Pre-market market trends

1. Pre-market trading on Thursday, October 10th, the three major U.S. stock index futures are all down. As of press time, Dow Jones futures fell 0.06%, S&P 500 index futures fell 0.15%, and Nasdaq futures fell 0.16%.

2. As of press time, deguodaxzhishu rose 0.02%, uk ftse100 index fell 0.20%, france cac40 index fell 0.11%, europe stoxx 50 index fell 0.04%.

3. As of press time, crude oil product rose 1.15%, trading at $74.08 per barrel. Brent crude oil rose 1.06%, trading at $77.39 per barrel.

Market News

The US CPI data for September is coming in strong! The financial markets and interest rate cut expectations face a major test! Economists predict that the overall CPI inflation in the US for September will increase slightly by 0.1% month-on-month, the smallest increase in three months; the overall CPI year-on-year growth rate is expected to drop from 2.5% in August to 2.3%, continuing the six-month trend of decreasing price pressures. However, the core CPI excluding food and energy prices, which is more closely watched, is expected to rise by 0.2% month-on-month, while the year-on-year increase is expected to remain stable at 3.2%. Tonight's CPI data is the most important inflation data for the Federal Reserve's November meeting, and also the final CPI report before the 2024 US presidential election, which may either reinforce or challenge the current predictions for the Fed's loose monetary policy, posing a significant test for the economy and the financial markets. Bank of America Global Research Department stated that given the improvement in macroeconomic data, the market should be able to withstand the impact of a slight increase in inflation, but if the CPI shows a 'significant surprise', it may bring uncertainty to the Fed's rate cut cycle and lead to greater market volatility.

Barclays warns: Momentum for US stock rotation trading is declining, it is advisable to maintain a wait-and-see approach. In a report released on Thursday, Barclays strategists explicitly pointed out that although the market is experiencing frequent fluctuations, the heat of rotation trading is gradually fading. The report pointed out that in recent months, influenced by macroeconomic events such as the unwinding of yen carry trades and a general decline in overall risk levels, the market factor rotation has been intense. However, strategists observed that the returns on most factors have stabilized, maintaining levels similar to two months ago. In the report, strategists stated: 'We believe that the global rate cutting cycle will stimulate and prolong the economic cycle, setting the stage for the economy in 2025. However, until the uncertainty of the US election is completely resolved, we will avoid increasing more cyclical exposure and wait to observe economic data for a few more months.'But after the bursting of the internet bubble and the Fed's rate cut in 2001, the ROI dropped by more than 10%.Creating conditions to stimulate the economy. However, until the uncertainty of the US election is completely resolved, we will avoid increasing more cyclical exposure and wait to observe economic data for a few more months.

Suspense surrounds the US presidential election, will the bullish trend in US stocks hit the brakes? The US presidential election is in a state of intense uncertainty, with investors potentially facing unclear or contested election results, which could hamper this year's bullish trend in US stocks. With less than a month to go until the election, opinion polls and market forecasts show a tight race between Democrat Harris and Republican Trump. A poll released on Tuesday showed Harris leading Trump by a slim margin of 46% to 43%, intensifying the situation compared to the same poll results a few weeks ago. Given Trump's attempts to overturn the situation where he lost to Biden in 2020, investors anticipate that a close election result this year could also be controversial. The balance of power in Congress is also precarious, with some potential tight races adding to this uncertainty. Walter Todd, Chief Investment Officer at Greenwood Capital, said, 'This will be a tight election. The likelihood of some type of dispute is higher than average, and this is understandable.' He expects that if the election results remain uncertain for several days, the stock market will see selling pressure.

'Dr. Doom' Roubini's latest view: Trump may trigger stagflation shock, AI worth long-term investment. Roubini recently warned that Trump's return to the White House could potentially pose a stagflation shock risk. He stated, 'Compared to Harris winning the US presidency, Trump's combination of trade, currency, fiscal, immigration, and foreign policies brings a higher level of stagflation risk.' In his view, Trump's package of policy plans – including imposing higher tariffs, seeking US dollar devaluation, and taking a tougher stance on illegal immigrants may slow down the pace of US economic development, while stimulating a rise in inflation. He also pointed out that the tense situation in the Middle East is a potential catalyst, further geopolitical tensions escalating could lead to an increase in oil prices, adding to price pressures, and driving up US inflation rates on a downward trajectory. Additionally, Roubini also stated that from a long-term perspective, investing in targets related to technology and artificial intelligence is a good long-term investment strategy, although he mentioned that substantial volatility may need to be endured during this period.

