America's stock market has developed a curious habit: climbing to improbable heights and then pausing abruptly. Yesterday, Wall Street made two small forays into positive territory at the start of trading, before sliding inexorably into the red. Risk appetite is evaporating. Concerns over sky-high valuations, fading hopes of a December rate cut, and some increasingly fraught bets on artificial intelligence have prompted a broad pullback across equities. Even the mighty tech titans are wobbling.

Amazon, Nvidia, Alphabet are now drifting lower in pre-market trading. Nvidia's upcoming earnings have become a sort of market referendum on the entire AI boom. If the company reports anything shy of immaculate numbers, investors may decide that the rally has been running on more imagination than income. Alphabet's chief executive, Sundar Pichai, did little to dispel the nerves, noting that no firm would escape unscathed were the AI boom to fizzle. The anxiety is not helped by a growing suspicion that the AI investment frenzy is being fueled increasingly by debt rather than cash flow. 

The Federal Reserve is doing little to calm spirits. A week ago, markets thought a December rate cut was nearly a sure thing. A month ago, it was practically gospel. Now, investors reckon the chances are about 46%. Several Fed officials have been sounding cautious though one, Christopher Waller, still appears keen on easing. Others prefer a slower approach, with some commentators forecasting only modest cuts next year.

Meanwhile, the economic data calendar - recently scrambled by the longest government shutdown in American history - is creaking back into motion. Factory orders, jobs figures, and other delayed releases are expected to trickle out in the coming days. Thursday's long-overdue September payrolls report is being treated as the main event, though not because it will provide profound revelation. Rather, with markets this jumpy, almost any datapoint can become a catalyst.

In corporate news, retail giants are publishing their results. Home Depot cut its profit outlook amid tariff-induced uncertainty. Walmart and Target will soon report results, which should help reveal whether American shoppers are still willing to tolerate high prices. Dell, Coinbase, Robinhood, and others are also under pressure. Even Bitcoin has caught the market's dour mood, sinking to a seven-month low.

Oracle lost 30% in a month, Palantir 15%. The excellent Robert Armstrong, who writes the Unhedged column in the Financial Times, pointed out on Friday that the market has begun to make a new distinction in the jungle of AI success stories: it has placed companies that can easily finance their colossal investments on one side and those that have to resort to aggressive financing or borrowing, often at high rates, on the other. This fundamental distinction (the warning signs are coming from the bond market, once again) is reflected in the rankings: if Oracle has recently collapsed, it is because the company, already in debt, is making a massive bet on AI and the cloud, which will disrupt its business model, and not necessarily for the better at first. Conversely, if Alphabet is holding its own, it is because its financing is extremely robust (and also, yesterday, because Berkshire Hathaway reported a position in the stock).

There will not be much macro data to digest today. The speeches by US central bankers will therefore continue to set the tone, with an intervention by Michael Barr, member of the Board of Governors.

In Asia-Pacific, things are looking rather bleak this morning. Europe and US leading indicators are also very bearish.

Today's economic highlights:

On today's agenda: in the United States, capacity utilization, GM industrial production, and the NAHB housing market index will be released. See the full calendar here.

  • Dollar index:
  • Gold: $4,046
  • Crude Oil (BRENT): $64.31 (WTI) $59.64
  • United States 10 years: 4.1%
  • BITCOIN: $91,431

In corporate news:

  • GlobalFoundries has acquired Advanced Micro Foundry to expand its silicon photonics capabilities and R&D presence in Singapore.
  • Trifork and Loft Dynamics will launch a pilot training simulator, LoftHOME, for Apple's Vision Pro headset.
  • Boeing received an order for 15 787 Dreamliners from Gulf Air, expanding on a prior commitment.
  • Baidu posted a Q3 net loss of 11.2 billion yuan due to impairment charges and a 7% revenue drop from weak advertising demand.
  • The European Commission has opened investigations into Amazon Web Services and Microsoft Azure under the Digital Markets Act for possible gatekeeping behavior.
  • Saba Capital Management sold credit default swaps on tech firms like Microsoft, Oracle, Amazon, and Alphabet amid growing concerns about AI-related corporate debt.
  • Apple's iPhone 17 series drove a 37% year-over-year surge in China smartphone sales in October, capturing 25% of the market.
  • Hyatt Hotels priced a $400 million senior notes offering to refinance debt and for general corporate use.
  • AkzoNobel and Axalta will merge in an all-stock deal to form a $17 billion paints and coatings giant.
  • Johnson & Johnson will acquire Halda Therapeutics for $3.05 billion to expand its oncology pipeline.
  • Sealed Air will be acquired by Clayton Dubilier & Rice in a $6.2 billion deal.
  • Alphabet CEO Sundar Pichai warned that no company, including Google, would be immune if the AI investment bubble bursts.
  • Futu Holdings reported a sharp increase in Q3 profit and revenue, beating analyst expectations.
  • Raytheon received a $699 million U.S. Army contract for its NASAMS air missile defense system.
  • XPeng shares dropped 9% after a vehicle margin miss and issuing soft Q4 guidance.
  • Trip.com posted a 16% revenue increase and nearly tripled its Q3 profit on robust travel demand.
  • Databricks is reportedly seeking funding at a valuation over $130 billion, up 30% from two months ago.
  • Alibaba launched a free AI assistant app, Qwen, integrating mapping, shopping, and productivity tools.
  • UBS and Ant International formed a blockchain partnership to enhance cross-border payments with UBS Digital Cash.
  • Google will build a data hub and subsea cables on Christmas Island, aiming to bolster Indian Ocean connectivity and renewable energy development.
  • XP Inc. announced a cash dividend, the retirement of treasury shares, and a new share repurchase program following a positive Q3 report.
  • James Hardie Industries confirmed the AZEK acquisition exceeded cost savings targets and boosted Q2 net sales.
  • Helmerich & Payne reported a miss in Q4 earnings but announced the reactivation of seven drilling rigs in Saudi Arabia.
  • Honda plans to gradually resume regular production at its North American vehicle factories starting November 24.

Analyst Recommendations:

  • Aes Corporation (The): Jefferies upgrades to hold from underperform with a price target raised from USD 12 to USD 13.
  • Alphabet Inc.: Loop Capital Markets upgrades to buy from hold and raises the target price from USD 260 to USD 320.
  • Amazon.com, Inc.: Rothschild & Co Redburn downgrades to neutral from buy with a target price of USD 250.
  • Deckers Outdoor Corporation: Stifel upgrades to buy from hold with a target price of USD 117.
  • Federal Realty Investment Trust: Barclays downgrades to market weight from overweight and reduces the target price from USD 113 to USD 106.
  • Microsoft Corporation: Rothschild & Co Redburn downgrades to neutral from buy and reduces the target price from USD 560 to USD 500.
  • Regency Centers Corporation: Barclays upgrades to overweight from market weight and reduces the target price from USD 83 to USD 82.
  • Zoetis Inc.: Stifel downgrades to hold from neutral and reduces the target price from USD 140 to USD 130.
  • Abbvie Inc.: Mirae Asset Securities maintains its buy recommendation and raises the target price from USD 264 to USD 328.
  • Comcast Corporation: Daiwa Securities maintains its outperform rating and reduces the target price from USD 38 to USD 30.
  • Ford Motor Company: Jefferies maintains its hold recommendation and raises the target price from USD 12 to USD 15.
  • General Motors Company: Jefferies maintains its hold recommendation and raises the target price from USD 55 to USD 75.
  • Jazz Pharmaceuticals Plc: Baird maintains its outperform recommendation and raises the target price from USD 160 to USD 209.
  • Netflix, Inc.: Argus Research Company maintains its buy recommendation and raises the target price from USD 141 to USD 1410.