September's US Personal Consumption Expenditures (PCE) price index, a key inflation measure for the Federal Reserve, rose by 0.2%, aligning with economists' predictions, following a 0.1% rise in August. Annually, the PCE price index increased by 2.1%, hitting the Fed's target. The core PCE index, which excludes food and energy, climbed 0.3% in September, up from 0.2% in August, and rose 2.7% year-over-year. This data might set the stage for a 25 basis point interest rate cut at the Fed's next meeting, but the market's reaction was lukewarm, with Wall Street's main indices slipping between 0.4% for the Dow Jones and 0.8% for the Nasdaq 100.

In other economic news, US household spending rose by 0.5% in September, following a 0.3% increase in August, meeting expectations. Initial jobless claims dropped to 216,000 from the previous week's 228,000, beating the consensus forecast of 230,000.

Wall Street had a rough day yesterday, thanks to some disappointing corporate earnings. AMD tumbled 11%, and Super Micro Computer, the fleeting darling of artificial intelligence, plunged 33% after its auditor's abrupt resignation. However, the damage was mitigated by the bullish performance of other stocks, notably Garmin, which soared 23%, and Alphabet, which rose 4%.

Across the pond, European markets took a nosedive, led by an 18.5% drop in Davide Campari's shares and a 7% decline in Nexans. Capgemini fell 6.4%, while UBS Group and UPM saw declines of over 4%. The earnings drama continued after the US markets closed, with tech stocks taking a breather after the previous day's highs. The Nasdaq 100 managed a 0.8% recovery, while the S&P 500 limited its decline to 0.3%.

Investors had high hopes for Microsoft and Meta to keep the bullish momentum alive, but alas, they were disappointed. Despite posting impressive earnings, both companies offered a less-than-rosy outlook due to rising AI-related costs. Microsoft's Satya Nadella and Meta's Mark Zuckerberg both expressed their commitment to AI, but emphasized the need for investment. Both stocks dipped just under 4%, as investors favored simpler tales of soaring profits at minimal cost. Nothing catastrophic, though.

All eyes are now on the next big duo, Apple and Amazon, set to release their results after the US market closes. The spotlight will be on AI, both in Apple's iPhones and Amazon's AWS servers. So far, AI has been more of a trick than a treat this earnings season. With AMD's mediocre performance, Super Micro Computer's accounting issues, and now Microsoft and Meta's cost concerns, only Alphabet's results have shone. Whether Apple and Amazon can piece the puzzle back together remains to be seen.

Meanwhile, those queasy from the market's rollercoaster might find solace in gold, which is having its best 10-month run since 1995. Today marks the peak of the third-quarter earnings calendar, with hundreds of companies worldwide reporting results. As I've been saying all week, the interim results are less than stellar, contributing to the recent gloomy market sessions. On the macroeconomic front, the world is holding its breath with the US presidential election just days away on November 5. In China, official PMI indicators dipped in October but stayed in neutral territory, hovering around 50 points for both industry and services. In Japan, the central bank kept its rate unchanged, as expected. Apart from China, Asia-Pacific markets are down this morning, dragged down by their tech sectors. European indices are also deep in the red.

Today's economic highlights:

In the eurozone, October inflation and the monthly unemployment rate are on the agenda. In the United States, we have the Challenger employment survey, the core PCE price index, new jobless claims, personal income and household consumption, as well as the Chicago PMI. For the full agenda, click here.

The dollar is worth EUR 0.9197 and GBP 0.7707. The ounce of gold remains high at USD 2,766. Oil regained some ground, with North Sea Brent at USD 72.74 a barrel and US light crude WTI at USD 69.10. The yield on 10-year US debt stands at 4.30%. Bitcoin is just over USD 71,800.

