Yesterday’s slightly stronger-than-expected US inflation data for September was initially shrugged. Then, investors got a little spooked and Wall Street lost some ground. Nothing serious, but a contraction of around 0.5% for the S&P500 and 0.4% for the Nasdaq 100.

CPI rose 0.4% on the month and 3.7% year-on-year, instead of 0.3% and 3.6% expected. On the other hand, core inflation, excluding the most volatile items, was in line with expectations (0.3% on the month and 4.1% on the year). "The market's assessment of the possibility of a rate hike by December has risen slightly, but we doubt it will happen," says ING's James Knightley. Even so, the statistic slightly shattered the blue-sky scenario built up by the market and reinforced by Fed official’s dovish communication this week. They said that with bond yields rising faster than expected, the Fed do without the final rate hike it had been contemplating. Some very knowledgeable people find this approach a little daring, but since no one has a crystal ball, especially in economics, time will tell who was right. In the meantime, the slight upturn in inflation prevented investors from letting their guard down yesterday.

The rest of the economic news is dominated by China. In the country in September, imports (-6.2%) and exports (-6.2%) continued to contract, but a little less than expected. Producer prices (-2.5%), on the other hand, fell more than expected, while annual inflation dropped to 0, even lower than economists' already paltry average forecast (+0.2%). The convalescence of the Chinese patient is clearly not over, and the country is struggling with the absence of inflation when others are fighting against its omnipresence. Even to extremes, as in the case of Argentina, which raised its key rate from 117% to 133%, while annual inflation in the country reached 138.3% in September. Returning to China, local indices had rebounded yesterday following the announcement that the sovereign wealth fund Central Huijin Investment would invest in five of the country's major banks. This morning, the latest rumor is that Beijing is considering the creation of another so-called stabilization fund, which could intervene to support the equity markets. I'm sure that the founders of the Chinese CCP had not foreseen in their country's statutes that public funds could be used to create an artificial buying current designed to support a capitalist stock market. Elsewhere, a number of speeches by central bankers are scheduled later today: Christine Lagarde for the ECB and Patrick Harker (a rather neutral dove) for the Fed.

On the political front, Steve Scalise, the Republican candidate for Speaker of the House of Representatives, withdrew his candidacy last night, which I imagine will do nothing to help the instability within the Republican Party. In the Middle East, Israel ordered the evacuation of 1.1 million inhabitants from northern Gaza within 24 hours, before carrying out large-scale military operations.

Today, investors will be focusing on the quarterly results from banking giants JPMorgan Chase, Citi and Wells Fargo, to get more clues about the health of the US economy.

Wells Fargo already released its results, which are rather good, with Q3 earnings of $1.48 per diluted share, up from $0.86 a year earlier. Revenues were boosted by higher interest paid by customers on loans.

Today's economic highlights:

European industrial production and the University of Michigan confidence index are today’s main indicators. The full agenda is here.

The dollar is worth EUR 0.9503 and GBP 0.8212. The ounce of gold is trading at USD 1899. Oil rallies, with North Sea Brent at USD 89.55 a barrel and US light crude WTI at USD 86.50. The yield on 10-year US debt has reached 4.67%. Bitcoin trades at USD 26,900.

In corporate news:

  • JPMorgan Chase reported an increase in third-quarter earnings on Friday, thanks to higher net interest income amid high borrowing costs and the acquisition of regional bank First Republic Bank. Share price up 0.5% in pre-market trading.
  • Citigroup reported stable overall third-quarter earnings on Friday, buoyed by higher interest rates and fee income in investment banking.
  • Blackrock, the world's largest asset manager, reported a 13% rise in third-quarter earnings on Friday, although this was marked by a sharp drop in net inflows. The share price is down 1% in pre-market trading.
  • UnitedHealth rose by 1.8% in premarket trading, as the healthcare group reported third-quarter earnings ahead of analysts' expectations, thanks to a smaller-than-feared increase in medical costs in its health insurance division.
  • Microsoft, Activision Blizzard - On Friday, the UK Competition and Markets Authority (CMA) approved the Windows publisher's $69 billion acquisition of the video games group, following concessions.
  • Intel, AMD, Nvidia - Joe Biden's administration is considering closing a loophole that allows Chinese companies to access US semiconductors for artificial intelligence (AI) via overseas subsidiaries, four people close to the matter told Reuters.
  • Boeing and Spirit Aerosystems have expanded their ongoing inspections to include new elements concerning a probable production defect affecting 737 Max 8 aircraft, the US aircraft manufacturer announced on Thursday. Boeing is down 1.8% in pre-market trading.
  • Meta Platforms said on Friday that it would remove messages praising and supporting Hamas from its platforms, as the European Union (EU) criticized social networks for not doing enough to combat misinformation.
  • KKR - The US investment fund is preparing to submit a multi-billion euro bid for Telecom Italia's (TIM) fixed-line telecoms network ahead of Sunday's deadline, in a project backed by Rome, sources close to the matter said.
  • Newmont Corporation- Newcrest Mining shareholders voted overwhelmingly in favor of the gold mining giant's A$26.2 billion (€15.92 billion) takeover bid. This is the largest buyout in Australia so far this year.
  • Dollar General on Thursday brought back its former CEO Todd Vasos to replace Jeffery Owen, less than a year after his appointment, as the low-cost retailer said it wanted to stabilize its troubled business, sending its shares up 7.1% in pre-market trading. The group also lowered its profit forecast for this year.

