October 12th Market Overview

Happy Friday

Well, the S&P 500 finished flat, but most sectors had a good day, really led by energy as oil climbed.

Big tech drag after a Chinese memory maker spooked chip stocks. These days, that’s enough to stall the whole index.

Let’s dig in...

Today's Big Picture

1. Oil Climbs on Two Fronts
   
   Trump’s energy ceasefire between Russia and Ukraine lasted only hours before Russia hit Ukrainian power plants. Ship tracker Kpler says oil flows through the Strait of Hormuz fell to 2 million barrels a day Saturday. Before the war, it was about 17 million. Brent climbed back near $107, and energy stocks hit their first record high since September 10.
   

2. China’s Memory Push Hits Micron 
   
   Chinese memory maker CXMT says it’s made real progress on a chip design that packs in more storage. It plans a server memory product built on it by year-end, less than three months away. Micron $MU fell and led tech lower, with SK Hynix and Samsung sliding too. Investors didn’t wait to see whether CXMT can deliver.
   

3. The Bull Market Turns Four 
   
   The S&P 500 bottomed at 3,577 four years ago today and has more than doubled since. Investors keep showing up. US stock funds just had 13 straight months of inflows, the longest streak in records going back to 2000. Goldman turned bullish on global stocks for the next three months, betting strong earnings keep the run going.

Market Overview

Index Performance

Stock Spotlight

Bumble $BMBL ( ▲ 50.2% )  
rallied on a Wall Street Journal report of advanced talks to go private at about $1 billion. Founder Whitney Wolfe Herd is expected to stay involved.

Chipotle $CMG ( ▼ 3.81% )  
fell after Starbucks $SBUX said flatly that it’s “not buying Chipotle.” The Financial Times floated the idea last Thursday, so the takeover talk lasted four days.

eBay $EBAY ( ▲ 3.64% )  
rose after Morgan Stanley named it a Top Pick, citing its fast-growing live-stream shopping business. Analyst Nathan Feather sees live selling as a $27 billion market and nudged his target to $132.

AST SpaceMobile $ASTS ( ▲ 1.66% )  
bounced after Deutsche Bank upgraded it to Buy and kept its $93 target. The stock fell hard Friday after Elon Musk said SpaceX would buy nationwide airwaves to compete with wireless carriers.

Big Name Updates

Salesforce $CRM ( ▲ 1.49% )  
helped lift the Dow after Bank of America upgraded it two notches to Buy. Analyst Tal Liani says AI should make big companies lean on Salesforce more, not rip it out.

Meta $META ( ▲ 3.28% )  
got good early numbers on Muse, its AI agent. Sensor Tower says Muse brings back nearly twice as many new users as ChatGPT the next day. ChatGPT pulls ahead after about a week.

LVMH $LVMUY ( ▼ 2.58% )  
said its fashion and leather unit, home to Louis Vuitton and Dior, brought in €8.25 billion last quarter. Analysts wanted €8.39 billion, and the company blamed a weaker economy in China.

Blue Chips
MarketBeat lists “7 Blue-Chip Stocks to Add To Your Forever Portfolio”

Volkswagen $VWAGY ( ▼ 0.39% )  
delivered 405,800 cars in China last quarter, down more than a third from a year ago. Chinese brands keep cutting prices, and VW refuses to follow them down.

Other Notable Company News

Moderna $MRNA cooled off after closing last week at its highest level in more than four years. Full late-stage data on its melanoma vaccine with Merck lands later this month.

Biogen $BIIB rose after JPMorgan upgraded it to Overweight, pointing to several drug trial results due in 2027.

Mattel $MAT rose after Seaport upgraded it to Buy, citing reports that other companies are interested in buying the toymaker.

Teekay Tankers $TNK and other oil shippers hit 52-week highs as the cost of shipping crude keeps climbing.

Valero $VLO and other refiners edged higher as investors sized up the push to bring more diesel to market.

IREN $IREN gave back its early pop from the Anthropic cloud deal and turned lower.

Vicor $VICR got US trade officials to open a patent probe into Foxconn and others over computer power parts.

Today’s Sponsor

Sector Watch

Bond Market

The bond market took Columbus Day off, so yields sat still and the dollar edged a little higher. Treasurys reopen tomorrow.

Policy Watch

Fiscal & Trade

Trump is betting his Russian diesel deal brings down sky-high fuel prices before the midterms. He defended it today, writing “I made the right choice for the American People.” Pushback is coming from both parties. Seven senators, four of them Republicans, said the US shouldn’t give Putin “a financial lifeline.”

Jefferies doesn’t expect the deal to move diesel prices much, and the numbers back that up.

• Russia promised 4.8 million tons, about nine days of US diesel demand, and not all of it comes here

• The first batch is just 300,000 tons, since Ukrainian strikes have hurt Russia’s refineries

• Diesel futures now trade above where they were before the deal

On the bright side, the ports of Los Angeles and Long Beach had their busiest month ever in September. LA port director Gene Seroka credits lower tariffs and strong consumer spending.

International

• Houthi strikes on Riyadh’s main airport killed 12 over the weekend, and Saudi Arabia shut the airport down
  

• Asked if the US would join Saudi strikes on the Houthis, Trump said “We may. We’re going to look at it.”

What to Watch

Bank Earnings Start Tomorrow

The big banks report this week, starting with JPMorgan $JPM, Goldman Sachs, Wells Fargo and Citigroup on Tuesday morning. Bank stocks had a rough month heading in, even though higher rates usually help them. I’m listening for how higher rates are hitting their borrowers and whether deal-making is slowing.

September Inflation Report

CPI lands Wednesday, with producer prices and retail sales on Thursday. The Fed is expected to hold rates at its next meeting. Orion’s Tim Holland thinks even a hot number won’t change that. The number to watch is core inflation, which strips out food and energy. If it runs hot, expect traders to start betting on another hike.

Thanks for reading - you are now the more informed 🙂

- John

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