Good morning,
 
US equities ended yesterday with modest losses despite crude falling.  2y yields fell but the long-end continued to march higher. Utilities led and Comm Services, Industrials and Consumer Discretionary were the other sectors in the green. The fall in oil pushed Energy to back of the pack. Large caps were mixed, with the tech mega caps mostly lower AAPL (-3%). Semi/memory stocks were among the leaders, especially the capital-equipment stocks. Anthopic’s IPO/S-1 details leaked, with lots of huge numbers in it for both revenue and spending. Also, a “destruction of humanity” note in the risk factors. Consumer Confidence was weaker than expected as were the JOLTS job openings, though CCL and KMX earnings showed consumer resiliency. NY Fed Williams dovish comments in the middle of the day helped the short-end rally and eased pressure on equities.  
 
In a throwback to my college years, Rice and Schlitts was on the dinner menu last night as the Yanks blasted and silenced the Red Sox in Game 1 of their post-season match. S&P futures were trading around flat before today’s end of month  and quarter, and this morning’s economic data hitting the tape. PCE, the main focus, came in a little cooler than expected. GDP was revised higher. 2y yields moved lower but 10 and 30y are flat to higher. Pricing for another rate hike next month is falling, to ~40% versus 50% yesterday, as futures moved to their highs. The S&P 500 is looking at a flatish September- a solid gain could push it into the green. For Q3 the index is up ~2%, despite rates ripping higher. Tonight Micron will report results in another piece of news flow for the industry formerly known as AI (now SI, Super Intelligence), adding to yesterday’s Anthropic news, OpenAI’s Dev day, which included their “Dots” personal AI response to Meta’s Muse, and the tech summit at the White House.
 

 
As far as the data, Core PCE was cooler than expected (+0.2% m.m vs 0.3%) but ticked up from last month. Headline PCE was also lower than expected.  The prior month was also revised lower for both Core and Headline and there are annual revisions that need to be digested, but overall it was dovish print. Personal Income was lower than expected while Spending was a touch higher. The 3^rd GDP estimate was revised higher, from 1.5% to 2.2%, with Consumer Spending revised higher again, along with Investments. The September ADP Jobs report was better than expected and rose from last month. The August Trade deficit was larger than expected and rose from last month. Fed Speakers are peppered throughout the day- I thought Warsh wanted to ease up on all the Fed communications?
 
Asian markets were mostly higher. The Nikkei was a leader, up 2% with broad gains. SoftBank was up ~7% on news of a new, $30B funding round for OpenAI, at $1.4T valuation. Japanese data were soft however as Retail Sales and Industrial Production missed estimates and fell versus last month. For September the Nikkei rose ~1%, but was down ~5% for Q3. China’s official Manufacturing PMI was inline and crept back above 50 this month. Non-Manufacturing was a little better than expected and also moved above 50. The private RatingDog numbers were a little better. Beijing announced new policies to stimulate the housing market but they seem to be less than hoped. Both Hong Kong and Shanghai declined ~4% in September, but diverged overall in Q3 with Hong Kong adding ~8% while Shanghai fell 6%. European indices are mostly lower, fading throughout their sessions. The French 10y spread to Germany (OAT to Bunds) is at its highest since 2012, and they yield >20bo more than Italian bonds for the first time in the Euro era. The STOXX 600 is down ~2% this month, which would be its first monthly decline after six straight gains. The index has a slight loss for Q3.
 

 
After declining yesterday oil is higher this morning. There are a lot of puts and takes across the oil complex. Goldman Sachs and JPM estimate Gulf exports are near or back to 2025 levels while multiple efforts to bypass the SOH ramp up, including the Saudi East-West pipeline. However diplomatic progress has stalled and a return to hostilities is becoming more likely, according to several reports. Brent is up over 10% this month and ~40% this quarter. Precious metals are higher. Gold is looking at a 5% decline this month, but up 5% this quarter. Ag is modestly higher and crypto is seeing gains as well with Bitcoin and Ether up ~2%, and ~10% on the month. They’re up ~50% and 75% for the month on the back of a few big spikes.  
 

 
Earnings
After-Market: AIR, CNXC
Pre-Market: CALM, CAG, FDS, JBL
After-Market: BSET, MU, PRGS
 
Economic Data:
US:

• Mortgage applications:  -4.3% vs prior -0.8%
  • Refis: -8.7% vs prior -2.6%
  • 30y: 7.30% vs prior 7.12%
• ADP employment change: 90K vs 70K cons, prior 38K
• PCE m.m / y.y: 0.3% / 3.4% vs 0.4% / 3.7% cons, prior 0.1% / 3.4%
• Core: 0.2% / 3.0% vs 0.3% / 3.3% cons, prior 0.1% / 3.0%
• 2Q GDP final estimate: 2.1% vs 1.5% 2^nd prior estimate
• Personal Income / Spending m/m: 0.2% / 0.9% vs 0.4% / 0.8% cons, prior 0.3% / 0.1%
• Trade Balance: $-132.6B vs $-115B cons, prior $-118.9B
• Retail ex-Auto: 0.1% vs 0.8% prior    
• Wholesale Inventories: 0.7% vs 1.1% cons, prior 1.3%
• 9:45am Chicago PMI
• 10:30am EIA Crude inventories
• 12:00pm quarterly grain stocks
• Fed Speakers: Barkin, Goolsbee, Kashkari

Global:

• China Sept Official PMI: 50.1 vs 50.1 cons, prior 49.8
  • Non-Manufacturing: 50.2 vs 49.2 cons, prior 49.0
• China RatingDog Manufacturing PMI: 52.1 vs 51.6 cons, prior 51.5
• Services: 51.6 vs 51.1 cons, prior 51.4
• Japan Retail Sales: 2.7% y.y vs 3.2% cons, prior 3.7%
• Japan Industrial Production: -1.7% m.m vs 1.3% cons, prior -0.2%
• South Korea Industrial Production m.m: -4.8% vs -7.5% cons, prior 0.5%
• Australia CPI: 4.0% vs 4.1% cons, prior 3.5%