Morning in New York: focus on Fed signals

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

Amid the information vacuum created by the shutdown, which led to the cancellation of the publication of important macrostatistics, including weekly data on the number of jobless claims, all investors' attention on October 9 will be focused on the speeches of the Fed representatives. The greatest interest is the pre-recorded address of the regulator's chairman Jerome Powell, first of all, his assessment of the delay in the release of macro data will be important, especially after the minutes of the September meeting, released the day before, which revealed disagreement among the members of the committee on the timing of interest rate cuts.

Other FOMC members, including Michelle Bowman, Mary Daly and Neel Kashkari, will complete the picture. Their comments on the state of the economy, risks to inflation and the labor market in the absence of official data will be of heightened importance in shaping market expectations. Investors will be trying to understand whether the majority on the committee is leaning toward further policy easing or preferring to remain cautious.

On the debt market on Thursday, the auction of 30-year Treasury bonds will be in the spotlight. After weak demand from foreign investors for 10-year treasuries issued the previous day (the auction was held with a "tail" of 0.3 bp), today's placement will be another test of the market's ability to absorb new volumes of government debt without a significant rise in yields.

PepsiCo (PEP) and Delta Air Lines (DAL) will report quarterly results before the main session opens, with Applied Digital (APLD) and Levi Strauss (LEVI) reporting after the session closes.

Futures on US indices show about zero dynamics. We assess the balance of risks as neutral with moderate volatility. We focus on S&P 500 fluctuations in the range of 6705-6795 points (from -0.7% to +0.6% of the previous session's closing level).

- Nvidia (NVDA) shares are in the spotlight following news that the U.S. government has approved a multi-billion dollar deal to supply chips to the UAE. This event removes months of uncertainty around export licenses. Quotes are adding about 1% and could hit an all-time high at the opening of the session.

- A strong quarterly report sparked a rally in shares of Richardson Electronics (RELL), which are up 23%. The company reported revenue of $54.61 million and EPS of $0.13 with consensus of $51.51 million and $0.02, respectively. Investors were positive on the operating margin improvement and management's comments on strong results in the semiconductor wafer segment.

- Costco (COST) is adding 1.7% on the premarket after the release of total sales data, which for September rose 8% year-over-year to $26.58 billion.

- Apogee Therapeutics (APGE) shares lose in price about 11%. The pressure on the quotations was exerted by the announcement of the planned additional placement of shares. Although the funds will be used to develop clinical programs, the market reacted negatively to the inevitable dilution of shares of existing shareholders.

On October 8, trading on American stock exchanges ended mostly in the green sector. S&P 500 (+0.58%) and Nasdaq 100 (+1.19%) updated the historical maximums. The Russell 2000 rose by 1.04%, and the Dow Jones ended the day virtually unchanged. The key positive driver was a rebound in technology and AI-related stocks. Buying also dominated in the "Magnificent Seven", with Nvidia (NVDA) making the most notable contribution. The high-tech industry (XLK: +1.75%) was the leader of growth on this background. The energy sector (XLE: -0.58%) was the outsider.

The main macroeconomic event of the day was the publication of the minutes of the September FOMC meeting. It follows from the presented document that the majority of the committee members at that time did not support aggressive policy easing. Risks for inflation were assessed as elevated, while risks for the labor market were also preserved. However, as expected, the minutes did not have a significant impact on investor sentiment, as it only confirmed the "hawkish" attitude of Jerome Powell, which he broadcasted at the press conference after the meeting. The market ignored this signal, focusing on the resumption of growth in the technology sector.

- Jefferies Financial Group (JEF) shares fell 7.9% on information that Leucadia Asset Management holds $715 million in receivables related to auto parts maker First Brands, which filed for bankruptcy

- Fair Isaac (FICO: -9.8%) quotes were pressured by the announcement by its competitor Equifax (EFX: +0.71%) of changes to support its credit scoring segment, which include offering VantageScore 4.0 mortgage credit scores at a discount of more than 50% off 2026 FICO prices.

- Shares of ASML Holding (ASML: -1.5%) reacted negatively to a report from the U.S. House of Representatives Select Committee on China, which alleged that the company, among others, contributed to the development of China's semiconductor industry by selling equipment to state-owned and MIC-related enterprises.

- News of the $1 billion acquisition of Specialty Products and Insulation drove Topbuild stock (BLD: +10.1%) higher.

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