Ten Stories Moving the Market

Ten Stories Moving the Market:

Qualcomm gave a lackluster profit forecast, a sign the largest maker of smartphone processors is still grappling with higher component prices; earnings will be $2.15 to $2.35 a share in the three months ending in December, compared to the expectation for $2.32 – Bloomberg. (Why you should care - the company is dealing with higher expenses caused by shortages in its own supply chain and a dearth of memory chips, largely fueled by the surge in demand for data center equipment)

Bank ​of Japan policymakers saw the need to keep raising interest rates with some signaling the chance of faster-paced increases, minutes of their September meeting showed, ‌bolstering the case for another hike as soon as December – Reuters. (Why you should care – some policymakers noted that bond market pricing for the so called “neutral rate’ has given the BOJ more flexibility to raise interest rates further) 

Arm Holdings gave a revenue forecast for the current period that left investors underwhelmed, a sign the chip designer hasn’t yet met the lofty hopes for its push into the AI data center market; sales will be about $1.54 billion in the fiscal third quarter compared to the expectation for $1.53 billion – Bloomberg. (Why you should care – with smartphones, Arm’s biggest business, slowing, the stock’s premium valuation now depends on data center growth showing up faster, and an in-line guide isn’t enough to justify it)

Apple is reducing employee budgets for artificial intelligence usage as part of a cost-cutting effort, even as the company seeks to put AI at the center of its operations; last month, Apple quietly lowered the daily spending cap for some engineers using AI models to $200 from $300 – Bloomberg. (Why you should care – companies are increasingly tracking AI token usage and steering spending toward where it boosts productivity most, a sign enterprise AI budgets are shifting from experimentation to ROI)

JD Vance has blamed Donald Trump’s Iran war for Republicans’ midterms wipeout as the U.S. vice-president’s long-held frustrations over the conflict spilled into the open; “The reason we lost is the war,” Vance wrote in a lengthy post on X - FT. (Why you should care - the vice president publicly tying the election losses to the war raises pressure on the administration to wind down the conflict as oil supplies are already recovering, which could put further downward pressure on oil prices and inflation)

Global oil supplies are recovering from Middle East disruptions, with JPMorgan estimating the market swung back to a surplus of 1.1 million barrels per day in September, widening to 1.4 million bpd in October, as Gulf exports rebound and demand weakens - Reuters. (Why you should care - a growing oil surplus should put downward pressure on crude prices, easing inflation pressure and input costs for businesses, though it’s a headwind for energy stocks)

South Korea’s current-account surplus jumped to a record in September, fueled by booming semiconductor exports as global investment in artificial intelligence continues to stoke demand for the country’s technology products – Bloomberg. (Why you should care - it’s hard evidence that the hyperscalers’ AI spending is flowing straight to memory chipmakers like Samsung and SK Hynix, a sign the buildout is still accelerating despite October’s tech selloff)

According to The Information, Lumentum’s roughly 19% slide since agreeing to a $115 billion all-stock takeover by Marvell has raised the chance that a rival bidder steps in, as Marvell’s falling share price has eroded the value of an offer originally pitched at a 24% premium - The Information. (Why you should care - optical connectivity has become one of the hottest corners of the AI buildout, and a potential bidding war shows how much big chip companies are willing to pay to secure it)

U.S. services sector growth slowed marginally in October amid a moderation in new orders, but supply chains remained strained, keeping prices for inputs elevated, according to the Institute for Supply Management – Reuters. (Why you should care – an end to the Middle East conflict could help to ease supply constraints and bring down input costs)

AstraZeneca made an offer of about $10 billion, or roughly $124 a share, for rare-obesity drugmaker Rhythm Pharmaceuticals last month, The Wall Street Journal reported, sending Rhythm shares up 28% to $110.68 - WSJ. (Why you should care - the bid puts a valuation premium on publicly traded obesity drug developers, as investors price in the chance that big pharma comes shopping for the next target)

Economic Calendar:

Earnings: COP, PH, SO, DUK, CI, CMI, APD, TRGP, CAH, SRE, BDX, ROK, KMB, IRM, ZTS, DTE, VRSK, RL, TPR, GPN, VTRS, EVRG, MNST, ABNB, EOG, LITE, SPG, MCHP, ED, LYV, AXON, MTD, AEE, AKAM, SOLV, REG, DVN, WYNN, CPT

Germany - Factory Orders for September (2 a.m.)

ECB's Cipollone (Executive Board Member) Speaks (2:30 a.m.)

ECB's Schnabel (Executive Board Member) Speaks (3:05 a.m.)

Norges Bank Monetary Policy Announcement (4 a.m.)

Eurozone - PPI for September (5 a.m.)

Bank of England Monetary Policy Announcement (7 a.m.)

BoE - Minutes of Monetary Policy Meeting (7 a.m.)

BoE’s Bailey (Governor) Speaks (7:30 a.m.)

U.S. - Challenger Job Cuts for October (7:30 a.m.)

U.S. - Initial Jobless Claims (8:30 a.m.)

U.S. - Continuing Claims (8:30 a.m.)

U.S. - Preliminary Nonfarm Productivity for Q3 (8:30 a.m.)

U.S. - Preliminary Unit Labor Costs for Q3 (8:30 a.m.)

Fed's Hammack (Cleveland, Voter) Speaks (8:50 a.m.)

Fed's Barkin (Richmond, Non-Voter) Speaks (9:10 a.m.)

U.S. - EIA Natural Gas Storage (10:30 a.m.)

ECB's Lane (Chief Economist) Speaks (10:40 a.m.)

ECB's Lagarde (President) Speaks (11 a.m.)

Banxico - Monetary Policy Announcement (2 p.m.)

Fed's Balance Sheet Update (4:30 p.m.)

Fed's Logan (Dallas, Voter) Speaks (7 p.m.)