Commentary
Major global indices delivered mixed results in past week, with large caps outperforming their peers in small and mid-cap classes. This was partly due to many large-cap stocks reporting better-than-expected earnings, such as PepsiCo (PEP), Delta Airlines (DAL), UnitedHealth Group (UNH), JPMorgan (JPM), Wells Fargo&Co (WFC), and Citigroup (C).
On the other hand, the US September inflation data left markets with mixed feelings. While the headline inflation failed to decline in line with forecasts, the core figure fell from 4.3% y/y to 4.1%. Part of the reason why the headline inflation did not move was a 2.1% m/m increase in gasoline CPI component. On a positive note, the crude oil price has fallen since its late-September peak. Moreover, falling refining margins suggest that decline in energy prices may continue during the upcoming months, which would have positive implications for headline CPI and, therefore, for the future Fed policy.
