Confidence - The EUR/USD pair is up by +0.01%, recovering from overnight losses due to an unexpected rise in the Eurozone's October consumer confidence indicator to an 8-month high of -14.2, which was stronger than expectations [4][5] - Central bank divergence is supporting the euro, as the Fed is expected to continue cutting interest rates while the ECB nears the end of its rate-cutting cycle [4] Group 3: Precious Metals Market - December COMEX gold is up by +89.00 (+2.19%) and December COMEX silver is up by +1.114 (+2.34%), rebounding after two days of losses [7] - The rise in precious metals is attributed to sanctions on Russian oil producers, which have led to a surge in crude prices and increased inflation expectations, boosting demand for gold and silver as hedges against inflation [7]

Inflation Outlook - Inflation is not generalized, with much of it concentrated in services, unrelated to tariffs [1] - One-time price adjustments are not inflationary and lead to spending adjustments elsewhere [1] - Inflation expectations are well-anchored [2] Pricing Strategies - Exporters are lowering prices [2] - Corporate America has room to absorb costs [2]

Economic Data - The preliminary University of Michigan Consumer Sentiment report for October showed a top-line figure of 55, slightly down from 55.1 in September, but above the expected 54.2 [2][3] - Current expectations increased to 61 from 60.4, indicating a stable confidence in the present economy, while future expectations declined to 51.2 from 51.7, reflecting a more pessimistic outlook [3] - Inflation expectations remained stable, with consumers anticipating a 4.6% rise over the next year and 3.7% over the next five years [4] Stock Market Performance - The U.S. stock market opened with the Dow up by 0.59%, while the S&P 500, Nasdaq, and Russell 2000 also showed positive movements [5] - Strong earnings reports from companies like Delta, PepsiCo, and Levi Strauss contributed to a positive sentiment, with Delta benefiting from premium seat revenue and higher airfares, PepsiCo seeing increased volume, and Levi Strauss leveraging e-commerce and price hikes [6] Market Sentiment - Despite positive earnings reports, there was a tepid mood among tech stocks, particularly following news of a potential cyberattack affecting enterprises using certain Oracle software [6][7]