The minutes of the Fed's September meeting revealed that there were disagreements among Fed officials on the issue of reducing the policy rate. While all officials agreed that easing monetary policy was appropriate, we see different views on the size of the reduction. While the majority supported a 50 basis point reduction, some participants argued that a smaller 25 basis point reduction would be sufficient. The minutes indicated that inflation was on a downward trend but still somewhat high, while the labor market was improving and the unemployment rate remained low. The Fed's next meeting is on November 6-7.
Although US inflation was announced as 2.4%, it was accepted by the market as evidence of strong consumption. The minutes of the last Fed meeting showed that officials were divided on the issue of the size of the interest rate reduction. The Nasdaq is trying to hold on to 20300. If a breakout occurs, it will be a very sharp move. Although we were involved in a small carry trade accident on the way, we continue to see strong performances. In fact, I think if the accident had not happened, we would have seen 6000 in the S&P 500 long ago. Right now, we are trading just slightly below 6000, less than a month after the end of the third quarter. The 5845 - 5860 levels will be important for the SP500. If it breaks, I expect it to reach 6000 before the end of October. If it gets a reaction from this area, I think the declines are likely to be buying opportunities again depending on the data.
Tesla (TSLA) introduced its Cybercab robotaxi, its new Robovan, and its Optimum humanoid robot at the “We Robot” event. Rio Tinto (RIO) announced that it will acquire Arcadium Lithium (ALTM) for $6.7 billion to strengthen its position in the global lithium market. Taiwan Semiconductor (TSM) announced third-quarter results that exceeded both its own estimates and analyst expectations, thanks to strong AI demand. Foxconn said it is building the world’s largest manufacturing facility in Mexico to assemble GB200 superchips, a key component of Nvidia’s (NVDA) next-generation Blackwell family computing platform. Infosys (INFY) is expanding its partnership with Microsoft (MSFT) to accelerate the global adoption of AI and Microsoft Azure.
Super Micro (SMCI) shares gained 14.24% for the week after the company reported that it shipped more than 100,000 chips during the quarter. Tesla (TSLA) shares lost 11.89% for the week after the company’s robotaxi and optimus technology launch event missed investor expectations. Redburn Atlantic upgraded MSCI (MSCI) from “NEUTRAL” to “BUY” and set its 12-month average price target at $680. Loop Capital upgraded Home Depot (HD) from “HOLD” to “BUY” and raised its 12-month average target price from $360 to $460. Wells Fargo upgraded LPL Financial (LPLA) from “EQUAL PORTFOLIO WEIGHT” to “HIGH PORTFOLIO WEIGHT” and raised its 12-month average target price from $235 to $285. JMP Securities updated Raymond James’ (RJF) “IN-PLAYER PERFORMANCE” rating to “OUT-PLAYER PERFORMANCE” and set a 12-month average target price of $146.
On Tuesday, UnitedHealth (UNH) Balance Sheet, Johnson&Johnson (JNJ) Balance Sheet, Bank of America (BAC) Balance Sheet, Goldman Sachs (GS) Balance Sheet, Citigroup (C) Balance Sheet, Rio Tinto (RIO) Balance Sheet are coming. On Wednesday, ASML (ASML) Balance Sheet, Abbott (ABT) Balance Sheet are coming. On Thursday, Eurozone Consumer Inflation (CPI), European Central Bank Interest Rate Decision, US Retail Sales, US Industrial Production, Netflix (NFLX) Balance Sheet, Morgan Stanley (MS) Balance Sheet are coming. On Friday, Procter & Gamble (PG) Balance Sheet, American Express (AXP) Balance Sheet, Schlumberger (SLB) Balance Sheet are coming.
The ECB is expected to reduce the deposit rate by 25 basis points to 3.25 percent at its meeting on October 17. In a Reuters poll conducted between October 2 and 8, 70 out of 75 economists expect the ECB to continue cutting interest rates. Only five economists expect no change in interest rates. The vast majority of economists think the ECB will cut interest rates by 25 basis points at its December meeting, bringing it down to 3 percent. This expectation is also in line with market pricing.
"The ECB will probably cut interest rates at its next meeting later this month," ECB Governing Council Member Francois Villeroy de Galhau told Repubblica in an interview. Villeroy noted that inflation fell below the ECB's 2 percent target in September and that the key measure of price increases will gradually decline to close to that level in 2025. On the other hand, Villeroy emphasized that market expectations for inflation in 2025 are below 1.8 percent, which is even lower than the ECB's forecast.
There are signs of fatigue in the movement of the Euro-Dollar parity. The 1.0810 level seemed like a potential target, but it will probably close the week without reaching it. The market continues to price in monetary expansion. Sales remain weak. Those with sell-side positions should be careful.
The information, comments and recommendations contained herein are not within the scope of investment consultancy. Investment consultancy services are provided within the framework of the investment consultancy agreement to be signed between brokerage firms, portfolio management companies, banks that do not accept deposits and customers. The comments in this article are only my personal comments and these comments may not be appropriate for your financial situation and risk return. For this reason, investments should not be made based on the information and comments in my articles.
