Weeks Issue Check: US Consumer Price Index, China Quartet, Tesla, Intel

10/20 Weeks Issue Check: US Consumer Price Index, China Quartet, Tesla, Intel

• U.S. Consumer Price Index
  The U.S. consumer price index, delayed by the shutdown, will be released on the 24th, which will lead to the release of data that can predict the FOMC results. Cleveland Fed’s Nowcast predicted a 0.38% month-on-month increase in September’s consumer price index and 0.26%, respectively, compared to the previous year’s forecast of 2.99% and 2.95%, respectively. Morgan Stanley and other investment companies announced higher prices of 0.41 percent and 0.32 percent, respectively. This is because they believe that the core commodity price will continue to rise due to tariffs. On the other hand, core service prices are expected to slow down slightly as housing costs are expected to rise after a strong rise in August. Health care prices, which are heavily affected by PCE, are expected to rebound. In the end, prices are expected to change due to the size of tariff transfer and the slowdown in housing costs. The importance of the consumer price index is greater than ever as Fed members have recently said that they are having difficulty making policy decisions at the FOMC in October due to a lack of data. In particular, interest rates on government bonds are likely to increase volatility in the bond market as they already reflect that they will cut interest rates at every meeting, including two rate cuts this year
• China’s four out-of-phone real indicators
  From Monday 20th to Thursday 23rd, the Chinese Communist Party will hold its fourth plenary session, or the quartet. This meeting will discuss the direction of the 15th Five-Year Plan (2026-2030), which will be covered by the Five-Year Plan, and is important because it presents a blueprint for achieving long-term goals by 2035. In particular, the announcement of the five-year plan is important amid the challenges of intensifying U.S. technology regulations and sluggish domestic demand. The market is expected to maintain the current technology/innovation and security-oriented policy stance and come up with a large-scale stimulus policy to boost domestic consumption, which has been sluggish. In particular, many say that resources and investment are likely to continue to focus on high-tech industries and strategic investments, such as AI and semiconductors, due to the intensifying U.S.-China conflict. There are many questions about whether this strategy can further expand the oversupply and help actual economic growth. Specific goals and details will be disclosed in the press release on the closing day of the meeting (on the 23rd), the proposals to be announced thereafter, and finally in the final report to be released in March 2026.

Meanwhile, real economic indicators such as China’s GDP and industrial production and retail sales will be released on Tuesday. The market is forecast to reach 4.8 percent, down from 5.2 percent growth in the previous quarter. Industrial production is expected to rise to 5.3 percent from the previous month, while retail sales will slow to 3.1 percent due to base effects, and fixed asset investment will remain sluggish at -4.6 percent due to the slump in real estate and policy. The market is expected to see a large-scale stimulus package at the quadrennial event to improve the Chinese economy, as it still shows no clear progress due to trade disputes

In the meantime, negotiations will begin in advance in Malaysia ahead of the U.S.-China summit, so it is important what the topic is. There have been various controversies recently, including the rare earth issue, Micron’s withdrawal, TikTok, and Trump’s 100% additional tariffs. In the end, there is a five-year plan and economic stimulus policy announcement at the quadruple meeting, but it is also considered the most important event of the week because it can provide a glimpse of the details related to the U.S.-China negotiations

• Tesla and Intel

Tesla’s third-quarter earnings, which will report results on Oct. 22 (Wednesday), are already highly anticipated, with record-high vehicle deliveries. This is due to consumers’ active purchases ahead of the end of the tax credit at the end of September. In addition, the deployment of energy storage devices is also at an all-time high, and the growth of business portfolios other than vehicle sales is expected. That’s why market attention is focused on how profitability has improved despite record-high deliveries. As Tesla has continued to cut vehicle prices due to intensifying price competition in the electric vehicle market, the results of gross margins in the automotive sector are also important. In addition, the outlook for fourth-quarter deliveries after the tax credit, AI business, robotaxi, and the actualization of low-cost models are also important, as we can see the mid- to long-term direction amid macroeconomic uncertainty and intensifying competition. Currently, the market is expected to see changes in stock prices due to the “concrete” of robotaxi

Intel’s earnings results, which will be released on Thursday, October 23, are also important. While the market is expected to be favorable, it is important to note the extent of the losses stemming from the prolonged slump in the PC and server markets, as well as the company’s massive restructuring costs and prior investment in foundry business. The market is expected to focus on identifying a roadmap for long-term recovery and growth rather than such gains and losses. The future outlook is especially important as the recent ‘super cycle’ issue is driving the rise of semiconductor companies. In particular, attention is paid to the strength of performance recovery in client computing groups (data centers and AI). In addition, how Intel is defending its share in the AI and server markets is also important. Therefore, detailed business guidance in the fourth quarter and beyond 2026 is important. The market is expected to present positive AI, server, and PC market guidance and “concrete” content on market defense.

• Pre-negotiation before U.S.-China summit

*Issues to Watch by Day of the week
Monday (20th): Weekend Trump remarks and more
Tuesday (21st): Japan’s Prime Minister Elects Netflix Earnings
Wednesday (22nd): Tesla Earnings Release
Thursday (23rd): China’s Five-Year Plan Details, Intel Reports Earnings
Friday (24th): U.S. Consumer Price Index

*a weekly schedule

October 20 (Monday)
China: Retail Sales, Industrial Production, Fixed Asset Investment, GDP Growth
US: Leading Index
Germany: Producer Price Index
Banks: China’s LPR Rate Decision
Remarks: BOJ Governor Ueda
Politics: China Quartet Exhibition (~23rd)
Long-Term Earnings: Steel Dynamic (STLD), ZION Bank (ZION)

10/21 (Tue)
Politics: Japanese Prime Minister Elects Parliament Elects
Remarks: ECB President Lagarde
Derivatives: WTI crude oil futures due date
LOADING PERFORMANCE: GE Aerospace (GE), Coca-Cola (KO), Philip Morris (PM), RTX (RTX), Danaher (DHR), Lockheed Martin (LMT), 3M (MMM), GM