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If I said your $100 USD would be worth $68 in 32 days, would you still invest?

Now, what if I said that $68 USD would be worth $200 in 12 months, would you still invest?

We call that investment risk.

The potential for your money to be worth more OR less than your initial amount over time. It can be a bit frightening at first.

Now, what if instead of investing that $100 USD, you left it in the bank. And it remained as $100 in perpetuity

Your account says $100 USD, it feels like $100 USD, but it's not really $100 USD anymore.

🔴Next year, the account balance will say $100 USD, but it'll only be able to purchase $98 worth of goods and services.

🔴The following year, it'll be able to purchase 96 USD worth of goods.

🔴 In the third year, it'll be down to $94 USD.

Now we can that inflation risks.

When you break it down, there's no risk without reward. Even if you do nothing, there are still risks.

The only difference is, the inflation risk is guaranteed to prevent you from reaching your financial goals.

When it comes to your financial future, which risk will you choose?

Thoughts? Drop a comment below.

Overnight Asia

Asian stocks were steady on Friday and the Dollar slipped as a report that developer China Evergrande Group pulled back from the brink of default aided sentiment. Rallies in China’s technology equities and property shares were among the more notable moves. Local media said Evergrande paid a Dollar-bond coupon before a weekend deadline, easing concerns about possible contagion from any default by the firm. Chinese junk bonds and the Australian Dollar climbed.

The S&P 500 edged up to a record overnight but the mood soured after the cash session when Snap Inc. — owner of the Snapchat app — tumbled on a tempered earnings outlook, hurting other technology shares in late trading. Nasdaq 100 futures retreated, S&P 500 contracts were little changed and European ones advanced.

The 10-year US Treasury yield fell below 1.70% but remains higher for the week. The Federal Reserve is nearing a reduction in bond purchases and traders are ramping up bets on rate hikes to quell price pressures. Market-implied expectations for inflation have hit multi-year highs.

Global stocks are set for a third weekly advance, helped by the ongoing global recovery from the health crisis. The rally is being shadowed by the prospect of a faster-than-expected tightening of monetary policy to curb inflation, which is being stoked by an energy crunch and creaking supply chains. “The US economy is still on solid footing, but now inflation remains the biggest threat,” Edward Moya, senior market analyst at Oanda Corp., wrote in a note, adding that investors are waiting for more earnings reports as well as the final shape of President Joe Biden’s economic agenda.

Biden said he doesn’t think there are enough Democratic votes to raise tax rates in a deal on that agenda, but that he believes he’ll reach an agreement on the overall legislative package. A White House official said Biden was referring only to corporate tax rate increases. In Australia, the Central Bank bought A$1 billion ($746 million) of April 2024 bonds to defend its yield target. The yield fell towards the 0.1% goal.

Snap’s outlook included a warning that global supply chain issues are weighing on advertising spending. Shares in other tech firms exposed to digital advertising, like Facebook Inc. and Twitter Inc., weakened in late trading.

Elsewhere, Crude Oil was lower and Bitcoin steadied after slipping back from its recent record.

Events to watch this week:

• Fed Chair Jerome Powell takes part in policy panel discussion, Friday

Some of the main moves in markets:

Stocks:

• S&P 500 futures fell 0.10% as of 7.10 am in London. The S&P 500 rose 0.30%
• Nasdaq 100 futures retreated 0.50%. The Nasdaq 100 rose 0.70%
• Japan’s Topix Index was steady
• Australia’s S&P/ASX 200 Index was flat
• South Korea’s Kospi Index fell 0.10%
• China’s Shanghai Composite Index lost 0.20%
• Hong Kong’s Hang Seng Index increased 0.20%

Currencies:

• The Bloomberg Dollar Spot Index dipped 0.10%
• The Euro was at $1.1626
• The Japanese Yen was at 113.98 per Dollar
• The offshore Yuan was at 6.3944 per Dollar

Bonds:

• The yield on 10-year Treasuries dipped three basis points to 1.67%
• Australia’s 10-year bond yield was one basis point higher at 1.80%

Commodities:

• West Texas Intermediate Crude was at $81.92 a barrel, down 0.70%
• Gold was at $1,787.52 an ounce, up 0.30%

