1. As of the time of drafting, Dow Jones futures fell by 0.14%, S&P 500 index futures rose by 0.14%, and Nasdaq futures rose by 0.26% in pre-market trading on October 14 (Monday) in the US stock market.

2. As of the time of drafting, the Germany DAX index rose by 0.35%, UK FTSE 100 index fell by 0.06%, France CAC40 index fell by 0.31%, and Europe Stoxx 50 index fell by 0.01%.

3. As of the time of drafting, WTI crude oil fell by 2.42%, to $73.73 per barrel. Brent crude oil fell by 2.29%, to $77.23 per barrel.

Market News

"Terrifying Data" to join heavyweight financial reports this week! Rate cut expectations will face further tests. The US stock market closed at record highs again last week as investors began to digest quarterly reports, and debates over what actions the Federal Reserve will take at the November interest rate meeting intensified. Last week, the Nasdaq Index, the S&P 500 Index, and the Dow Jones Industrial Average all rose by more than 1%, with the Dow and S&P 500 both closing at record highs last Friday. In the coming week, the highly anticipated US monthly retail sales report, known as "terrifying data," will lead the economic calendar. Investors will assess whether the economy is picking up speed again after the unexpectedly strong September employment report. In terms of corporate news, Bank of America (BAC.US), Goldman Sachs (GS.US), and Morgan Stanley (MS.US) among other major banks will release financial reports. Taiwan Semiconductor (TSM.US) and ASML Holding (ASML.US) will kick off the semiconductor industry's earnings season, while United Airlines (UAL.US) and Netflix (NFLX.US) financial reports will also be in focus this week.

Is Inflation Reaching the Target? Goldman Sachs Predicts September PCE Close to the Fed's 2% Target. The US September Personal Consumption Expenditures (PCE) report is set to be released on October 31, 2024. According to a recent report by Goldman Sachs economists, the predicted increase in this inflation indicator for the next 12 months is 2.04%, rounded to 2%, which is the Federal Reserve's target inflation rate. The report on personal consumption expenditures will provide the latest insights into inflation trends, including both the overall and core personal consumption expenditure price indices, which are closely monitored by the Fed in making monetary policy decisions. The personal consumption expenditure report is often described as the Fed's preferred inflation indicator. It is notable that Goldman Sachs expects "core" personal consumption expenditure to be 2.6%. Core inflation rates exclude food and energy, which the Fed considers a better indicator of long-term trends. PCE annualized at 2.6%, much lower than the 3.3% reported last week based on the CPI report.

Expectations of Trump's Victory Push Bitcoin to a Two-Week High. Expectations of Trump's victory, which support Bitcoin, have increased, leading Bitcoin to its highest level in two weeks. On Monday, this largest digital asset rose steadily, then retraced slightly. As of the time of drafting, Bitcoin was up by 3.04%, at $64,148. Smaller tokens like the second-ranked Ethereum and the top 10 token Solana also saw significant gains.

As the countdown to the US presidential election continues, global corporate executives are flocking to foreign exchange hedging transactions. With less than a month until election day, the potentially market-shaking and uncertain US presidential election is prompting financial executives to strengthen their company's foreign exchange hedging. In the fierce competition for the presidency and congress, Harris and Trump have put forward sharply different views on trade, government spending, and economic issues. Companies operating in different countries are facing a variety of situations—including a Republican or Democratic landslide—that could lead to severe exchange rate fluctuations like those seen when Trump was first elected eight years ago. This has exacerbated exchange rate volatility. The one-month implied volatility of the Euro is currently at its highest level in about a year; according to compiled data, this indicator is currently at its highest level for the Mexican Peso since 2020.

Uncertainty about the prospect of a Fed rate cut is exacerbating market volatility, prompting investors to turn to medium-term bonds. With the prospect of a Fed rate cut becoming more uncertain, bond investors are taking defensive measures. Surprisingly high inflation data and weak labor market data released last week led traders to reduce bets on the magnitude of Fed rate cuts for the rest of 2024, pushing US bond yields to their highest level since July. In addition, a closely watched index measuring expected volatility in US bonds also rose to its highest level since January. Against this backdrop, investors are finding it difficult to decide where to allocate cash in the world's largest bond market. To mitigate economic resilience, potential fiscal impacts, or vulnerabilities from the turmoil of the US election, asset management giants including BlackRock, PIMCO, and UBS Global Wealth Management are advocating the purchase of five-year bonds.

