Morning Brew October 30 2025

Good Morning,

Markets seesaw on earnings and the FOMC but remain near the highs.

Microsoft delivered robust cloud growth and solid overall revenue, supported by strong enterprise demand and continued expansion in Azure. Margins held up despite significant investments in AI and data centers, reflecting management’s confidence in long-term growth. However, after hours, Microsoft’s shares fell roughly 3-4% as investors registered concern over high spending on AI and questioned short-term profit clarity. https://www.home.saxo/content/articles/equities/msft-earnings-30102025

Meta reported resilient ad revenue and strong engagement across platforms, with profitability ahead of forecasts due to disciplined cost management. Management did caution about rising regulatory risk and moderating growth ahead. In after-hours trading, Meta’s stock dropped over 8%, driven by a $16 billion tax charge and guidance for sharply higher capex in 2026, which raised doubts about future margins. https://www.home.saxo/content/articles/equities/meta-earnings-30102025

Alphabet beat expectations, posting strong growth in both search and cloud, aided by active investment in AI and cost discipline. After earnings were released, Alphabet’s shares jumped 6-7% after hours, as investors welcomed the solid results and early signs that AI spending is already delivering commercial benefits. https://www.home.saxo/content/articles/equities/googl-earnings-30102025

After the expecte rate cut, Powell emphasized the rate cut was mainly a "risk management" move amid rising concerns about a weakening labor market and liquidity tightening. However, he surprised markets by signaling that a December rate cut is far from certain, highlighting a split among FOMC members about future policy. Powell expressed caution regarding economic data amid the ongoing government shutdown, indicating rising unemployment risks are a bigger concern than inflation. He also noted the economy’s devide between higher- and lower-income groups and refrained from judging financial markets' current levels.

Market reactions were mixed: U.S. stocks showed modest gains but trimmed earlier rallies, bond yields on 10-year and 2-year Treasuries rose slightly, and the dollar strengthened by around 0.2% against major currencies like the euro. Overall, Powell’s cautious tone and lack of a commitment to further cuts introduced uncertainty, causing investors to recalibrate expectations for upcoming Fed moves. The probability of a rate cut in December is now 70%. The BoJ left rates unchanged as

The USD Index rises to 99.09, ten year yields cross north of the 4% to 4.07%. EURUSD is 1.1620, GBPUSD is 1.32 and USDJPY 153.40.Gold and Silver remain interesting at 3975 and 47.80. Bitcoin falls to the 110k.

• Headlines:
  At the summit with President Xi, Donald Trump said he had agreed with President Xi Jinping to trim tariffs on China in exchange for Beijing cracking down on the illicit fentanyl trade, resuming U.S. soybean purchases and keeping rare earths exports flowing
• In the Netherlands, the far right Geert Wilders lost voter support and D66, a centrist party gains.
• Open AI is set up to be the largest IPO ever at a valuation of approximately 1 trillion USD, in the second half of 2026

From here, we focus on the Swiss KOF, the EU GDP, the ECB rate decision and Mrs Lagarde before the results of Apple and Amazon tonight… The US GDP release has been cancelled due to the lockdown in the US. 

Thursday, Oct 30     Swiss KOF, DE Unemployment & CPI EU GDP, U.S. Q3 GDP (Advance) - Eurozone GDP (Q3, advance) - Eurozone Unemployment Rate (Sep) - ECB Meeting - Japan Unemployment Rate Bank of Japan Meeting

Apple, Amazon, Coinbase, Reddit, Roku, Cloudflare, Lilly, Merck, Comcast Shell

Friday, Oct 31           EU Inflation, U.S. PCE  - U.S. Chicago PMI (Oct) - Canada GDP (Aug) - Eurozone CPI (Oct, preliminary) - U.K. Nationwide House Prices (Oct)

Exxon, Linde, CBOE