Morning Briefing
Published
S&P 500 futures point to a modestly lower open, down roughly 0.3%, as Wednesday's hotter-than-expected CPI print gives way to a flight-to-safety trade overnight after reports that Washington is weighing use of the "mother of all bombs" against Iran, with sirens and explosions hitting Saudi Arabia's Najran and Jazan regions before officials said the danger had passed.
The inflation shock that drove the five-year Treasury yield to 2007 highs on Wednesday has now reversed, with the five-year down 10 basis points and the 10-year off 11 basis points to 5.08%, as war fear overtakes rate-hike repricing. September CPI rose to 3.7% year over year with core at 2.6%, both above consensus, prompting Citigroup to add a 25-basis-point December hike to its Fed forecast. Fed officials remain divided: Goolsbee called the report "discouraging" and flagged service-sector inflation as a concern, while Barkin said Thursday's producer price data will help shape his view ahead of the October FOMC meeting. Two commercial vessels have reportedly sunk near the Strait of Hormuz in the past day, and Russia says drones struck refineries in Saratov and Ryazan; Ukraine says it hit a Russian refinery overnight in response. The VIX is up roughly 4% pre-market.
Technology is the clear underperformer among sectors, with semiconductor names leading losses as the AI-infrastructure selloff that hit CoreWeave, Rocket Lab and Nebius Group on Wednesday carries into Thursday. Consumer Staples, Health Care and Utilities are firmer, and growth and momentum factors continue to lag value. Gold and silver miners are rallying as Treasury yields fall on haven demand.
Company News
- BNY reported Q3 adjusted EPS of $2.37, ahead of expectations, with revenue of $5.68 billion versus $5.60 billion expected.
- PNC Financial reported Q3 EPS of $5.09, beating estimates, though shares are sharply lower in early trading.
- US Bancorp reported Q3 EPS of $1.34, in line with expectations, with record net revenue of $8.0 billion.
- Marsh McLennan reported Q3 EPS of $2.03, slightly ahead of expectations, with $500 million in buybacks during the quarter.
- Commercial Metals reported Q4 EPS of $2.09, topping estimates, and declared a quarterly dividend.
- Allstate reported September catastrophe losses of $220 million, with total third-quarter catastrophe losses of $1.65 billion.
- FMC shares are down sharply pre-market.
- Golub Capital and Elliott Management are buying CCC Intelligent Solutions for $7.75 per share in cash.
- Flex completed its $4.4 billion acquisition of EPC Power, with plans to spin off its Cloud and Power Infrastructure unit as Axiom Solutions International in early 2027.
- Transocean's acquisition of Valaris cleared Brazilian antitrust review without restrictions, with closing expected in the fourth quarter.
Overseas Data
Japan's industrial production fell 2.4% month over month in August, worse than the prior 1.7% decline, while capacity utilization dropped 4.2% against an expected 0.5% gain.
France's September CPI came in at 3.1% year over year, above the 3.0% expected and prior reading. The German 10-year yield fell 10 basis points to 3.37%, its lowest since September 8, while the ECB's Kazaks said there is no need to rush rate moves despite near-term inflationary pressure and the Bank of England's Breeden said she was surprised by how well the UK economy has absorbed the energy shock.