Key Takeaways
- Morgan Stanley has significantly raised its target prices for tech giants Alphabet (GOOG) and Apple (AAPL), signaling strong analyst confidence in the sector.
- US Treasury Secretary Scott Bessent anticipates a "big breakthrough" in the upcoming round of China trade talks, with the current truce set to expire on November 10.
- Bessent also reported that the initial phase of Federal Reserve Chair interviews is nearing completion, with three to five strong candidates expected to be presented to Donald Trump.
- Nasdaq 100 futures extended their climb, rising 0.5% to a session high, reflecting positive market sentiment.
- Donald Trump announced a meeting with Russ Vought of Project 2025 to discuss potential cuts to "Democrat Agencies," indicating a focus on government spending and restructuring.
The market saw a positive start with Nasdaq 100 futures climbing 0.5% to a session high. This upward momentum was bolstered by significant upgrades from Morgan Stanley for two of the largest tech companies. The firm raised its target price for Alphabet (GOOG) to $270 from $210 and for Apple (AAPL) to $298 from $240, reflecting an optimistic outlook on these key tech players.
US Treasury Secretary Scott Bessent provided extensive updates on several critical economic and political fronts. Regarding China trade, Bessent stated that the next round of talks should demonstrate a "big breakthrough". He emphasized that the mutual respect between the two leaders provides comfort, and a face-to-face conversation between Trump and Xi in Korea would be "very helpful". The current China trade truce is scheduled to end on November 10.
On the domestic front, Bessent reported significant progress in the search for the next Federal Reserve Chair. He indicated that the US has passed the halfway point in Fed job interviews, with the first round expected to be completed next week. Bessent confirmed that three to five strong candidates will be presented to Donald Trump for consideration.
Secretary Bessent also addressed concerns about government spending and a potential shutdown, stating that a shutdown could lead to a "hit to GDP". He affirmed that the administration would not backtrack on spending cuts outlined in the tax act and that it is "not unreasonable" for Trump to use all available levers on spending. Bessent also noted that Democrats desire more "inflationary spending" and that Senator Schumer's change in position on spending reflects his polling.
In agricultural news, Bessent expects an announcement on Tuesday regarding support for US soybean farmers, acknowledging China's "unfortunate choice" to use soy in trade talks. He also reported a record harvest and a potential storage shortage.
Politically, Donald Trump announced via Truth Social that he is meeting with Russ Vought, known for Project 2025, to determine which "Democrat Agencies" should be cut, and whether these cuts would be temporary or permanent. Project 2025 is a conservative initiative focused on preparing a presidential transition.
Internationally, Bessent touched on South American affairs, stating that the US is "not putting money into Argentina" but continues to maintain a strategic focus on the country. He also suggested that Bolivia, Ecuador, and Colombia "might join forces together". In Brazil, Finance Minister Haddad indicated that the Senate is anticipated to approve an income tax bill. Meanwhile, AXA suggested that "gilt fears" are overblown amid undue bearishness about UK bonds.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.