Market News

Comments from the Fed’s Barkin cross the wires:

• Direction of travel is “straightforward” for the Fed, the question is pace.
• A gradual approach is a good way to go right now.
• A lot of cost pressures are hitting American businesses.
• In the context of years of elevated inflation it is easier for businesses to argue they need to raise prices.
• Resilience of consumer spending has been a surprise given relatively flat incomes.
• The AI investment surge has pressured supply chains, and that is inflationary.
• AI investment is leading to demand side inflation, which is the kind of thing the Fed can lean against.
• Businesses are saying that there cost pressures are broad-based.
• Businesses are laying plans to pass those costs on to their customers.
• Demand remains…

US stocks are trading lower, with the Nasdaq indices taking the biggest hit as investors reassess the earnings outlook—and the cost of delivering on the AI growth story.

• Dow: Down 176.04 points, or 0.34%, at 52,172.21.

• S&P 500: Down 88.50 points, or 1.15%, at 7,631.89.

• Nasdaq Composite: Down 569.26 points, or 2.17%, at 25,615.47.

• Russell 2000: Down 18.92 points, or 0.66%, at 2,840.30.

• Nasdaq 100: Down 752.25 points, or 2.56%, at 28,650.25.

The selling highlights a shift in what investors are willing to reward. Strong AI growth remains important, but the market is becoming more demanding about what that growth costs, when the investment will generate returns, and how much cash is left along the way.

Amazon and Intel both reported after…

Crude oil extended the gains into new highs yesterday after the Houthis targeted the Aramco oil company in widespread wave of missile attacks.

The bullish momentum then accelerated after the Wall Street Journal reported that in a rare in-person visit to the White House, the top US commander in the Middle East briefed Trump on military options for Iran as the US weighed resuming major combat operations.

This is the last weekend before the US midterm elections, so there’s some concern of a US attack over the weekend. We might see some hedging going into the weekend that could push oil prices even higher.

The market remains supported amid the Saudi-Houthi conflict and the…

• Prior quarter was +0.9%
• Employment benefits +0.9% vs +1.0% prior quarter
• Employment wages +0.7% vs +0.9% prior quarter

The US Employment Cost Index (ECI) increased by 0.8% q/q in the third quarter, with both wages and salaries and benefit costs contributing to the increase. Wages and salaries rose 0.7%, while benefit costs increased 0.9% compared with the previous quarter.

On an annual basis, total compensation costs for civilian workers increased by 3.4%, with wages and salaries rising 3.1% and benefit costs accelerating by 3.9%. The figures show that labour cost pressures remain relatively contained, although benefits continue to increase faster than wages.

Looking at private industry, compensation costs also increased by 0.8% q/q and 3.4%…

• Prior Month 0.0%

Details of the Canada GDP for the month of August:

• August real GDP: 0.0% MoM. Prior 0.0%.

• September advance estimate: -0.1% MoM.

• Q3 preliminary growth indication: +0.3% QoQ, not annualized.

• Breadth: 9 of 20 industrial sectors expanded in August.

• Services-producing industries: -0.1%.

• Goods-producing industries: +0.1%.

Key August sector details:

• Retail trade: +1.2%, led by motor vehicle and parts dealers.

• Manufacturing: +0.3%, supported by machinery and petroleum refining.

• Wholesale trade: -1.4%, the largest drag on growth.

• Public sector: -0.2%, partly reflecting the winding down of Census work.

• Oil and gas extraction: -1.2%, its third consecutive monthly decline.

• Utilities: -0.4%, weighed down by nuclear maintenance outages.

Canada’s…

Technology stocks are taking another hit heading into Friday’s North American session. Disappointing earnings from Amazon and a sharp negative reaction to Intel’s results are adding to concerns about the spending, profitability and expectations surrounding the AI trade.

The weakness is concentrated in technology, with Nasdaq futures down 785 points and S&P futures down 84 points, while Dow futures are holding a modest 15-point gain. That divergence matters. Technology is leading the pressure, while the Dow is showing greater resilience.