In corporate news:

Analyst recommendations:

  • Align Technology, Inc. Baptista Research upgrades to buy from hold with a price target raised from USD 253 to USD 282.20.
  • Alphabet Inc. CTBC Securities Investment Service Co LTD downgrades to neutral from buy with a target price reduced from USD 200 to USD 180.
  • Advanced Micro Devices Punto Research upgrades to hold from buy with a price target raised from USD 159.56 to USD 170.22.
  • Dt Midstream, Inc. Stifel downgrades to hold from buy and raises the target price from USD 78 to USD 89.
  • Edwards Lifesciences Corporation Daiwa Securities downgrades to neutral from outperform with a target price of USD 72.
  • Graphic Packaging Holding Company Truist Securities downgrades to hold from buy with a price target reduced from USD 32 to USD 30.
  • Lear Corporation Barclays downgrades to equalweight from overweight with a price target reduced from USD 140 to USD 120.
  • Masco Corporation RBC Capital downgrades to sector perform from outperform with a target price raised from USD 79 to USD 80.
  • Nvidia Corporation Punto Research downgrades to sell from hold with a target price of USD 126.70.
  • Qorvo, Inc. CTBC Securities Investment Service Co LTD downgrades to reduce from neutral with a price target reduced from USD 110 to USD 90.
  • Selective Insurance Group, Inc. BMO Capital Markets upgrades to outperform from market perform and raises the target price from USD 95 to USD 105.
  • Allison Transmission Holdings, Inc. Oppenheimer maintains its outperform rating and raises the target price from USD 90 to USD 115.
  • Biomarin Pharmaceutical Inc. Leerink Partners maintains its outperform rating and reduces the target price from USD 132 to USD 105.
  • Boyd Gaming Corporation Raymond James maintains its outperform rating and raises the target price from USD 67 to USD 81.
  • Corning Incorporated HSBC maintains its hold recommendation with a price target raised from USD 37 to USD 51.
  • Crocs, Inc. BNP Paribas Exane maintains its neutral recommendation with a price target reduced from USD 128 to USD 100.
  • Doximity, Inc. Morgan Stanley maintains its underweight recommendation and raises the target price from USD 26 to USD 33.
  • E.l.f. Beauty, Inc. Jefferies maintains its buy recommendation and reduces the target price from USD 220 to USD 175.
  • Encompass Health Corporation Deutsche Bank maintains its buy recommendation and raises the target price from USD 95 to USD 118.
  • Exelixis, Inc. Citigroup maintains its buy recommendation with a price target raised from USD 31 to USD 38.
  • Leidos Holdings, Inc. RBC Capital maintains its sector perform recommendation with a price target raised from USD 145 to USD 180.
  • Monster Beverage Corporation Evercore ISI maintains its outperform recommendation and reduces the target price from USD 60 to USD 30.
  • Paypal Holdings, Inc. Punto Research maintains its buy recommendation and raises the target price from USD 76 to USD 93.83.
  • Qorvo, Inc. BNP Paribas Exane downgrades to neutral from outperform with a price target reduced from USD 117 to USD 80.
  • Reddit, Inc. Goldman Sachs maintains its neutral recommendation with a price target raised from USD 68 to USD 105.
  • Royal Caribbean Group HSBC maintains its buy recommendation with a price target raised from USD 185 to USD 242.
  • Tenet Healthcare Corporation Deutsche Bank maintains its buy recommendation and raises the target price from USD 160 to USD 200.
  • Tyler Technologies, Inc. Baptista Research maintains its hold recommendation with a price target raised from USD 505 to USD 638.60.
  • Admiral Group Plc HSBC upgrades to buy from hold with a target price of GBP 33.
  • Bridgepoint Group Plc Citi downgrades to neutral from buy with a price target raised from GBP 3.20 to GBP 3.50.
  • Burberry Group Plc Bernstein upgrades to outperform from market perform with a price target raised from GBX 680 to GBX 930.
  • Hunting Plc Kepler Cheuvreux upgrades to buy from hold with a target price reduced from GBX 450 to GBX 435.
  • Lloyds Banking Group Plc Morgan Stanley downgrades to equal weight from overweight with a target price reduced from GBX 70 to GBX 65.