Mon 20 Oct: After the Bell
🎙️📄+ Market Data.
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Good evening,
Global stocks rallied on Monday, boosted by optimism over a potential US-China trade deal, a strong day for Apple, propelled by robust iPhone 17 sales, and growing expectations of a resolution to the US government shutdown. The Nasdaq Composite gained 1.4% ahead of a busy week for earnings, bond, currency, and oil markets traded mostly sideways today, while gold rallied over 4% to a fresh record shy of $4,400.
Amazon Web Services experienced a major outage early Monday, disrupting connectivity for millions of popular websites and apps. Despite the disruption, investors largely viewed it as a short-term technical issue, and market impact was limited.
Today’s notable mega-cap mover was Apple (mcap $3.9tn), which rallied 4% to an all-time high, driven by strong demand for the recently launched iPhone 17 series, which has outsold the previous generation by 14% in the first ten days in both the US and China.
Japan’s stock market surged to new all-time highs, with the Nikkei 225 rising 3.4%, following the ruling Liberal Democratic Party forming a coalition with the Japan Innovation Party. This political breakthrough has paved the way for Sanae Takaichi to become Japan’s first female prime minister. The rally, dubbed the “Takaichi trade,” reflects expectations of increased fiscal stimulus and loose monetary policy.
In commodity markets, US Natural Gas front-month futures surged 12.5% as colder weather forecasts increased heating demand expectations, triggering speculative short covering. Meteorologists shifted their outlook from above-normal to near-normal temperatures through early November.
Geopolitics: A shift in Trump’s approach was evident during his Friday meeting with Zelenskyy, where Trump urged Ukraine to consider territorial concessions to Russia to achieve peace and end the conflict. This marked a pivot from earlier support for Ukraine reclaiming all its territory, emphasising instead a ceasefire at current front lines and peace through compromise, which caused tension between the two leaders.
Economics: Monday’s data releases were mostly centred in China with a weak batch of updates. The economy expanded 4.8% YoY in Q3, marking its slowest GDP growth pace in a year and down from 5.2% in Q2. This deceleration reflects ongoing challenges from US trade tensions, a prolonged property slump, and weak domestic demand. Retail sales expanded at 3% YoY, the slowest in one year, highlighting consumer caution. Fixed asset investment decreased by 0.5% YoY, marking the first contraction since 2020 and falling short of market expectations.
In Europe, Germany’s PPI inflation fell 1.7% YoY, confirming a continuing trend of producer price declines for the seventh consecutive month. The drop is largely driven by lower energy costs, which remain the biggest contributor to the downward pressure.
Credit Ratings: On Friday, S&P Global unexpectedly downgraded France’s sovereign credit rating by one notch from AA- to A+ (stable outlook), citing fiscal concerns and political instability following a tumultuous week during which Prime Minister Lecornu vowed to halt the highly unpopular pension reform and narrowly survived two no-confidence votes. Moody’s maintains an Aa3 rating with a stable outlook, while Fitch Ratings downgraded France to A+ in mid-September, in line with S&P. (Market Data for chart).
Deals: In France’s luxury sector, Kering (mcap €40bn) is selling its beauty division (including Creed and long-term licenses for Gucci, Balenciaga, and Bottega Veneta) to L’Oréal (mcap €211bn) for €4bn to reduce debt and refocus on luxury fashion. Kering shares advanced 5% to the highest level in 15 months.
Swiss building-materials supplier Holcim (mcap €38bn) announced a €1.85bn agreement to acquire Germany-based walling solutions company Xella, owned by Lone Star, aiming to expand its sustainable building solutions portfolio.
IPOs: Thyssenkrupp Marine Systems, the submarine division of Germany’s Thyssenkrupp (mcap €6bn) debuted on the Frankfurt Stock Exchange today, in one of the largest European defence listings this year. The offering was a direct listing following the spin-off, with trading beginning at €60, giving TKMS a market cap of €6.3bn. TKMS is Europe’s largest non-nuclear submarine and frigate builder. Shares jumped 35% while Thyssen plunged 19%.
Day ahead:
Earnings: Netflix, Coca-Cola, GE Aero, Texas Instruments, Raytheon, Lockheed M, Northrop G, General Motors, 3M, Philip Morris. Economics: Canada inflation.
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