Pre-market Market Trends

1. On October 9th (Wednesday) pre-market, U.S. stock futures for the three major indices fell in unison. As of press time, Dow futures were down 0.06%, S&P 500 index futures were down 0.05%, and Nasdaq futures were down 0.13%.

2. As of press time, the German DAX index was up 0.27%, the UK FTSE 100 index was up 0.25%, the French CAC 40 index was up 0.28%, and the Euro Stoxx 50 index was up 0.11%.

3. As of press time, WTI crude oil was down 0.65%, trading at $73.09 per barrel. Brent crude oil was down 0.57%, trading at $76.74 per barrel.

Market News

Bank of America: The Q3 earnings season kicks off, investors to revel in a "stock picker's paradise." Bank of America stated that the third quarter will be an "excellent environment" for stock pickers, with the performance of S&P 500 constituents driving a significant portion of the index's returns. The bank's equity and quantitative strategists believe that the derivatives market's pricing reflects the largest implied volatility at the stock level post-earnings release since 2021 in its data history. Meanwhile, as of September, corporate earnings contributed 45% to the S&P 500's 12-month return rate, while in the "macro-driven market" from 2022 to 2023, corporate earnings multiples have lagged significantly behind return rates. Bank of America equity strategist Ohsung Kwon said in a report on Sunday, "This earnings season could be a paradise for stock pickers." Kwon mentioned that the Federal Reserve cut interest rates by 50 basis points to 4.75%-5% last month, and said, "As the easing cycle begins, we expect corporate earnings to account for a larger share of future returns."

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Fed rate cut bets fade, dollar hits longest winning streak in nearly three years. Last week's unexpectedly strong U.S. jobs report prompted the market to rule out the possibility of the Fed cutting rates by another 50 basis points this year, and since then the dollar has surged to its highest level since mid-August. The Bloomberg Dollar Spot Index has risen for eight consecutive days, marking the longest winning streak since April 2022. After a series of surprising data showing the resilience of the U.S. economy, traders have been forced to reconsider their bets on U.S. easing policies. This has reduced the necessity for the Fed to continue cutting rates aggressively as inflation slows. Erik Wytenus, Head of Investment Strategy at J.P. Morgan Private Bank EMEA, said in an interview, "We often use the word 'resilient' to describe the health of the U.S. economy, and it's hard to argue with that." He added that this has driven investors' preference for U.S. assets.

Bridgewater's Dalio: A significant rate cut by the Fed is by no means the norm, and U.S. Treasuries have become a "high-risk investment." Billionaire investor and founder of the world's top hedge fund Bridgewater Associates, Ray Dalio, recently said that he expects the Fed not to "significantly cut rates," with a 50 basis point rate cut not being the norm, as the U.S. economy is still "in a relatively good balance," and he emphasized that given the recent significant volatility in the U.S. Treasury market due to rate cut expectations, U.S. Treasuries have become a high-risk investment. He said, "Current U.S. Treasuries are not a good investment, in my view, we have interest rate risk in the bond market." Dalio said that investors focused on the U.S. Treasury market are betting on a rapid rate cut pace by the Fed, but this aggressive dovish expectation seems premature.

Guggenheim CIO: An inflation rate of up to 4% could become the new normal. Anne Walsh, Chief Investment Officer at Guggenheim Partners Investment Management, believes that the U.S. inflation rate will rise to 4% in the medium term. She said that although the inflation rate is expected to return to the Fed's 2% target level in the short term, it may not last long. Walsh said, "We have recently entered the world of reflation for the first time." When the inflation rate returns to the Fed's 2% target, policymakers "should let go of that ridiculous cap and operate within a range, because I don't think they can maintain it at this level for long." In recent months, as price pressures have steadily retreated from their 2022 peak, investors have shifted their focus from inflation to economic growth, but the strong jobs report released last Friday after policymakers announced a 50 basis point rate cut has sparked concerns about inflation heating up again.

