Ten Stories Moving the Market

Ten Stories Moving the Market:

TSMC, the world's largest contract chipmaker, reported record third-quarter revenue of T$1.49 trillion ($46.71 billion), beating the market ​forecast and rising 50% from the year-earlier period; TSMC ​is expected to report a 64% on-year rise in ​third- ⁠quarter net profit to T$740.8 billion – Reuters. (Why you should care – the results speak to the continued strength in demand for AI infrastructure products)

Federal Reserve Governor Christopher Waller said further interest-rate hikes will likely be needed to slow inflation, though officials have some flexibility on timing and don’t need to tighten at consecutive policy meetings – Bloomberg. (Why you should care – while the headlines sound slightly hawkish, Waller’s implying there’s no need to raise rates at the October FOMC meeting)

Samsung Electronics projected its quarterly ​profit would top 100 trillion won ($80 billion), a world first for a technology company, estimating a nearly nine-fold jump in third-quarter ‌earnings – Reuters. (Why you should care – this marked the fourth straight quarter of record operating profit, driven by a global shortage of memory products)

China is building data centers at rapid speed across its energy-rich hinterland, as Beijing seeks to turn abundant electricity and cheap land into an advantage in the global race to develop AI – FT. (Why you should care – the government in Beijing has outlined AI progress as a national strategic priority)

Federal Reserve officials unanimously backed the decision in September to raise interest rates, with many supporting the move to guard against the risk of intensifying inflation pressures; a separate group of officials said higher rates were necessary based on their outlook for the economy – Bloomberg. (Why you should care – the minutes show most officials see the need for one more rate hike before the end of the year)

The White House has asked the Pentagon to develop strike options against Iranian targets that could be exercised ahead of the midterms, according to administration officials; the planning underscores just how much the president wants to reduce gas prices and demonstrate progress in the conflict before the vote – The Atlantic. (Why you should care – Wall Street currently anticipates strikes after the midterms, so the article could create headline volatility around oil)

Top Russian and U.S. officials have held talks about bringing a U.S. investor into the Nord Stream pipelines that delivered gas to Germany before Russia invaded Ukraine; while a ⁠gas deal would please the Kremlin, it would split German public opinion, which is divided over buying Russian energy – Reuters. (Why you should care – any such deal would likely face high hurdles in Europe)

OpenAI stoked a price war with Anthropic this summer with the release of its GPT-5.6 lineup—Sol, Terra, and Luna—giving customers access to models with varying capabilities, including some that are less expensive to run – WSJ. (Why you should care - Businesses grappling with mounting costs as more employees experimented with artificial intelligence are increasingly realizing they didn’t always need the most advanced options for most tasks)

The spike in French bond yields is mostly driven by the country’s crushing debt, politicians’ inability to agree on a solution, and, perhaps, the remote prospect of a truly extreme solution: default; in August far-left leader Jean-Luc Mélenchon, a candidate in next year’s presidential election, suggested canceling all the government debt held by the Bank of France – WSJ. (Why you should care – while the prospect of France defaulting on its obligations is very low, the rhetoric will stoke fear until the election campaign ends next year)

PepsiCo warned that growth and margin recovery in its key North American market ‌was taking longer than planned and said it would pursue additional cost cuts to offset sluggish demand for its snacks and beverages – Reuters. (Why you should care – the company anticipates rising costs will weigh on fourth quarter margins)

Pre-Market Levels:

S&P Futures -0.44%, Nasdaq Futures -0.68%, Dow Jones Futures -0.74%, Russell 2000 Futures -0.82%

Europe:

EuroStoxx 50 -1.03%, U.K. FTSE -0.22%, German DAX -0.99%, French CAC -0.61%, Italian MIB -1.12%, Spanish IBEX -0.80%

Asia:

Japan's Nikkei -1.42%, Japan's TOPIX -1.72%, China's Shanghai Composite -0.79%, Hong Kong Hang Seng -1.43%, South Korea's KOSPI -2.62%, Taiwan's TSE -1.28%

Currencies:

Dollar +0.16%, Euro -0.09%, Japanese Yen -0.15%, British Pound -0.05%, Canadian Dollar -0.07%, Swedish Krona +0.03%, Swiss Franc -0.12%

Risk:

VIX +4.51%, Bitcoin -1.40%, Ethereum -1.50%

Growth:

WTI Crude +4.44%, Brent Crude +4.42%, Nat Gas +1.78%, Copper -0.18%

Safety:

Gold +0.21%, Silver -2.06%

Sovereign Bonds:

U.S. 10-Year +4.7bps at 5.324%

U.S. 2-Year +4.4bps at 4.808%

German 10-Year +2.4bps at 3.505%

French 10-Year +1.9bps at 4.888%

U.K. 10-Year +3.6bps at 5.485%

Japan 10-Year +1.7bps at 3.101%

Economic Calendar:

Earnings: PEP

Germany - Trade Balance for August (2 a.m.)

U.K. - BoE Credit Conditions Survey (4:30 a.m.)

Fed's Waller (Board, Voter) Speaks (4:30 a.m.)

Eurozone - Eurogroup Meetings (6 a.m.)

ECB's Lane (Chief Economist) Speaks (6 a.m.)

BoE's Pill (Chief Economist) Speaks (6:30 a.m.)

ECB - Account of Monetary Policy Meeting (7:30 a.m.)

BoE's Bailey (Governor) Speaks (8:15 a.m.)

U.S. - Initial Jobless Claims (8:30 a.m.)

U.S. - Continuing Claims (8:30 a.m.)

U.S. - Wholesale Inventories for August (10 a.m.)

U.S. - EIA Natural Gas Storage (10:30 a.m.)

Treasury Auctions $22 Billion in 30-Year Bonds (1 p.m.)

Fed's Musalem (St. Louis, Non-Voter) Speaks (1:40 p.m.)

Fed's Balance Sheet Update (4:30 p.m.)

Japan - Household Spending for August (7:30 p.m.)