Overnight, the emphasis has been on Chinese stocks. They are underperforming as caution grows ahead of a key weekend briefing that may shed more light on Beijing’s fiscal stimulus. On Saturday, China’s finance minister is expected to announce support measures to revive a slowing economy. As much as 2 trillion yuan ($283 billion) in fresh fiscal stimulus is anticipated to boost growth and restore confidence, but the devil will be in the details.
As for US markets, the inflation data is still the main discussion point. US inflation rose more than forecast in September, signaling stalling progress in the fight to bring prices in line. Separately, initial claims data showed applications for US unemployment benefits rose last week to the highest level in over a year. The market has an 80% chance priced in that the Fed will cut by 25 basis points when it meets in November, but truly crushing inflation is not a simple task.
Other noteworthy news includes an announcement that the Israeli cabinet is said not to have reached a decision on their Iran response, according to Israeli State Broadcaster Kan. Oil edged lower, trimming some of its gains from Thursday, and WTI opens at $75.60 per barrel.
In other markets, Bitcoin rose 1.5% to $60,637.06, Ether rose 1.9% to $2,412.1, the yield on 10-year Treasuries sits at 4.06%, and spot gold rose 0.6% to $2,644.91 an ounce. Data-wise, we have seen UK Monthly GDP slightly softer, rising +0.2% m/m (in line) and +0.2% 3m/3m (small miss) in August.
As for the day ahead, JPMorgan and Wells Fargo kick off earnings season for the big Wall Street banks. We will get US PPI and University of Michigan consumer sentiment data, as well as speeches from the Fed’s Lorie Logan, Austan Goolsbee, and Michelle Bowman.