US Market Wrap

The S&P 500 set a record high on Thursday and extended its gains to a seventh day, as investors dive into the thick of earnings season and assess inflation risks. The benchmark gauge, which wavered between gains and losses throughout the day before finally drifting past the record level it had set on 2 September, finished the day higher by 0.3%. Seven of the 11 major industry groups rose, with the consumer discretionary and health care sectors leading to the upside, while energy and financials fell. The tech-heavy Nasdaq 100 Index rose 0.7%, while the blue-chip Dow Jones Industrial Average, which set an intraday record on Wednesday, was little changed.

Tesla Inc. closed at a record high after posting its ninth-straight profitable quarter while American Airlines Group Inc. and Southwest Airlines Co. reported narrower losses than expected. International Business Machines Corp.’s revenue missed estimates, sending the shares tumbling, and Freeport-McMoran Inc. produced less copper than expected last quarter. Meanwhile, Crocs Inc. surged after reporting a “stellar” third quarter. Blackstone Inc.’s assets under management hit a record for the firm at $731 billion and AT&T Inc.’s quarterly adjusted earnings per share beat estimates.

Reports in recent days from companies like Crocs Inc. and Procter and Gamble “showcase both how well companies are managing supply chain headwinds and how little investors care when firms suffer big supply chain hiccups,” Adam Crisafulli, Vital Knowledge analyst, wrote in a note. “With peak supply chain negativity, a market priced for Fed tapering, and Washington abandoning tax hikes, bulls have the baton,” he added.

On the economic front, weekly initial jobless claims came in below estimates and set a new pandemic-era low for the second week in a row. Continuing claims also clocked in lower than expected. The US 10-year yield rose, climbing as high as 1.68%. Tiffany Wilding, Pacific Investment Management Co.’s chief US economist, expects net job gains for October when the data is released in a few weeks.

“We do see some really encouraging signs that the economy is re-accelerating,” she said on Bloomberg Television on Thursday morning.

Sectors in Focus:

• Shares of Oil services firms tumbled on Thursday as the price of Oil slid by the most since August amid concerns around global economic growth
• Online dating companies Match and Bumble rallied following news that Alphabet’s Google is slashing the fees it takes from subscription services on its app store
• Transportation companies were in focus amid earnings. The Dow Jones Transportation Average jumped as much as 1% on Thursday, its sixth straight day of gains, after several companies, including railroad operator CSX and airlines American and Southwest, reported strong results
• Footwear retailers gained after Crocs beat third-quarter estimates and boosted the low end of its full-year revenue forecast in news seen as positive for the broader market. Crocs shares jumped 9.30%

Politics/Economy:

• The Federal Reserve will ban policy makers and other senior officials from buying individual stocks and bonds, and will also restrict active trading after an ethics scandal led to the departure of two regional presidents and risked confidence in the Central Bank
• Congressional Democrats are at odds over both the tax and spending sides of a bill to enact the bulk of President Joe Biden’s economic agenda, putting in question the goal of party leaders to strike a deal by the end of the week
• President Joe Biden’s pick to be ambassador to China drew sharp lines with Beijing over its “aggressive” actions in the Indo-Pacific but said “American strength” gives the US key advantages in the relationship between the world’s two largest economies

Markets

• S&P 500 Index up 0.30% to the highest level ever
• Dow Jones Industrial Average little changed
• NASDAQ Composite Index up 0.60%
• Russell 2000 Index up 0.30%
• Seven of 11 main S&P 500 sectors closed higher
• Consumer discretionary up 1.40%
• Health care up 0.40%
• US Generic Govt 10-Yr up 1.80%
• Bloomberg Dollar Spot Index (Rebased Version) down 0.20%

Overnight Asia

Most Asian stocks fell on Thursday as investors weighed corporate earnings, elevated inflation and the outlook for China’s property sector. Japan’s Yen strengthened.

Equities retreated in Japan and Hong Kong, and were little changed in China. While ailing China Evergrande Group sank on a worsening cash squeeze, other developers rallied after regulators said real estate risks are controllable. US and European futures were in the red following a mixed Wall Street session in which the S&P 500 neared a record and the tech-heavy Nasdaq 100 slipped.

