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The Federal Reserve's next interest rate decision is scheduled for October 28, and markets are increasingly expecting rates to remain unchanged.
Latest market-implied probabilities:
• October: 86.2% chance of no rate change
• December: 76.3% chance of rates being 25 basis points above their current level
The Fed's latest projections point to additional tightening before rates stabilize.
Investors will be watching closely for clues about the Fed's next move.
U.S. pending home sales plunged 7.3% in September, reaching their lowest level since records began in 2001.
Other housing data showed:
• Housing starts: 1.221 million annualized, versus 1.305 million expected
• Building permits: 1.400 million, versus 1.387 million expected
• Pending Home Sales Index: 66.0, down from 71.2
Higher mortgage rates continue to weigh on housing demand, with pending sales declining across all four major U.S. regions.
AI's growing demand for memory could create new opportunities for SanDisk.
Despite concerns about increasing competition from China and pressure on profit margins, demand for memory and data storage could continue to rise as AI applications become more advanced.
With AI-powered devices requiring greater storage capacity, could $SNDK be positioned to benefit from the next wave of AI growth?
@TraceyRyniec
October has historically been a strong month for stocks during midterm election years, averaging a 3.0% gain.
But stocks finished mostly lower last week, with only the Dow notching a weekly gain as hotter-than-expected inflation reports weighed on the market.
With Q3 earnings season heating up, can stocks regain momentum before the month ends?
Could the recent rise in Treasury yields be nearing an end?
The 10-year Treasury yield fell last week, starting at 5.24% and finishing Friday near 5.10%, despite hotter-than-expected CPI and PPI inflation reports.
With the Fed Funds Rate midpoint at 3.88%, the spread between the two stood at approximately 122 basis points.
Over the past 40 years, the spread has typically ranged from 100 to 150 basis points, with a median of 120.
Could yields be returning to their long-run average?
Q3 earnings season heats up this week, with hundreds of companies set to report.
Some of the biggest names on deck include:
• Tuesday: Netflix, GE Aerospace and General Motors
• Wednesday: Meta, Tesla, Texas Instruments, IBM and Abbott Laboratories
• Thursday: Western Digital
Following last week's market pullback, investors will be watching to see if strong earnings can help stocks regain momentum.
Which company's results are you watching most closely?
Thursday's Producer Price Index (PPI) report came in hotter than expected.
• Headline PPI: +1.3% MoM vs. +0.5% expected
• Headline PPI: +6.3% YoY vs. +5.4% expected
• Core PPI: +0.7% MoM vs. +0.3% expected
• Core PPI: +5.0% YoY vs. +4.5% expected
Between Wednesday's CPI and Thursday's PPI, the latest reports show inflation picking back up.
Wells Fargo $WFC and Citigroup $C reported mixed Q3 earnings results.
Wells Fargo:
• EPS surprise: +1.08%
• Sales surprise: -1.26%
• EPS growth: +8.09% YoY
• Sales growth: +2.01% YoY
Citigroup:
• EPS surprise: +7.14%
• Sales surprise: +0.78%
• EPS growth: +27.2% YoY
• Sales growth: +7.9% YoY
Citigroup's revenue reached $23.85 billion, marking its highest third-quarter revenue in a decade.
Both banks reported earnings growth, although Wells Fargo missed sales expectations.
Goldman Sachs $GS and JPMorgan Chase $JPM kicked off Q3 earnings season with mixed results.
Goldman Sachs:
• EPS surprise: +31.86%
• Sales surprise: +10.75%
• EPS growth: +31.9% YoY
• Sales growth: +23.1% YoY
Equities trading revenue jumped 72%.
JPMorgan Chase:
• EPS surprise: -3.20%
• Sales surprise: -3.90%
• EPS growth: +13.4% YoY
• Sales growth: +8.06% YoY
JPMorgan's trading revenue grew 46%, while a $658 million securities loss weighed on earnings.
Both banks reported year-over-year growth, despite differing results against expectations.
AI stocks have pulled back over the past two weeks, but are investors overreacting to bearish headlines?
In the latest Zacks Market Minute, @andrewrocco1 breaks down three headlines he believes investors are misinterpreting and explains why the AI trade could still have room to run.
Zacks.com retweeted
Short-term headline noise has led to bearish price action among AI leaders. However, misinterpreted revenue metrics, overstated platform slowdowns, and exaggerated competitive threats have created an artificial wave of panic. $META $MU $SNDK $ASML $SKHY Read:
zacks.com/commentary/3006393…
@ZacksResearch
Zacks.com retweeted
All three big banks today have said the consumer is fine. – at Chicago, IL
Watch what they do not what they say…
Charlie Scharf, CEO of Wells Fargo:
“While economic uncertainty exists and consumer sentiment remains mixed, our data shows that our consumer and business customers are doing well.
Consumers are spending more, loan delinquencies are low, and deposit and investment balances have grown. Businesses continue to have strong balance sheets and losses remain low. While higher interest rates, higher oil prices and persistent inflation create risks to the economy, strong positive forces such as the investment in AI infrastructure, high employment levels and consistent wage growth continue to outweigh the risks.”
Zacks.com retweeted
Big banks will be reporting this morning. Citigroup has only missed once in the last 5 years. It's one of the cheapest of the big banks. I own it in Zacks Value Investor portfolio. Is the sell-off overdone? $C
Microsoft is making another major push into agentic AI.
$MSFT recently unveiled a revamped Copilot experience, bringing deeper AI integration across its productivity ecosystem, including Word, Excel, PowerPoint and Teams.
With new AI capabilities rolling out and the stock showing signs of a technical breakout, could Microsoft's expanding AI ecosystem become its next major growth catalyst?
@ethanfeller430