Elsewhere, the U.S. dollar is mostly lower and Treasury yields are falling across the curve. Crude oil, however, is moving higher despite President Trump’s optimistic comments about an end to the Iran war.…

Ethereum tanked yesterday following the news of Binance security breach, which reportedly resulted in approximately $6.3 billion being drained from wallets across multiple blockchains. It was the largest cryptocurrency heist in history.

The hack raised concerns about exchange security and potential contagion across the crypto ecosystem. Although Binance pledged to cover customer losses, uncertainty surrounding the stolen assets and potential liquidations weighed on sentiment.

Around $1.53 billion in leveraged positions were liquidated over 24 hours. While the Binance hack triggered the initial shock, leveraged positioning and cascading liquidations magnified the losses.

Headlines:

• What is spooking markets as stocks, Treasury yields and gold all fall today?
• Gold gets hit again by forced liquidations as equity losses mount; fundamental outlook increasingly positive
• BOJ governor Ueda says will stick to rate hike path in response to latest macro developments
• BOJ governor Ueda tries to play down inflation victory declaration, says it will be up to the government to call that
• Eurozone Q3 GDP beats expectations but the growth surprise comes with a catch
• Germany Q3 preliminary GDP +0.2% vs +0.1% q/q expected
• France's economy contracts in Q3 as growth troubles pile up for the ECB
• Spain Q3 GDP growth slows slightly but it's the inflation problem that should worry the ECB
• Italy Q3 preliminary GDP +0.0% vs +0.1% q/q expected
• <a href="https://investinglive.com/news/german-state-inflation-cools-in-october-but-will-that-ease-the-ecb-s-headache"…

• Eurozone Q3 preliminary GDP +0.4% vs +0.2% q/q expected
• Prior +0.6%
• Eurozone Q3 preliminary GDP +1.3% vs +1.1% y/y expected
• Prior +1.2%

Well, well, well. Would you look at that. The euro area economy has managed to pull a rabbit out of the hat, delivering a better-than-expected Q3 GDP reading at first glance. But before we start popping the champagne, there's a catch or two worth considering when you look at the details.

To start, quarterly growth did still slow down to 0.4% in the third quarter - down from 0.6% in the second quarter. So while the headline surprise is encouraging, the underlying momentum isn't quite as impressive as it might seem.

And when you drill deeper into the details, that is when things start to get a bit more interesting.

• Prior +4.2%
• HICP +5.6% vs +4.6% y/y expected
• Prior +4.2%

Inflation accelerated sharply in October 2026, but the increase was primarily driven by energy prices, with both regulated and non-regulated energy products recording significant increases. Regulated energy inflation surged from 25.8% to 59.5% y/y, while non-regulated energy prices accelerated from 22.5% to 29.4%. Higher energy costs remain the dominant driver of the inflationary shock.

However, price pressures were not limited to energy. Unprocessed food inflation accelerated from 5.5% to 7.5%, while processed food prices also returned to positive annual growth. Services inflation picked up more modestly, rising to 2.9% from 2.6%, with transport-related services accelerating to…

Gold came under renewed pressure yesterday as another selloff in equities weighed on precious metals. Gold has been tightly correlated with the stock market recently, with the latest losses seemingly driven by investors liquidating positions to cover losses elsewhere in their portfolios.

Chart: You can see the correlation between the Nasdaq (blue line) and gold (candlesticks)

To understand the mechanics, imagine that an investment fund holds stocks, gold and government bonds. Some stocks suddenly crash, and the fund suffers losses on leveraged positions. The fund may need to raise cash to meet margin calls, reduce leverage or satisfy investor redemptions. Rather…

• Prior +0.2%
• GDP Y/Y +0.8% vs +0.9% y/y expected
• Prior +1.0%

Italy's economy unexpectedly stalled in the third quarter of 2026, with GDP remaining unchanged q/q, following 0.2% growth in the previous quarter. On an annual basis, GDP increased by 0.8%, pointing to a relatively modest pace of economic expansion.

On the supply side, services and agriculture provided positive contributions to growth, while industrial activity declined. The weakness in industry remains a concern, particularly given the sector's importance to Italy's export-oriented economy.

On the demand side, domestic demand, including changes in inventories, supported economic activity, while net foreign demand acted as a drag. This suggests that domestic spending continues to…