The only way is up

The three main Wall Street indices set new records again yesterday. Just like the day before. And the day before that, and probably the day before that too. You don't need to be a maths whizz to conclude that once a stock market record has been set, it will be broken at the end of every subsequent bullish session. It's becoming difficult to keep track of them all. Too many records kill the record, so to speak.

This is the 30th time this year that the S&P 500 has closed at a record high. In addition to these peaks, two topics dominated political and financial news at the end of the week. First, the Trump administration’s threats to fire thousands of civil servants in order to shift the blame and consequences of the U.S. budget stalemate onto the Democrats. Second, the flood of announcements about artificial intelligence, which continues to make the sector float like a hippie on LSD.

Between OpenAI’s $500 billion valuation in its latest fundraising round and the wave of partnership announcements in semiconductors, investors don’t know where to look. Wall Street benefited from the strong support of AI stars to smash the previous day’s record.

In recent days, the rally has even broadened, with rebounds in lagging sectors such as pharmaceuticals, luxury goods, and automobiles. It is thanks to these stocks that the Euro Stoxx 50 surpassed its previous record, set in March, this week. What’s more, this record was achieved without the help of banks, which are heavyweights in the index and are catching their breath after a thunderous first half of the year.

So if you want to shine in society this weekend, you can talk about AI and these records. Keep in mind, however, that outside of finance geeks, these bullish trends don’t necessarily interest many people. If I’m digressing, it’s because today’s agenda has been somewhat cleared. This afternoon, the monthly employment report in the United States will in all likelihood be missing, because the shutdown has led to the closure of many agencies, including the Bureau of Labor Statistics.

The shutdown is not disrupting Wall Street. Firstly, because the market is used to it: this is the 15th shutdown since 1981. Secondly, because strategists have no shortage of studies on these periods. The conclusion: the impact on Wall Street, as on Main Street, is ultimately relatively limited—provided, of course, that the circus doesn’t go on too long.

For now, the Republicans are still looking for seven Democratic votes to pass a temporary funding plan in the Senate. The disagreements mainly concern healthcare spending: the Democrats want to extend subsidies that expire at the end of the year, while the Republicans want to deal with this issue separately. Donald Trump, as mentioned above, is threatening permanent layoffs to twist the Democrats’ arms.

One last word on the tariff negotiations, which have been somewhat sidelined in recent days. U.S. Treasury Secretary Scott Bessent believes there will be significant breakthroughs in the next round of trade negotiations with China. For the time being, however, little progress seems to be happening between the United States and the countries that are resisting, namely Brazil, India, and China.

In Asia-Pacific, markets are moving in all directions. Japan is up 1.7% thanks to the AI boost. Hong Kong is losing some of its previous day’s gains, falling 0.7%. India is flat, while Australia is up 0.5%. Mainland China and South Korea are closed for Golden Week. European markets are expected to open higher.

Today's economic highlights:

On the agenda today: Japan's PMIs, followed by those of France, Germany, the Eurozone, and the United Kingdom; In the United States, non-farm employment changes, the unemployment rate, PMIs, and the ISM Services Index are expected. See the full calendar here.

• GBP / USD: US$1.34
• Gold: US$3,858.31
• Crude Oil (BRENT): US$64.53
• United States 10 years: 4.1%
• BITCOIN: US$120,010

In corporate news:

• Thames Water creditors propose a debt write-off plan with new equity investment.
• Zegona Communications considers selling Vodafone's data centers in Spain.
• BP Plc will seek a development partner for its major oil discovery at Bumerangue in Brazil.
• Eni approves development of a second floating LNG facility offshore Mozambique.
• Asseco Poland announces a shareholders agreement with TSS Europe acquiring 14.84% of its shares.
• Toscana Aeroporti reports a record 995,000 passengers in September, a 7% increase from September 2024.
• Clariant dismisses a 2 billion euro damages claim from BP Europe and an ExxonMobil subsidiary.
• Egetis Therapeutics completes a directed share issue raising approximately 183 million SEK.
• Alphabet Inc. retains its stake in Verily and resolves potential YouTube content blackout with NBCUniversal.
• Tesla disappoints investors with Q3 production and delivery figures despite a surge in sales.
• Applied Materials anticipates a $710 million revenue impact by fiscal 2026 due to US export restrictions.
• OpenAI seeks to dismiss a lawsuit from Musk's xAI amid tech sector growth.
• Boeing delays 777X aircraft delivery to 2027, facing billions in charges due to production delays.

See more news from UK listed companies here

Analyst Recommendations:

• Greggs Plc: Berenberg maintains its buy recommendation and reduces the target price from GBX 3060 to GBX 2640.
• Diploma Plc: RBC Capital upgrades to outperform from underperform with a price target raised from GBX 4500 to GBX 6000.
• London Stock Exchange Group Plc: Goldman Sachs maintains its buy recommendation and reduces the target price from GBX 13450 to GBX 13200.
• Tate & Lyle Plc: Barclays downgrades to equalweight from overweight and reduces the target price from GBP 6.50 to GBP 4.30.
• Schroders Plc: Citi upgrades to buy from neutral with a price target raised from GBP 4.20 to GBP 4.35.
• Bunzl Plc: Goldman Sachs upgrades to neutral from sell with a price target raised from GBX 2375 to GBX 2510.
• Genuit Group Plc: RBC Capital maintains its outperform recommendation and raises the target price from GBX 505 to GBX 520.
• Tesco Plc: Goldman Sachs maintains its buy recommendation and raises the target price from GBX 470 to GBX 510.
• Gsk Plc: TD Cowen maintains its hold recommendation and raises the target price from GBX 1790 to GBX 1930.
• Jupiter Fund Management Plc: Deutsche Bank maintains its hold recommendation and raises the target price from GBX 130 to GBX 145.
• Man Group Plc: Deutsche Bank maintains its buy recommendation and raises the target price from GBX 215 to GBX 225.
• Flutter Entertainment Plc: Macquarie maintains its outperform rating and reduces the target price from USD 340 to USD 330.