Goldman Sachs: A slight decline in geopolitical risk premiums in the oil market, with Brent oil expected to rise by $10-$20. Goldman Sachs said that after last week's significant increase in both Brent crude implied volatility and call option implied volatility, this week's geopolitical risk premium indicator in the oil market has slightly declined. Goldman Sachs still expects that in the event of an interruption in Iranian oil production, Brent crude prices could rise by up to $10 to $20 per barrel due to the uncertain progress of geopolitical conflicts. However, the bank also added that in the absence of significant disruptions, oil prices may stabilize near current levels this quarter.Individual Stock News

Can NVIDIA (NVDA.US) continue its frenzy? The stock continues to rise before the market opens, approaching its historical high! After experiencing a "five-day winning streak," NVIDIA's stock price has quietly climbed close to its historical high. As of Tuesday's US stock market close, NVIDIA rose by 4.05%, closing at $132.89, just a "step away" from the closing high of $135.58 set in June. As of press time, NVIDIA's US stock price before the market opened on Wednesday rose by more than 1%,有望连续第六个交易日上涨. At the same time, Wall Street is also bullish. Analysts say that strong demand for the new Blackwell chip series will lead to strong performance for NVIDIA next year.

Tech giant Google (GOOGL.US) faces a "breakup moment"! The US Department of Justice told a federal judge that they are considering recommending that the tech giant Google be forced to sell some of its businesses to alleviate the monopoly harm it has caused in the online search market. If Google is really broken up, it will also be a historic antitrust breakup. In addition to the breakup, the US Department of Justice also recommended that Google provide more exclusive data transparency, allowing competitors and new entrants to access and use search engine data, and reduce Google's advantage in using its platform (such as Chrome, Play, Android) to promote its own search business. Since Washington's attempt to break up Microsoft failed 20 years ago, this is the most important measure to control the illegal monopoly behavior of a large US technology company, showing that Google may face a similar long-term legal battle as Microsoft at the time, and the possibility of a breakup will continue to exist. Google needs to go through a lengthy legal process to avoid a breakup.

Negotiations break down again! Boeing (BA.US) withdraws a 30% pay raise plan: There is no point in further negotiations. It is reported that Boeing and the International Association of Machinists and Aerospace Workers (IAM) negotiated with a federal mediator on Monday and Tuesday over a plan to raise pay by 30% and increase retirement benefits, but the negotiations broke down, and Boeing and IAM blamed each other for the deadlock. Boeing said it has withdrawn the aforementioned plan and said there is no point in further negotiations. This indicates that the strike that has been going on for nearly a month will continue, and Boeing's key manufacturing plants for producing commercial aircraft on the US West Coast will still be paralyzed.

AI chips maintain strong demand, and TSMC (TSM.US)'s Q3 revenue increased by 39%, exceeding expectations. This major chip manufacturer for NVIDIA and Apple announced sales of 75.97 billion New Taiwan dollars ($23.6 billion) for the quarter in September, higher than the average analyst expectation of 74.8 billion New Taiwan dollars, which eased concerns about AI hardware spending beginning to decrease. The company will announce its full third-quarter results next Thursday.

Arcadium Lithium (ALTM.US) soars more than 30% before the market opens! Rio Tinto (RIO.US) acquires it at a premium of $6.7 billion. Rio Tinto's proposed $6.7 billion cash acquisition of Arcadium Lithium has been approved by the board of directors, which will help this, the world's second-largest mining company, become a major producer of key battery materials. Rio Tinto said in a statement on Wednesday that it would acquire Arcadium Lithium at a price of $5.85 per share. This is Rio Tinto's largest deal since its $38 billion acquisition of Canadian aluminum company in 2007. Rio Tinto believes that lithium will help it promote a new round of growth in the battery metal industry. Rio Tinto said the deal has been unanimously approved by both boards and is expected to be completed by the middle of 2025.