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Good morning investors! The market went up despite trade jitters.
Today we cover:
The economy
Earnings
Student loan borrowers at risk?
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📊 Economy and News
US Economic Activity Stalls, Layoffs Rise Amid Uncertainty
US economic activity remained flat with stable employment, but layoffs increased due to weaker demand, economic uncertainty, and AI investments, according to the Federal Reserve's latest Beige Book. Labor shortages persisted in hospitality, agriculture, construction, and manufacturing, worsened by tightened immigration policies.
Consumer spending slightly declined, with five of the Fed’s 12 regions reporting reduced retail activity. Lower- and middle-income households cut back, relying more on food pantries and "buy now, pay later" services, while upper-income consumers drove spending gains. Retailers expressed mixed holiday sales outlooks, citing potential tariff-driven price hikes.
Tariffs raised input costs across many districts, though pass-through to consumers varied. Businesses noted a shrinking labor pool and softening demand, with policy uncertainty and inflation as top concerns. The report, based on data through October 6, may influence Fed policymakers amid a government shutdown delaying key data like inflation and retail sales reports.
Global hits:
Nigerian inflation slows to more than three-year low in September as food prices ease.
India central bank minutes show room for rate cuts as inflation outlook softens.
China September bank loans rise less than expected as weak credit demand persists.
Brazil retail sales rebound in August after four straight declines.
Shutdown continues: The government shutdown entered its third week with no viable deal to resolve it. The Senate -- for the ninth time -- rejected dueling stopgap funding bills as Republicans and Democrats continued to argue for dueling measures.
Democrats insist that any funding deal include extending enhanced Affordable Care Act subsidies, which are set to expire at the end of 2025.
Exciting: Nvidia, Microsoft, xAI and BlackRock part of $40 billion deal for Aligned Data Centers. Trump says he might attend Supreme Court tariff case arguments.
Don’t forget: Trump admin federal job cuts likely to be ‘north of 10,000’. However, A federal judge blocked the Trump administration, for now, from firing federal workers during the ongoing government shutdown.
Controversial: US President Donald Trump said he might stop trade in cooking oil with China, injecting fresh tensions into the relationship between the world’s two largest economies. The news sent Bunge Global up 11%.
Tariffs are pushing prices higher and consumers are feeling the hit, Fed’s Beige Book shows.
Lastly, CEOs of Wells Fargo and Pfizer caution the U.S. could lose its edge to China without innovation.
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📈 Stocks
S&P 500 6,671.06 (+0.40%)
DJIA 46,253.31 (-0.037%)
NASDAQ 22,670.08 (+0.66%)
BRENT CRUDE 62.23 (-0.02%)
* Prices as of Oct 16th, 12:20 AM UTC
Big earnings are here
United Airlines posted higher-than-expected earnings for the third quarter but revenue that missed Wall Street’s estimates. The carrier boosted capacity more than 7% in the third quarter while unit sales fell for both domestic and international travel. United said it expects an adjusted-earnings forecast of $3 to $3.50 a share in the fourth quarter.
Morgan Stanley posted third-quarter earnings that topped expectations by the largest margin in nearly five years. The bank said profit surged 45% from a year earlier to $4.61 billion, or $2.80 per share. Revenue rose 18% to $18.22 billion.
Bank of America Corp delivered impressive third-quarter results according to its October 15, 2025 earnings presentation, with revenue growing 11% year-over-year and earnings per share jumping 31%. The stock responded positively, rising 5.26% following the announcement to reach $52.73, approaching its 52-week high of $52.88.
EV demand: General Motors, Ford and Stellantis have all issued troubling commentary about their electric vehicle businesses. Prospects for the market have changed due to a number of policies, most recently the killing off of a $7,500 federal tax credit for EVs. Tesla reports earnings next week, and many investors will be paying close attention to what the company says about demand.
Good to know: Apple seeks tax law changes in India to support manufacturing growth. Nissan to recall more than 173,000 US vehicles over fuel pump issueNissan to recall more than 173,000 US vehicles over fuel pump issue.
New devices and tools: Apple announced new MacBook Pro, iPad Pro and Vision Pro models with an updated M5 chip that allows them to run faster than their predecessors.
MacBook Pro models start at $1,599, the 11-inch iPad Pro starts at $999 and the latest Apple Vision Pro starts at $3,499.
The devices are available to preorder now in most markets and go on sale Oct. 22.
Elsewhere, Honor revealed a new smartphone with a fold-out robotic camera arm. Also, its new AI phone comes with tools that help users get online shopping discounts and more.
Anthropic launches Claude Haiku 4.5, a smaller, cheaper AI model.
💵 Personal Finance
Student Loan Borrowers Face Default Crisis as Delinquencies Surge
Millions of student loan borrowers are at risk of default, with 5.3 million already in default and 4.3 million in late-stage delinquency (181-270 days late) since the post-pandemic relief period ended on September 30, 2024, per the Congressional Research Service. Severe delinquencies are nearing record highs, according to FICO’s September Credit Insights report.
A “default cliff” looms as borrowers struggle with payments, exacerbated by reduced access to income-driven repayment (IDR) plans due to court rulings and policy changes under President Trump’s administration. The Education Department faces a backlog of 1.1 million IDR applications.
Sen. Elizabeth Warren and other lawmakers urged the Education Department to address the crisis, warning that rising defaults threaten borrowers’ financial stability and the broader economy. They proposed clearing the IDR backlog and creating a temporary interest-free forbearance program to prevent defaults.
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👩🏽⚖️ Legal Stuff
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