The Morning Brief
A blowout China trade report and a strong ASML (ASML) beat are colliding with a hawkish Fed voice and a widening crack in private credit, leaving futures trying to hold gains into today's CPI print.
China's export engine just reaccelerated, and that's the overnight headline.
September exports jumped 36.3% year-over-year, blowing past the 25.5% estimate, while imports rose 31.0% against a 24.5% forecast. The trade surplus came in at $133.53 billion versus $116.80 billion expected. Producer prices ran hotter than forecast at 5.0%, while consumer prices stayed soft at 0.9%. The mix reads as a manufacturing economy running hot on external demand even as domestic consumption lags, a dynamic that eases some fears about China's growth trajectory but keeps a lid on the "deflation story" that had sent investors into FXI-linked names. The EU, meanwhile, moved to deepen critical minerals ties with Vietnam as a hedge against Beijing, a sign the broader supply-chain repositioning away from China continues regardless of the trade beat.
ASML blew through estimates but the stock is lower, not higher.
The Dutch lithography giant posted Q3 EPS of $14.88 against a $12.47 estimate, with sales of $13.42 billion topping the $13.18 billion consensus. Management raised the 2026 outlook and flagged AI-driven capacity talk stretching beyond 2028. Shares are off 1.9% regardless, a sell-the-news reaction that is bleeding into the broader chip complex. Micron (MU) got hammered again on China-related fears, with Cramer dismissing the selloff as "nonsense," and Applied Materials is down for a sixth straight session even as Cantor sees deep upside from here.
The Fed's Susan Collins just threw cold water on the easing narrative.
The Boston Fed president said rates should move "a bit further" higher before year-end, explicitly citing AI and energy-driven inflation risk. That lands awkwardly next to Ray Dalio's warning that $2.1 trillion in fresh Treasury supply could deepen a debt "death spiral," and Nassim Taleb's pushback on Bessent's inflation victory lap. Treasuries (TLT) are modestly firmer, the dollar (UUP) is soft, and crude (USO) is up on a fresh Strait of Hormuz scare after Iranian state media reported a container ship sank near a naval mine.
Private credit stress is bubbling under the AI trade.
CoreWeave bond yields spiking to 15% drew a "yikes" from Elon Musk and a renewed bubble warning from Chamath Palihapitiya, while Carlyle separately cautioned that private credit is getting "too deep" into AI financing ahead of a trillion-dollar wave. Bank of America (BAC) heads into its own print this morning absorbing $1.2 billion in Treasury penalties.
Movers:
GameStop hit a 52-week high on continued Ryan Cohen buying, Liquidia fell 3% after settling litigation with United Therapeutics for a net $380.7 million, and Enovix jumped premarket on a 100,000-unit drone battery order.
On the radar today:
September CPI, plus bank-heavy earnings from Bank of America, Morgan Stanley, BlackRock, State Street and Progressive, alongside Abbott and Fastenal.
Bottom line: strong China trade data and an ASML beat should be bullish signals, but a hawkish Fed and cracking credit spreads are keeping the tape on edge ahead of CPI.