Market Update: Inflation, Oil Prices, and Geopolitical Risks

The market remains cautious ahead of tomorrow's CPI data, reflecting uncertainty around inflation and geopolitical risks.

### Market Update: Cautious Trends Amid Geopolitical Risks and Economic Data
* 📉 Today, the market opened weakly with the Dow Jones down **0.05%**, Nasdaq down **0.13%**, and S&P 500 down **0.05%**, reflecting a **cautious wait-and-see attitude** ahead of tomorrow's CPI inflation data.
* 💰 Gold prices have lost momentum, decreasing by **0.13% to $2,632.70**, while oil prices have also declined, with WTI down **1.35% at $72.60** and Brent crude down **1.3% at $76.15**, largely due to **easing geopolitical tensions in the Middle East**.
* 📊 The 10-year yield has risen above **4%**, increasing by **0.6 basis points** to **4.41%**, while the 2-year yield has also risen to **3.984%**, with discussions suggesting it may reach **4%**.
* 💵 The dollar index is up **0.2% at 102.77**, nearing its highest level since August, indicating **potential instability in the market** as high dollar values often signal **selling pressure**.
* 🏡 Mortgage rates have risen significantly, reaching **6.14% to 6.36%**, causing a **5% decrease in mortgage applications** compared to last week, as homeowners with low-rate mortgages hesitate to buy new homes.
* 📈 The upcoming U.S. weekly crude oil inventory update and Fed officials' remarks are expected to provide **further insights into market trends**, especially with the release of the **September FMC minutes** later today.
* 🌀 Hurricane Milton is causing significant concerns, with predictions of **extensive damage** and a potential economic impact estimated between **$10 billion to $150 billion**, particularly affecting **insurance companies and the broader market**.
* 📉 In tech news, Google faces potential business split orders from the Department of Justice due to **monopoly concerns**, leading to a **2.6% drop in its stock**, while Meta's stock is down despite **positive earnings forecasts and target price increases**.

### TSMC's Impressive Sales Surge and Market Updates Amid Economic Shifts
* 📈 TSMC's September sales reached **218.7 billion Taiwan dollars**, a remarkable **40% increase from the previous year**, exceeding expectations significantly.
* 💼 The third quarter also **surpassed consensus estimates**, with an **earnings surprise anticipated** in the upcoming official results.
* 🔍 Morgan Stanley predicts TSMC will maintain high growth over the next five years, with an **average annual revenue growth rate of 15% to 20%**.
* 💡 Demand for NVIDIA's AI chips and Apple’s production of 3-nanometer chips are driving TSMC's revenue, indicating a **strong growth outlook** for the company.
* 🚀 Meanwhile, Boeing faces challenges as negotiations break down, with its corporate bond rating on **negative watch**, risking a **downgrade to junk status**.
* 📉 Hindenburg Research's short position on Roblox initially caused a decline, but the stock rebounded after Wells Fargo raised its target price, **ignoring the allegations made against it**.
* 💰 The acquisition of Arcadium Lithium was confirmed, resulting in a **30% stock price increase**, while Tesla prepares for a significant event unveiling its **robot taxi prototype**, amidst mixed market sentiments regarding **inflation and economic resilience**.
* 🌍 Overall, the market shows signs of strength, with major indices rising, despite ongoing concerns in sectors like oil, as **crude inventories unexpectedly surged**.

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The market opened weakly, with the Dow Jones, Nasdaq, and S&P 500 all down slightly.

Gold prices are losing momentum, while oil prices continue to decline due to decreased geopolitical risk.

The 10-year and 2-year yields have risen, and the dollar index is also up, indicating potential instability.

The 30-year mortgage rate has increased, leading to a 5% decrease in mortgage applications.

Homeowners with low-rate mortgages are reluctant to buy new homes at current mid-6% rates.

The Fed officials are maintaining a strong economy and plan to pause interest rate cuts, while the U.

Current Economic and Environmental Challenges

Jefferson, the Vice Chair, noted that inflation is returning to 2%, with the market expecting the Fed to cut rates.

Hurricane Milton, a level 5 storm, is approaching Florida, causing significant damage and prompting a complete evacuation order.

The hurricane's impact is expected to be severe, with insurance companies and Disney facing major financial losses, while the U.

is trying to mitigate geopolitical risks in the Middle East.

-Israel Relations and Google's Monopoly Case

is upset with Israel's recent actions against Hezbollah, leading to a tense situation between Biden and Netanyahu.

Bob Woodward's new book highlights the strained relationship between Biden and Netanyahu since last year's Hamas attack.

Department of Justice is pushing for a business split at Google due to its illegal maintenance of a monopoly in the search market, leading to a decline in Google's stock prices.

Google's Antitrust Challenges and Market Impact

Google is facing significant uncertainty due to ongoing antitrust issues, which may weaken its monopoly power and ability to suppress potential competitors.

The company is appealing a federal court's decision to open its App Store for the next three years, while also dealing with ongoing antitrust lawsuits in Europe.

Despite these challenges, KeyBanc maintains a positive outlook on Alphabet, citing potential long-term benefits and encouraging cost-cutting measures, while also highlighting Waymo's growing valuation in the taxi sector.

TSMC's revenue is driven by strong demand, with Apple starting production of 3-nanometer chips and a potential wafer price increase next year.

Boeing, on the other hand, is facing a breakdown in labor negotiations, a negative corporate bond rating watch, and the potential for a junk status downgrade, which could lead to higher borrowing costs and significant financial losses.

Meanwhile, Roblox is rebounding from a short position by Hindenburg Research, with Wells Fargo raising its target price and expecting strong booking growth ahead of the third-quarter earnings announcement.

Carnival's Rise and Tesla's Upcoming Event

Carnival's operations may be impacted by hurricanes, but the reason for its stock rise is unclear.

The crude oil inventory has unexpectedly increased by 5.

81 million barrels, leading to potential downward pressure on oil prices.

Tesla's stock is up 1% ahead of a major event tomorrow, where they are expected to unveil a robot taxi and potentially announce the Model 2 and an expansion of their electric vehicle lineup.

The Model 2 in the automotive sector is expected to have a limited growth path until production starts in 2027, potentially negatively impacting stock prices.

JP Morgan's new analyst is advocating for a shift towards growth stocks, citing the strong resilience of the U.

There is an increased likelihood of inflation rising again, driven by the recent increase in raw material prices and a consistent upward trend in expected inflation.

Shifts in Market Expectations and Stock Preferences

The yield on 10-year bonds has dropped significantly, with a potential rise to 14%, leading to a "higher for longer" interest rate scenario.

JP Morgan has shifted its focus from defensive and cyclical stocks to mega-cap tech and quality growth stocks, with AI and companies like NVIDIA and Amazon being top picks.

Piper Sandler has identified stocks to be cautious about for potential earnings misses, including Paramount, Live Nation, and Southwest Airlines, while the S&P 500's potential volatility due to the upcoming CPI release has increased.

Inflation is a concern, with the CPI expected to decrease slightly, but the core CPI remains above 3%.

Morgan Stanley predicts a gradual slowdown in inflation, with housing cost inflation finally easing.

The stock market is showing positive movement, and oil prices are being influenced by a significant increase in inventory and an approaching hurricane.