North American Morning Briefing: Stock Futures Rise as Amazon, Apple Earnings Reignite Tech Rally

Adam

Summary:

U.S. stock futures rose after strong earnings from Amazon and Apple revived tech sentiment. Despite recent market volatility and a prolonged government shutdown, tech shares led gains, while the dollar and Treasury yields stayed firm.

OPENING CALL

Stock futures were rising early Friday, after a solid batch of earnings reinforced hopes that the tech rally can roll on.

The three major indexes fell in a messy day of trading on Thursday, but they looked set to rebound after earnings from Apple and Amazon, both of which beat the Street's bottom-line expectations.

"Just as the tech mood had soured yesterday, this morning that has mostly turned around following results from Apple and Amazon after the closing bell," Deutsche Bank said.

"This renewed momentum has helped sentiment after a more challenging day yesterday despite the positive outcomes from the U.S.-China trade discussions."

Meanwhile, the government shutdown is nearing a full month, active-duty military personnel are due their next paycheck, and effects on airports are getting worse.

The nation's air-traffic controllers first missed their paycheck this week, and Transportation Security Administration employees--including airport screeners--are also going without pay.

That increases the risk of further flight cancellations mere weeks away from the air-travel Super Bowl: Thanksgiving week.

Navan fell 20% Thursday when the software firm became the largest company to go public during the shutdown.

Its performance could give pause to companies looking to stage IPOs during the period.

Stocks to Watch

Amazon.com reported revenue up 13% and strong cloud sales. The stock rose 12% premarket.

Apple was up 2.6% after September-quarter revenue hit a record, despite supply constraints.

Reddit's revenue and profit rose on advertising demand. The stock gained 9% after the bell.

SPS Commerce cut its sales outlook after recording revenue below expectations. Shares dropped 26%

Watch For:

Personal Income & Spending for September and Employment Cost Index for 3Q are due; Chicago Business Barometer - ISM-Chicago Business Survey - Chicago PMI for October; Canada GDP for August; Earnings from Canadian National Railway, Chevron, Exxon Mobil, AbbVie and Colgate-Palmolive.

Today's Top Headlines/Must Reads:

-How Chevron Got Caught in the Clash Between the U.S. and Venezuela

-The Long Road to a U.S.-China Trade Pact

-Amazon's Cloud Business Won't Be an AI Laggard for Long

MARKET WRAPS

Forex:

The dollar remained higher, supported by reduced bets for another rate cut in December after Powell said it was far from a done deal.

"If the government shutdown continues, it would not be obvious that the Fed will continue with rate cuts," Jefferies said.

The euro-dollar exchange rate remained driven by dollar moves following the ECB meeting, ING said.

There's some speculation in the market that the euro could fall below $1.15 but this looks unlikely given prospects of further weak U.S. jobs data.

The eurozone economy is also showing a slight improvement, it added.

Bonds:

Treasury yields edged higher across the curve, except for the two-year maturity, but moves were overall small following this week's major central bank policy decisions.

Barclays strategists recommended 3.61% as an entry level for the two-year Treasurys saying it believed two-year yields can fall by 25 basis points.

TD Securities doesn't expect Treasury auction size increases until at least late 2026, with the Treasury likely keeping guidance unchanged.

"Treasury should continue bringing more supply in bills as coupon auction sizes remain unchanged--especially as QT is coming to an end and reserve management purchases may be in the cards in 2026."

Energy:

Oil prices were headed for a monthly loss of nearly 3% ahead of Sunday's OPEC+ meeting.

The market has largely priced in a modest output increase of 137,000 barrels a day for December, but concerns over a growing supply glut continue to weigh on sentiment.

Meanwhile, the trade agreement with China did little to resolve questions over Chinese purchases of Russian oil, analysts said.

"There has been no indication on the Chinese side as to whether they will stop buying," according to ANZ.

"There was also hope that China would agree to purchases of U.S. oil and gas as part of a broader U.S.-China deal."

Metals:

Gold prices rose as investors digested the trade deal with China and the Fed's hawkish tone on December rate cuts.

Futures in New York are up 0.4% to $4,032.10 a troy ounce after retreating back below the $4,000 mark earlier this week, and are now set for monthly gains of more than 4%.

"We expect gold prices to remain elevated in the coming weeks, especially as central bank purchases remain high," BMI said.