Longer-term Treasury yields trimmed an advance. The 10-year breakeven rate - a proxy for where investors see annual inflation rates over the next decade - touched the highest since 2013. A similar measure for Japan reached a three-year high.

The Dollar was little changed, Crude Oil was steady and Bitcoin retreated from an all-time peak. Chinese coal futures plunged amid efforts by officials to contain power costs. Corporate results have tempered but not dissipated worries that cost pressures - stoked by an energy crunch and supply chain snarls - could slow the pandemic recovery. Investors are also grappling with the prospect of reduced Central Bank support and watchful of the travails in China’s real estate sector. In the latest Federal Reserve comments, Governor Randal Quarles said he favours an initial move to slow monetary stimulus next month and is concerned by a broadening of inflationary pressures that could require a policy response. The Fed is “trapped in a very difficult situation,” David Kudla, Chief Executive Officer at Mainstay Capital Management, said on Bloomberg Television. That’s because of the possibility of reduced stimulus followed by rate hikes amid a significant slowing of economic expansion, he said.

Meanwhile, the US Food and Drug Administration cleared the way for Moderna Inc. and Johnson & Johnson Covid-19 booster shots. Russia is among countries stepping up virus restrictions to curb surging infections.

Events to watch this week:

• US Conference Board Leading Index, US existing home sales, jobless claims, Thursday
• Fed Chair Jerome Powell takes part in policy panel discussion, Friday

Some of the main moves in markets:

Stocks:

• S&P 500 futures dropped 0.30% of 6.57 am in London. The S&P 500 rose 0.40%
• Nasdaq 100 contracts fell 0.40%. The Nasdaq 100 fell 0.10%
• Japan’s Topix Index fell 1.30%
• Australia’s S&P/ASX 200 Index was little changed
• South Korea’s Kospi shed 0.20%
• Hong Kong’s Hang Seng Index lost 1.00%
• China’s Shanghai Composite Index was little changed
• Euro Stoxx 50 futures were declined 0.50%

Currencies:

• The Japanese Yen rose 0.30% to 113.98 per Dollar
• The offshore Yuan was at 6.3934 per Dollar
• The Bloomberg Dollar Spot Index was little changed
• The Euro was at $1.1650

Bonds:

• The yield on 10-year Treasuries was at 1.65%
• Australia’s 10-year bond yield was at 1.79%, down two basis points

Commodities:

• West Texas Intermediate Crude was at $83.35 a barrel
• Gold was at $1,785.08 an ounce, rising 0.20%

US Market Wrap

The S&P 500 meandered upwards for a sixth session, finishing the day within a point of its record closing high as it stretched its winning streak to the longest since July. The benchmark gauge gained 0.4%, while the blue-chip Dow Jones Industrial Average set a fresh intraday high but finished the day short of its record close. Eight of the S&P 500’s 11 major industry groups rose, with utilities and real estate leading the Index higher, and the information technology and communication services sectors retreating. The tech-heavy Nasdaq 100 Index slipped by 0.1%.

Netflix Inc. fell after analysts said its subscriber outlook underwhelmed investors. Pharma company Abbott Laboratories gained after boosting its full-year forecast. Anthem Inc. jumped 7.7% after the health insurer also raised its 2021 profit outlook. “The latest releases have helped to distract from stagflation fears but have diverted attention towards supply chain bottlenecks which look set to plague Q3 earnings,” Fiona Cincotta, senior financial markets analyst at City Index, wrote on Wednesday morning.

The gains come on the heels of the S&P’s best start to an earnings season in the last two years.

“It’s too early to say markets are ‘in the clear’ for this earnings season but, so far, the spike in costs is not translating into earnings reductions, and if that can continue it’ll remove a significant source of anxiety for investors,” said Tom Essaye, founder of the Sevens Report newsletter, wrote on Wednesday morning.

After the market closed on Wednesday, Tesla Inc. reported results that beat on EPS but missed on revenue. IBM‘s shares sunk post-market as its revenue missed.

