Big Things Happening This Week

• A rebound for all the major indexes. Fueled by oil prices pulling back and tech stocks advancing, the major indexes were on a tear on Tuesday. The NASDAQ rose nearly 1.5% as tech mega caps recouped their losses. The S&P 500 was up nearly 1% and close to its previous record high while the Dow Jones saw a gain of 0.3%.
• Nvidia sees gains for five straight days. Chipmaker Nvidia was one of the big bounces on Tuesday soaring another 4% for its fifth consecutive day of gains. 
• Many of the "Magnificent Seven" saw green.  Amazon (AMZN), Apple (AAPL), and Alphabet (GOOG, GOOGL) all finished the session firmly in the green.
• Oil prices went lower. Mideast tensions somewhat cooled leaving prices of oil lower on Tuesday at a little over $73. Crude oil inventories in the United States however rose by 10.9 million barrels for the week ending October 4, according to The American Petroleum Institute (API). Analysts had expected a build of only 1.95 million barrels.
• Pressure in China. China failed to roll out another large stimulus package on Tuesday, a surprise to investors hoping to add more fuel to the unprecedented rally. Stocks in Hong Kong slumped over 9%.
• Eyes are on interest rate cuts again. New York Fed president John Williams told the Financial Times on Tuesday that Federal Reserve policy is "well positioned" to nail a "soft landing" for the economy. Fed governor Adriana Kugler said data will continue to drive rate decisions.
• The CPI report this week is important. The CPI inflation report due Thursday will provide further clues on the path forward for interest rates.
• Trump Media & Technology Group stock exploded. The stock extended gains by another 13% on Tuesday after closing more than 10% higher on Monday.
• Analyst noted that Apple iPhone 16 spending is higher than for the 15. KeyBanc analysts said in a note Tuesday that spending on the iPhone 16 in the first 10 days after its launch in September was 12% higher than it was in the same period following the iPhone 15's rollout.
• PepsiCo Q3 earnings results were dismal. PepsiCo lowered its sales outlook for the year, forecasting organic revenue growth in the low single digits below the previously expected 4% growth. Q3 revenue trailed behind Wall Street's estimates, coming in at $23.3 billion, versus the $23.8 billion expected.
• Hurricane Milton is heading to Florida, and it could cause economic problems. There could be a potential impact of the Category 5 storm on the labor market and economic data ahead of the Federal Reserve's November meeting.

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“When we look at the amount of money that hurricanes have caused from 1980 through 2023, damages were upwards of $2.6 trillion. That's roughly $60 billion a year. So imagine as a share of GDP [gross domestic product], that's like 0.2%, but it could potentially cut up to three tenths off of GDP after the event. However, a lot of that can potentially be offset by rebuilding, but nonetheless, it's highly disruptive. And when we look at the storms that have been coming through, they've been impacting large swaths of the labor market.”

-The Conference Board chief economist Dana Peterson

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In the Spotlight

GM Expects 2025 Earnings to be Similar to 2024

General Motors expects its 2025 adjusted earnings to be in a “similar range” to the company’s results this year, CFO Paul Jacobson said during the company’s investor day. The automaker’s targeted adjusted earnings before interest and taxes this year is between $13 billion and $15 billion, or $9.50 and $10.50 per share.

TikTok Faces Lawsuit Over Children Mental Health Concerns

A bipartisan group of more than a dozen state attorneys general is filing lawsuits against social media giant TikTok related to its app’s effects on teens and other young users. A suit by the District of Columbia attorney general accuses TikTok of deceiving users by claiming that its app is safe for children, and of operating an illegal money transmission business.

TikTok lawyers recently argued in a federal appeals court that a new law banning the app after Jan. 19 unless ByteDance sells it to a non-Chinese buyer was unconstitutional.