This Week

It was a slow week for data (no offense, PMIs), so markets were once again focused on the artificial intelligence (AI) trade and developments in the Iran conflict.

• AI stocks sell off as mega-cap earnings beats aren’t enough to offset costs concerns. We got earnings beats from mega-caps SPCX, TSLA and META (after adjusting for META’s large legal settlement), putting the Nasdaq-100® on pace for 45% per annum earnings growth in the third quarter. But investors were focused on AI revenue and spending.
• U.S. oil prices hover above $100 per barrel as Iran conflict continues.

So, for the week, the Nasdaq-100® is down 1%, while apparent safe-haven demand amid selling of AI names has 10-year Treasury yields down nearly 10 basis points to 5.0%.

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Next Week

Here are the top events I’m watching next week:

• Wednesday: Fed Rate Decision, GOOG and MSFT Earnings (Q3)

• Thursday: Real GDP Growth (Q3), PCE Inflation and Spending (September), Jobless Claims (week ending Oct. 24), AMZN Earnings (Q3)

• Friday: Employment Cost Index (Q3)