Share markets steadied in Asia on Monday as investors hoped for Apple earnings later in the day to provide some relief from AI cash-burn worries, while oil prices eased after talks continued between Iranian and Qatari mediators.
Apple has been an oasis of relative calm given it does not spend billions on data centres, and its shares have climbed for four months straight to help it unseat Nvidia as the world’s most valuable listed company.
Analysts are looking for quarterly earnings per share (EPS) of $2 on revenue of $113 billion, up from $1.85 the same time last year. The company might also offer some guidance on how early sales of the iPhone 18 are performing with pre-orders having started in mid-October.
The optimism helped S&P 500 futures edge up 0.4%, while Nasdaq futures NQc1 bounced 0.8%. The tech-heavy Nasdaq lost almost 7% in October for its worst month since the ‘Liberation Day’ tariff rout of April 2025.
Some upbeat news is sorely needed after concerns about negative cash flow and the sheer scale of AI capex saw the cost of insuring against corporate defaults blow out last week.
Intel’s near 29% tumble on Friday has also raised the stakes for other chip groups, including AMD.
An added wrinkle is the midterm elections in the United States, where a win by Democrats in either or both houses could result in more political hurdles for data centres.
Analysts at Goldman Sachs expect capex by hyperscalers to almost double to $800 billion this year, and rise further to $1.2 trillion in 2027. At the same time, they see S&P 500 EPS growth of nearly 30% in 2026 slowing to 18% next year.
“Earnings results have underscored the fundamental challenge facing equity investors — earnings growth is strong, but it is no longer accelerating,” wrote Ben Snider, Goldman’s chief US equity strategist, in a note.
“Similarly, Q3 results support our view that AI investment spending will continue to grow but that the growth rate of AI capex is peaking.”
Adding to the air of unease were withdrawals from Binance as the world’s biggest cryptocurrency exchange went back online on Sunday after hackers stole billions from the platform last week.
Japan’s Nikkei was down 0.1%, but off early lows, while South Korea added 0.8%, having shed 16% last month. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2%.
In Europe, 50 futures and DAX futures both firmed 0.1%, while FTSE futures were flat.
MORE RATE HIKES COMING
The retreat in equities last month provided a reprieve to safe-haven bonds, with investors wondering if a sustained selloff in the stock market could deter the Federal Reserve from hiking interest rates in December. 0#USDIRPR
Futures still imply a 72% chance of a quarter-point rate rise, but now only have 55 basis points of total tightening priced in compared to more than 70 basis points a month ago.
Yields on 10-year Treasuries US10YT=RR nudged up to 4.941%, but remained well off their October peak of 5.3645%, while 2-year yields stood at 4.612%.
Among central banks meeting this week, markets are wagering on hikes from the Reserve Bank of Australia, Bank of England and Riksbank, while the Norges Bank is seen on hold.
Economic data due this week includes the influential US ISM survey of manufacturing for October later on Monday, while the all-important payrolls report is on Friday.
Median forecasts are for a 65,000 rise in jobs, after September’s disappointing 29,000 gain, with the unemployment rate holding at 4.2%.
In currency markets, the majors were pretty much sidelined while all the action was concentrated in stocks. The euro was a shade firmer at $1.1169, while the dollar was barely changed at 157.75 yen.
For commodities, oil prices slipped as talks continued aimed at pushing for a deal to end the US-Israeli war on Iran, though tankers were still being attacked in the Gulf.
Brent futures dipped 2.0% to $111.15 a barrel, though that follows a 13.6% jump in October, while US crude futures eased 2.3% to $101.73 a barrel.
Non-interest-bearing gold bounced 0.9% to $3,911 an ounce, having fallen 6.8% last month amid talk some investors were having to sell to cover margin calls on equities.
(Reuters)