Sectors in Focus:

• Auto parts suppliers reversed earlier losses to outperform the broader market on Wednesday afternoon, with a key Index swinging between a 1.2% drop and a 1.2% gain
• The newest Crypto stock surged on its first day of trading as Bitcoin climbed to a record high. Crypto miner Stronghold Digital Mining Inc. rose 52% from its initial public offering price in Wednesday’s debut session, which came as Bitcoin topped $66,000 for the first time
• Las Vegas Sands declined 2.4% post market after a third-quarter loss that was wider than analysts’ estimates. The miss also dragged other casino peers down in after-hours trading on Wednesday

Politics/Economy:

• President Joe Biden says he thinks lawmakers will reach a deal on his economic agenda before the G-20 begins next week
• Federal Aviation Administration Chief Steve Dickson will tell lawmakers on Thursday that the agency is taking a new stance in overseeing the safety efforts of airplane manufacturers, Reuters reports, citing his prepared testimony for a House panel hearing
• Bundesbank President Jens Weidmann will step down after more than a decade in the post, marking the exit of one of the most hawkish policy makers at the European Central Bank just as it debates the future of its post-crisis stimulus

Markets

• S&P 500 Index up 0.40%
• Dow Jones Industrial Average up 0.40%
• NASDAQ Composite Index little changed
• Russell 2000 Index up 0.60%
• Eight of 11 main S&P 500 sectors closed higher
• Utilities up 1.60%
• Real estate up 1.50%
• US Generic Govt 10-Yr up 0.80%
• Bloomberg Dollar Spot Index (Rebased Version) down 0.30%

Overnight Asia

Asian stocks were mixed on Wednesday as traders weighed company earnings and risks from inflationary pressures. Treasury yields rose and the Dollar dipped.

A rally in Chinese technology firms such as Alibaba Group Holding Ltd. bolstered Hong Kong on hopes the worst of Beijing’s regulatory crackdown is over. Equities slipped in China, where the Central Bank boosted short-term liquidity, held loan prime rates steady and set a weaker-than-expected Yuan reference rate in a sign of discomfort over currency strength.

US and European futures edged lower. The S&P 500 closed near a record as traders weighed the corporate impact of supply chain snarls and higher commodity prices. Johnson & Johnson raised a profit forecast, Netflix Inc. subscribers jumped and Procter & Gamble Co. faced rising costs. The 10-year US Treasury yield was above 1.60% and Australian debt of a similar tenor slid. Bitcoin is close to hitting a record on optimism following the debut of the first Bitcoin-linked exchange-traded fund listed in the US. Oil fell from a seven-year high.

The earnings season has taken some of the spotlight away from concerns about a slowing pandemic recovery, price pressures stoked by energy costs and reduced Central Bank support. The Cboe Volatility Index, a measure of implied equity swings for the S&P 500, has fallen back to the lowest level since August.

In the latest Fed comments, Governor Christopher Waller said the Central Bank should begin tapering its bond-buying programme next month. He expects inflation to be moderate and said interest rate hikes are probably “still some time off.” “I don’t think the Fed is going to act or hike very aggressively in part because they have this inflation view, but also because we are going to be in a slowing growth environment by the end of next year,” Esty Dwek, FlowBank SA Chief Investment Officer, said on Bloomberg Television.

Meanwhile, progress on President Joe Biden’s economic agenda appears closer, after Congressional Democrats made headway in breaking a stalemate on the multi-trillion Dollar tax and spending package.

Traders continue to monitor the debt woes at China’s real estate developers. Sinic Holdings Group Co. became the latest to default, while the wait continues for China Evergrande Group’s overdue interest payments on Dollar bonds. A property slump saw China’s home prices fall for the first time in six years.

