A daily market update from FS Insight — what you need to know ahead of opening bell

“Integrity, wisdom, skill, intelligence – such things are forged in adversity.” – Mencius

Overnight

Helene lashes the South with wind and flood rains after coming ashore as a Category 4 storm AP

Newsmax and Smartmatic settle defamation lawsuit over false 2020 election claims WSJ

Ports seek order to force dockworkers to bargaining table as strike looms at East and Gulf ports AP

Japan’s scandal-hit ruling party picks next ex-Defense Minister Shigeru Ishiba as next PM BBC

Chinese stocks post best week since 2008 after stimulus blitz FT

US economy grew at a solid 3% rate last quarter, government says in final estimate AP

French preliminary inflation eases more than expected in September RT

U.S. new vehicle sales expected to have struggled during third quarter CNBC

UK clears Amazon’s AI partnership with Anthropic RT

Super Micro stock plunges on report of Justice Department investigation BAR

EU privacy regulator fines Meta 91 million euros over password storage RT

Costco posts major earnings beat, but misses on these metrics IBD

Swiss National Bank delivers third straight rate cut WSJ

China’s newest nuclear submarine sank, setting back its military modernization WSJ

Earth to briefly gain second ‘moon’, scientists say BBC

Chart of the Day

MORNING INSIGHT

Good morning!

This week’s most “incremental” development, which therefore represents the most positive surprise for markets, is the drastically positive actions taken by China’s PBOC and government. We want our clients to take advantage of this upside breakout in China equities, most evident in broader China (FXI 0.85% )

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TECHNICAL

• Short-term bullish trend looks to be reasserting itself after Thursday’s gains.
• Consumer Discretionary and Materials have both begun to gain strength.
• Healthcare is being lowered to Neutral, technically given this week’s breakdown.

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CRYPTO

• Successful economic support from the PBOC and MOF could boost the broader Asian economy, providing a tailwind for APAC capital flows into crypto over the coming quarters. 
• As year-end approaches, we remain optimistic about the crypto outlook, viewing the market’s lean toward a soft landing as constructive for prices. 

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First News

Rondo Alla Turca. Turkey made prominent headlines in three separate stories yesterday, not all of them particularly flattering. In New York City, Mayor Eric Adams was indicted on fraud and bribery charges. Federal prosecutors described an alleged scheme that ran for 10 years, accusing Adams of – among other things – soliciting cash and luxury travel from Turkish government officials. In return, the indictment claims, Adams successfully pressured the Fire Department of New York to approve the opening of a new Turkish Mission to the United Nations despite safety concerns at the time that should have caused the 36-story skyscraper to fail inspection. Adams denied the charges, and Turkish officials did not respond to requests for comment.

The Republic of Turkey also notched its largest international bond sale ever, raising $3.5 billion by selling 10-year dollar bonds with a 6.75% yield. Investors swapped about $1.9 billion in debt maturing through 2025, and the country raised about $1.6 billion in fresh funds. It was the country’s fourth international bond sale of the year, and no doubt welcome news to Turkish President Recep Tayyip Erdoğan, who is in New York for the United Nations General Assembly. 

Perhaps in matter with more emotional resonance to the everyday Turk, it was reported that Turkey has sought authorization from the European Commission to regulate what can and cannot legally be called döner kebab, a widely popular street food that involves roasting spiced beef, lamb, and/or chicken on vertical spits. Turkey wants authority to set the standards as to what kinds of meat are used, what spices are used to marinate it, and how the meat is sliced. Germany objected strenuously to the proposal – döner kebab arrived there via Turkish immigrants in the 1970s, and in the years since it has evolved somewhat from its roots as it became popular with the broader German population. “The kebab is part of Germany,” the German Ministry of Food and Agriculture argued. “There’s no need for guidelines from Ankara.” The EC has given the two countries six months to come up with a compromise agreement before it makes a ruling. POL, EC, FT 

Getting the message. Recent news regarding messaging platforms shows the continued difficulty in balancing civil rights and public safety. The Wall Street Journal recently reported on the disappearance of one of China’s most prominent economists after he criticized Xi Jinping’s economic policies in a private chat group on Tencent’s WeChat platform. Until his disappearance this spring, Zhu Hengpeng, was deputy director of the Institute of Economics at the Chinese Academy of Social Sciences. It is unclear precisely what he wrote to displease authorities, though the WSJ described the content as “comments about China’s flagging economy and veiled criticism of Xi that referred to his mortality.”

Yet at the same time, online chat platforms that safeguard user privacy have also come under fire. Telegram has long been roundly criticized for its famous (or infamous) refusal to assist authorities with search warrants seeking to surveil its users. Telegram CEO Pavel Durov was arrested in France this August after authorities there accused him of failing to do enough to stop the spread of illegal content on his platform, content that allegedly included child pornography, extremist and terrorist content, and drug-trafficking communications. It was also the platform of choice for protesters organizing opposition efforts against authoritarian regimes, such as Russia and Iran. 

Initially defiant after his arrest in France, Durov conveyed a more compliant message on Monday, telling users on his platform that Telegram had changed its user and content-moderation policies. He also wrote that Telegram would henceforth comply with “valid government requests” for user information.  

It’s worth noting that last week, Ukraine made a contrasting assertion, accusing the platform of working with Russian authorities. In response, Ukraine banned all government and military personnel, as well as defense-sector and infrastructure employees, from installing or using Telegram on their official mobile devices. “Telegram is actively used by the enemy for cyber-attacks, the distribution of phishing and malicious software, user geolocation and missile strike correction,” Ukrainian intelligence officials asserted, claiming that Russian intelligence officials can even access deleted messages of Telegram users. (BBG, BBC, WSJ)