Dow advanced 409, advancers over decliners better than 3-1 & NAZ was up a more modest 60. The MLP index was flattish in the 289s & the REIT index rose 3+ to the 425s. Junk bond funds were a tad higher & Treasuries had modest buying which reduced yields. Oil slid back pennies in the 75s as investors monitor the Middle East & gold surged 35 to 2674 (more on both below).
Dow Jones Industrials
US consumer sentiment slipped in Oct amid lingering frustration over high prices, a survey showed. The University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 68.9 this month, compared to a final reading of 70.1 in Sep. The forecast called for a preliminary reading of 70.8. "While inflation expectations have eased substantially since then, consumers continue to express frustration over high prices," said Surveys of Consumers Director Joanne Hsu. "Still, long run business conditions lifted to its highest reading in six months, while current and expected personal finances both softened slightly." The survey's reading of 1-year inflation expectations rose to 2.9% from 2.7% in Sep & its 5-year inflation outlook dipped to 3.0% from 3.1% in the prior month. "With the upcoming election on the horizon, some consumers appear to be withholding judgment about the longer term trajectory of the economy," said Hsu.
US consumer sentiment slips in October
Tesla (TSLA) shares tumbled after the electric vehicle company's long-awaited robotaxi event failed to impress investors. CEO Elon Musk unveiled the firm's Cybercab self-driving concept car
— a low, silver 2-seater, with no steering wheels or pedals — at the company's “We, Robot” event, & hyped his
company's ambitions to create a fleet of autonomous vehicles & robots. Musk
said the company hopes to be producing the Cybercab before 2027, but
offered no details on where the cars will be manufactured. He said
consumers would be able to buy a Tesla Cybercab for a price tag under
$30K. He also said he expects TSLA to have “unsupervised FSD”
up & running in Texas & California next year in the company's Model 3& Model Y electric vehicles. FSD, which stands for Full Self-Driving,
is TSLA's premium driver assistance system, available today in a
“supervised” version for Tesla electric vehicles. In addition to the Cybercab, Musk also announced plans to produce an
autonomous, electric Robovan that can carry up to 20 people, or be used
to transport goods. He said it will “solve for high density,”
transporting a sports team, for example. Analysts, meanwhile, said that Musk failed to make the
case that TSLA is an artificial intelligence company during the event. Analysts noted that Musk didn't offer any details on improvements
to its FSD system or say anything about rumored plans of a tie-up
between TSLA & xAI, Musk's AI company. The stock sank 21+ (9%).
Tesla shares drop 8% after robotaxi reveal ‘underwhelmed’ investors
JPMorgan Chase (JPM), a Dow stock, CEO Jamie Dimon
sees risks climbing around the world amid widening conflicts in the
Middle East & with Russia’s invasion of Ukraine showing no signs of
abating. “We have been closely monitoring the geopolitical
situation for some time, and recent events show that conditions are
treacherous and getting worse,” Dimon said. “There
is significant human suffering, and the outcome of these situations
could have far-reaching effects on both short-term economic outcomes and
more importantly on the course of history,” he added. The
intl order in place since the end of World War II is unraveling
in light of conflicts in the Middle East & Ukraine, rising US-China
tensions, & the risk of “nuclear blackmail” from Iran, North Korea & Russia, Dimon said. “It’s
ratcheting up, folks, and it takes really strong American leadership
and Western world leaders to do something about that,” Dimon continued. “That’s my No. 1 concern, and it dwarves any I’ve had since
I’ve been working.” The ongoing conflict between Israel & Hamas
recently hit the 1-year mark since Hamas' attack on Oct 7, 2023,
sparked war, & there have been few signs of it slowing down. Tens of
thousands of people have been killed as the conflict has broadened into fighting on multiple fronts, including with Hezbollah & Iran. Dimon also said that he remained wary about the future of the
economy, despite signs that the Federal Reserve has engineered a soft landing. “While
inflation is slowing and the U.S. economy remains resilient, several
critical issues remain, including large fiscal deficits, infrastructure
needs, restructuring of trade and remilitarization of the world,” Dimon added. “While we hope for the best, these events and the prevailing
uncertainty demonstrate why we must be prepared for any environment.”
Jamie Dimon says geopolitical risks are surging: ‘Conditions are treacherous and getting worse’
Gold rose over 1% after a US inflation data cemented prospects of a rate cut next month, restraining the $ below recent highs, while safe-haven demand stemming from the geopolitical tensions in the Middle East also lifted the bullion. Spot gold rose 1.1% to $2658 per ounce, up for the 2nd straight session, & US gold futures settled 1.4% higher at $2676. US producer prices were unchanged in Sep, pointing to a still-favorable inflation outlook & supporting expectations of Fed rate cut next month. This follows data yesterday showing US consumer prices rose slightly more than expected last month, but the annual increase in inflation was the smallest in more than 3½ years. The $ held below a 2 -month high against a basket of peers today. On the physical front, gold dealers in India charged premiums for the first time in 2 months this week as the upcoming festival season attracted some jewellery buying.
Gold Extends Gains Over 1% as US PPI Data Solidifies Rate Cut Hopes
Oil prices edged lower but were on track for the 2nd straight weekly increase as investors weighed factors such as possible supply disruptions in the Middle East & Hurricane Milton's impact on fuel demand in Florida. Brent crude oil futures were down 21¢ (0.3%) at $79.19 a barrel. US West Texas Intermediate crude futures slipped 25¢ (0.3%) to $75.60 per barrel. For the week however, both benchmarks were headed for gains of more than 1%. Crude benchmarks spiked so far this month after Iran launched more than 180 missiles against Israel on Oct 1, raising the prospect of retaliation against Iranian oil facilities. Israel has yet to respond.
Oil down on Florida fuel demand outlook but headed for weekly gains on Middle East worries
Stocks gained as investors weighed the likely impact of mild inflation data. Investors continue to parse the latest consumer inflation data, which failed to clearly signal the Fed's next move on interest rate cuts. They are also getting ready for a tricky earnings season. Dow is up 533 in Oct, largely coming last week. With all the uncertainty out there, gold remains popular with dubious stockholders.
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