Events to watch this week:

• Earnings roll in including from AT&T Inc., Barclays Plc and Tesla Inc.
• EIA Crude Oil inventory report, Wednesday
• China property prices, loan prime rates, Wednesday
• US Conference Board Leading Index, US existing home sales, jobless claims, Thursday
• Fed Chair Jerome Powell takes part in policy panel discussion, Friday

Some of the main moves in markets:

Stocks:

• S&P 500 futures fell 0.10% as of 7.01 am in London. The S&P 500 rose 0.70%
• Nasdaq 100 futures dipped 0.10%. The Nasdaq 100 rose 0.70%
• Japan’s Topix Index was little changed
• Australia’s S&P/ASX 200 Index added 0.50%
• South Korea’s Kospi Index fell 0.50%
• Hong Kong’s Hang Seng Index gained 1.30%
• China’s Shanghai Composite Index shed 0.20%
• Euro Stoxx 50 futures slipped 0.20%

Currencies:

• The Japanese Yen was at 114.51 per Dollar, down 0.10%
• The offshore Yuan was at 6.3810 per Dollar, down 0.10%
• The Bloomberg Dollar Spot Index dipped 0.10%
• The Euro traded at $1.1646

Bonds:

• The yield on 10-year Treasuries was at 1.64%
• Australia’s 10-year bond yield climbed about eight basis points to 1.81%

Commodities:

• West Texas Intermediate Crude was at $82.76 a barrel, down 0.20%
• Gold was at $1,776.87 an ounce, up 0.40%

US Market Wrap

The S&P 500 extended its rally for its strongest five-day streak since March as earnings season’s shift from financials to consumer staples, transportation giants and other bellwethers helped ease worries in a quarter shadowed by supply chain issues and rising commodity prices. The benchmark gauge rose 0.7%, trading at its highest level in six weeks. 10 of the 11 major industry groups rose, with the health care and utilities leading gains, while consumer discretionary fell. The tech-heavy Nasdaq 100 Index rose 0.7%, while the blue-chip Dow Jones Industrial Average climbed by 0.6%.

The focus on earnings is drawing attention away from the inflation worries that have stalked the market recently, even as Brent Oil closed above the $85-per-barrel mark for the first time since October 2018 and US 10-year yields rose above the 1.63% level. “Investors will be particularly parsing reports this week, as results from the banks and financials only provided metrics on spending and lending in the economy,” Art Hogan, Chief Market Strategist at National Securities, wrote in a note. “As other factors continue to bite businesses and consumers alike, it will be crucial to see how supply chain disruptions, inflation, higher energy costs and labour shortages affected the biggest US corporations in Q3.”
Netflix Inc. reported its strongest subscriber growth this year, beating estimates. Johnson & Johnson lifted its profit forecast for the year, boosting its shares the most since January. Procter & Gamble Co. slipped as rising costs pushed against strong demand. And fracking giant Halliburton Co. expects the global energy crisis to boost its sales. This week’s earnings results “will go a long way towards telling us if inflation and margin compression are legitimate risks, and if the consumer remains as strong as expected,” said Tom Essaye, Founder of the Sevens Report newsletter.

“The answer to that question, combined with where yields go over the next few days, will likely determine whether this rebound in stocks continues and the S&P 500 moves comfortably above 4,500 or fades,” Essaye wrote.

Sectors in Focus:

• Covid pill and vaccine makers were in focus after Roche’s partner Atea Pharma said a mid-stage study for their antiviral pill missed its main goal in Covid-19 patients. Roche fell in European trading while Atea crashed about 66%
• An Index for health care equipment companies, the S&P Supercomposite Health Care Equipment Index, rose the most since April after Johnson & Johnson’s results showed growth for its medical technology sales
• The NYSE FANG+ Index extended gains, rising to a record. The Index, which includes an assortment of technology-related stocks including Apple and Tesla, had fallen 9.40% from a previous high on 7 September to 4 October

Politics/Economy:

• US housing starts decreased in September, driven by a pull-back in multi-family construction, as lingering supply chain constraints, shortages of skilled labour and elevated materials costs continue to challenge builders. Residential starts fell 1.60% last month to a 1.56 million annualised rate, according to government data released on Tuesday
• Boris Johnson said the global climate talks the UK is hosting at the end of the month will be “extremely tough,” as he made a last ditch call on world leaders to take concrete steps to protect the planet
• President Xi Jinping ordered better regulation of the country’s technology sector, underscoring the intense scrutiny and upheaval faced by Chinese internet giants following their rapid growth

Markets

• S&P 500 Index up 0.70%
• Dow Jones Industrial Average up 0.60%
• NASDAQ Composite Index up 0.70%
• Russell 2000 Index up 0.40%
• 10 of 11 main S&P 500 sectors closed higher
• Health care up 1.30%
• Utilities up 1.30%
• US Generic Govt 10-Yr up 2.20%
• Bloomberg Dollar Spot Index (Rebased Version) up 0.10%

Overnight Asia

Asian stocks rose on Tuesday as technology shares rallied and the prospect of solid corporate earnings helped counter concerns stemming from elevated inflation. The Dollar declined.

