Source: Charles Schwab, data from 10/19 – 10/23

Weekly Market Minute

“Start where you are. Use what you have. Do what you can.”
— Arthur Ashe

🧭 This Week In the Markets

Image Source: Kevin Carter | Getty Images

U.S. Housing Market Weakens as Rising Mortgage Rates Complicate Fed Outlook

The U.S. housing market showed further signs of weakness in September as rising mortgage rates weighed on homebuyer demand and residential construction. Pending home sales fell 7.3% from August and 11.3% year-over-year, reaching their lowest level on record dating back to 2001, according to the National Association of Realtors. Meanwhile, housing starts declined 5.2% for the month, significantly exceeding economists’ expectations for a 0.4% decline, while building permits fell 0.2%. The slowdown comes as the average 30-year fixed mortgage rate climbed from approximately 6.8% to 7.6% during September, further challenging housing affordability.

The weakening housing market presents an additional challenge for the Federal Reserve as it balances persistent inflation with slowing economic activity. Despite declining housing demand, recent inflation reports have shown continued price pressures, complicating the Fed’s interest rate outlook. Markets currently expect the central bank to hold rates steady at its meeting next week, although expectations for additional rate hikes later this year and into 2027 remain elevated. Economists anticipate that higher borrowing costs could continue to weigh on housing activity, with Goldman Sachs forecasting further declines in residential investment over the next three quarters.

Tesla and SpaceX Explore Potential Merger Following Roadster Unveiling

Tesla and SpaceX are reportedly exploring a potential merger, with Elon Musk confirming that both companies have formed special committees to evaluate a possible combination. The discussions follow Tesla’s unveiling of its long-delayed next-generation Roadster, which incorporates SpaceX technology, including rocket thrusters that allow the vehicle to hover. Tesla expects production of the Roadster to begin in 2028, nearly a decade after it was first announced.

A potential combination would bring together two of the world’s most valuable companies, with SpaceX valued at approximately $2 trillion and Tesla at $1.4 trillion. If completed at their current valuations, the transaction would represent the largest corporate merger in history. While no formal agreement has been announced, the discussions highlight the growing collaboration between the two companies across automotive technology, aerospace, and artificial intelligence.

U.S. Jobless Claims Near Historic Lows Despite Slowing Hiring

Initial unemployment claims fell to 194,000 for the week ending October 17, approaching their lowest levels in nearly six decades. Despite the decline in layoffs, hiring activity remains subdued, with the U.S. economy adding just 29,000 jobs in September and averaging 69,000 new jobs per month throughout 2026. The unemployment rate rose to 4.2%, reflecting an increase in labor force participation. These figures suggest that employers are largely retaining existing workers while remaining cautious about expanding their workforces. The latest labor market data comes ahead of next week’s Federal Reserve interest rate decision, as policymakers continue to balance signs of economic resilience against persistent inflationary pressures.

🏢 Corporate Earnings

• Space Exploration Technologies (SPCX) exceeded quarterly earnings expectations, reporting adjusted earnings per share of $0.45 on revenue of $14.58 billion, compared with estimates of $0.13 per share and $12.72 billion. These strong results were driven by a ninefold increase in revenue from its artificial intelligence business and continued expansion of its Starlink satellite internet service.
• Netflix (NFLX) narrowly exceeded earnings expectations, reporting earnings per share of $0.87 on revenue of $12.87 billion, compared with estimates of $0.82 per share and $12.87 billion. These results come as the streamer saw significant year-over-year revenue growth, supported by an expanding subscriber base and higher subscription prices.
• Meta Platforms (META) recorded better-than-expected quarterly revenue, reporting revenue of $64.60 billion compared with estimates of $63.37 billion. These results came amid continued strength in its advertising business and growing adoption of its Muse artificial intelligence assistant.
• Tesla (TSLA) surpassed quarterly earnings expectations, reporting adjusted earnings per share of $0.48 on revenue of $28.05 billion, compared with estimates of $0.43 per share and $27.9 billion. These results came despite a decline in automotive revenue, as lower vehicle prices and increased spending on artificial intelligence and robotics weighed on profitability, partially offset by growth in its services business.
• Procter & Gamble (PG) beat expectations, reporting adjusted earnings per share of $2.00 on revenue of $23.3 billion, compared with estimates of $1.88 per share and $22.8 billion. These results were fueled by growing demand for its laundry detergent and home care products.

📊 Sector Performance

5-day closing price ($) and change (%)

Source: Select Sector SPDRs, data based on the Sector SPDR ETFs as of 10/23

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Source: Charles Schwab

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Sources: CNBC, CNBC, CNBC, CNBC, CNBC
Corporate Earnings: Space Exploration Technologies, Netflix, Meta Platforms, Tesla, Procter & Gamble

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