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Coffee With Greta: Oil Prices Surge, Stocks Drop

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DJIA Futures: -199 (-0.6%) 

SPX Futures: -29 (-0.7%)

NASDAQ Futures: -119 (-0.8%)

Good morning friends!

Futures are falling as a war breaks out in the Middle East following Hamas’ brutal attacks against Israel over the weekend.

Let’s get right to it!

Oil Prices Jump

Oil prices are surging this morning in response to the war between Israel and Hamas.

West Texas Intermediate crude futures are up 4.1% at over $86 bbl while Brent crude futures are up 3.9% at just under $88 bbl.

But analysts believe this surge in prices will be a temporary reaction unless there is a sustained reduction in oil supply or transport.

Neither country is a major oil producer but the conflict is taking place near a key oil producing and export region.

Energy stocks are popping alongside oil prices. 

The Energy Select Sector SPDR ETF (XLE) is up 2.7% ahead of the open, with Exxon Mobil (XOM) shares rising 2.6%, Chevron (CVX) shares up 2.9%, and Occidental Petroleum (OXY) shares up 3.2%.

Activist Investor Hikes Disney Stake

Walt Disney (DIS) shares are up 1.4% in premarket trade following a report over the weekend that activist investor Nelson Peltz’s Trian Fund Management increased its stake in the company. 

The Wall Street Journal reported Trian’s Disney stake is now worth over $2.5 billion.

The fund now holds more than 30 million shares vs 6.4 million at the end of June. 

The report said Trian is planning to request multiple seats on the Disney board, including one for Peltz. 

Disney previously denied a request from Peltz to join the board, arguing he didn’t understand the media industry. 

If Disney were to deny any upcoming requests, Trian could nominate directors that would be voted on at the annual meeting next spring.

Tesla Slips On Declining China Sales

Tesla (TSLA) shares are slipping 1.8% ahead of the open following a report that its China-made EV sales dropped in September. 

The China Passenger Car Association reported Sunday that Tesla sold 74,073 China-made EVs last month. 

That was a 10.9% decrease year over year. 

Sales of Model 3 and Model Y cars made in China dropped 12% from August. 

Meanwhile, Tesla’s Chinese rival BYD saw its sales jumped 42.8% year over year last month.

Inflation Week

This will be an important and busy week of economic data for traders. 

Things start off slow with a couple of Fed speeches today, then the NFIB small business optimism index and wholesale inventories Tuesday morning. 

Wednesday morning the Bureau of Labor Statistics releases the September producer price index, followed by the Fed’s September meeting minutes in the afternoon. 

On Thursday, traders will get weekly jobless claims and the September CPI in the morning. 

And on Friday, September import prices will be reported in the morning followed by the University of Michigan’s preliminary consumer sentiment index.

Earnings season also kicks off with the big banks on Friday.

Bond Market Closed

A reminder that the bond market is closed today in observance of Columbus Day.

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