Not expecting the Fed to aggressively cut interest rates! Castle Securities: Expect only another 25 basis point rate cut by the end of the year. Castle Securities stated that a strong US economy and persistent inflation will lead the Fed to cut interest rates only once more this year, totaling a 25 basis point reduction. Michael de Pass, Global Head of Interest Rate Trading at Castle Securities, said, 'Based on the current economic conditions in the US and sticky inflation, the market's expectations for the extent of rate cuts may be somewhat excessive. Although the market expects around a 50 basis point cut this year, I dare say that for the remainder of the year, the Fed will ultimately only cut rates by 25 basis points.'

Individual stock news

Attention! Tesla (TSLA.US) Robotaxi will be unveiled soon. Local time on Thursday, October 10th, 19:00 (10:00 AM Beijing time on the 11th), Tesla will hold an official Robotaxi demonstration event themed "We, Robot". It is rumored that Musk will showcase the Cybercab prototype and share the latest developments in Tesla's FSD technology. Tesla has previously stated that they are developing a specially built, dedicated robot taxi. Musk hinted at this vehicle possibly being called Cybercab during a recent earnings conference call. In June of this year, Musk presented his vision for the Robotaxi network, describing it as a blend of Airbnb and Uber, where owners can choose to have their cars join the service in their spare time.

Delta Air Lines (DAL.US) Q3 earnings and Q4 guidance fall short of expectations. The financial report shows that Delta Air Lines' Q3 adjusted revenue was $14.6 billion, below the analyst average expectation of $14.65 billion; adjusted EPS was $1.50, lower than the analyst average expectation of $1.52. The company stated that in the third quarter, flight cancellations caused by a global outage triggered by a CrowdStrike software update resulted in a revenue decrease of approximately $0.5 billion and increased costs. Delta Air Lines expects Q4 revenue to grow 2% to 4% year-on-year, below the analyst average expectation of 4.3% year-on-year growth; and anticipates adjusted EPS for Q4 to be between $1.60 and $1.85, with the midpoint of the forecast range lower than analysts' average expectation of $1.75. The company anticipates a decline in travel demand during the U.S. election period, with industry growth gradually slowing down. As of the time of publication, Delta Air Lines pre-market trading on Thursday fell over 3%.

Texas Instruments (TXN.US) and Infineon (IFNNY.US) join Nvidia (NVDA.US) supply chain! Two analog chip giants expand into AI. Renowned technology industry analyst Guo Mingxi from TF International Securities, who tracks Apple and other tech giants' supply chains, stated on Wednesday that the two leaders in the analog chip field, Texas Instruments and Infineon, have been added to Nvidia's new list of AI chip suppliers. Typically, listed companies that join Nvidia's hardware product supply chain will experience a significant surge in stock prices. According to the latest disclosures, Texas Instruments and Infineon now provide voltage regulator components, which were previously mainly provided by Monolithic Power Systems (MPWR.US), a manufacturer of analog and mixed-signal chips focusing on power solutions.

Stellantis (STLA.US) announces a disastrous profit warning, with the CEO seeking a "significant management reshuffle". According to insiders, Stellantis CEO Carlos Tavares is planning a comprehensive reorganization of the management team in response to the previous disastrous profit warning. The sources stated that Tavares may present his proposal at a board meeting scheduled to take place in the U.S. this week. This restructuring could lead to changes in the management team, affecting various departments from finance to regional operations and individual brands. It is unclear at present whether the board members will support the CEO's personnel adjustment plan, as several other outcomes are still possible. They mentioned that the board members will also focus on the efforts to reverse losses in the U.S., which is Stellantis' largest single profit source.

GXO Logistics (GXO.US) rises over 9% in pre-market trading due to potential sale news. According to insiders, the company is working with financial advisors and evaluating its options after receiving interest from potential buyers. The decision to sell has not been finalized, and the company may choose to remain independent.

Important economic data and events notice

20:30 Beijing time, U.S. September CPI data

At 20:30 Beijing time, the initial jobless claims for the week ending October 5 in the United States.

At 21:15 Beijing time, Federal Reserve Governor Lisa Cook delivered a speech.

At 22:30 Beijing time, 2024 FOMC voter and Richmond Fed President Barkin participated in a fireside chat.

At 23:00 Beijing time, FOMC permanent voter and New York Fed President Williams delivered a speech on economic outlook and monetary policy and participated in discussion.

Performance forecast.

Pre-market on Friday: JPMorgan (JPM.US), Wells Fargo & Co (WFC.US).