MetraviseStocks cap a record week as bank earnings and CPI take center stage
In brief
- Record week: The S&P 500 rose +0.58% on Friday to close out a record-setting week, even as other markets stayed indecisive.1
- Telecoms slide: Verizon, T-Mobile and AT&T fell after SpaceX agreed to acquire spectrum to take Starlink into mobile service.2
- Inflation week: September CPI lands Wednesday and PPI Thursday, alongside a busy run of big-bank earnings.3
What it means
S&P 500 futures are up +0.31% before the open, extending Friday's tone. Investors hope third-quarter earnings can help stocks power through Middle East turmoil.3 Markets put the odds that the Fed keeps rates unchanged in October at more than 80%, after last month's first hike in three years, while still favoring another hike in December.4
The day in review and where money is flowing
Technology leads Metravise's sector map, ahead of the S&P 500 by +0.2 pts over the month, while the weakest sector trails by -11.4 pts. Within technology, Semiconductor Equipment & Materials (+10.4 pts), Electronics & Computer Distribution (+10.3 pts) and Semiconductors (+8.7 pts) are the strongest industries. On memory, D.A. Davidson analyst Gil Luria says investors are early in understanding Micron's value and expects demand to outstrip supply over the next two years.5
Telecoms: Starlink goes mobile
SpaceX agreed to acquire a nationwide spectrum portfolio, and Verizon posted its worst day in more than two decades.2 JPMorgan analysts say the deal makes Starlink Mobile's long-term prospects more credible, but they see limited near-term risk to incumbents given the time, infrastructure and capital required. The gap between a credible long-term threat and a slow build-out helps explain why the selloff and the analyst view point in different directions.
Market mood
The VIX fell -4.09% to 14.79, a calm reading, while the equity put/call ratio at 0.62 sits close to its 5-day average of 0.60. Together they point to steady positioning rather than heavy demand for protection heading into a data-heavy week.
What to watch this week
Times are US Eastern (ET).
- 00:10US index futures (futures, not the session)Versus the prior close, S&P 500 futures are +0.31% and Nasdaq 100 futures +0.36%; these are futures prices, not the session. The US session opens at 9:30 ET.
- TueJPMorgan Chase & Co. (JPM) earnings · before the openStronger-than-expected bank results are generally read as a sign of healthy lending and credit conditions.
- Wed 08:30Consumer price index (CPI)Economists expect monthly CPI of 0.6% versus 0.4% in August and core of 0.2%, with headline annual inflation at 3.6%.6
- Thu 23:30Fed Chairman Kevin Warsh speaks — Conversation between IMF Managing Director Georgieva and Federal Reserve Chaiman WarshWith markets still favoring a December hike, Fed Chair Warsh's remarks are watched for clues on that path.4
- Thu 08:30Producer price index (PPI)Core PPI is expected at 0.25% month over month versus 0.20% in August, a gauge of pipeline price pressure.6
Metravise Portfolio
- PortfolioFriday change+0.40%
- —No entries or exits in the last session.
Metravise is an educational research platform — this bulletin is not investment advice. News summaries are based on the footnoted sources; numbers are Metravise data. Past performance is not indicative of future results.
Sources
- Wall Street finishes its record-setting week with gains — The Washington Post · Oct 10
- Verizon posts worst day since 2002 as SpaceX U.S. network plans whack cell provider stocks — CNBC · Oct 10
- S&P 500 futures rise as big banks set to kick off earnings season: Live updates — CNBC · Oct 12
- Here are the 6 big things we're watching in the stock market this week — CNBC · Oct 12
- Micron to nearly triple as investors wake up to value, D.A. Davidson says — CNBC · Oct 8
- What's Happening in the Markets This Week — Morningstar · Oct 9