MSCI Inc.’s Asia-Pacific Equity Index was at its highest since late September. Hong Kong outperformed and the city’s gauge of Chinese tech stocks surpassed its 50-day moving average. US and European futures edged up after US stocks gained, with the Nasdaq 100 leading the way. Treasury yields declined and a flattening in the yield curve paused. Australian bonds were whipsawed after the Central Bank in its latest minutes said it remains committed to maintaining highly supportive monetary conditions to bolster the economy.

In China, the focus is on debt-laden China Evergrande Group’s real estate unit and its coupon payment due on a local bond.

Markets are taking some comfort from robust earnings, but also grappling with the prospect of tightening monetary policy to quell price pressures. Traders are waiting to see if a slate of Federal Reserve speakers this week will try to calm the jitters stemming from the scaling back of pandemic-era policy support.

“The world is watching interest rates more closely than it has for some time — and rightly so, the moves have been emphatic, especially in the short-term maturities,” Chris Weston, Head of Research at Pepperstone Financial Pty wrote in a note. He added it’s “impressive how resilient and calm markets are in the face of the rates repricing.”

The Oil rally paused with prices around multi-year highs. A natural gas shortage is spurring demand for products like fuel oil and diesel for power generation. Investors are paying close attention to the earnings season to see how higher costs for energy and raw materials are affecting margins. “We are going to get a lot of information on whether margins are being squeezed by these shortages and higher prices and wages continuing to go up,” JoAnne Feeney, Advisors Capital Management Partner and Portfolio Manager, said on Bloomberg Television. She added the Delta-plus Covid variant could be among sources of volatility in the next few months.

Elsewhere, Bitcoin traded around $62,500. ETF issuer ProShares is preparing to launch its Bitcoin futures fund on the New York Stock Exchange on Tuesday.

Events to watch this week:

• Earnings roll in including from AT&T Inc., Barclays Plc, Johnson & Johnson, Netflix Inc. and Tesla Inc
• Bank Indonesia rate decision and briefing, Tuesday
• China’s NPC Standing Committee starts a meeting on Tuesday that goes on through 23 October. A review of anti-monopoly regulations is on the agenda
• US housing starts, Tuesday
• EIA Crude Oil inventory report, Wednesday
• China property prices, loan prime rates, Wednesday
• US Conference Board Leading Index, US existing home sales, jobless claims, Thursday
• Fed Chair Jerome Powell takes part in policy panel discussion, Friday

Some of the main moves in markets:

Stocks:

• S&P 500 futures rose 0.10% as of 7 am in London. The S&P 500 rose 0.30%
• Nasdaq 100 futures rose 0.10%. The Nasdaq 100 rose 1.00%
• Japan’s Topix Index increased 0.40%
• Australia’s S&P/ASX 200 Index fell 0.10%
• South Korea’s Kospi Index rose 0.60%
• Hong Kong’s Hang Seng Index rose 1.10%
• China’s Shanghai Composite Index added 0.60%
• Euro Stoxx 50 futures rose 0.10%

Currencies:

• The Japanese Yen was at 114.13 per Dollar, up 0.10%
• The offshore Yuan traded at 6.4018 per Dollar, up 0.40%
• The Bloomberg Dollar Spot Index fell 0.30%
• The Euro was at $1.1652, up 0.40%

Bonds:

• The yield on 10-year Treasuries slipped two basis points to 1.58%
• Australia’s 10-year bond yield fell about two basis points to 1.73%

Commodities:

• West Texas Intermediate Crude was at $82.90 a barrel, up 0.60%
• Gold was at $1,776.95 an ounce, up 0.70%

