Morning in New York: consumer price data will set the trading vector

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research

The focus for investors today will be the delayed release of the Consumer Price Index (CPI) data for September due to the shutdown, scheduled for 8:30 AM ET. The consensus forecast calls for a 0.4% m/m rise in the overall reading and a 0.3% m/m rise in the core reading. The market is almost fully pricing in two Fed rate cuts before the end of the year, so an actual reading above expectations could trigger a reassessment of the monetary easing trajectory and put pressure on quotes.

Also released today will be the preliminary business activity (PMI) estimates for October and the final version of the consumer sentiment index from the University of Michigan. These leading indicators are of particular importance for monitoring the state of the economy amid the information vacuum created after the government shutdown.

Ahead of a meeting between Donald Trump and Xi Jinping scheduled for next week, Beijing has said it opposes "severing ties". The White House chief announced the day before that he was halting all trade talks with Canada in response to an ad campaign criticizing the tariffs, adding uncertainty to trade relations with another key partner of the States.

Procter & Gamble (PG), HCA Healthcare (HCA), General Dynamics (GD), Illinois Tool Works (ITW) and Booz Allen Hamilton (BAH) will report quarterly results before the open.

Futures on US indices show weakly positive dynamics. We assess the balance of risks as neutral with increased volatility. If the September CPI is higher than forecast, the balance will shift to the negative side, if the statistics indicates a slowdown in price growth, the broad market index will be able to renew the historical maximum. We focus on the S&P 500 fluctuations in the range of 6660-6800 points (from -1.2% to +0.9% of the previous session's closing level).

- Intel's (INTC) strong third-quarter report caused its shares to jump 8% in the premarket. The company beat revenue and profit expectations, and investors were positive about signs of recovery in the PC market and solid results in the data center segment.

- SS&C Technologies (SSNC) shares are up 5% after the company posted better-than-expected quarterly results and raised its full-year forecast. The company named strategic acquisitions (Calastone, Curo Fund Services), as well as active development of AI and automation as key growth drivers.

- Ford Motor (F) stock is up 2% ahead of the open, reacting to the release of third quarter results. The automaker's revenue for the period rose 9% YoY to a record $50.5 billion, while adjusted EPS rose to $0.45 from the consensus of $0.37. Despite the costs due to import tariffs estimated at $700 million and a fire at the plant of aluminum supplier Novelis, the company maintains its leadership in the hybrid truck segment with a 70% share of the respective market.

- Deckers Outdoor (DECK) shares reacted to the quarterly report with an 11% drop. The strong results were offset by a conservative guidance for the current quarter, which implies pressure from import duties and higher costs.

- Shares of Newmont Corporation (NEM) are down 7% following the release of its quarterly earnings. Although the issuer's earnings and revenue exceeded consensus, investors reacted negatively to the warning of lower free cash flow in the fourth quarter due to increased costs for the construction of treatment facilities at the Yanacocha mine in Peru.

Trades on October 23 on American sites ended with growth, which allowed to compensate for the losses of the previous day. S&P 500 added 0.58%, Nasdaq 100 rose by 0.88%, Dow Jones rose by 0.31%, and Russell 2000 - by 1.27%. Geopolitical tensions, which caused oil prices to spike, determined market sentiment. Shares of the "Magnificent Seven" traded mostly in plus. Tesla (TSLA: +2.28%) demonstrated the most confident positive dynamics, having recovered the morning decline. Energy companies (XLE: +1.33%) were the leaders of growth. Manufacturers of consumer staples (XLP: -0.49%) were the outsiders.

The main event of the day was the introduction of direct sanctions by the US and the EU against major Russian oil companies Rosneft and LUKOIL. Against this background, the price of WTI crude oil soared by 5.6%, to which energy stocks reacted positively.

In addition, traders were analyzing contradictory news regarding U.S.-China relations. On the one hand, the White House confirmed the planned October 30 face-to-face meeting of the leaders of the two countries in South Korea, which should be the first since 2019. On the other hand, information has emerged that the US may initiate an investigation into China's non-compliance with the terms of the 2020 trade deal. The uncertainty associated with this agenda restrained the activity of "bulls".

Secondary housing market sales for September rose 1.5% m/m to 4.06 million, with a consensus of 4.067 million.

- Shares of Honeywell (HON: +6.8%) reacted positively to the release of its third quarter report. The company exceeded revenue and profit expectations, with the aerospace segment being the key driver of the improvement.

- Successful results for the first fiscal quarter and an improved full-year outlook prompted buying in shares of Lam Research (LRCX: +4.5%). Despite supply constraints in China, the company expects further performance growth due to stronger demand for NAND memory chip manufacturing equipment.

- Las Vegas Sands (LVS: +12.4%) soared on the back of its third-quarter report. Its revenue and earnings beat consensus thanks to the recovery of its gaming businesses in Macau and Singapore. The company also increased its buyback program and raised its dividend.

- Shares of Dow (DOW: +13%) reacted positively to exceeding operating EBITDA estimates for the third quarter. In addition, the company's management noted an increase in cash flow.

- American Airlines (AAL: +5.6%) reported stronger-than-forecast revenue and earnings for the quarter. Investors positively assessed the strong free cash flow guidance, which will help the company reduce its debt load.

- Profit of Molina Healthcare (MOH: -17.5%) for the reporting quarter did not meet expectations, which caused the issuer's quotations to collapse. At the same time, the management significantly lowered the annual forecast due to the growth of medical expenses.

- Shares of Wyndham Hotels & Resorts (WH: -5.5%) were pressured by a weak third-quarter report and a downgraded guidance on key full-year metrics.

- Despite exceeding revenue and earnings forecasts, T-Mobile (TMUS: -3.3%) shares have come under pressure due to low average revenue per user (ARPU) and concerns about increased competition in the sector.

This article was AI-translated and verified by a human editor