Morning in New York: focus on geopolitics and corporate news

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

The focus remains on trying to normalize US-China trade relations. In the coming days, U.S. Treasury Department head Scott Bessent will meet with Chinese Vice Premier He Lifeng in Malaysia after a phone call last Friday that resulted in Bessent's announcement of de-escalation. For his part, Donald Trump acknowledged that the imposition of a 100% duty from November 1 remains in doubt, reiterated his plan to meet with Xi Jinping at the APEC summit and expressed optimism about the upcoming trade deal. The President also allowed for a reduction in import duties for the PRC on condition of increased purchases of US soybeans. Investors see this as a chance for a new "truce", but remain cautious due to uncertainty over the parameters of duties and control over critical supplies.

An additional factor on the geopolitical agenda is the relations between the United States and India. The head of the White House said that he would maintain the existing import duties for India until the country stops importing Russian oil. Despite the statements about the decrease in the volume of its purchases, in October they remained at an increased level. This situation increases tension in commodity markets and increases the sensitivity of currencies of developing countries to any signals from Washington.

Cleveland-Cliffs (CLF), Summit Materials (SMMT) and Deluxe (DX) will report quarterly results before the open, and WR Berkley (WRB), Zions Bancorporation (ZION), Cadence Bank (CADE) and Steel Dynamics (STLD) will report after the close of the main session.

Futures on US indices show positive dynamics. We assess the balance of risks as neutral with moderate volatility. We focus on S&P 500 fluctuations in the range of 6600-6720 points (from -1% to +0.8% of the previous session's closing level).

- Kering (KER.EU) is selling its perfume division L'Oréal (OR.EU), including the Creed brand and fragrance licenses to Gucci, Bottega Veneta and Balenciaga, for $4.66 billion to reduce debt and focus on its fashion business. Shares of both companies are rising.

- Nvidia (NVDA) CEO Jensen Huang will attend the APEC CEO Summit in South Korea for meetings with major local companies including Samsung (SMSN.EU) and SK Hynix. On the premarket, the securities of Nvidia and its key technology partners are trading in the plus side.

- Paramount Skydance (PSKY) will cut about 2,000 jobs in the U.S. starting Oct. 27 as part of a $2 billion savings program following its merger with Skydance Media. PSKY shares are down before the start of main trading.

- ISS (Institutional Shareholder Services) urged Tesla (TSLA) shareholders to reject the board's proposed $1 trillion compensation package for Elon Musk, adding pressure ahead of the board's meeting scheduled for November 6 and prompting increased volatility in the issuer's shares. TSLA quotes were growing by more than 1% before the opening.

- In the first 10 days, sales of iPhone 17 in the United States and China exceeded the figure of the previous model by 14%. The volume of sales of the base version in the PRC almost doubled, and combined with the result of the States, the growth amounted to about 31% due to upgrades at the same price. On the premarket, Apple (AAPL) securities show a slight increase.

- Boeing (BA) has received FAA approval to increase production of the 737 MAX to 42 units per month while maintaining increased oversight. The management of the aircraft giant is preparing a step-by-step production ramp-up, which is important for the restoration of the company's cash flow. The concern's securities remain in the green before the opening of trading.

Trades on October 17 on American stock exchanges ended mostly in the plus. S&P 500 grew by 0.53%, Nasdaq 100 rose by 0.65%, Dow Jones added 0.52%, only Russell 2000 fell by 0.6%.

Most industrial indices closed in positive territory. The non-cyclical consumer goods sector (XLP: +1.33%) was the leader of growth. Energy (XLE: -0.46%) was the outsider. Positive dynamics prevailed in the shares of the Magnificent Seven. Tesla (TSLA: +2.46%) was the best performing stock, while Amazon (AMZN: -0.67%) remained under pressure.

The positive momentum was due to the easing of concerns around credit problems at regional banks, in particular Zions Bancorporation (ZION) and Western Alliance (WAL). Analysts noted that the situation is localized and does not pose a threat to the banking system as a whole, despite lingering uncertainty following the bankruptcies of First Brands and Tricolor. Reported above expectations Truist Financial (TFC), Huntington Bancshares (HBAN) and Ally Financial (ALLY) provided stabilization of sentiment in the sector.

The situation remains tense on the trade front between the US and China, although the sides have not adopted new restrictive measures. Donald Trump said in an interview with Fox Business that "high bilateral duties are unsustainable" and Washington will be able to mend relations with Beijing, which somewhat calmed the market. However, uncertainty surrounding a possible meeting between Trump and Xi at the upcoming ARES summit remains. This restrains the activity of buyers in the high-tech segment.

- American Express (AXP: +7.3%) beat earnings and revenue expectations and raised the lower end of its guidepost for 2025, citing increased customer spending on travel and gains in commercial payment volume.

- Jefferies Financial Group (JEF: +5.9%) said the losses from the First Brands bankruptcy are insignificant and received an upgrade to outperform from Oppenheimer.

- Oracle (ORCL: -6.9%) stock price declined after an investor day. Optimistic statements from management regarding the cloud and AI business were offset by disappointment regarding the FY 2028 earnings guidance.

- Interactive Brokers (IBKR: -3.3%) reported better than expected, but its quotes declined on fears of yield pressure from lower rates.

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