5 Things to Know Before the Stock Market Opens

Here are five key things investors need to know to kick off the trading day:

The already complex trade relationship between the U.S. and Canada took an unexpected turn late last night. President Donald Trump announced an abrupt halt to all U.S. trade negotiations with Canada, citing objections to an advertisement aired by the Ontario provincial government. The ad, featuring audio from former President Ronald Reagan, criticizes tariffs and their potential negative impact on American citizens.

The Ronald Reagan Presidential Foundation and Institute has publicly stated that the ad selectively misrepresents Reagan’s 1987 remarks and was edited without their permission. The Foundation has raised concerns about the ad’s potential to mislead the public regarding Reagan’s stance on trade matters.

President Trump accused Canada of attempting to influence a pending Supreme Court case concerning the legality of several tariffs imposed during his administration. Ontario Premier Doug Ford had previously announced a $75 million investment in running the controversial ad campaign across the United States. The move raises questions about the appropriateness of foreign entities attempting to impact U.S. legal proceedings and trade policy.

Analysts at TD Securities note that this action could significantly impact sectors reliant on cross-border trade, putting pressure on Canadian dollar and potentially delaying the resolution of ongoing trade disputes.

Investors and the Federal Reserve are keenly awaiting the release of September’s Consumer Price Index (CPI) report, now arriving after a nine-day delay due to the government shutdown. This crucial inflation indicator provides insights into the prices consumers are paying for a broad range of goods and services.

Key points to watch:

• Economists surveyed by Dow Jones anticipate a 0.4% increase in the overall CPI compared to August and a 3.1% rise year-over-year. The core CPI, excluding volatile food and energy components, is projected to climb 0.3% month-on-month and 3.1% over the past 12 months.
• The report’s delay stems from the ongoing federal government shutdown, now the second-longest in U.S. history, adding another layer of uncertainty to already skittish markets.
• The absence of regular economic data releases, including the nonfarm payroll report, has amplified investor anxieties.
• This CPI data is the last major economic release before the Federal Reserve’s upcoming policy meeting, giving it significant weight in influencing the central bank’s interest rate decisions.
• Market volatility is expected following the report’s release, making for a potentially turbulent trading day.

Economists at Goldman Sachs suggest a higher-than-expected CPI reading could solidify expectations for another rate hike in December. Conversely, a lower reading might lead the Fed to pause its tightening cycle amidst concerns over economic growth. The report will be parsed meticulously for granular details regarding sector-specific price movements and underlying inflationary pressures.

Target is embarking on a significant restructuring initiative, announcing the elimination of approximately 1,800 corporate positions, marking the company’s first major layoff in a decade. The job cuts includes the layoffs of approximately 1000 employees but also the eliminations of approximately 800 open positions, representing nearly 8% of its corporate headcount, according to a statement provided to CNBC.

The move signals a strategic shift by the retailer as it seeks to reinvigorate growth following a period of sluggish sales. The timing also coincides with the impending transition of CEO Brian Cornell, with Michael Fiddelke slated to take over the leadership role next year.

Analysts at Cowen & Co. point out that Target’s restructuring is likely aimed at streamlining operations, reducing expenses, and improving profitability. The cuts may also reflect a change in strategic direction led by the new CEO with a greater focus in particular areas of the business.

Ford Motor exceeded Wall Street’s expectations for its third-quarter earnings, driving shares up by more than 4% in after-hours trading. The strong performance was ultimately overshadowed, however, by a revised full-year outlook.

The automaker significantly reduced its profit forecast, citing an estimated $1.5 billion to $2 billion impact due to a fire at their aluminum supplier in New York. The incident has disrupted production of Ford’s popular large trucks and SUVs, revealing the vulnerabilities in modern supply chains.

Meanwhile, electric vehicle manufacturer Rivian confirmed a workforce reduction affecting approximately 4.5% of its employees. The company will cut more than 600 positions. The layoffs likely reflect the company’s efforts to streamline operations and contain costs in a challenging economic environment.

The NBA is grappling with a major crisis as Miami Heat guard Terry Rozier and Portland Trail Blazers head coach Chauncey Billups were arrested amid serious sports gambling investigations. The NBA has placed both Rozier and Billups on administrative leave, and is said to be cooperating fully with law enforcement.

A criminal indictment against former NBA player Damon Jones alleges he leaked confidential information about LeBron James and Anthony Davis to bettors during his time affiliated with the Los Angeles Lakers. Sources familiar with the matter indicate that James was not aware that his confidential information had been shared without his consent for betting purposes. The situation will likely lead to calls for increased oversight of sports betting and could spark greater scrutiny over player’s relationships with outside parties.

Here are some stories we recommend reading if you have some downtime this weekend: