Morning Brew October 20 2026

Good morning.

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Key drivers — Renewed inflation concerns from high oil prices and a recovery in AI shares pushed yields higher. Expect choppy trading until tomorrow’s key earnings from Meta, Tesla and SAP provide a clearer signal. The Fed is in its blackout period ahead of next week’s rate decision. Markets assign an 80% probability to no change, while a December hike is nearly fully priced.

Oil — U.S. crude futures reversed earlier losses and settled 2.2% higher at USD 104 a barrel after Yemen’s Iran-aligned Houthis attacked a military training camp and renewed strikes on Saudi energy, airport and military facilities. Brent is back at USD 110.

U.S. equities — The Dow slipped 0.1% to 51,966, while the S&P 500 gained 0.4% to 7,691 and the Nasdaq Composite rose 1.1% to 26,431. Technology and consumer shares — Amazon gained 5% after Morgan Stanley named the e-commerce and cloud-computing company its top pick, while Tesla rose 3.8%. CoreWeave, which was at the centre of last week’s selloff after falling more than 25% on concerns over its USD 50 billion debt load, ended the session 0.4% lower.

Reuters reports that OpenAI is racing to secure investor commitments before Anthropic’s expected public-market debut in mid-November. The unusually rapid fundraising could value the ChatGPT maker at more than USD 1.4 trillion, according to two people familiar with the matter.The accelerated timetable partly reflects OpenAI’s desire to move ahead of Anthropic as the two frontier labs increasingly target the same investors. OpenAI also wants to capitalise on recent revenue growth following new model launches. SoftBank, Abu Dhabi-based MGX and other existing backers are discussing participation in a roughly USD 30 billion round.

European equities — The Stoxx 600 fell 0.8% to 640, the DAX dropped 1.2% to 25,320 and the FTSE 100 lost 1.1% to 10,765. The CAC 40 fell 1.1%, underperforming after weekend riots in France. Banks were the weakest sector, with BNP Paribas, Société Générale and Crédit Agricole all down more than 2%. HSBC fell 2.2% and Aker dropped 7.1%. The CAC 40 now trades at its steepest discount to the DAX since early 2009. Year to date, the CAC is down 4.8% versus a 2.5% decline for the DAX. Stoxx 600 earnings are expected to be 20.7% above last year’s third quarter, up sharply from 15% in August.

France — Authorities imposed curfews in parts of several cities on Monday, including Paris, Lille and Nice, amid pressure over security failures after a weekend of riots and looting linked to nationwide anti-government protests.

BHP — Quarterly copper output missed estimates after disruptions at its Chilean mines.

U.S. farmers — President Trump said the United States will launch an USD 8 billion support programme to offset diesel costs.

Yields remain elevated, with the U.S. 10-year at 5.11%, France at 4.92%, Germany at 3.45%, Japan at 2.89% and Switzerland at 0.53%. The USD Index is at 101.75, EUR/USD at 1.1230, GBP/USD at 1.3333 and USD/JPY at 158.10. Gold is trading near 4,130 and silver near 57.3. Markets are likely to remain choppy until tomorrow’s earnings from Meta, Tesla and SAP provide a clearer signal, with oil, yields and the stability of the AI recovery remaining the key drivers.

Koen took a look at Tesla earnings:  Tesla earnings: the median says small, the average says big. What do options price?  Tesla's typical earnings reaction is about 4.5%, but its average is about 7.8%, lifted by two very large moves. Options price something close to the larger number. Which history fits better?

Tuesday, 20 October 2026
Macro: People’s Bank of China interest-rate decision; UK labour-market report.
Corporate earnings: GE Aerospace, Philip Morris, RTX, General Motors, Northrop Grumman, 3M, Halliburton, Netflix, Chubb, Intuitive Surgical and United Airlines.

Wednesday, 21 October 2026
Macro: UK CPI; New Zealand CPI.
Corporate earnings: Meta Platforms, Tesla, SAP, IBM, Texas Instruments, Lam Research, Thermo Fisher Scientific, Abbott Laboratories, Danaher, AT&T and NextEra Energy.

Thursday, 22 October 2026
Macro: U.S. housing starts and initial jobless claims.
Corporate earnings: Procter & Gamble, Union Pacific and Western Digital.

Friday, 23 October 2026
Macro: UK retail sales; flash manufacturing and services PMIs for Germany, the euro area, the UK and the United States.
Corporate earnings: American Express, General Dynamics, Eni and SLB.