Pre-market market trends

1. On October 11 (Friday), the futures of the three major US stock indexes fell sharply before the US stock market. As of press release, Dow futures were down 0.10%, S&P 500 futures were down 0.24%, and NASDAQ futures were down 0.40%.

2. As of press release, the German DAX index rose 0.19%, the British FTSE 100 index fell 0.09%, the French CAC40 index rose 0.10%, and the European Stoxx 50 index rose 0.11%.

3. As of press release, WTI crude oil fell 0.90% to $75.17 per barrel. Brent crude fell 0.92% to $78.67 per barrel.

Market news

Has the US stock bull market come to an end? “Old Debt King”: Gains are weakening due to multiple headwinds. Although Wall Street continues to be impressed by the record rise in US stocks this year, “Old Debt King” Bill Gross is uncertain whether this trend can be maintained for much longer. It is worth mentioning that Gross did not predict the imminent collapse of the stock market bull market; he only said that some adverse factors were imminent. These factors include overvaluation, as well as various macroeconomic and geopolitical headwinds. Gross said in a recent report that as momentum wanes, investors should reallocate defensive and high-yield stocks. He also advised investors to reduce their exposure to fixed income assets. He previously criticized the current state of US Treasury bonds. Gross said, “There is no bear market, but it's not a bull market anymore.” He added that the stock market will receive positive returns with “low purchases” in the future. Gross also mentioned that legendary investor Warren Buffett is currently hoarding a record amount of cash. Some believe this is a sign that the stock market may soon see a sharp sell-off. For Gross, he believes this at least indicates a “rough road ahead” for the stock market.

Federal Reserve Barkin: Inflation is moving in the “right direction,” but the fight against inflation is not over yet. Richmond Federal Reserve Chairman Barkin expressed optimism about the progress of inflation, but pointed out that the fight is not over, citing the potential risk of causing price pressure. “We're definitely moving in the right direction,” Barkin said. (But) I'm not going to declare victory.” When asked about factors that may cause inflation to stick, Barkin mentioned the conflict in the Middle East and the possibility that housing demand will exceed supply as the Federal Reserve cuts interest rates. However, he added, “I don't want what may happen to hinder our progress on inflation and obscure the fact that we have actually made a lot of progress.”

Hurricanes are coming intensively! Will it be difficult for the Federal Reserve not to pay attention this time around? The two devastating hurricanes that hit the southeastern United States in recent weeks will make it harder for the Federal Reserve to assess the state of the economy. In the past, the Federal Reserve often overlooked temporary supply shocks caused by natural disasters. However, Diane Swonk, KPMG's chief economist in the US, pointed out that the frequency and extent of recent natural disasters means it is increasingly difficult for the Federal Reserve to ignore them. Stephen Stanley, chief economist at Santander, pointed out: “The impact of the hurricane is not unusual for this season, but the extent of damage caused by Hurricane Helen indicates that the number of initial jobless claims will increase dramatically and continuously.” Nancy Vanden Houten, chief US economist at the Oxford Institute of Economics, said that the impact of the hurricane “may continue for a few weeks” and that the October non-farm payrolls report may “be hit quite hard.” However, analysts still expect the Federal Reserve to continue to cut interest rates by 25 basis points at the meeting at the beginning of next month. Some economists have formed their views based on Federal Reserve Chairman Powell's recent speech. In his speech, Powell hinted that the baseline expectation is that interest rates will continue to be cut by 25 basis points in the future.

Structural transformation has arrived! Isn't $3,000 in gold impossible? Chantelle Schieven, chief research officer at Capitalight Research, said that although the recent slowdown in interest rate cuts by the Federal Reserve may continue to put pressure on gold prices because investors are adjusting their market expectations, geopolitical uncertainty continues to support precious metals. Schieven pointed out that geopolitical turmoil is a key factor in the nearly 30% rise in gold prices this year, but the safe-haven premium for gold is still very low because investors have only just begun to pay attention to specific geopolitical hotspots, mainly the escalating conflict in the Middle East. She added that as a kindSafehaven assetsRising geopolitical tension can easily push up the price of gold by 10%. “Under these circumstances, it is not out of reach for gold to reach $3,000 per ounce. If we see the escalation of the Middle East conflict, I expect the price of gold to reach 3,000 US dollars/ounce by the end of this year. But if the tension eases, we may also see a 10% drop in the price of gold.”

Wall Street debt issuance wave is here! Will the big six banks rampage 20 billion dollar bonds next week? Wall Street banks are expected to launch a series of bond offerings next week to take advantage of ultra-low credit spreads and strong investor demand. After announcing quarterly results on Friday, the six largest US banks are likely to borrow between 20 billion and 24 billion dollars, which is more than the 15 billion dollars they usually raised in October in the past decade. Despite an increase in bank borrowing this year, bond issuance has returned to normal since the Federal Reserve stopped raising interest rates and began cutting interest rates last year. Analysts expect banks to take advantage of borrowing costs close to a 20-year low to complete sales of at least $15 billion to $20 billion. Banks usually issue bonds after announcing quarterly results, and large banks, as the largest borrowers in the US investment-grade bond market, are dealing with potential fluctuations before and after the November US election.

