Ten Stories Moving the Market

Ten Stories Moving the Market:

Federal Reserve Bank of Cleveland President Beth Hammack said on Monday she hopes the Fed can lower inflation without damaging ​the job market, but that may entail cooling the blistering pace of corporate investment or the market-driven wealth gains fueling personal consumption – Reuters. (Why you should care – Hammack, the most hawkish policymaker, said she would have an “open mind” at the upcoming FOMC meeting)

JPMorgan Chase reported a surprise drop in fixed-income trading revenue in the third quarter, the first such decline in more than two years; the fixed-income haul fell 4% from a year earlier, bringing total trading revenue to $10.3 billion for the period compared to the expectation for $10.5 billion – Bloomberg. (Why you should care – uncertainty around how far bond yields may rise could be hampering demand for debt)

Wells Fargo posted an increase in third-quarter profit, helped by growth in its loan ​book and higher interest income; the bank has been able to deploy more ⁠of its balance sheet since the Federal Reserve removed a years-long regulatory cap ​on its assets, giving it greater room to compete for loans – Reuters. (Why you should care - CEO ‌Charlie ⁠Scharf said the bank’s consumer and business customers continue to do well)

Meta released long-awaited artificial intelligence model Muse Wonder on Monday, a milestone that will test whether its multibillion-dollar push to rebuild its AI organization has improved its technology enough to compete among leaders – Bloomberg. (Why you should care – this is could drive more broad-based adoption of agentic AI by households, increased demand for already scarce compute capacity)

Anthropic has warned that rogue “AI worms” will soon be able to hijack smart home devices such as ovens and TVs, creating a new cyber security threat that will be difficult to contain – FT. (Why you should care – the company continues to push for a regulatory moat around its business ahead of the upcoming IPO an the increasing release of cheaper open-weighted models)

The global economy will still manage to top 3% real GDP growth this year as strong AI investment offsets the energy ​shock from the war in the Middle East, but downside risks are mounting and more countries are being left behind and vulnerable to rising debt loads, according to the International Monetary Fund – Reuters. (Why you should care – the IMF’s guidance for 3.1% global economic growth this year is up from is 3.1% forecast in July)

President Trump says he struck a diesel-supply deal with Russia, but it likely won’t do much to ease fuel prices ahead of next month’s midterm elections; the deal is getting strong pushback in Washington from lawmakers on both sides of the aisle who question its legality – WSJ. (Why you should care – analysts anticipate the amount of supply involved is too small to have any real effect on global diesel prices)

President Donald Trump's envoys told Ukrainian officials that a deal to allow Russian diesel exports is part of a ​bid to draw Russia back to negotiations after the failure of previous efforts to launch sustained talks to end the war – Reuters. (Why you should care – a broader and comprehensive peace agreement between Ukraine and Russia would help to unlock a swath of commodity supplies that have held back from global markets)

U.K. Prime Minister Andy Burnham said Iran’s Islamic Revolutionary Guard Corps was “almost certainly” responsible for an alleged terror plot at a British airbase used by the U.S.; Burnham leveled the formal accusation against Iran during his first appearance in Parliament since the incident late last month at RAF Fairford – Bloomberg. (Why you should care – the foiled plot is likely to complicate Strait of Hormuz negotiations)

Major economies are defying the Middle East energy shock as surging AI spending helps sustain growth, but turmoil in sovereign debt markets will loom over this week’s IMF and World Bank meetings - FT. (Why you should care – the headlines are likely to focus on commentary about AI hazards and rising fiscal debt stress)

Pre-Market Levels:

S&P Futures -0.12%, Nasdaq Futures -0.74%, Dow Jones Futures +0.34%, Russell 2000 Futures +0.26%

Europe:EuroStoxx 50 -0.03%, U.K. FTSE +0.69%, German DAX +0.33%, French CAC +0.17%, Italian MIB +0.42%, Spanish IBEX +0.08%

Asia:Japan’s Nikkei -1.82%, Japan’s TOPIX +0.14%, China’s Shanghai Composite +0.10%, Hong Kong Hang Seng +0.30%, South Korea’s KOSPI -5.46%, Taiwan’s TSE -2.11%

Currencies:Dollar -0.29%, Euro +0.28%, Japanese Yen +0.30%, British Pound +0.24%, Canadian Dollar +0.15%, Swedish Krona +0.41%, Swiss Franc +0.21%

Risk:VIX +1.58%, Bitcoin +0.12%, Ethereum -1.62%

Growth:

WTI Crude -1.96%, Brent Crude -1.75%, Nat Gas -1.36%, Copper +0.18%

Safety:

Gold +0.42%, Silver +0.14%

Sovereign Bonds:

U.S. 10-Year -5.9bps at 5.185%

U.S. 2-Year -2.5bps at 4.766%

German 10-Year -3.9bps at 3.438%

French 10-Year -8.2bps at 4.817%

U.K. 10-Year -5.7bps at 5.390%

Japan 10-Year +1.7bps at 3.023%

Economic Calendar:

Earnings: JPM, JNJ, UNH, GS, WFC, C, DPZ

Germany - CPI for September (Final) (2 a.m.)

Fed's Waller (Board, Governor) Speaks (3:45 a.m.)

U.S. - NFIB Small Business Optimism Index for September (6 a.m.)

OPEC - Monthly Oil Market Report (6 a.m.)

U.S. - ADP Weekly Employment Change (8:15 a.m.)

U.S. - Existing Home Sales for September (10 a.m.)

Treasury Auctions $95 Billion in 13-Week Bills (11:30 a.m.)

Treasury Auctions $82 Billion in 26-Week Bills (11:30 a.m.)

BoE's Dhingra (MPC Member) Speaks (12 p.m.)

Treasury Auctions $95 Billion in 6-Week Bills (1 p.m.)

Fed's Barkin (Richmond, Non-Voter) Speaks (1 p.m.)

U.S. - Monthly Budget Statement for September (2 p.m.)

Fed's Collins (Boston, Non-Voter) Speaks (4 p.m.)

China – CPI, PPI for September (9:30 p.m.)

IMF - Fiscal Monitor Released (10 p.m.)

China - Trade Balance for September (11 p.m.)

BoE's Breeden (Deputy Governor) Speaks (11:30 p.m.)