| Good morning. US tech stocks are rallying. South Korea is set to join FTSE Russell's benchmark bond index. And traders are priming for central bank decisions in New Zealand and India. Here's what's moving markets. —Isabelle Lee Five Things will publish its last edition as a digital product on Oct. 11. To keep you up to speed, you will automatically begin receiving the new, more expansive subscriber-only Markets Daily newsletter starting Oct. 14. Not a Bloomberg.com subscriber yet? You'll get a complimentary trial of Markets Daily. A version of Five Things Asia will still be available on the Bloomberg Terminal. The world's largest tech companies drove the S&P 500 higher Tuesday, with the US stock market rebounding from its worst session in a month. Equities closed within a striking distance of their all-time highs, with the S&P 500 up 1% and chipmaker Nvidia leading gains. Yet while the tech sector rallied, energy stocks fell along with oil and US-listed Chinese stocks tumbled as the government in Beijing stopped short of launching more major stimulus. Wall Street's favorite volatility gauge — the VIX — dropped from its highest since August. South Korea will join FTSE Russell's benchmark bond index, capping months of official campaigning and an overhaul of financial market infrastructure in the hopes of attracting tens of billions of dollars of inflows. The index provider also added India to its gauge of emerging-market debt, according to a statement on Tuesday. Vietnamese stocks, meantime, were kept on a watch list for possible reclassification to emerging market. S&P Global Ratings is weighing downgrading Boeing Co.'s credit score to junk as the company continues to suffer from the fallout of a protracted labor strike. The credit grader estimates that the planemaker will incur a cash outflow of approximately $10 billion in 2024, due in part to costs associated with the strike. The company is also likely to need additional funding to meet its day-to-day cash needs and finance debt maturities, according to a statement Tuesday. Regulators in the US and UK should make it easier for companies to go public, JPMorgan CEO Jamie Dimon said. He pointed to the dropoff in research into smaller companies and rising expenses from litigation and regulatory filings. Dimon said it's "odd" there's been no commensurate rise in IPOs with the surge in public market valuations. He added, however, that there's a growing IPO backlog — though that doesn't guarantee that they'll happen. In the wide-ranging interview with Bloomberg TV, Dimon also said more midsize banks in the US should be allowed to merge. Central bank decisions will be front and center for both New Zealand and India on Wednesday. The Reserve Bank of New Zealand is likely to quicken the pace of monetary-policy easing as economic output and employment suffer, with economists surveyed by Bloomberg tipping a half-point cut at this meeting. India's new monetary policy committee, meanwhile, may lay the groundwork for a future interest rate cut as growth moderates. While most of the 35 economists in a Bloomberg survey expect the Reserve Bank of India's six-member MPC to keep the repurchase rate unchanged at 6.5%, several predict a switch to a 'neutral' stance for the first time since June 2019 from its current hawkish view. Here's what caught our eye over the past 24 hours: - Catastrophe bond investors brace for huge losses as Hurricane Milton rages
- Brevan Howard posted its best monthly return since 2022 following the Federal Reserve's decision to cut rates
- Citi trading veteran starts private credit social housing firm
- Ares to buy GCP's ex-China assets for up to $5.2 billion
- Home Depot orders corporate staff to take 8-hour retail shifts
- CFA Level I pass rate slips to 44%, still above historic average
- 'Godfather of AI' Geoffrey Hinton among Nobel prize winners
Despite a return to relative calm in the US on Tuesday, Treasury rates can surge demonstrably over 4% on a hot reading of US consumer price inflation this Thursday. That's the takeaway from comments by Mohamed El-Erian, Queens' College Cambridge president and Bloomberg Opinion columnist. The crux of his remarks is that, with the latest US jobs report, "this market lacks anchors when it comes to how it sees the interest rates. And his view is that "until we restore some sort of anchor you're going to have this volatility." The question is what gives us that anchor. The debate now is not between a soft landing and a recession tail-risk. It's shifted to either a soft landing or the risk of overheating. The increased prospect of 'no landing' has also eliminated a floor for Treasury prices. The 10-year Treasury sat above 4%, with the 5-year low point in the rates curve hovering around 15 basis points away. That means Treasury volatility will continue until US inflation hits 2%. New York Fed President John Williams took a lot of guessing out of the market on a 50-basis-point move at the coming meeting, basically ruling it out in comments with the Financial Times. And while he said the economy was on track, he didn't say if and when the Fed might pause based on hot inflation prints. That leaves swaps markets to price in a small chance of no cut in November and makes more volatility likely until the tail risk of no-landing and resurgent inflation is eliminated. Market pricing is predicated on Fed rate cuts that are designed to remove policy restrictiveness by reducing real interest rates. But to the degree inflation proves sticky, those cuts will not be forthcoming, rate volatility will continue and the whole US Treasury curve will move above 4%. Thursday is our first test. Any year-on-year core CPI above consensus at 3.2% will provoke a move and might just be enough to send the entire Treasury curve over 4%. Ed Harrison writes the Everything Risk newsletter. Follow him on X at @edwardnh. | 
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