I'm LongbridgeAI. Here is the key information I extractedZhitong Finance APP learned that on Friday, the three major indices closed lower. Rising oil prices continued to pressure the stock market. US President Trump recently stated that the US might soon end the war against Iran. He claimed that the US has the capability to control all of Iran's oil resources, is currently transporting the necessary oil out, and stated that the Strait of Hormuz is "completely under my control," adding that the US even has the ability to take over the entire country of Iran. Additionally, Trump revealed that the US is close to reaching a trade agreement with Mexico, and Canada is also actively seeking an agreement with the US.
【US Stocks】 At the close, the Dow Jones Industrial Average fell 652.82 points, or 1.23%, to 52,215.16, rising 0.41% for the week; the S&P 500 Index fell 39.75 points, or 0.52%, to 7,623.68, down 0.47% for the week; the NASDAQ Composite Index fell 53.51 points, or 0.21%, to 25,955.34, down 0.71% for the week. Western Digital (WDC.US) fell 2.97%, Google (GOOG.US) fell 1.24%, SanDisk (SNDK.US) fell 1.82%, Meta Platforms (META.US) fell 0.96%, and Apple (AAPL.US) fell 0.14%; SK Hynix (SKHY.US) rose 4.05%, and Micron Technology (MU.US) rose 2.46%. The NASDAQ Golden Dragon China Index fell 0.84%.
【European Stocks】 The German DAX 30 Index fell 201.19 points, or 0.79%, to 25,170.56; the UK FTSE 100 Index fell 42.69 points, or 0.40%, to 10,682.34; the French CAC 40 Index fell 28.44 points, or 0.36%, to 7,782.82; the Euro Stoxx 50 Index fell 21.86 points, or 0.36%, to 6,065.15; the Spanish IBEX 35 Index rose 80.82 points, or 0.43%, to 18,994.32; and the Italian FTSE MIB Index rose 160.84 points, or 0.33%, to 48,544.50.
【Foreign Exchange】 The US Dollar Index rose on the 23rd. The US Dollar Index, which measures the value of the US dollar against six major currencies, rose 0.2% on the day to close at 101.811 in late trading. At the close of New York forex trading, 1 euro exchanged for $1.1193, lower than the previous trading day's $1.1220; 1 British pound exchanged for $1.3371, lower than the previous trading day's $1.3400. 1 US dollar exchanged for 156.87 Japanese yen, higher than the previous trading day's 156.78 yen; 1 US dollar exchanged for 0.8252 Swiss francs, higher than the previous trading day's 0.8205 francs; 1 US dollar exchanged for 1.4004 Canadian dollars, lower than the previous trading day's 1.4008 Canadian dollars; 1 US dollar exchanged for 9.9424 Swedish krona, higher than the previous trading day's 9.9079 krona. For the week ending October 20, leveraged funds' net short positions in the euro increased by 1,305 contracts to reach 94,100 contracts, the highest level since March 2020, corresponding to bearish bets of approximately €11.8 billion. Political turmoil, debt pressures, and intensified protests in France have exacerbated market concerns, dragging down the euro. Investors are also concerned about slowing economic growth in Europe and limited room for the European Central Bank to raise interest rates, which could further widen the interest rate differential between the US and Europe. The euro weakened against the US dollar again this week, cumulatively falling 0.4%.
【Cryptocurrencies】 Bitcoin dipped slightly, trading at $81,234.67 at the time of writing; Ethereum rose slightly by 0.56% to $2,395.73.
【Precious Metals】 Spot gold fell 0.71%, breaking below the $4,000 mark to close at $3,997.08 per ounce; spot silver fell over 1% to $53.936 per ounce.
【Crude Oil】 At the close of trading on the day, the price of light crude oil futures for December delivery on the New York Mercantile Exchange rose $3.80 to settle at $103.27 per barrel, a gain of 3.82%; London Brent crude oil futures for December delivery rose $3.55 to settle at $116.72 per barrel, a gain of 3.14%.
【Macro News】
Trump Administration Cancels 50% Tariffs on Some Canadian Goods, Imposes Taxes on Other Products. According to reports, the US government announced on Friday that it would exempt certain Canadian imported goods from the 50% tariff, including blueberries, potatoes, apples, seaweed, as well as plastic crates, packaging materials, refrigeration equipment, and packaging machinery. These tariffs were previously implemented after US-Canada trade negotiations broke down in late August. The White House simultaneously imposed tariffs on certain valves, carpets, and waste products to offset the impact of some tax cuts. Susan Collins, a Republican Senator from Maine, stated that she had secured new tariff exemptions for the local agricultural industry. Democratic Senate candidate Troy Jackson criticized the move, stating that Trump's trade war has raised the cost of living for Maine residents, noting that Collins had previously supported relevant policies but is now attempting to win voter support through tariff reductions. This move comes on the eve of the US midterm elections on November 3. Polls show that Democrats are expected to win majority seats in both the House and Senate, and Republican candidates in states like Michigan have begun publicly calling for an end to the trade war with Canada. The White House stated that this adjustment aims to further clarify the scope of application for tariffs on Canada.
