U.S. Indexes were sold across the board on Friday, with the NASDAQ 100 underperforming as the rout in technology, AI, chip and memory stocks continued. Reports that Anthropic’s valuation expectations had been lowered to USD 1.5 trillion from USD 2 trillion added to concerns over elevated valuations across the AI sector. Elsewhere, geopolitical tensions remained elevated amid ongoing strikes between Saudi Arabia and the Houthis, with Saudi Arabia’s East-West pipeline reportedly targeted. Meanwhile, US lawmakers introduced legislation to block President Trump’s agreement on Russian diesel exports, while Russia’s U.S. Indexes were sold across the board on Friday, with the NASDAQ 100 underperforming Ryazan oil refinery reportedly halted operations at one of its primary units following the October 15th drone attack. The developments helped keep crude prices supported, with WTI (Nov) settling above USD 100/bbl, while Brent (Dec) briefly reaching USD 110/bbl, its highest level since May. Fixed income saw choppy trade amid competing influences from higher oil prices and the technology-led equity sell-off. Meanwhile, Fed Chair Warsh’s overnight remarks helped reinforce expectations for an October pause, with some analysts interpreting his usual reluctance to provide forward guidance as an indication that he was comfortable with current market pricing despite the recent hotter-than-expected inflation reports. As a reminder, Warsh’s August Jackson Hole speech had helped prepare markets for the Fed’s September rate hike. The Dollar weakened despite the rise in longer-dated Treasury yields, as traders pared expectations for an October Fed rate hike to around 17% from 29% before Warsh’s remarks. Despite the broader risk-off tone, the antipodean currencies and Sterling outperformed, while the Japanese Yen lagged, potentially reflecting concerns over the implications of the AI sell-off for US growth expectations. Gold was little changed on Friday, while Silver saw modest weakness and Bitcoin declined. Elsewhere, US economic data delivered another set of elevated inflation readings, with Import and Export Prices accelerating, while Industrial Production exceeded expectations and outpaced Manufacturing Production. Industrial Production rose 0.7% M/M in September, above the expected 0.4% and accelerating from the prior 0.1%, while the Y/Y rate increased to 2.2% from 1.4%. Manufacturing Production rose 0.3% M/M, in line with expectations and rebounding from the prior 0.2% decline, while annual growth accelerated to 1.1% from 0.9%. Meanwhile, Capacity Utilisation increased to 76.9% (exp. 76.5%, prev. 76.4%), although it remained below its long-run average. Overall, the report pointed to a strengthening in industrial activity in September, with headline production growth outpacing manufacturing. All major market groups posted gains except business equipment, which was unchanged. Consumer goods output rose 0.7%, as an increase in nondurable goods more than offset a decline in durable goods, while defence and space equipment output rose 0.4%. Elsewhere, construction supplies increased 1.0%, business supplies rose 0.9% and materials output advanced 0.7%, supported by both energy and non-energy components. ING noted that US manufacturing continues to perform strongly, led by advanced technology, pharmaceuticals, chemicals and energy, although more commoditised production remains under pressure given the difficulty of justifying a premium for US-made goods. US Import Prices rose 1.1% M/M in September (exp. +0.8%, prev. +0.5%), with the annual rate accelerating to 8.1% from 6.7%, marking the largest Y/Y increase since July 2022. The monthly rise was driven by both fuel and nonfuel imports, with fuel prices increasing 4.8%, supported by higher petroleum (+4.6%) and natural gas (+1.6%) prices. Nonfuel import prices rose 0.7%, driven by capital goods (+0.9%), nonfuel industrial supplies and materials (+1.4%) and consumer goods excluding automobiles (+0.4%). Meanwhile, Export Prices surged 2.2% M/M (exp. +1.0%, prev. +1.2%), with the annual rate accelerating to 11.6% from 8.6%, also marking the largest increase since July 2022. The monthly rise was driven by higher agricultural export prices (+2.6%), particularly soybeans, corn and wheat, alongside a 2.1% increase in nonagricultural export prices, supported by industrial supplies and materials (+4.0%). Overall, the report added to this week’s inflation concerns following the hotter-than-expected CPI and PPI releases, potentially posing further upside risks to the September PCE report due October 29th. However, with Fed Chair Warsh maintaining his preference against explicit forward guidance in his overnight remarks, markets continue to price an October hold despite the recent inflation surprises. Elsewhere, Oil closed higher by 3% while Gold was flat.
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For anyone following my Platinum Service it made 1150 points on Friday and is now ahead by 2733 points for October after ending September with a nice gain of 7767 points, after ending the month of August with a gain of 2645 points after closing July with a gain of 8031 points, after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a previous record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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