Global equity markets experienced a tough week, with most indices declining, overshadowed by geopolitical concerns and mixed corporate earnings. Notably, Tesla’s impressive 22% gain boosted the Nasdaq. Major tech firms like Alphabet, Microsoft, and Apple are set to release quarterly results, which may influence investor sentiment leading up to the US presidential elections. Meanwhile, significant international news includes military actions in Iran and mixed political outcomes in Japan and Georgia, impacting the global economic landscape.
Outward appearances can be misleading. Last week showcased a particularly challenging period for global equity markets, despite a last-minute effort to shift momentum. Although many financial sectors were engulfed in red, a few companies managed to shine brightly—thanks to their results (like SAP SE, Philip Morris, and GE Vernova), innovative prowess (think Nvidia and Microsoft), or more mysterious means (Tesla). Ultimately, most indices experienced declines, with the Nasdaq being an exception, seeing a modest increase of 0.1%, largely fueled by Tesla’s remarkable 22% rise on Thursday. Major technology firms often serve as a safe haven for investors amid uncertainty, particularly when that uncertainty is multifaceted, intertwining issues like the U.S. presidential election, monetary policies, and geopolitical tensions.
While Tesla has disclosed its results, Nvidia is set to report on November 20. This week, the highly influential group of American technology giants, commonly referred to as the Five Magnificents, will release their quarterly results. Alphabet will report on Tuesday, followed by Microsoft and Meta Platforms on Wednesday, and finally, Apple and Amazon on Thursday. These companies will reveal their figures after U.S. market close, which occurs at 10:00 p.m. local time (or 9:00 p.m. since the U.S. transitions to winter time next weekend). These results, along with numerous others released concurrently, are expected to occupy market attention leading up to the U.S. presidential election scheduled for November 5. Current performance assessments are deemed “mixed,” a term used by FactSet in their weekly review of S&P 500 results—an increasingly complex landscape to navigate as numbers pile up. By this week’s end, around 71% of S&P 500 companies will have reported their earnings.
What’s making news in the financial press today?
- Nvidia and Apple are once again vying for the title of the world’s largest capitalization.
- Beijing is actively protesting the latest U.S. arms sale to Taiwan.
- Israel has targeted military sites in Iran; however, analysts suggest the situation remains stable, as oil production was not directly impacted by these actions.
- Moody’s has marked the Iranian oil industry as “very weak.”
- On Friday, Moody’s downgraded France’s credit rating outlook due to ongoing budget issues, with parliamentary discussions on this topic set to return on November 5.
- Elon Musk faced scrutiny from the Washington Post regarding past illegal work in the U.S. during the 1990s.
- In Georgia, the pro-European coalition lost elections to a pro-Russian opposition, which has led to allegations of election interference.
- Japan’s ruling party lost its majority amid recent elections, resulting in a drop for the yen, interpreted as negative for the Bank of Japan’s rate hike strategy.
Concerning macroeconomic factors, discussions surrounding European interest rates will intensify with the release of Germany’s inflation data on Wednesday, October 30. In the United States, key focus will be on the preliminary Q3 GDP estimate (also Wednesday), PCE inflation data (Thursday), and the monthly employment report (Friday, November 1). The Bank of Japan’s policy meeting on October 30 is anticipated to yield little change, as the Governor has signified rates will remain steady. Meanwhile, Federal Reserve officials are under a communication blackout until November 7, ahead of their policy meeting.
On the corporate front, around 50 significant companies are expected to report, including U.S. giants like Alphabet, Microsoft, Meta, Apple, and Amazon, as well as European heavyweights such as Novartis, HSBC, Schneider, Airbus, TotalEnergies, and Anheuser-Busch Inbev.
In the Asia-Pacific region, Japan’s Nikkei 225 climbed 1.8% thanks to a weaker yen. China’s markets are stabilizing, while South Korea and India both gained 1%, and Australia rose slightly by 0.1%. European indicators show a slightly positive trend as well.
The CAC40 opened 0.5% higher at 7,535 points, with the SMI rising 0.3% to 12,223 points and the Bel20 increasing by 0.2% to 4,303 points.
Today’s Economic Highlights
No significant economic indicators are anticipated today. Here’s the full agenda:
- Euro: 1.0795 USD
- Gold: 2,743 USD per ounce
- Brent Crude: 72.64 USD per barrel
- 10-Year U.S