US Consumer Confidence Drops to Five-Month Low Due to Inflation Concerns. In October, the US Consumer Confidence Index slipped slightly due to rising prices and interest rates, falling to its lowest level in five months. According to a survey report released on Friday, the University of Michigan's final Consumer Sentiment Index fell from 48.1 in September to 48. Nevertheless, this figure was better than the preliminary reading and higher than economists' expectations. Consumers expect prices to rise by 4.7% over the next year, higher than the 4.6% predicted last month; they also believe that costs will grow at an annual rate of 3.5% over the next five to ten years. Both figures are the highest since May. Joanne Hsu, head of the survey, stated: "After inflation has remained above target levels for five consecutive years, short-term and long-term inflation expectations have risen in recent months, exposing the risk that high inflation expectations may become entrenched." She also stated: "Consumers across all political affiliations agree that inflation poses a far greater risk to the economy than unemployment over the next year."
US Economy Remains Robust at Start of Fourth Quarter. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, stated: "Preliminary PMI data for October shows that the US economy continues to prosper at the start of the fourth quarter. The output data from the survey is consistent with an annualized GDP growth trend of 5%, compared to the previously expected 4% growth in the third quarter. Corporate earnings and profits are particularly strong, and hiring activities have increased significantly as companies expand capacity to meet stronger customer demand. Excluding the factor of post-pandemic economic reopening, the growth achieved by US businesses in recent months marks the best performance since early 2015. However, cost pressures remain a primary concern, especially as rising crude oil prices impact various goods and services. Meanwhile, supply chain bottlenecks are intensifying, and order backlogs are rising, making it easier for businesses to pass higher costs on to consumers. As a result, sales prices have seen their most dramatic increase in four years, and current trends suggest that consumer price inflation may further exceed the Federal Reserve's target levels in the coming months."
Canadian Retail Sales Recovery Momentum Expected to Continue in September. Canadian retail spending is expected to continue growing in September, although the pace may slow compared to August. Preliminary data from Statistics Canada shows that retail sales in September increased by 0.7% year-on-year. Previously, driven by growth in all nine sub-sectors, retail sales in August increased by 1.2%. Sales volume in August also rebounded, increasing by 1.2%. Given the escalation of the trade war with the US in September, economists had previously warned that the rebound in August might be temporary. The Canadian economy appears to have shaken off the slump caused by tariffs in the second quarter, but GDP growth in July and August has flattened. Retail data is the last clue available to Bank of Canada policymakers regarding the state of the Canadian economy before next week's interest rate decision. Over the past week, several traders and economists have changed their stance and are now betting on an interest rate hike. Traders in the overnight swap market have pushed the probability of an interest rate hike at next week's meeting to over 80%.
【Individual Stock News】
Media: Merger of SpaceX and Tesla May Face Antitrust Scrutiny. According to reports, Musk proposed the merger of Tesla (TSLA.US) and SpaceX (SPCX.US) this week. A former Department of Justice official stated that the risk of triggering antitrust issues is real. The official pointed out that antitrust regulators view such "vertical" mergers as pro-competitive because they help improve supply chain efficiency; however, if the Tesla-SpaceX combination is deemed a possible "vertical exclusionary" merger, regulators may attempt to block the merger. The official explained that an "exclusionary" situation occurs when a company uses its position to restrict competitors at other levels of its supply chain. In this case, if only Tesla vehicles can use technologies like SpaceX's Starlink in the future, other autonomous driving or electric vehicle manufacturers could be harmed. Of course, this depends on the terms of this currently hypothetical transaction. It also depends on how willing US antitrust enforcement agencies, aligned with Trump's stance, are to conflict with Musk—a major donor to the Republican Party. Even so, if Democrats regain control of the House of Representatives next month, Musk will face congressional investigations—and lawmakers will closely scrutinize any attempts he makes to merge his companies.
【Major Bank Ratings】
UBS Group: Raised the target price for Blackstone Group (BX.US) from $116 to $118; raised the target price for Lockheed Martin (LMT.US) from $653 to $692.
Mizuho Bank: Lowered the target price for Western Digital (WDC.US) from $590 to $490; raised the target price for Meta Platforms (META.US) from $750 to $950.