A daily market update from FS Insight — what you need to know ahead of opening bell
“You can’t cross the sea merely by standing and staring at the water.” ― Rabindranath Tagore
Overnight
‘Godfather of AI’ shares Nobel Physics Prize BBC
Hurricane Milton Churns Toward Florida as Category 4 Storm WSJ
China announces more support for economy but holds back on major spending package AP
Google must make it easier for app stores to compete on Android, judge rules WSJ
Nvidia supplier Foxconn to make Blackwell AI servers in Mexico FT
Cboe to list hedged ADRs developed by Precidian RT
Goldman Sachs sees recent market rally setting stage for more IPOs BBG
Three startups aim to raise $400 mln as US biotech IPOs gain traction RT
Stellantis files new lawsuits against United Auto Workers union RT
Customers of failed crypto firm FTX set for refunds BBC
SMCI says it is shipping over 100K GPUs per quarter, and that it has delivered 2K liquid cooled racks since Jun-24 RT
US Supreme Court denies Uber, Lyft bid to avoid California driver suits RT
German factories fall further behind as orders sink WSJ
BP reportedly abandons goal to cut oil output, resets strategy RT
Antisemitic incidents in US surge to record high – report BBC
Supreme Court rejects Martin Shkreli fine appeal CNBC
Lead drinking-water pipes must be replaced nationwide, E.P.A. says NYT
Saudi tycoon plans comeback with world’s tallest tower FT
Chart of the Day
| Overnight |
| S&P Futures +20
point(s) (+0.3%
) Overnight range: -20 to +23 point(s) |
| APAC |
| Nikkei -1.0%
Topix -1.47% China SHCOMP +4.59% Hang Seng -9.41% Korea -0.61% Singapore -0.65% Australia -0.35% India +0.86% Taiwan -0.4% |
| Europe |
| Stoxx 50 -0.74%
Stoxx 600 -0.69% FTSE 100 -1.18% DAX -0.45% CAC 40 -0.91% Italy -0.3% IBEX -0.31% |
| FX |
| Dollar Index (DXY) -0.15%
to 102.38 EUR/USD +0.13% to 1.099 GBP/USD +0.08% to 1.3094 USD/JPY -0.22% to 147.85 USD/CNY +0.49% to 7.0533 USD/CNH -0.22% to 7.0558 USD/CHF +0.02% to 0.8547 USD/CAD +0.15% to 1.3641 AUD/USD -0.43% to 0.6728 |
| Crypto |
| BTC -0.89%
to 62450.96 ETH -0.53% to 2428.47 XRP -1.18% to 0.529 Cardano -0.87% to 0.3521 Solana -0.58% to 143.12 Avalanche -1.45% to 26.49 Dogecoin -2.98% to 0.1075 Chainlink -1.86% to 11.05 |
| Commodities and Others |
| VIX -1.99%
to 22.19 WTI Crude -2.06% to 75.55 Brent Crude -1.96% to 79.34 Nat Gas +0.58% to 2.76 RBOB Gas -1.94% to 2.112 Heating Oil -2.16% to 2.344 Gold -0.07% to 2640.85 Silver -1.29% to 31.27 Copper -2.58% to 4.449 |
| US Treasuries |
| 1M -3.1bps
to 4.8179% 3M -6.7bps to 4.5793% 6M -1.3bps to 4.4222% 12M -5.7bps to 4.1673% 2Y -3.7bps to 3.9582% 5Y -2.3bps to 3.8426% 7Y -1.5bps to 3.9114% 10Y -1.2bps to 4.0139% 20Y -0.7bps to 4.3688% 30Y -0.3bps to 4.302% |
| UST Term Structure |
| 2Y-3
M Spread narrowed 0.4bps to -66.5
bps 10Y-2 Y Spread widened 2.3bps to 5.1 bps 30Y-10 Y Spread widened 0.8bps to 28.5 bps |
| Yesterday's Recap |
| SPX -0.96%
SPX Eq Wt -0.78% NASDAQ 100 -1.17% NASDAQ Comp -1.18% Russell Midcap -0.82% R2k -0.89% R1k Value -0.72% R1k Growth -1.16% R2k Value -0.76% R2k Growth -1.02% FANG+ -1.51% Semis +0.16% Software -1.36% Biotech -1.21% Regional Banks -0.45% SPX GICS1 Sorted: Energy +0.35% Materials -0.17% Indu -0.29% Healthcare -0.49% Tech -0.68% REITs -0.73% SPX -0.96% Cons Staples -1.1% Fin -1.24% Cons Disc -1.92% Comm Srvcs -1.97% Utes -2.32% |
| USD HY OaS |
| All Sectors +5.9bp
to 341bp All Sectors ex-Energy +5.7bp to 318bp Cons Disc +7.6bp to 300bp Indu +0.1bp to 248bp Tech +5.3bp to 337bp Comm Srvcs +3.5bp to 558bp Materials +5.9bp to 315bp Energy +4.2bp to 311bp Fin Snr +6.1bp to 301bp Fin Sub -0.9bp to 211bp Cons Staples +10.8bp to 323bp Healthcare +9.3bp to 372bp Utes +9.7bp to 215bp * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 10/8 | 6AM | Sep Small Biz Optimisum | 92.0 | 91.2 |
| 10/8 | 8:30AM | Aug Trade Balance | -70.5 | -78.791 |
| 10/9 | 2PM | Sep 18 FOMC Minutes | n/a | 0.0 |
