Market Report.
🤝 U.S. President Donald Trump and Russian President Vladimir Putin agreed to hold another summit on the war in Ukraine, a surprise move that came as Moscow feared fresh U.S. military support for Kyiv. Trump and Putin may meet within the next two weeks in Budapest, though neither side provided a specific date. The Kremlin confirmed plans for the meeting.
📞 During the call, Putin told Trump that supplying long-range missiles to Ukraine would harm the peace process and damage U.S.-Russia ties. Trump later joked that Putin “doesn’t want” Tomahawks given to Ukraine, calling them a “vicious weapon.”
🗓️ The Trump-Putin meeting is expected to follow talks next week between U.S. Secretary of State Marco Rubio and Russian Foreign Minister Sergei Lavrov, at a location to be determined.
📊 According to a survey by FindOutNow, the nationalist party Reform UK is the most voting force in the UK, far ahead of the current government. This is consistent with the results of another survey conducted by YouGov this month.
🇬🇧 Reform UK leader Nigel Farage criticized Vladimir Putin as irrational and backed shooting down Russian jets that enter NATO airspace. Farage said he would support spending frozen Russian assets to help Ukraine and could deploy British troops to the country as part of a United Nations peacekeeping force.
🤔 This change of view is surprising, considering that Nigel Farage admitted in the past that Russia’s attitude responded to the failure to comply with agreements of the 90s and NATO’s military expansion towards Russian borders.
📉 Shares of regional banks and investment bank Jefferies tumbled on Thursday as fears mounted around some bad loans lurking on Wall Street. Zions Bancorporation dropped over 13% and Western Alliance Bancorp fell over 10%, while the SPDR S&P Regional Banking ETF (KRE) lost more than 6%.
🚗 The bankruptcies of two auto industry-related companies, First Brands and Tricolor Holdings, have raised concerns about loose lending practices, especially in the opaque private credit market.
⚠️ The collapse of U.S. auto parts maker First Brands Group is reverberating across the banking sector on both sides of the Atlantic, highlighting the risks associated with private credit’s often “aggressive” funding structures.
🛑 Some analysts compare the First Brands situation to the subprime mortgage-backed securities at the center of the 2008 financial crisis, warning that the private credit market has “put another layer between the actual lenders and the borrowers.”
🐞 JPMorgan Chase CEO, Jamie Dimon, said “When you see one cockroach, there are probably more,” indicating these failures could be early signs of more credit issues to come.
📉 Alternative asset managers like Blue Owl Capital, Ares Management, and Blackstone also suffered declines, reflecting broader concerns about the health of some loans. While major banks like JPMorgan and Bank of America saw relatively subdued declines, the stock market was dragged lower by the regional bank selloff.
📉 Federal Reserve Governor Christopher Waller said he favors another 25 basis point interest rate cut at the Fed’s policy meeting later this month, citing worrisome labor market developments. Waller explained that if hiring sputters and inflation remains in check, he believes the Fed should reduce the policy rate to a neutral level of 2.75%-3.00%.
🔄 Waller’s remarks signal a shift from his previously unambiguously dovish approach, as he noted a December cut is not guaranteed if firmer growth leads to stronger labor data.
📉 Meanwhile, Fed Governor Stephen Miran, who is on leave from the Trump White House, again argued for a more aggressive rate cut path than his colleagues. Miran said monetary policy is currently too restrictive and the longer it stays that way, the greater the downside risk, especially with new trade tensions between the U.S. and China.
📅 The Fed is broadly expected to deliver another 25 basis point rate cut at its October 28-29 meeting.
📉 The U.S. budget deficit shrank by $41 billion to $1.775 trillion in the 2025 fiscal year, the first time the annual deficit had fallen since 2022. The smaller deficit was aided by a record $195 billion in net customs receipts from President Trump’s tariffs, an increase of $118 billion from the prior year.
📈 Fiscal 2025 outlays also reached a record $7.01 trillion, up 4% from the prior year, with increases in mandatory spending programs like Social Security and Medicare, as well as interest on the debt. The Treasury reported a record $198 billion surplus for September 2025, boosted by a $131 billion cut to the Department of Education budget.
📉 The fiscal policy changes may simply replacing revenue and spending without lowering the overall deficit, leaving the U.S. on an unsustainable path. Treasury Secretary Scott Bessent aims to bring the deficit-to-GDP ratio down to 3%, but the latest numbers show little progress toward that goal.
🇯🇵 According to Reuters, Japan’s core inflation likely accelerated in September for the first time in four months, adding to pressure on the Bank of Japan (BOJ) to raise interest rates. The core consumer price index (CPI), which excludes fresh food prices, was forecast to have risen 2.9% in September from a year earlier, up from 2.7% in August.
📈 The acceleration in inflation was likely partially due to a skewed comparison with September 2024, when energy prices fell due to the introduction of utility and gas subsidies.
⚖️ The Bank of Japan (BOJ) must be careful when normalizing monetary policy due to uncertainty about how the economy would react to a new environment of positive interest rates, according to Seiichi Shimizu, the central bank’s assistant governor.
📉 The BOJ confronts uncertainty about how the economy will react to rises in interest rates, as Japan is unaccustomed to positive interest rates after experiencing a prolonged era of low inflation and rates. The BOJ exited a decade-long, massive stimulus program last year and raised its key interest rate to 0.5% in January, marking a historical withdrawal of its radical monetary experiment.
🌍 Geopolitics.
⚔️ Trump once again threatens Hamas for killing the Israeli collaborators and ISIS affiliated gangs who were helping Israel: “If Hamas continues killing people we will go in and kill them”. Later, according to Al Jazeera, Trump clarified that he did not intend to send U.S. troops into Gaza but implied that “others nearby” (likely Israel or regional allies) would take action under U.S. oversight if the killings continued.
☎️ President Trump claimed earlier this week that Indian Prime Minister Narendra Modi assured him that India would stop purchasing oil from Russia, saying, “Modi assured me today that India will not be buying oil from Russia.” However, India has denied this claim, with the Indian Foreign Ministry stating that there is no record of any such call between Modi and Trump on the day in question.
🛡️ After staying on the sidelines for two years, Turkey is now joining a multinational task force to oversee the Israel-Hamas ceasefire, though its exact future role in Gaza remains unclear. Turkey is expected to play a role in the task force that will be formed as part of the US-backed deal between Hamas and Israel. The task force will include US, Turkish, Egyptian, and Qatari troops.
✅ Turkey’s deployment of troops to Gaza would require parliamentary approval, which the government is expected to secure easily. Also to be taken into account is the potential Israeli reservations about Turkey’s military presence in the region.
📈 Market View.
📉 US futures are beginning to show worrying bearish patterns, possibly influenced by the latest regional banking crisis detailed in the news section.
📉 Mini S&P 500 futures have dropped to 6,620 points, while Nasdaq 100 futures are down to 24,610 points.
📉 The DXY dollar index continues to decline after its recent bullish run and is approaching the 98-point mark. EUR/USD has managed to surpass 1.17 and has been trading above this level in recent hours.
📉 In Europe, DAX 40 futures have fallen to 24,000 points, currently trading at 24,025 points. EuroStoxx 50 futures are also losing ground, currently dropping below the 5,600-point level.
🛢️ There is a sharp decline in crude oil, with Brent crude losing support at $61 per barrel.
🪙 Gold remains at its highs, with futures nearing $4,400 per ounce.
📉 Bitcoin has fallen below its most recent support levels, currently trading at $106,770 after dropping below $109,000.
