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Good morning investors! Markets continue to hit new highs as investors await big earning reports and Fed rate cut decision.
Today we cover:
Fed’s cutting rate?
Nvidia going higher.
Earnings (PayPal, Visa, and more)
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📊 Economy and News
Fed to Cut Rates Amid Economic Concerns
The Federal Reserve is expected to lower interest rates by a quarter point this week, with potential cuts in December and January, according to the October CNBC Fed Survey.
Of the 38 respondents, including economists and strategists, 92% anticipate the cut, but only 66% support it, citing concerns over limited data from the government shutdown, an AI bubble, persistent inflation, and possible political influence on Fed decisions.
Critics argue financial conditions don’t justify cuts, with GDP tracking 3.5-4% and inflation above the Fed’s target.
Respondents forecast 100 basis points of cuts by 2026, lowering the fed funds rate to 3.2%. Meanwhile, 80% see AI stocks as overvalued by over 20%, predicting modest stock market growth.
The government shutdown is not expected to impact stocks significantly, with most anticipating economic recovery post-reopening. Growth forecasts are slightly up, with GDP at 1.9% this year, 2.2% in 2026, and 2.3% in 2027, while inflation is expected to remain around 3%.
Tariffs are the top economic risk, though their inflationary impact has been less than anticipated so far.
Global hits:
Korea’s GDP growth accelerates to 1.7% in third quarter.
Euro zone consumers maintain benign inflation view.
Home Prices Trail Inflation, Eroding Homeowner Wealth
Home prices across the U.S. rose 1.5% in August year-over-year, down from 1.6% in July, according to the S&P CoreLogic Case-Shiller Index. However, this growth lags behind the 3% inflation rate, eroding homeowners' real wealth for the fourth straight month. High mortgage rates, averaging 6.5% in August, have dampened buyer demand, contributing to this trend.
New York led with a 6.1% annual price gain, followed by Chicago at 5.9% and Cleveland at 4.7%. Meanwhile, Tampa saw a 3.3% decline, with Phoenix and Miami each down 1.7%. Western markets like San Francisco (-1.5%) and Denver (-0.7%) also weakened.
Are homes a good investment?
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📈 Stocks
S&P 500 6,890.89 (+0.23%)
DJIA 47,706.37 (+0.34%)
NASDAQ 23,827.49 (+0.80%)
BRENT CRUDE 64.43 (-1.23%)
* Prices as of Oct 29th, 12:20 AM UTC
Visa, PayPal, and more Earnings
Online home goods company Wayfair beat Wall Street estimates and said revenue jumped 8% in the third quarter. Excluding the impact of the company’s exit from Germany, Wayfair said its revenue grew 9% year over year. CFO Kate Gulliver told CNBC the company doesn’t believe the growth is driven by any macro-related factors like tariffs or interest rates and instead is a result of initiatives like its loyalty program and shift to physical retail.
Royal Caribbean Cruises reported mixed third-quarter 2025 results, with adjusted earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
Visa Inc. reported fiscal Q4 2025 net revenue up 12% year-on-year to $10.72 billion and adjusted earnings of $2.98 per share, slightly above analyst expectations. The payments giant also announced a 14% increase in its quarterly dividend to $0.67 per share.
PayPal's shares rose 3.9% following a strong earnings report, with earnings per share of $1.34 compared to the consensus estimate of $1.20. The firm reported revenue of $8.42 billion for the quarter, exceeding expectations and marking a 7.3% year over year increase. Moreover, PayPal has signed a deal with OpenAI to become the first payments wallet in ChatGPT.
Check this: Amazon laying off about 14,000 corporate workers as it invests more in AI. Elsewhere, UPS says 48,000 roles eliminated this year.
Elon Musk’s AI-powered Wikipedia competitor goes live after a rocky launch.
Apple crosses $4 trillion market cap for the first time as Microsoft joins too.
Big news from Nvidia
Nvidia CEO Jensen Huang highlighted the AI boom, stating AI models are now valuable enough to monetize. Nvidia's advanced Blackwell AI chip wafers are in production in Phoenix, Arizona. To sustain growth, Huang stressed reducing computing costs in the $500B AI market by decade’s end, per Furutrum estimates.
Nvidia announced partnerships with Uber and Lucid for autonomous vehicles, targeting 100,000 Level 4 self-driving cars by 2027 using Nvidia’s Drive ACX ‘Hyperion 10’ platform. Despite this, Uber’s stock fell 1.03%.
Nvidia also acquired a 166M share stake in Nokia, boosting its stock 22.84%—its biggest gain in a decade—for 5G/6G connectivity solutions. Additionally, Nvidia and Eli Lilly are building a powerful supercomputer and AI factory to accelerate pharmaceutical drug discovery.
Microsoft Increased its OpenAI stake to 27% of its for-profit arm, valued at $130B. OpenAI committed to $250B in Microsoft Azure services, and Microsoft secured rights to use OpenAI models through 2032, including potential AGI, which could revolutionize or endanger humanity.
💵 Personal Finance
How Another Fed Rate Cut Impacts Borrowers
The Federal Reserve is expected to cut interest rates on Wednesday, following September’s reduction, bringing the federal funds rate to 3.75%-4.00%. This affects consumer loans like mortgages, credit cards, and auto loans, though the impact varies:
Credit Cards: With average rates above 20%, a quarter-point cut may lower rates slightly within a billing cycle, but savings are modest (e.g., $61 on a $7,000 balance with a $250 monthly payment).
Auto Loans: Fixed rates (~7% for five-year loans) won’t change for existing loans, but future cuts could slightly reduce rates, boosting buyer sentiment.
Mortgages: Long-term rates, tied to Treasury yields, are less affected, but further cuts may ease rates, encouraging homebuyers. Adjustable-rate mortgages and HELOCs, linked to the prime rate, adjust faster.
Another cut is anticipated in December, but future rate paths are uncertain, influenced by economic factors and potential Fed leadership changes.
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👩🏽⚖️ Legal Stuff
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