See the ‘Market Data’ post for tables & charts.
Good evening,
Cooler-than-expected US inflation data fueled a rally across risk assets, sending all major equity benchmarks to record highs. The S&P 500 gained 2% for the week, led by strength in technology and energy stocks. The 3% CPI print reinforced expectations for lower interest rates ahead of next week’s Fed meeting. Optimism was also supported by news that Trump will meet Xi Jinping, reopening hopes for renewed trade talks. For the week, crude oil surged nearly 8% on US sanctions against Russian producers, while gold slipped 2% after touching an all-time high. In currencies, the $ index was flat, the ¥ weakened 1.5% on Japan’s political shift, and core bond yields were little changed for the week.
Geopolitics: Trump announced the immediate termination of all trade negotiations with Canada, citing a Canadian advertisement featuring former President Reagan criticising tariffs as fraudulent and intended to interfere with US Supreme Court decisions. The ad, aired by Ontario during a major sports event, highlighted Reagan’s warnings about the long-term harm of tariffs on American workers and consumers. This move marks a significant deterioration in US-Canada trade relations, despite recent efforts to ease tensions through talks and tariff adjustments.
Economics:
→ US inflation edged slightly higher in September, with headline CPI rising 3.0% YoY (up from 2.9% in August but below the 3.1% forecast). Core CPI also increased 3.0%, undershooting expectations and easing from 3.1% in the prior month. Overall sentiment is mildly positive: inflation heated somewhat but remained contained and came below expectations. Futures markets continue to price in an almost certain (97% chance) 25bp rate cut at the Fed’s meeting next Wednesday. (see Market Data for inflation chart).
→ The University of Michigan Consumer Sentiment Index for October was revised down to 53.6 from 55.1 in September, marking a five-month low and missing expectations.
→ Japan’s headline CPI inflation rose 2.9% YoY, up from 2.7% in August, surpassing the Bank of Japan’s 2% inflation target and marking the fastest pace in four months. Core CPI, which excludes fresh food, also increased by 2.9%, while the broader core-core CPI (excluding both fresh food and energy) rose 3.0%, indicating sustained underlying inflation pressures mainly driven by higher food and energy prices. The BoJ meets next Thursday.
→ The PMI Composite readings show a mixed but overall positive outlook for major economies. The US PMI remains strong and continues to improve, signalling steady expansion. The €-zone PMI hit a 17-month high at 52.2, driven by robust growth in Germany (53.8), the strongest in over two years, with rising services activity and manufacturing stabilising. However, France remains a weak spot, with PMI falling further into contraction territory at 46.8, weighed down by political uncertainty and contracting services.
Earnings: Blue-chip names reporting today included P&G, HCA Healthcare, and General Dynamics, all beat top and bottom-line estimates, with modest but positive stock reactions.
→ The focus is on Ford (mcap $55bn), which reported yesterday evening and jumped over 12% today to a 14-month high, and accumulated a 40% YTD return. It’s today’s best-performing S&P 500 stock. Ford reported a record Q3 revenue of $50.5bn, up 9% YoY. Net income rose modestly by 1.6% to $2.4bn. Despite facing tariffs and supply disruptions, adjusted EBIT remained steady at $2.6bn.
Monetary Policy: The Central Bank of Russia cut its key policy rate by 50bp to 16.5%, marking its fourth consecutive reduction this year. The reduction was less than expected and came despite inflation pressures linked to new US sanctions, recent refinery attacks, and a proposed 2026 VAT increase. The ruble appreciated by ~2% today to 79.75 per $.
Deals: Friday was another quiet day for M&A. → Blackstone will pay $706mn to acquire a 10% stake in India’s Federal Bank (mcap $6.8bn), becoming its largest shareholder. The deal, completed through a preferential issue of convertible warrants, marks Blackstone’s first direct investment in an Indian bank and aims to strengthen Federal Bank’s capital base for growth in retail and digital lending.
→ In private markets, Swiss PE firm Partners Group sold a ~25% stake in Singapore-based global freight transportation group Apex Logistics for $1bn, to majority shareholder Kuehne+Nagel (mcap $22bn) of Switzerland.
Week Ahead:
M: US durable goods.
T: Visa, UnitedHealth, UPS, PayPal, HSBC earnings.
W: Fed and BoC policy meetings; Microsoft, Meta, Alphabet, Caterpillar, Santander, Boeing, Starbucks, GSK, Deutsche Bank earnings.
Th: Trump – Xi Jinping meeting in South Korea; ECB and BoJ policy meetings; US, €-zone, Germany, France, Italy GDP growth; Apple, Amazon, Eli Lilly, Mastercard, Shell earnings.
F: US PCE inflation; €-zone inflation; Exxon, Chevron, AbbVie, Colgate earnings.
That’s all for this week. Enjoy your weekend.
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