Vital Dawn Podcast for Friday October 16

Welcome to the vital tone podcast for Friday, October 16th, U.S. equity futures are seeing gains so far this morning, S&P futures are up about 15 points, that's 20 basis points, Dow futures are up about 170 points, that's 30 basis points, Russell futures are up about 12 points, that's 40 basis points, and the Nasak futures are flat, a very small lagging slightly behind the other indices. In Europe, the mid-autumn cheese are up about 55 to 70 basis points, relatively strong gains in Europe, most of the mid-autumn groups are in the green, you're seeing outperformance in autos, industrials, tech, media, retail, and telecom, and you're seeing outperformance in healthcare real estate chemicals, basic resources, and then turning to Asia, you saw gains across the board from the most part of the decade jump, 0.4% to hangs and grows 50 basis points, and I cop, ticked up 25 basis points, Taiwan rose 30 basis points, and the career at Cosby jumped about 2%, treasuries are seeing very small profit taking yields are flat up about 3 basis points across the curve, so very quiet overnight, nothing too major out, washed it speak at an IMF event overnight in Thailand, his remarks were pretty innocuous, and I think the takeaways at by being pretty innocuous, he's kind of implicitly blessing the current expectations set up, which is that the Fed will do nothing at the October meeting, the market for a while has been kind of roughly pricing in a rate hike in December and then another rate hike in March, and so the fact wars didn't really kind of attempt to dramatically jolt those expectations, again the conclusion is that the Fed will be nothing in October, no real important economic data to speak of, I will just note that we obviously have some very hot inflation figures this week for the month of September, Treasuries shrugged off those figures, especially on Thursday, JB Hunt reported earnings overnight, and on the call talked a lot about how they plan on pushing through price hikes going forward over the coming months and quarters, that was really kind of a big theme, they had a big jump in costs and expenses that weighed on earnings in the quarter, and they plan on addressing that going forward, so I think the macro takeaway from that obviously is that months and months of elevated energy costs, this is how it seeps into the real economy and becomes a core inflation problem, not only do they plan on hiking prices that management sounded pretty confident that they would really see a lot of pushback from customers absorbing those price increases, none of the earnings, you know, JB Hunt, Alkoa, Interactive Brokers were the earnings on the US last night, you know, other than that JB Hunt conclusion from the macro perspective, I don't think any of those releases really kind of jolt the broader narrative in the market, and you're up to big reports this morning with Schneider Electric, which is a major data infrastructure stock, the numbers were very healthy, they raised guidance, and the stock is underperforming in Europe this morning, which again I think kind of just speaks to how expectations for tech despite all the rocky price action we've seen are still very elevated, this group is still very crowded on the long side, you know, so we did see some relief yesterday in tech and AI, but that group is not out of the water by any means, there was report on orders that came out overnight talking about how some anthropic investors are dialing back their IPO expectations from evaluation perspective, so, you know, a couple weeks ago the thought had been that anthropic would be public by Thanksgiving at a two plus trillion dollar valuation, that Rory's article said that some investors are now kind of dialing that back to one and a half trillion, and again I think this is kind of the key underlying problem when it comes to AI, you're clearly seeing pushback from equity and debt markets when it comes to all the capital raising that's been taking place for the industry, that capital is critical to fueling the data center boom, and so inevitably you're going to have to see, you know, a dialing back on the pace of spending, you know, which is why picking shovel stocks are most exposed, given what's everything that's happening right now, and the companies that are funding the bulk of their spending out of operating cash flow are going to be most advanced, and that's really the hyperscalers right now. So that is what's happening in tech this morning on the geopolitical front, you know, new slowout think all week has gone from bad to worse both in the Middle East and Ukraine, I think markets have been preoccupied by what's happening with AI, so there hasn't been as much attention focused on it, you know, I think the one positive thing you could say is that we aren't seeing Brent set fresh highs despite the bad news that's, you know, somewhat encouraging, but definitely, you know, there's very little that is, you know, positive that's come out in the geopolitical front for the last several days, there are a bunch of developments overnight from both the Ukraine and the Middle East that I have in the piece. On today's calendar, there are a few earnings up for the open, including a bunch of regional banks and then travelers and insurance, otherwise there aren't many critical events on the calendar. Looking into next week, there aren't too many major macro events. We will get a lot of Chinese economic data, along with the Flash PMI's October, but next week it's very busy on the earnings front, you know, a lot of big names. I would say meta Wednesday night is probably going to be the most important, but there are a lot of others including Netflix, Western Digital, ATT, Tesla, Blackstone Comcast, American Express GM and others. And that is everything for today, Friday, October 16th. Thank you everyone for listening.