Morning Briefing
Published
Map: The Gulf and Hormuz, marking Strait of Hormuz, Riyadh
S&P 500 futures point to a firmer open, up roughly 0.5%, as traders digest the fallout from SpaceX's overnight spectrum deal even as the Strait of Hormuz standoff keeps a lid on sentiment elsewhere.
The Hormuz crisis remains the dominant geopolitical risk. Three Saudi nationals died in twin Houthi strikes on Riyadh's King Khalid International Airport, and the Saudi-led coalition says it destroyed three Houthi missile launchers while vowing a strong response. Reports of heavy blasts and mined tankers in the southern Strait circulated overnight even after crude pulled back from its highs once President Trump said the US will not attack Iran before the November 3 midterms, insisting talks remain productive while the blockade stays in force. The Pentagon has reportedly drafted a three-day strike plan against Iranian missile, energy, and Revolutionary Guard targets, though Trump has rejected five such proposals so far. Against that backdrop, Pimco warns the 10-year Treasury yield risks a climb toward 6%, a level last seen in 2000, a reminder that the energy shock is feeding directly into an already stressed rates market.
The clearest single catalyst in equities is SpaceX's agreement to acquire a nationwide 800 MHz low-band spectrum portfolio, paired with FCC approval of its Starlink satellite expansion. Telecom carriers are being hammered, with T-Mobile US, AT&T, and Verizon all down between 6.5% and 7.6%, while tower landlords Crown Castle, SBA Communications, and American Tower are surging between 6.8% and 8.7% on the consolidation logic. Technology leads sector gains, with chip equipment names Corning, KLA, Lam Research and Applied Materials near the top, while Real Estate also benefits from the tower rally. Energy is the weak spot despite the overnight oil spike.
Company News
- Delta Air Lines posted Q3 EPS of $1.72, missing estimates by $0.27, with revenue of $17.59 billion versus $17.78 billion expected; the company guided to full-year adjusted EPS of $5.10 to $5.60 and plans to pay down more than $2 billion of debt in 2026.
- Humana says it exceeded its Top Quartile 2027 Medicare Advantage Star Ratings goal and affirmed 2026 guidance of at least $9.00 in adjusted EPS, extending its post-earnings surge.
- Apple is said to have scaled back iPhone 18 Pro orders on weaker-than-expected demand, according to Nikkei.
- American Express agreed to pay a $350 million penalty to the OCC over anti-money-laundering compliance failures, with the company saying the order carries no asset cap and won't affect 2026 or 2027 guidance.
- Devon Energy agreed to sell its Eagle Ford assets to Crescent Energy for $4.2 billion, with proceeds earmarked for buybacks and debt reduction.
- Prudential Financial's Japanese units received business suspension and improvement orders from Japan's Financial Services Agency, barring new business solicitation through January 2027.
Overseas Data
In Asia, Japan's machine tool orders rose 60.4% year over year in September, decelerating from August's 64.7% gain, while China's central bank held its reverse repo rate steady at 1.40% and set the yuan reference rate at 6.7330 per dollar.
In Europe, Norway's underlying inflation rose to 3.4% year over year in September, below the 3.6% expected, while Sweden's GDP indicator rose to 3.5% year over year from 2.5% even as service production slowed. The Bank of Spain projects the country's public debt-to-GDP ratio at 98.5% by end-2026, citing risks from geopolitics, oil prices, and rising bond yields.