Analyst recommendations:

  • Abrdn plc: Morgan Stanley maintains its underweight/in-line recommendation with a target price reduced from GBX 177 to GBX 167.
  • American express: HSBC maintains its buy recommendation with a target price of USD 181.
  • Amgen inc: Goldman Sachs maintains its buy recommendation and reduces the target price from USD 310 to USD 305.
  • Ashmore group pl: Numis downgrades its recommendation to reduce with a price target reduced from GBX 175 to GBX 160.
  • Avangrid: Morningstar downgrades to hold from buy with a price target reduced from USD 38 to USD 33.
  • Biogen inc: Goldman Sachs maintains its buy recommendation and reduces the target price from USD 436 to USD 400.
  • Biomarin pharmac: Goldman Sachs maintains its buy recommendation and reduces the target price from USD 152 to USD 147.
  • Block: HSBC maintains its hold recommendation with a target price of USD 46.
  • British land: BNP Paribas Exane upgrades to outperform from neutral with a price target reduced from GBX 410 to GBX 370.
  • Capital one fina: HSBC maintains its reduce recommendation with a target price of USD 84.
  • Constellation en: Mizuho Securities maintains its neutral recommendation with a price target raised from USD 106 to USD 116.
  • Deliveroo plc: JP Morgan upgrades to neutral from underweight with a price target raised from GBP 1.13 to GBP 1.42.
  • Digital realty: DBS Bank maintains its buy recommendation with a target price of USD 149.15.
  • Discover financi: HSBC maintains its buy recommendation with a target price of USD 104.
  • Dollar General c: Gordon Haskett upgrades to buy from hold with a price target raised from USD 115 to USD 140.
  • Easyjet plc: Oddo BHF maintains its neutral recommendation with a price target reduced from GBP 5.60 to GBP 5.10.
  • Equinix: DBS Bank maintains its buy recommendation with a target price of USD 907.89.
  • Fortinet: Barclays downgrades to equalweight from overweight with a price target reduced from USD 71 to USD 63.
  • Hays plc: Liberum maintains its buy recommendation with a price target reduced from GBX 125 to GBX 120.
  • Jupiter fund: Morgan Stanley maintains its equal weight/in-line recommendation with a price target reduced from GBX 133 to GBX 115.
  • Man group: Morgan Stanley maintains its overweight/in-line recommendation with a target price raised from GBX 296 to GBX 307.
  • Mastercard: HSBC maintains its hold recommendation with a target price of USD 424.
  • Meta platforms: William O'Neil & Co Incorporated upgrades to buy from dropped coverage.
  • Moderna: Goldman Sachs maintains its buy recommendation with a target price reduced from USD 285 to USD 269.
  • Old dominion: Raymond James maintains its outperform rating and raises the target price from USD 440 to USD 455.
  • Paypal holdings: HSBC maintains its buy recommendation with a target price of USD 69.
  • Pioneer natural: Morningstar upgrades to buy from sell with a price target raised from USD 203 to USD 274.
  • Regeneron pharm: Goldman Sachs maintains its buy recommendation and raises the target price from USD 1028 to USD 1064.
  • Schroders plc: Morgan Stanley maintains its equalwt/in-line recommendation and reduces the target price from GBX 536 to GBX 515.
  • Synchrony financ: HSBC maintains its hold recommendation with a target price of USD 32.
  • Tractor supply: Oppenheimer downgrades to market perform from outperform with a price target reduced from USD 280 to USD 210.
  • Unilever plc: Bryan Garnier & Co. maintains its neutral recommendation with a price target raised from EUR 51 to EUR 54.
  • Union pac: Raymond James maintains its strong buy recommendation and reduces the target price from USD 270 to USD 240.
  • Vertex pharm: Goldman Sachs maintains its buy recommendation and reduces the target price from USD 437 to USD 436.
  • Visa: HSBC maintains its hold recommendation with a target price of USD 266.
  • Whitbread plc: Oddo BHF upgrades to outperform from neutral with a price target raised from GBP 35 to GBP 43.50.