US Market Wrap

The S&P 500 rose for a fourth session, building on its best week since July, as inflation worries eased with Crude Oil fading from its multi-year highs. The benchmark, which is at its highest level in more than a month, rose 0.3%. Seven of the 11 major industry groups rose, with consumer discretionary and information technology leading to the upside, while utilities and health care were the worst performers. The tech-heavy Nasdaq 100 Index rose by 1%, trading at its highest level in more than three weeks. Meanwhile, the blue-chip Dow Jones Industrial Average fell by 0.1%. Inflation concerns waned as Oil retreated from the multi-year highs it hit earlier in the session. US industrial data showed signs of weakness on Monday, which weighed on energy prices, helping to offset an ongoing shortage of natural gas that has been pushing prices higher.

Strength in tech stocks also helped push markets higher on Monday, Edward Moya, Senior Market Analyst at Oanda Corp., said in a note. “It was a good day to be a mega-cap tech stock as Microsoft rose to fresh record highs, Netflix rallied ahead of earnings and Apple’s event on AirPods, MacBooks and new music plan were positively received,” Moya said. For the market to hit fresh highs, however, clarity will be needed on issues including the debt ceiling debate in Washington that lawmakers punted to December, third-quarter earnings and whether inflation will drive the Federal Reserve to “get more aggressive on tapering,” wrote Tom Essaye, Founder of the Sevens Report newsletter. “Bottom line, the issues that caused the pullback have quieted over the past two weeks which has rightly allowed stocks to bounce. But these issues are not resolved by any stretch of the imagination,” Essaye said. “So, while we hope this bounce lasts a while longer, we are skeptical that stocks will be able to hit new highs until there’s more clarity on all of the above issues.”

After last week’s earnings reports showcased banks, consumer spending trends will be in focus this week, as companies from Netflix Inc. to American Airlines Group Inc. and Tesla Inc. report. The next few days will give a snapshot of how consumer-facing companies have fared in the past quarter – and what they expect for the rest of the year. Supermarket chain Albertsons Cos. reported 1.5% growth in its same store sales on Monday, sending shares higher.

Sectors in Focus:

• Tesla Inc. shares are staging a comeback as investors expect the Elon Musk-led electric carmaker to navigate the crippling semiconductor shortage better than rivals that have been severely disrupted. The stock gained as much as 3.8% to $875.26 on Monday in New York, before closing at $870.11, up nearly 55% from a 8 March low of $563
• Crypto-related stocks are in focus as Bitcoin leaps as much as 5.3% and is just shy of a fresh six-month high. Riot Blockchain, Marathon Digital and Coinbase all closed higher by at least 4.5%
• Keep an eye on tech shares after the Nasdaq 100 Index rose to its highest level in more than three weeks, with Tesla, Apple, Facebook and Microsoft pushing the benchmark higher

Politics/Economy:

• Production at US factories fell by the most in seven months in September, in part reflecting a sharp pull-back in the manufacturing of motor vehicles as well as broader backlogged supply chains and materials shortages. The 0.7% decrease for manufacturers followed a revised 0.4% decline in August, Federal Reserve data showed on Monday
• The Federal Reserve’s army of more than 400 Ph.D. economists has a message on inflation for policy makers and the American public: Chill out. While some officials are publicly anxious about rising prices and Wall Street has ramped up its forecasts, the Fed’s staff in Washington predicts inflation will be back under 2% in 2022, according to minutes of last month’s Federal Open Market Committee meeting released on 13 October
• Colin Powell, who was born in Harlem to Jamaican immigrants and rose to become the first African-American to be US Secretary of State and Chairman of the Joint Chiefs of Staff, has died. He was 84. Powell died on Monday due to complications from Covid-19, his family said on the general’s page

Markets

• S&P 500 Index up 0.30%
• Dow Jones Industrial Average down 0.10%
• NASDAQ Composite Index up 0.80%
• Russell 2000 Index up 0.10%
• Seven of 11 main S&P 500 sectors closed higher
• Consumer discretionary up 1.20%
• Information technology up 0.80%
• US Generic Govt 10-Yr up 1.10%
• Bloomberg Dollar Spot Index (Rebased Version) down 0.10%