JPM US Market Intelligence | Morning Briefing

• MKT UPDATES – Supportive breadth despite lower indices, AI-linked weakness, and a higher oil risk premium; Joshua Meyers on Semis / Hardware weakness.

• FACTOR UPDATES – Manish flags the risk of a Quality reversal around CPI and the Fed meeting

• 26Q3 EARNINGS PREVIEW – Expectations and Mkt Intel’s key things to watch this earnings season

• US MKT INTEL VIEW – we are Tactically Bullish and update the Monetization Menu

JPM MARKET INTEL MORNING UPDATES

• SPX +0.0%, NDX -0.5%, RTY +0.4%. WTI -180bps at $92.05, NatGas -111bps to $3.13, UK NatGas +179bps to £2.1345, Gold +22bps to $4,181, Silver +33bps to $60.46, 10Y @ 5.194%, and VIX @ 15.36.

• US: Futs are mixed with tech lagging as the rotation out of tech continued (semis/memory still under pressure: NVDA -0.6%, MU -2.6% and SMCI -1.9% in pre-market session). Our trading desk flagged that Broadcom CEO’s comments deepened the concerns on the financing side of AI, both in debt and equity, along with multiple headline drivers such as the CXMT’s “4F2” announcement (See JPM TMT specialist Josh Meyer’s comments below). On the other hand, broadening continues in both ex-tech Cyclicals and RTY: Financials are higher this morning ahead of large-cap bank earnings pre-market.

Treasuries rallied with yields down ~2–5bp led by 10y, and the USD is softer with DXY - 30bp. Commodities are lower with WTI -1.8% overnight while gold +30bp and silver +40bp.

• EU/UK: Major Eurozone indices are higher led by UK and Germany. Defensives and rate-sensitive baskets outperforming, including chemicals, staples and financials, while semis and luxury are lagging. Luxury is a clear drag with LVMH’s worse-than-expected earnings due to weakness in Chinese demand (CNBC); semis remain heavy in sympathy with the global AI unwind. Rates are lower globally: 10y Gilt and Bund are 5bp and 4bp lower, respectively.

• US MACRO DATA: NFIB Small Business Optimism at 6am ET. ADP Weekly Employment Change at 8.15am ET. Existing Home Sales at 10am ET. Federal Budget Balance at 2pm ET. (Oct 13-15) SEMICON West.

• US EARNINGS: ACI, C, DPZ, GND, GS, JNH, JNJ, JPM, WFC

• GLOBAL MACRO DATA: (Japan) Money Stock M2 and Money Stock M3 at 7.50pm ET. (China) CPI/PPI at 9.30pm ET.

JPM MARKET INTEL EQUITY & MACRO NARRATIVE

All three major indices closed lower yesterday, but breadth was supportive (over 60% of S&P 500 stocks finished higher). Similarly, we see this rotation/broadening continues into this pre-market sessions. Declines were concentrated in AI-linked baskets yesterday, especially semis (SOXX -2.6%) and memory (DRAM -4.3%). Comments from JPM Tech specialist Josh Meyers summarized the drivers pretty well below. On macro, oil reversed yesterday’s gains this morning, triggering a decline in global yields, but the situation over the weekend showed clear escalation (Houthi attacks on Saudi airports; Ukraine said Russia hit energy targets despite Trump’s ceasefire announcement, per RTRS) and we have seen energy markets trading range-boundedly recently.