To The Moon

Last Week's Recap

The US Market - The S&P 500 and Dow hit new highs

• The major averages registered a fifth straight week of gains. The S&P 500 and Dow powered to new highs on Friday and capped off a winning week as banking behemoths ushered in a promising start to the third-quarter earnings season.

• Stocks also benefited from data that alleviated fears that inflation was not cooling off quickly enough. Wall Street isn't worried that disinflation has run its course.

• The CPI rose 0.2% on the month and 2.4% from a year ago, both above forecasts. The core CPI rose 0.3% from August, while the 12-month increase unexpectedly edged up to 3.3%. Friday's PPI data showed an in-line 0.2% gain in core wholesale prices, but upward revisions to prior months' data meant the 12-month core PPI inflation rate jumped to 2.8% in September from 2.4%.

• Furthermore, economists expect jobless claims to rise to around 300,000 in coming weeks amid the effects of Hurricane Milton.

• The 10-year has now added roughly 30 basis points over the week as investors have scaled back their expectations for interest rate cuts amid signs that inflation may be stickier than initially thought while economic growth data holds steady.

• Fed funds futures trading suggests a nearly 90% likelihood that the Federal Reserve will dial back interest rates by a quarter point in November, according to the CME FedWatch Tool.

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The US Sectors & Stocks - TSLA tumbled after an under-expected robotaxi event

• Technology sector was the S&P 500′s top outperforming sector with a 2.8% up, led by software and semiconductors. Uber (UBER)’s weekly gains of more than 16% to close at all-time high, as Tesla’s robotaxi event appeared to soothe investor concerns.

• JPMorgan Chase (JPM) rose 4.4% after topping profit and revenue expectations, while Wells Fargo (WFC) popped 5.6% on stronger-than-expected profits. JPMorgan raised its full-year NII target, while Wells' NII fell 11% from last year. JPMorgan increased credit loss provisions while Wells cut its reserve slightly.

• The Financial Select Sector SPDR Fund (XLF) jumped 1.9% Friday to reach a new intraday all-time high, led by BAC、WFC and JPM.

• Tesla (TSLA) was the worst-performing stock in the index with a slide of more than 12%. CEO Elon Musk showed off a Cybercab and Robovan at Thursday night's robotaxi event while also proclaiming that fully autonomous Tesla vehicles will be on the roads in Texas and California next year. Morgan Stanley analysts noted that the event “overall disappointed expectations” due to a lack of details in several areas.

• Warren Buffett’s Berkshire Hathaway cuts Bank of America (BAC) stake to less than 10%, bringing its stake below a key reporting threshold. In a SEC filling, Buffett disclosed the sale of more than 9.5 million shares, split between three transactions made from Tuesday to Thursday.

• TSMC (TSM) said September sales surged nearly 40% year over year, topping Wall Street estimates. Demand for AI processors helped fuel the increase. The world's largest contract chipmaker plans to report its third-quarter results on Oct. 17. Its Q3 report will be a barometer for sales at its major customers, which include Apple (AAPL), Nvidia (NVDA), AMD (AMD) and many more fabless semiconductor companies.

• Morgan Stanley reiterated its overweight rating and $150 price target on Nvidia (NVDA). Analyst Joseph Moore noted that Nvidia is gearing up to launch its Blackwell line of GPUs and the ramp up in production appears "quite strong". NVDA stock was up nearly 8% last week.

• Boeing (BA) talks with its machinist union broke down, with the Dow aerospace giant pulling its offer to the 33,000 striking workers. Both sides, reportedly far apart on terms, are preparing for an extended strike. Shares fell to the lowest level since Oct. 2022.

Hong Kong Market - HSI fell 6.5%

• Hong Kong stocks tumbled 6.5% in the holiday-shorten week, after the benchmark rallied for a fourth week in a row. The Hang Seng Index (HSI) closed at 2,1251.98, which is same to Monday's trade.

• Under the People's Bank of China's swap facility, various kinds of financial institutions will have the option to exchange bonds and ETFs as collateral for government bonds and central bank bills, according to a Thursday report by the SCMP. The financing facility is a constituent of the 800 billion yuan funding mechanism revealed by the central bank in September to inject liquidity into the stock market.

Singapore Market - STI fell 0.43%

• Singapore's stocks edged lower this week, with the Straits Times Index fell 0.43% to 3573.76 this week.

• Singapore’s economic growth accelerated in the third quarter, suggesting the recovery is gaining momentum in the face of tight monetary settings and intensifying geopolitical tensions. Gross domestic product advanced 2.1% in the three months through September from the prior quarter, the Ministry of Trade and Industry said Monday. That compares with a 2% pace that economists had anticipated.

• Real estate investment activity in Singapore has seen signs of picking up since the US Federal Reserve announced a 0.5 per cent rate cut in September, creating some optimism in the market, indicated a Knight Frank Singapore report on Tuesday (Oct 8).

• Singapore’s lower-wage workers should get a built-in monthly wage increase of 5.5 to 7.5 per cent, or at least S$100 to S$200, whichever is higher, the National Wages Council (NWC) said in its latest guidelines on Thursday (Oct 10).

Australian Market - ASX fell 0.8%

• The ASX 200 Index fell 0.8% to 8214.5 points for the week, as optimistic hopes of a rebound in the Chinese economy stalled amid scepticism that the Chinese Government was serious about stimulus.

• Gold shares blossomed in the uncertain environment, with Regis Resources (ASX: RRL) up 7%, Newmont (ASX: NEM) up 2% and Gold Road Resources (ASX: GOR) up 4.7%. That followed from a 1% bump in the gold price to US$2633 an ounce following the renewed pessimism flowing from the US inflation and jobs numbers.

• Arcadium Lithium(ASX: LTM), with its shares almost doubling, with a more than 90% rise to $8.18 following on from confirmation of a $9.9 billion bid for the lithium miner by Rio Tinto.

The Week Ahead

Macro Factors - Retail sales on deck

• Third-quarter earnings season ramps up this week, with nearly 1-in-10 S&P 500 companies scheduled to report. The latest U.S. economic data and an interest-rate decision by the European Central Bank will be the highlights on the macro calendar.

• Stronger-than-expected economic data has helped drive the "no cut" discussion. Investors will have another update in that department this week with the release of the September retail sales report on Thursday. Economists expect that retail sales increased 0.2% in September from the prior month. In August, retail sales rose 0.1%, defying the decline economists had projected.

• Regardless, investors have a lot more uncertainty to get past this month. While many investors remain optimistic that there is further upside for equities, they’re also bracing for choppiness given the risks around the presidential election, rising Treasury yields and escalating geopolitical risks in the Middle East and elsewhere.

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2、Earnings

• U.S. major banks kicked off the new earnings season. Already, JPMorgan Chase and Wells Fargo rallied after reporting their latest results on Friday, an auspicious start to the earnings season. The banking sector provides investors further insight into the health of the capital markets as well as the consumer.

• With the benchmark S&P 500 index notching its 45th all-time high this year, U.S. companies need to deliver exceptional earnings this season to sustain the current record-breaking rally. Analysts expect an earnings growth rate for the S&P 500 of 4.1% in the third quarter, according to FactSet, which would represent a fifth straight period of year-over-year growth.

• The results from Bank of America (BAC), Goldman Sachs (GS), and Morgan Stanley (MS) will round out earnings from big banks, while reports from United Airlines (UAL) and Netflix (NFLX) will also highlight the week.