Market Report.
📉 Despite the government stoppage, the stock market momentum appears to be unaffected. Two news could be what has motivated the market again.
👷♂️ The US ADP Employment Change for September came in at -32,000, significantly below the forecast of 50.5k and the previous reading of 54k (revised to -3k). The report indicates a contraction of private sector jobs, signaling potential weakness in new private hiring. Again, bad news would make the Fed’s rate cuts more urgent.
💊 According to Politico, Trump is delaying the imposition of tariffs on pharmaceutical imports to negotiate drug prices. Last week, Trump threatened to implement triple-digit tariffs starting Wednesday, but the White House has now indicated that these tariffs may not be necessary. A White House official stated that the administration has paused its plan to impose these duties in order to negotiate agreements with major pharmaceutical companies. This includes a recent agreement announced with Pfizer.
🏭 Furthermore, U.S. manufacturing activity edged closer to recovery in September, with the ISM manufacturing PMI increasing to 49.1 from 48.7 in August, though it remained below 50, indicating contraction.
⚠️ However, the shutdown of the US government adds to concerns over institutional credibility, fiscal position, and “dysfunction” of the US economy, which could lead investors to look elsewhere and move towards perceived safe-haven assets. Possibility of selling US bonds in search of more stable regions, in favour of the yen or the Swiss franc for example. Nevertheless, US companies and the leadership of AI in the technological sector are generating by far the best stock returns.
🌍 Factory activity contracted in much of the world last month, as signs of a slowdown in U.S. growth and the impact of President Trump’s tariffs added to pressure from weak Chinese demand:
🇪🇺 – The Eurozone manufacturing PMI fell back into contraction territory, at 49.8, still slightly above the previous month’s reading of 49.5, with new orders declining at the fastest rate in six months, signaling a fragile recovery in the region’s industrial sector.
🇬🇧 – Manufacturing activity shrank in the UK, reflecting subdued domestic demand and fewer export orders, painting a more downbeat picture than recent official data.
🇯🇵 – Export powerhouses Japan and Taiwan saw manufacturing activity shrink in September, leaving businesses in Asia heavily dependent on the U.S. market on a fragile footing.
🇨🇳 – China, a key engine of the global economy, also remained in the doldrums, with manufacturing activity contracting for the sixth consecutive month, dragged down by weak consumption and the squeeze from U.S. tariffs.
📈 In Europe, inflation is on the rise. The CPI index goes from 2% to 2.2%. Real interest rates now become zero in view of the low rates set by the ECB. We warned that this could happen for weeks.
🔄 According to Bloomberg, the copper market is currently experiencing a supply-driven bull market, rather than one driven by strong demand growth. Copper prices have surged well above the 2015-2025 average, reaching record highs last year, due to a series of supply disruptions at major mines around the world.
🌧️ This year has seen a particularly long list of supply upsets, including flooding, accidents, and social unrest impacting mines in countries like the Democratic Republic of Congo, Chile, Peru, and Indonesia. Also, China, which accounts for over 50% of global copper demand, is currently not buying much copper due to a slowdown in its real estate sector and export struggles amid the trade war with the U.S.
💻 In the corporate world, most of the news comes from the technological side of US, as usual.
🔗 Intel is in early talks with AMD to manufacture chips for it in Intel’s foundry business, according to a report from Semafor. It would signal that AMD, which competes with Intel in x86-based chips for PCs and servers, is confident doing its manufacturing with its biggest competitor. Intel has recently added several significant investors, including the U.S. government, Nvidia, and Softbank.
📈 Intel’s shares have risen nearly 77% so far in 2025 as investors gain more confidence in the chipmaker. Both Intel and AMD have declined to comment on the potential partnership, with AMD stating it does not comment on rumors or speculation.
🚀 Shares of Samsung Electronics and SK Hynix surged on Thursday after the two South Korean chip giants partnered with OpenAI as part of the AI company’s Stargate initiative. The partnership will focus on increasing the supply of advanced memory chips essential for next-generation AI and expanding data center capacity in Korea.
🌐 OpenAI has also signed deals to explore developing next-generation AI data centers in South Korea with the Korean Ministry of Science and ICT, SK Telecom, and Samsung subsidiaries. The partnership with OpenAI is expected to further strengthen the South Korean chipmakers’ positions in the growing AI semiconductor market.
🚗 In Europe, Chinese carmakers grabbed a record 9.8% share of Europe’s hybrid-vehicle sales in August, marking the fourth time this year they have reached a new peak in this segment. While Chinese EV sales in Europe dipped slightly in August, their hybrid sales continued to surge, as they pivoted to this segment after the EU imposed tariffs on Chinese-made EVs.
🇨🇳 Chinese brands like BYD, SAIC Motor’s MG, and Zhejiang Leapmotor Technology have been targeting Europe’s growing market for electric vehicles, putting pressure on incumbents like Volkswagen and Stellantis. MG, the British brand owned by China’s SAIC, has shifted its focus to hybrid and plug-in hybrid models in Europe after facing the highest EU tariffs on its EVs.
⚔️ Geopolitics:
🇫🇷 French special forces have launched an unprecedented attack on a Russian tanker in international waters. This operation targets the Boracay, an oil tanker under investigation for sanctions violations and suspected involvement in Russia’s shadow fleet.
🚢 The tanker is believed to have played a role in drone flights that led to the closure of airports in Denmark last week. The vessel was one of four Russia-linked ships present in the vicinity of Denmark during unexplained drone sightings on September 22 and 24. The Boracay has reportedly used various identities to evade detection and sanctions enforcement.
⚔️ French Army Chief of Staff General Pierre Schill has warned that forces must be ready “as soon as tonight” for high-intensity warfare, indicating a potential direct military confrontation with Russia over the defense of a NATO ally in Eastern Europe. This alarming statement coincides with rising tensions in the region, highlighting the urgency of military preparedness amid ongoing geopolitical conflicts.
🇫🇷 Meanwhile, France and Germany are facing severe economic crises. In Germany industrial production continues to deteriorate, while in France trade unions are calling for new mobilizations to protest the government’s budgetary adjustments in the face of the fiscal crisis it is facing. Is the war against Russia a smokescreen for a sinking European political class?
✊ Massive demonstrations in Morocco have escalated into a significant rebellion, particularly among Generation Z protesters. Protesters burned down the headquarters of the Ministry of Justice in Taroudant, signaling a deepening discontent with the monarchy. Reports indicate that at least two people have died amid the unrest, highlighting the severity of the situation. Protesters are denouncing police repression, claiming the use of live ammunition to suppress the demonstrations.
🛳️ Neither the Italian navy, nor the Spaniards, nor the Turkish drones, all withdrew when the civilian flotilla they escorted approached less than 150 miles from the coast of Gaza. The ships have been intercepted by Israeli forces and their occupants, western citizens, detained.
📊 Market View.
📈 S&P 500 futures are resurging again, reaching new historical highs, currently trading at 6,765 points. Nasdaq 100 futures are in a similar position, surpassing 25,000 points and currently at 25,060 points.
💵 The dollar index appears to have found support above 97.50 points, although the charts show significant selling pressure in that area. EUR/USD has struggled to consolidate gains above 1.1750, retracing repeatedly and currently trading at 1.1748.
🛢️ Crude oil is retreating to the support zone of the range indicated in previous reports, with Brent crude reaching $65.20 in recent hours and rebounding to the current $65.40.
💰 Gold futures surpassed $3,900 per ounce during yesterday’s session but have slightly retraced to the current $3,890 per ounce.
💻 Bitcoin has broken through closer resistance levels, reaching $119,500, but is currently retracing to $118,630.
