October 13th Market Overview

Happy Monday

We saw this same playbook in April on a larger scale. Trump backed off China over the weekend. Markets bounced.

Gold up to $4,125 while stocks rally. Nobody trusts the currency.

Nov. 1 is a real date to pay attention too. Rare earths change the game this time, our big tech companies cannot skirt around a supply squeeze like that.

Let's dig in...

Today's Big Picture

1.Trump Backs Away From China Escalation 
Trump walked back Friday's threat with a Sunday post saying "it will all be fine." Bessent said the tariff hike "doesn't have to happen" and confirmed talks this week. Markets treated it as the April playbook repeating - threaten, negotiate, walk back. Nov. 1 deadline still looms.

2. Gold Breaks $4,125 → Currency Trust Erodes 
Gold hit a new record above $4,125. Citadel's Ken Griffin captured what's happening: investors now view gold as the safe-harbor the dollar used to be. When stocks and gold rally together, you're betting on growth while hedging the currency that measures it. This is structural.

3. AI Infrastructure Money Gets Real
Broadcom and OpenAI formalized their partnership to build 10 gigawatts of custom AI accelerators. Same day, Brookfield committed $5 billion to deploy Bloom Energy fuel cells for AI data centers.

Market Overview

Index Performance

Stock Spotlight

Broadcom $AVGO ( ▲ 9.86% ) 
and OpenAI announced they're building 10 gigawatts of custom AI accelerators together. This formalizes an 18-month collaboration that had been under wraps.

Bloom Energy $BE ( ▲ 26.67% ) 
landed a $5 billion partnership w/
Brookfield Asset Management $BAM ( ▲ 3.67% )
to power AI data centers with fuel cells. First European site announcement coming before year-end.

Warner Bros. Discovery $WBD ( ▲ 4.53% ) 
rejected a takeover proposal from Paramount Skydance $PSKY around $20 per share. Bloomberg reports Ellison may take the offer directly to shareholders.

Big Name Updates

Nvidia $NVDA ( ▲ 2.54% ) 
CEO said AI computing demand has climbed meaningfully over the past six months. He confirmed involvement in xAI's financing round.

Tesla $TSLA ( ▲ 4.93% ) 
Shanghai Gigafactory began its Q4 production ramp. Melius initiated coverage with a Buy rating and $520 target.

Other Notable Company News

Beyond Meat $BYND ( ▼ 48.26% ) 
collapsed after announcing a debt exchange involving over 300 million new shares. Massive dilution.

Intel $INTC ( ▲ 1.77% ) 
was cut to Underperform at BoA. The note questions valuation and sees no clear AI strategy or foundry split catalyst.

PayPal $PYPL ( ▼ 1.07% ) 
was downgraded to Sell by Goldman Sachs with a $70 target, citing interest rate headwinds and softer German trends.

JPMorgan Chase $JPM ( ▲ 2.7% ) 
announced a $10 billion investment plan over the next decade for companies critical to U.S. national security.

Sector Watch

Bond Market

Treasurys were closed for Columbus Day. The dollar hit its highest level since August. Bond trading resumes Tuesday.

Policy Watch

Fed 
Philadelphia Fed President Anna Paulson said tariff-driven price increases should be temporary. She supports more rate cuts this year but wants to move cautiously as the Fed gets closer to neutral.

Government Shutdown 
Trump directed the Pentagon to ensure Oct. 15 troop paychecks as the shutdown enters week two. Economic data releases continue to be delayed - consumer inflation data pushed back to Oct. 24.

Fiscal & Trade 
Bessent said the China tariff hike "doesn't have to happen" if talks progress. Working-level meetings are set for this week. A Trump-Xi meeting in South Korea before Nov. 1 remains on the table. This mirrors April's playbook.

International 
China's September exports showed strength to non-U.S. markets despite shipments to America falling. The Middle East ceasefire held and all living Gaza hostages were released, removing a key oil risk.

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What To Watch

Bank Earnings Starting Tuesday
Citigroup $C, Goldman Sachs $GS, JPMorgan Chase $JPM, and Wells Fargo $WFC report Tuesday.
Bank of America $BAC and Morgan Stanley $MS follow Wednesday.
Watch for any consumer stress signals.

Tariff Timeline and China Talks
Nov. 1 is the deadline. Watch for confirmation of this week's working-level meetings and any Korea summit details. The rare earth angle adds complexity this time.

Silver Supply Squeeze
Goldman expects metal to move back from New York to London, which could relieve the squeeze. Watch London premiums and ETF flows.

Thanks for reading 🙂

- John