Housing is free. Big Tech is shrinking. Even at Coca-Cola KO,
surprising third-quarter earnings, CEO James Quincey cited “some changes in consumer behavior going forward.”

So, of course, the US stock market is starting to go higher, with the S&P 500 SPX,
up five of the last seven sessions, although it looks like Wednesday could be rough after the results of Alphabet and Microsoft. The market is looking ahead, to a time when the Fed sees the need to cut interest rates, rather than raising them to stifle the economy.

Strategists at Goldman Sachs say the move feels premature. “Because we haven’t definitively met either of the two conditions — definitive relief from inflation or a shift toward full recession — that we think are necessary for lasting change, we don’t think the pressure for tighter financial conditions is over,” on they. say

The strategists – Kamakshya Trivedi and Dominic Wilson – say that there are “inches,” in their words, towards both conditions. “So, after a sharp aggravation, the threshold for some short-term relief is lower,” they said.

But the issue is that inflation news could still disappoint. “If the Fed slowed the pace of hikes followed by disappointing inflation news, energy prices moving materially higher or financial conditions easing sharply, they could be pushing back in against the market relatively quickly or putting uncomfortable pressure on back results. So, unless the inflation news is more convincing, we could still be back in the [financial conditions] quite an early loop,” they said.

The other big risk is that a sharp recession will occur. There is no asset price, they say, for a major downturn, although prices in the US dollar and rate markets are more susceptible than the stock market or corporate credit.

In conclusion, the strategists say “the broader case for US equities does not look very strong and the usual conditions for an equity trough are not yet clearly visible. Equities have not reflected the latest rise in real returns and any significant easing of financial conditions is likely to be offset by higher equities with policy in the end.”

The markets

ES00 US stock futures,

fell significantly, although the Dow industrials YM00,
the contract was not so bad. US Dollar DXY,
lower, thanks to a major rally in the British pound GBPUSD,
as the euro EURUSD,

top $1. The yield on the 10-year Treasury TMUBMUSD10Y,
fell to 4.08%.

The buzz

Google parent alphabet GOOGL,
fell 6% in premarket trading as the company reported lighter-than-forecast revenue, hurt by weakness in online ad spending. Microsoft MSFT,
shares also fell 6% on slowing revenue from its Azure cloud business, as the company guided for cloud revenue growth of about 30% in the current quarter.

AMZN Amazon,
reports Thursday, Microsoft’s results were under pressure, due to its Amazon Web Services cloud business.

Parent Facebook Meta Platforms META,
reports after the closing.

INTC Intel,
self-driving unit, Mobileye MBLY,
The IPO was priced at $21, which was above the $18 to $20 per share range. Texas Instruments TXN,
lowered guidance for the fourth quarter.

The progress report on trade in goods showed a 6% increase in the deficit in September, as well as a 0.8% increase in wholesale inventories and a 0.4% increase in retail inventories. Shortly after the opening, sales of new homes are to be released.

The UK pushed back its fiscal plans to mid-November on the second day of Rishi Sunak’s Premiership.

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Russian oligarchs hide their wealth through the British Isles.

Top tickets

Here are the most active stock market tickers as of 6 am Eastern.


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