| 10/10 | 8:30AM | Sep CPI m/m | 0.1 | 0.2 |
| 10/10 | 8:30AM | Sep Core CPI m/m | 0.2 | 0.3 |
| 10/10 | 8:30AM | Sep CPI y/y | 2.3 | 2.5 |
| 10/10 | 8:30AM | Sep Core CPI y/y | 3.2 | 3.2 |
| 10/11 | 8:30AM | Sep PPI m/m | 0.1 | 0.2 |
| 10/11 | 8:30AM | Sep Core PPI m/m | 0.2 | 0.3 |
| 10/11 | 10AM | Oct P UMich 1yr Inf Exp | 2.7 | 2.7 |
| 10/11 | 10AM | Oct P UMich Sentiment | 71.0 | 70.1 |
| 10/14 | 11AM | Sep NYFed 1yr Inf Exp | n/a | 3.0 |
MORNING INSIGHT
Good morning!
Hurricanes, Israel-Iran, and Trump’s gains in betting markets join a heavy macro calendar in adding to “uncertainty,” which is why markets are choppy. We continue to watch the VIX – the uninversion of the 4M-less-1M would signal less choppiness ahead.
Click HERE for more.
TECHNICAL
- Short-term SPX breakout should lead back to new highs over next 1-2 weeks.
- Crude oil, FXI, Utilities and Treasury yields all look to be nearing resistance.
Click HERE for more.
CRYPTO
Starting in 2025, banks across North America, Europe, and Asia will use SWIFT’s network to trial live digital asset and currency transactions, transitioning from experimental phases to real-world implementation. These trials will demonstrate SWIFT’s capability to integrate digital assets into the traditional financial system.
Click HERE for more.
First News
The mining giant Rio Tinto confirmed yesterday that it was negotiating to buy Arcadium, a leading producer of lithium. Arcadium’s assets include lithium mines, processing facilities, and deposits in Argentina, Australia, Canada, and the U.S. The company’s stock price had fallen by roughly 50% YTD – consistent with a similar drop in lithium prices this year, but with many expecting steeply rising demand, Rio Tinto likely hopes to expand its market share in the metal.
Both the Biden and Trump administrations have increasingly recognized the importance of lithium and other materials used in leading-edge technologies, including those being developed for power storage, green energy, and defense. The issue is one with bipartisan support, with both parties recognizing that the U.S is seriously vulnerable to supply-chain disruptions of 50 critical minerals. Recent government data shows that of these, the U.S. is 100% dependent on imports for 12, and at least 50% dependent for 31 others. China is the largest supplier to the U.S. for 26 out of 50 critical minerals.
Rectifying this has become a security priority, with the U.S. seeking diplomatic alliances around the world – particularly with India, Australia, and Japan. Last Friday, Sens. John Hickenlooper (D-Colorado), Chris Coons (D-Delaware), Lindsey Graham (R-South Carolina), and Todd Young (R-Indiana) last Friday (October 4) co-sponsored new legislation that proposes to fund a Department of Energy (DOE) initiative to develop at least three domestic projects to help rectify the situation, using derivatives and other financial instruments if necessary.
U.S. State Department officials yesterday accused China of deliberately overproducing lithium and other materials to drive global competitors out of business. Meeting with officials in Portugal, a major lithium producer, the State Department’s Jose Fernandez, under secretary for economic growth, energy and the environment, told reporters that China’s producers “engage in predatory pricing… (they) lower the price until competition disappears.“
Others have called for expanding of the Strategic Petroleum Reserve (SPR) to include stockpiles of critical materials (and renaming it the Strategic Resilience Reserve), using it to help improve financial markets’ and private mining companies’ resilience to commodity-related price shocks, whether deliberately caused (by China flooding the market, for example) or occurring due to supercycles, in much the same way that the Federal Reserve uses open market operations to control money supply. FT, CFR, WSJ