Concentration Risk:S&P Resilience, and $107 Brent Crude
Talks are being had about a big percentage of the future S&P 500 projected earnings being made up by only a handful of mega-cap tech companies, with the S&P up around 0.50% on the day and Brent crude oil trading at $107 a barrel. There is nothing on the macroeconomic data today and no big mega-cap earnings. Netflix plans to reduce labor .
Geopolitical maneuvering and domestic political friction dominated global markets as the S&P 500 flatlined amid intense single-stock churn. Consumer sentiment took a severe hit, with the University of Michigan's current conditions index crashing to a record low while Canadian employment data showed unexpected job losses for September.
Diesel and oil markets reacted sharply to geopolitical developments as Donald Trump announced an agreement with Vladimir Putin for Russia to immediately release millions of tons of diesel to US and global markets. This supply shock comes as Saudi Aramco reportedly restores full crude supply to Europe, even as tanker attacks by Iran beyond the Strait of Hormuz and the threat of hurricanes keep energy desks on edge.
Federal Reserve politics intensified after Trump launched a formal White House inquiry into Fed Governor Lisa Cook, escalating a campaign to remove her despite her lawyers stating there is no basis for her ouster. In equities, Delta Air Lines fell after slashing its profit outlook due to near-record jet fuel costs, while telecom stocks tumbled following a SpaceX spectrum deal.
Trade tensions eased in the automotive sector as the European Union and China reached an understanding to cut Chinese hybrid car exports by over half. Meanwhile, healthcare stocks saw big moves with Pennsylvania announcing a GSK investment of more than $800 million in a biopharma hub. Next up, watch US CPI data and the start of third-quarter earnings.