Good morning investors! Pressure continues as banks win big.
Today we cover:
Don't forget semiconductors
Banks report
Hedging your money
📊 Economy and News
Cramer: Don’t Bail on Semiconductor Stocks Despite the Sell-Off
Semiconductor stocks have taken a beating, with the VanEck Semiconductor ETF dropping 7.2% over six straight sessions. Jim Cramer says investors should not abandon the group.
Rising oil prices and interest rates may extend the pain, and the stocks are trading as a pack rather than on individual fundamentals. But Cramer argues the underlying demand remains strong.
He pointed to growing computing needs in everyday devices—more advanced Siri features and smarter home technology—as evidence that chipmakers still have powerful tailwinds. “Don’t watch the semiconductor index, watch the devices,” he said.
Micron stands out. The memory-chip maker has 26 long-term customer agreements covering about 35% of revenue through 2030, with talks already underway for 2031. These take-or-pay contracts give it clearer visibility into future sales amid the AI-driven memory shortage.
Cramer also highlighted Intel and AMD, whose CPUs power a vast range of machines. While a sharp pullback after the sector’s big run is reasonable, he insists much of the earlier gains were driven by real demand, not just speculative excess.
Cramer’s Charitable Trust owns shares of Apple, Intel, and Micron.
Global hits:
Kazakhstan’s economy grows 4.2% as oil output declines 8.3%.
US blockade cuts Iranian crude exports to zero in October.
Singapore third-quarter GDP growth softens from four-year high but beats estimates.
German September inflation confirmed at 3.3%.
China’s exports seen growing at faster pace in September.
Reminder: IMF flags risks to global economy from AI market correction, war and debt as it holds 2027 global growth forecast at 3.4%. Also,Williams says Fed may not have to hike rates in 2027, at odds with traders.
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📈 Stocks
S&P 500 7,805.45 (-0.0234%)
DJIA 51,670.10 (-0.37%)
NASDAQ 27,204.38 (-0.13%)
BRENT CRUDE 105.01 (-0.21%)
* Prices as of Oct 14th, 12:20 AM UTC
Major US Banks Report Solid Q3 Loan Growth Amid Intense Deposit Competition
Major US banks delivered resilient third-quarter results, posting growth in both loans and deposits even as high interest rates and fierce competition forced them to pay more to hold onto customer funds.
The consumer remains a key source of economic strength, though higher prices continue to weigh on sentiment, according to Wells Fargo executives. Still, the banks face ongoing funding pressure. As Treasury yields climbed, customers sought better returns elsewhere, prompting lenders to raise deposit rates and squeezing margins.
JPMorgan, the largest US bank, reported a 4% rise in average deposits and a 2% increase in loans from a year earlier. Its deposit margin slipped slightly to 2.78% in the third quarter from 2.79% a year ago, reflecting the higher cost of retaining funds.
CFO Jeremy Barnum noted that internal data does not show consumers shifting away from discretionary spending despite inflation concerns. US consumer prices rose 3.4% in the 12 months through August, while job growth slowed more than expected in September, adding uncertainty about future loan demand.
Citigroup
Citigroup posted some of the strongest growth among the big banks, with average deposits up 11% and average loans jumping 12%. The bank also increased its provision for credit losses during the quarter.
Analysts said overall credit quality across the sector has not shown major cracks so far, with households still managing debt obligations. However, a weakening labor market and rising living costs could put more pressure on borrowers going forward.
Wells Fargo
Wells Fargo saw average deposits rise 10.7% and average loans climb 11%, supported by its consumer banking division. Like Citigroup, the bank raised its provision for credit losses. Its net interest margin on a taxable basis fell to 2.43% from 2.61% a year earlier.
“Loan and deposit growth continue to chug along, albeit maybe with some concern on deposits and how much is left over for the rest of the reporters,” said Truist analyst Brian Foran.
Anthropic and more: Anthropic is asking a federal appeals court in Washington, D.C. to rehear its appeal in a case concerning the Pentagon’s blacklisting of the company’s AI models. Also, the company will release updated financials to a group of institutional investors gathering at its headquarters this week as the AI giant prepares for what could be the largest IPO in history. Lastly, Anthropic warns AI models may soon self-replicate and could wreak havoc on the web.
Surprising: United Airlines will eliminate flight segments as a factor in how MileagePlus members can earn elite “Premier” status with the airline. In other news, Bank of America fined $1.2 billion over money-laundering violations. Furthermore, Apple releases HomeView smart home hub with screen as showcase for Siri AI. Lastly, Visa gas received China’s approval to begin the process of establishing a local bank card clearing business.
💵 Personal Finance
How to Hedge Inflation: Commodities and More
Inflation remains sticky above the Federal Reserve’s 2% target. The September CPI is expected at 3.6%, and one-year consumer inflation expectations have risen to 3.9%. Investors seeking protection have several options.
TIPS look more attractive
Treasury Inflation-Protected Securities now offer real yields near multi-decade highs (10-year TIPS around 2.87%). The bonds adjust principal with CPI, providing a direct inflation hedge.
Year-to-date, TIPS funds have posted losses because rising real yields offset income gains. Longer-maturity TIPS carry significant duration risk if rates rise further. Short-term TIPS funds (such as Vanguard Short-Term Inflation-Protected Securities ETF or iShares 0-5 Year TIPS Bond ETF) reduce that risk while still offering inflation protection. Holding individual TIPS to maturity also locks in the inflation-adjusted principal.
Other inflation hedges
Analysts recommend diversifying beyond TIPS:
Commodities (via diversified ETFs such as PDBC or GSG) historically help when inflation exceeds expectations.
Infrastructure stocks and ETFs (IGF, TOLZ) benefit from contracts with built-in inflation adjustments.
Multi-asset real-return funds that blend TIPS, commodities, gold and REITs provide broader balance.
A mix of moderate rate exposure, income assets and alternatives can help portfolios withstand another inflation surprise without relying on a single hedge.
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