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Briefing.com Summary:
*Early signals point to a mixed start for the major indices.
*September import and export prices had their share of not-good inflation readings.
*Netflix is getting a new Chief Content Officer while Tesla lovers are getting a new Roadster.
The story at the start of yesterday's trade was the fallout in the AI trade. The story at the end of yesterday's trade was the impressive intraday rebound in the AI trade, which included semiconductor stocks, mega-cap stocks, and high-beta names.
The Nasdaq Composite had been down 1.4%, but it ended the session up 0.1%. The Philadelphia Semiconductor Index had been down 4.4%, but it ended the day down 0.9%.
Today, the setup is mixed ahead of the opening bell. The S&P 500 futures are up 10 points and are trading 0.1% above fair value, the Nasdaq 100 futures are down 75 points and are trading 0.4% below fair value, and the Dow Jones Industrial Average futures are up 46 points and are trading 0.1% above fair value.
It is a fitting indication going into the last trading day of a week that has seen some ample volatility in Treasury yields, some disarming inflation data, geopolitical rancor, and generally underwhelming reactions to better-than-expected earnings results.
That is all on display again this morning.
- The 10-yr note yield scraped 5.07% overnight, hit 5.12% a short time ago, and now stands at 5.11%.
- September import prices were up 1.1% month-over-month and 8.1% year-over-year. Excluding fuel, they were up 0.7% month-over-month and 6.0% year-over-year. Export prices jumped 2.2% month-over-month and were up 11.6% year-over-year. Excluding agricultural products, export prices rose 2.1% month-over-month and were up 11.8% year-over-year.
- President Trump said he doesn't intend to use nuclear bombs or ground forces in Iran, but he hasn't ruled out the possibility of using the "Mother of All Bombs."
- Travelers (TRV) is down 3.4% after topping the Q3 FactSet consensus EPS estimate by $1.79.
Some other matters of note are in today's mix.
Fed Chair Warsh spoke at an IMF gathering in Bangkok. Not surprisingly, he refrained from providing any forward guidance, but he did voice some optimism about the economy and acknowledged the synchronous policy tightening by global central banks.
Reports suggest the balance of his remarks was interpreted as a basis to think that the Fed will leave the policy rate unchanged at the October 27-28 meeting. The fed funds futures market has corroborated that thinking, placing the probability of a 25-basis-point hike at just 14.9% now, according to the CME FedWatch Tool, versus the 50ish% probability seen shortly after the September CPI report.
On the corporate news front, the AI trade has had a little wind taken out of its rebound sails, with Reuters reporting that investors are considering a lower valuation for Anthropic's IPO after yesterday's revenue update and CoreWeave (CRWV) back on the defensive; Netflix (NFLX) is down 3.7% after the news that it will be replacing its Chief Content Officer; and Tesla (TSLA) is getting a 3.0% boost after unveiling its next-generation Roadster, which comes with SpaceX (SPCX) thrusters that allow the car to hover.
That is truly next-generation, alright, and it is thrilling to see. The thrill for market participants right now, though, is entertaining the thought of what comes next for the stock market. That is a hard thought to unpack with today's mixed indications.