Individual stock news

Gurman: Apple (AAPL.US) may launch a low-priced version of the headset as early as next year, or smart glasses in 2027. According to media reports on Sunday, Mark Gurman, a well-known tech journalist at Bloomberg, said Apple may launch a lower-priced Vision headset device as early as next year to develop a more consumer-friendly mixed reality headset device. The previously released $3500 Vision Pro headset from the company did not generate much enthusiasm. Since its launch in the US in February this year, sales of this device have not exceeded 0.1 million units in a single quarter, and it is not expected to exceed 0.5 million units this year either. The price of the low-end model is estimated to be around $2000 and may use a weaker processor and cheaper materials. The report also states that Apple expects sales of this low-priced headset to be at least twice that of the Vision Pro.

TSMC denies investment plans in Europe. There are reports that TSMC plans to build more factories in Europe, focusing on the artificial intelligence chip market to expand its global business footprint. Reports suggest that TSMC has started building its first wafer fab in Dresden, Germany, and is planning to build several wafer fabs for different market segments in the future. However, in a statement, TSMC stated that the company remains focused on its current global expansion projects and currently has no new investment plans. TSMC is the world's largest chip manufacturer, and most of its chips are produced in Taiwan, China. The company is currently investing billions of dollars in building new factories in the US, Japan, and Germany.

Apple (AAPL.US) reportedly cancels California testing permit, officially ending autonomous car plans. According to reports, at Apple's request, the California Department of Motor Vehicles canceled the company's permit to test autonomous cars on public roads in California, officially putting an end to the previously rumored autonomous car plans by Apple. The permit, first issued in 2017, allowed Apple to test autonomous cars on the road with a safety driver by April 30, 2025. Apple reportedly submitted a confirmation notice to the California DMV to cancel the permit. The department replied on September 25 that the permit would be canceled on September 27. This is the latest setback for Apple's autonomous car project Titan. Earlier this year, reports indicated that the tech giant delayed the release of the Apple Car and downgraded the level of autonomous driving from L4 to L2+.

After selling Bank of America shares, Berkshire massively increases stake in SiriusXM (C). Last week, Warren Buffett's Berkshire Hathaway (BRK.A.US) made significant purchases of shares in the broadcasting company SiriusXM. According to documents filed with regulators last Friday, this investment group bought $86.73 million worth of stock in three days, increasing its total stake in the company to 108.72 million shares. Berkshire Hathaway bought 0.8698 million shares of SiriusXM stock on Wednesday; it bought 0.9178 million shares and 517,200 shares through two separate transactions on Thursday; and it purchased 1.2593 million shares on Friday. Berkshire Hathaway disclosed its stake in SiriusXM back in November 2023. In September last year, following a deal with Liberty Media, SiriusXM became a capital structure-simplified independent public company. The broadcasting company is expected to announce its first performance since then on October 31.

Important economic data and events notice

At 23:00 Beijing time: US September New York Fed's 1-year inflation expectations (%).

At 21:00 Beijing time: In 2026, FOMC voting member and Minneapolis Fed President Kashkari participates in an expert panel discussion.

At 03:00 Beijing time the next day: Fed Governor Waller gives a speech on the economic outlook.

At 05:00 Beijing time the next day: In 2026, FOMC voting member and Minneapolis Fed President Kashkari participates in a seminar on the current US monetary policy.

To be determined: OPEC releases the monthly crude oil market report (specific timing of the monthly report announcement is TBD, usually around 18:00-20:00 Beijing time).

Performance forecast.

Pre-market on Tuesday: Ericsson (ERIC.US), UnitedHealth (UNH.US), Johnson & Johnson (JNJ.US), Bank of America (BAC.US), Goldman Sachs (GS.US), Citigroup (C.US).