📊 Trade War 2.0: Beijing Fires the First Shot

Tensions between the U.S. and China boiled over last Friday. A day after Beijing restricted exports of rare earths and related tech, President Trump hit back, promising a 100% tariff on all Chinese imports starting November 1. The moves sent global companies scrambling to rethink their supply chains.

Beijing called its new rules, effective November 8, "legitimate export licensing," but the message was clear. By controlling an estimated 70% of the world's rare earths and most of the processing, China reminded the U.S. of its leverage over materials critical for EVs, smartphones, and fighter jets. The U.S. responded with threats of additional tariffs, and U.S. Treasury Secretary Scott Bessent didn't mince words, calling China's move "a bazooka fired at the industrial base of the free world."

While the rhetoric is heating up and spilling over into new shipping fees, both sides have left the door open for potential talks later this month. Rare earths make up a small fraction of China's economy, but their strategic value is immense. By weaponizing its control over the minerals, Beijing has found a key U.S. vulnerability, and Washington is now forced to play catch-up.

Fed Chair Jerome Powell: Powell said the economy looks somewhat firmer, the end of Quantitative Tightening is in sight, and cuts will be decided meeting by meeting, which lowers perceived rate risk and supports risk appetite.

Large U.S. banks: Major banks posted strong Q3 results, boosted by a rebound in dealmaking. Goldman Sachs reported $12.25 in earnings per share, and JPMorgan raised its outlook for net interest income.

Fed Governor Christopher Waller: Waller supported an October rate cut, citing signs of a softer labor market. His comments reinforced expectations for a gentler path on rates, which generally supports stock valuations.

U.S. 10-year Treasuries: Yields rebounded above 4% as banking and trade fears eased, reflecting improved risk sentiment but raising borrowing costs for rate-sensitive sectors.

Shutdown, week three: Key economic data releases, such as CPI and payrolls, remain on hold, leaving investors with less visibility and adding to uncertainty in both bond and equity markets.

Gold: Gold surged past $4,300 per ounce on October 16, heading for its biggest weekly gain since 2008. The rally highlights strong safe-haven demand and boosts the earnings potential of gold-mining companies.

Philadelphia Fed survey (Oct): The manufacturing index dropped to -12.8, pointing to weaker activity, while price pressures increased. The mix of slowing output and rising costs complicates the Fed’s efforts to ease policy.

FCC action: The FCC moved to revoke a Hong Kong telecom carrier’s license to operate in the U.S. over national security concerns, raising compliance costs and data-security risks for global telecom firms.

Market breadth (Oct. 16): The S&P 500 saw 29 new 52-week highs, including GOOGL, AMD, WMT, MNST, DUK, BG, and EL, signaling broader market participation that often helps sustain rallies.

Jobless claims: Goldman Sachs economists estimate that initial jobless claims fell to about 217,000 last week, down from roughly 234,000 previously. The decline suggests layoffs are easing slightly, pointing to a still-resilient labor market.

Silver: Silver hit new all-time highs above $50 per ounce on October 13, moving in tandem with gold’s surge. The rally reflects defensive investor flows and supports precious-metals stocks.

OpenAI–Broadcom: The firms unveiled a 10-GW custom AI-accelerator collaboration that Citi pegs near $100B and +$8 in earns per share over time, deepening AI revenue visibility and intensifying supplier competition.

First Brands case: Creditors accused First Brands of a $2.3 billion accounting gap, prompting the DOJ and U.S. Trustee to call for an independent examiner. The case raises credit concerns and could tighten financing conditions.

ASML: ASML said 2026 sales will likely be “flat at worst,” with 2027 growth depending on AI-driven demand. The outlook offers visibility for capital spending and the semiconductor-equipment cycle.

BlackRock: The asset manager reported Q3 net inflows of $205 billion (including $171 billion in long-term investments). A bullish call from Evercore suggests continued momentum into 2026, improving its earnings outlook.

Oracle–AMD: Oracle plans to deploy 50,000 AMD MI450 GPUs in Q3 2026, expanding its AI cloud infrastructure. The deal strengthens AMD’s data-center position against Nvidia.

Progyny (PGNY): Stock fell on Friday by about 10% after the Trump administration rolled out an IVF access plan, including steep EMD Serono drug discounts and a new standalone employer fertility-benefit option, as investors weighed potential pressure on its margins.

Other interesting reads:

Weight-Loss Drug Prices in the Crosshairs: President Trump said Ozempic prices will be “much lower,” pressuring Novo Nordisk and Eli Lilly and pulling the weight-loss drug boom into policy crosshairs. That raises the risk of U.S. pricing action on semaglutide and tirzepatide. (The Drug)

ETF boom or bubble: New ETFs are hitting the market at a record pace after 2019 rule changes. Issuers keep pushing ever-niche, often leveraged products, while liquidity providers are getting choosier. Not every new ticker will make it - favor scale, tight spreads, and simple structure. (The Question)

Bolton indicted in classified-docs case: A federal grand jury in Maryland charged former national security adviser John Bolton with 18 counts tied to transmitting and retaining national defense information. (The Charges)

🟩 Up this week

Morgan Stanley (MS) +4.98% WTD: Q3 profit jumped on an investment-banking rebound, improving capital return and earnings visibility. (The Deal)

Bank of America (BAC) +5.94% WTD: The bank said First Brands loans are secured, easing contagion fears and supporting credit-risk confidence. (The Credit)

Taiwan Semiconductor (TSM) +5.24% WTD: Raised 2025 revenue-growth guidance to the mid-30% on AI demand, reinforcing foundry pricing power and capacity plans. (The Capacity Plans)

Jefferies Financial Group (JEF) +1.14% WTD: Disclosure of ~$715m receivables exposure to First Brands heightened private-credit and counterparty-risk scrutiny. (The Outlook)

🟥 Down this week

Zions Bancorporation (ZION) -5.33% WTD: Filed an 8-K noting an approx. $60m provision and a ~$50m charge-off tied to two Commercial & Industrial loans, raising credit-quality concerns. (The Loan Update)

Western Alliance (WAL) -4.23% WTD: Disclosed a lawsuit against a borrower alleging collateral fraud, elevating legal and recovery-risk uncertainty. (The Risk)

Novo Nordisk (NVO) -4.49% WTD: Pressured after talk of weight-loss drug price cuts hit GLP-1 makers. (The Talk)

Kenvue (KVUE) -8.23% WTD: Ongoing consumer-staples softness and fresh target cuts weighed on shares. (The Target)

That’s the wrap for this week’s market movements. We’ll be back next week with more updates on our live portfolio.

Until then, happy investing!
— The Investogy Team, Kätlin & Siimon

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