US EQUITY OPEN: Indices see pressure post hot US CPI as earnings season continues

OPEN: US indices opened with losses and weighed on by the hotter-than-expected US CPI report, which garnered a broad-based hawkish reaction across markets, with money markets now pricing in a 48% chance of a 25bps hike in October, vs. c. 11% pre-data. Recapping the dataset, Y/Y printed 3.7% (exp. 3.6%, prev. 3.4%), with the core printing 0.3% M/M (exp. 0.2%, prev. 0.3%) and 2.6% Y/Y (exp. 2.5%, prev. 2.4%). Following this, the Dollar saw notable strength, to the detriment of global FX peers, while Treasuries, US equity futures, and spot gold all saw pressure. In the energy space, the crude complex is firmer as geopolitics continue to weigh on the space, with the latest update being that a Yemeni Army Spokesperson said operations towards Saudi airports and oil facilities will continue in the coming days.

US earnings continue to get underway, with further financial reports on Wednesday the highlights, with numbers from BLK, BAC, and MS all taking center stage. Memory names continue to sell off this week, and also see further pressure amid the aforementioned broader market conditions. Sectors are largely in the red, with Health the clear gainer, while Financials and Utilities lag, with the former weighed on by bank earnings.

Ahead, Fed speak is scheduled from Barkin (2027 voter) and Goolsbee (2027 voter), as well as the Fed Beige Book, with the weekly private inventory metrics after-hours, delayed a day on account of US Columbus Day on Monday.

• BlackRock (BLK): EPS & rev. topped w/ constructive comms.
• Bank of America (BAC): EPS, rev., FICC & equities rev. all missed on top of being fined $1.2b over money laundering failures
• Morgan Stanley (MS): Headline metrics impressed although internals were more mixed
• State Street (STT): Top line slightly short of Wall St exp.

• Liquidia (LQDA) reached a global settlement agreement w/ UTHR to resolve all pending litigation between Cos.
• GameStop (GME) CEO Cohen raises stake to 9.1%.
• GlobalFoundries (GFS) receives USD 21bln as part of the US-Japan deal for two new fabs.
• Dell (DELL) downgraded at Barclays.
• Berkshire Hathaway (BRK.B) invests a further USD 330mln in Bending Spoons (BSP).
• Netflix (NFLX) is cutting about 6% of its global workforce, or roughly 1,000 positions, in its largest layoffs since 2022, reports WSJ citing sources.