Individual stock news

The steering wheel, pedals, and rearview mirror are all gone! Tesla (TSLA.US) Robotaxi “Wang Bang” debuted: The cost is less than 0.03 million US dollars, and production is expected to begin in 2026. At 22:00 EST on October 10 (10:00 Beijing time on the 11th), Tesla's “We, Robot (We, Robot)” event was held at Warner Bros. Studio in Hollywood. Three new products were launched, namely Cybercab (cyber unmanned taxi), Robovan (driverless utility vehicle), and the new humanoid robot Optimus. Among them, the Cybercab, the prototype of Tesla's Robotaxi, uses a gull wing door and a two-door, two-seater design, and is suitable for 2 adults. Musk said that the new car will be mass-produced by 2026 or 2027, and that the vehicle's sales price will be kept within 0.03 million dollars. Furthermore, Musk admits that it is not realistic for Cybercab to go online in the short term, so he proposed to initially implement the RoboTaxi service through iterative FSD. At the press conference, he revealed that Tesla first wants to move FSD from supervised fully autonomous driving to the stage of unsupervised fully autonomous driving. The time point is set before 2027.

J.P. Morgan Chase (JPM.US) Q3 investment bank operating expenses revenue increased 31% year over year, raising the annual net interest income guideline. Financial reports show that J.P. Morgan Chase's Q3 revenue increased 7% year over year to 42.654 billion US dollars, net profit fell 2% year over year to 12.898 billion US dollars, and earnings per share were 4.37 US dollars. Net interest income was $23.5 billion, up 3% year over year. The bank currently expects net interest income to reach about 92.5 billion US dollars in 2024, higher than the previous forecast of about 91 billion US dollars. It is worth mentioning that investment banking revenue increased 31% year over year, higher than expected 16%; stock trading revenue increased 27% year over year. Despite the strong performance, CEO Jamie Dimon gave a slightly bleak economic outlook. “Although inflation is slowing and the US economy remains resilient, several key issues remain, including huge fiscal deficits, infrastructure needs, and trade restructuring,” Dimon said in a statement on Friday. On the geopolitical side, Dimon said that “the situation is dangerous and is getting worse” and that the results “may have a profound impact on short-term economic results and, more importantly, on the course of history.”

BlackRock (BLK.US)'s Q3 revenue and EPS exceeded expectations, and the scale of asset management reached a record high. According to financial reports, the company's Q3 revenue increased 15% year over year to 5.197 billion US dollars, better than analysts' general expectations of 4.92 billion US dollars; adjusted net profit was 1.715 billion US dollars, up 4% year over year; adjusted earnings per share were 11.46 US dollars, better than analysts' general expectations of 10.32 US dollars. By the end of the third quarter, BlackRock's asset management scale (AUM) reached a record 11.5 trillion US dollars, up 26% year over year; the average AUM for the third quarter was 11.1 trillion US dollars, up 18% year on year. BlackRock's Q3 net capital inflow was $221.18 billion. Long-term investment funds had a net inflow of $160.173 billion. Among them, the net inflow of stock products was $74.144 billion; the net inflow of fixed income products was $62.74 billion; and the net inflow of multi-asset products was $17.814 billion. Net cash management inflow of $61.007 billion.

Wells Fargo Bank (WFC.US)'s Q3 results were mixed. Net interest income fell short of expectations, and investment banking expenses surged 37% year over year. According to financial reports, Wells Fargo's total Q3 revenue was 20.37 billion US dollars, lower than analysts' general expectations of 20.46 billion US dollars; diluted earnings per share were 1.42 US dollars, higher than analysts' general expectations of 1.29 US dollars. Net interest income fell 11% year over year to $11.69 billion, below analysts' general expectations of $11.88 billion, the latest sign that the company is no longer benefiting from continued high interest rates. It is worth mentioning that investment banking expenses increased 37% year over year to $0.672 billion, which helped offset the decline in loan income due to falling interest rates. Additionally, Wells Fargo wrote off $1.1 billion of loans in Q3, below analysts' general expectations of $1.3 billion. As of press release, Wells Fargo's US stocks rose more than 3% in the premarket on Friday.

McDonald's (MCD.US) CEO warns of weak consumption: the company is preparing for next year's “challenge.” McDonald's CEO Chris Kempczinski said it is expected that the wallets of low-income customers will continue to be tight next year. He said, “We started talking about 2025, and my message to our team was: 'We need to prepare for another challenging year, '” the burger chain announced its first quarterly same-store sales decline in four years in July because consumers curtailed spending after years of high inflation. Kempczinski said McDonald's launched a limited-time $5 package in June and is considering further improvements to its affordable products. Company executives have previously said they expect consumers to remain under pressure in the coming quarters.

Key economic data and event forecasts

US September PPI data at 20:30 Beijing time

At 9:45 Beijing time, the 2025 FOMC Voting Committee, Chicago Federal Reserve Chairman Goulsby, and Federal Reserve Governor Bowman attended the 18th Annual Conference of Community Bankers

At 22:00 Beijing time, the preliminary value of the US Consumer Confidence Index for the University of Michigan in October

22:45 Beijing time 2026 FOMC voting committee and Dallas Federal Reserve Chairman Logan participated in an expert panel discussion

The next day at 01:10 Beijing time, Federal Reserve Governor Bauman delivered a speech