However, "risks are slated to the downside as the Fed has downplayed the possibility of another cut in December and the trade deal between the U.S. and China has abated a lot of the uncertainty in the market."

UOB maintained its positive outlook for gold and raised price forecasts to $4,000 by 4Q 2025, $4,100 by 1Q 2026, $4,200 by 2Q 2026, and $4,300 by 3Q 2026.

TODAY'S TOP HEADLINES

Elon Musk's SpaceX Set to Win $2 Billion Pentagon Satellite Deal

SpaceX is set to receive $2 billion to develop satellites that can track missiles and aircraft under President Trump's Golden Dome project, people familiar with the matter said.

The funding was included in the tax-and-spending bill that Trump signed in July, but wasn't publicly linked to a contractor. The planned "air moving target indicator" system could eventually field as many as 600 satellites, some of the people said.

Samsung Electronics, Nvidia to Build AI Factory in New Chip Deal

Nvidia has struck a spate of deals with some of South Korea's biggest companies that will see more than a quarter-million of its chips deployed across the country.

The tie-ups with Samsung Electronics, Hyundai Motor Group and other Korean industrial giants were announced Friday as Nvidia CEO Jensen Huang visited South Korea to attend a summit.

Audi Cuts Profitability Guidance Again

Audi cut its full-year margin guidance again as U.S. tariffs, restructuring costs and the postponement of an electric-vehicle platform weigh on profitability at the German automaker.

"We are responding to the challenging overall economic situation and intensified competition with stringent cost control measures and are continuing to work on our financial performance," Audi Chief Financial Officer Juergen Rittersberger said. "At the same time, we are making our business model future-proof and resilient."

French Inflation Eases After ECB Holds Rates

French inflation cooled a little in October despite an unexpectedly strong upswing in the economy, likely helping keep European Central Bank policymakers on course to hold interest rates well into next year.

Consumer prices were 0.9% higher than the same month of last year, down from 1.1% in September, EU-harmonized figures published by statistics agency Insee showed Friday.

More Home Purchases Are Falling Through in an Uncertain Economy

Trish DaCosta saved for more than five years to buy a home in Nashville, Tenn., and was thrilled when her offer on a roughly $400,000, three-bedroom house was accepted. Then, a month before closing earlier this year, she was laid off from her job in public relations.

When she learned she lost her job, the first call she made was to her real-estate agent to pull the offer.

Wall Street Is Punishing Stocks When Earnings Fail to Sparkle

The market isn't far from all-time highs and many experts would argue that stocks are priced for perfection. That is a problem because top companies like Meta Platforms and Chipotle are reporting earnings and issuing outlooks that are a little less than perfect.

Chipotle illustrates what is happening. The popular Mexican food chain's results, released late Wednesday, weren't bad per se: Earnings and revenue matched Wall Street's forecasts. But the company said same-store sales for the fourth quarter are now likely to decline, a sign of slowing demand that Wall Street wasn't expecting.

Hezbollah Is Rearming, Putting Cease-Fire at Risk

Lebanese militant group Hezbollah is rebuilding its armaments and battered ranks, defying the terms of a cease-fire agreement and raising the prospect of renewed conflict with Israel, according to people familiar with Israeli and Arab intelligence.

The intelligence shows Iranian-backed Hezbollah is restocking rockets, antitank missiles and artillery, the people said. Some of those weapons are coming in via seaports and weakened but still functional smuggling routes through Syria, some of the people said. Hezbollah is manufacturing some new weapons itself, one of the people said.

Trump Pivots Second Term Toward Foreign Policy

BUSAN, South Korea-President Trump wrapped up his six-day swing through Asia by touting trade deals and new investments in the U.S. But as he arrives back in Washington, the gold-plated receptions abroad are giving way to a shuttered government and deepening voter anxiety about the economy.

The split screen sheds light on why Trump has turned much of his second-term attention to foreign policy.

Trump's Vow to Resume Nuclear Tests Leaves Experts Puzzled

WASHINGTON-A day after President Trump vowed to resume testing of nuclear weapons, the White House wasn't answering questions about the details, leaving members of Congress, experts and even the administration's nominee to command U.S. nuclear forces uncertain what he meant.

"I don't have insights into the president's intent," Vice Adm. Richard Correll said at his Senate confirmation hearing to lead U.S. Strategic Command, after he was asked whether Trump wanted to step up missile flight tests or resume underground nuclear detonations for the first time in more than three decades.

Source: morningstar

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