Morning Briefing
S&P 500 futures point to a sharply lower open, down roughly 1.1%, as the earnings-driven split between AI-capex exposure and defensive, guidance-raising names that has dominated this week's tape deepens into the open. Technology is the epicenter of the selling, with Intel plunging after warning that the PC correction has accelerated and that a shortage of advanced organic substrates is crimping output, dragging the sector lower even as chipmakers and hardware names across the board follow it down.
The Strait of Hormuz remains the dominant geopolitical risk. Iran's navy claims it destroyed a US unmanned vessel in the eastern strait, a claim Washington has not confirmed, while Iran's Revolutionary Guard says it stopped two tankers that had switched off their navigation systems south of the waterway. Diplomacy is running in parallel: Qatari mediators are in Tehran discussing the latest US peace proposal, and Trump told radio interviewers the conflict "is going to get wrapped up soon," though he says Iran must still agree to a guarantee against ever building a nuclear weapon. Separately, Binance's hack has grown into a $6.3bn heist, with the exchange now working with the FBI and Secret Service even as it maintains withdrawals will resume within about 45 hours. On policy, the Bank of Japan's Ueda kept a hawkish tone, saying rates remain below neutral and hikes stay live at every meeting, while the ECB's Kocher warned that inflation risks have "clearly increased" and that the bank needs to act if conditions don't improve.
Sector positioning reflects a clear flight from growth into defense: the technology sector is down nearly 4%, with momentum and growth factors both sharply lower, while consumer staples are up more than 2% and health care gains nearly 2% on a run of earnings beats.
Company News
- AbbVie raises full-year adjusted EPS guidance and lifts its quarterly dividend 5.2%.
- Colgate-Palmolive raises full-year sales and margin guidance on strong nine-month performance.
- Church & Dwight raises organic sales and tightens EPS growth outlook, and approves a new $1bn buyback.
- Regeneron posts a large EPS beat, raises full-year guidance, and expands its antibody collaboration with Sanofi for a $1bn upfront payment.
- Chevron and ExxonMobil both beat estimates; Exxon plans $20bn in 2027 buybacks and Chevron outlines a $7bn Venezuela joint-venture investment.
- Newell Brands raises its full-year sales growth outlook after a beat-in-line quarter.
- Kenvue reports in line but withholds guidance pending its pending combination with Kimberly-Clark.
- Intel falls sharply after warning the PC correction is accelerating, even as it reaffirmed its 18A-P and 14A manufacturing timelines.
Overseas Data
In Asia, Japan's September unemployment rate came in at 2.4%, slightly better than the 2.5% expected, while South Korea's industrial output surged 9.0% month-on-month in September, far outpacing forecasts, alongside stronger retail sales and service-sector output.
In Europe, eurozone third-quarter GDP grew 0.4% quarter-on-quarter, above the 0.2% expected. Germany's September import prices rose 10.4% year-on-year, hotter than expected, and Spain's preliminary October inflation held at 4.9% year-on-year, in line with estimates.
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