Access both platforms from your single Saxo account.
London Quick Take - 5 Things to Know in Markets Today - 30 Oct
5 Things to Know in Markets Today
1.Tech rout deepens as investors question AI returns
Tech carnage as October wraps up: Alphabet –12%, Nasdaq-100 –1.4% and after-hours Amazon –7%, Intel –25%...NDX futs taking a beating some more down –2%. This is starting to look quite ugly. Amazon missed on the top and bottom lines and reported deeper negative free cash and stuck to its capital expenditure forecast of $220 billion. Free turned negative for a second straight quarter at -$42.4bn, a figure that fresh fears about the pace of capex vs monetisation. Intel dropped like a stone after delivering weaker-than-expected guidance for the fourth quarter on softness in its core PC market where shipments fell –4%. Intel’s client computing and physical AI group revenues declined 5% year-on-year to $8.1bn, missing estimates, though there was a bright spot in data centre and AI revenue, which rose 78% to $7.3bn.
The S&P 500 notched its first decline in four days as Alphabet cracked after its earnings disappointed sky-high expectations. Caterpillar also had a horrid day despite posting better-than-expected revenue and earnings as sales for its construction industries business came in a bit soft. The scale of these moves on solid-enough earnings suggests markets have baked in super-strong earnings momentum so anything within the prints that suggests anything other than near-perfect execution is being severely punished. Neoclouds were hit as Microsoft's lower-than-expected capex number indicated that infrastructure companies are taking longer to build out data centre capacity - CoreWeave and Nebius down ~30% in October. Huge losses for Marvell, Fortinet and ServiceNow yesterday and there is some real damage across the board in pre-mkts with Reddit –22%, Twillio -17%, Illumina –11%, Stryker –10%, Dell-9%, AMD –8% as of pixel time. Overnight damage was focused on the big tech names in Asia with Samsung Electronics –3% and SK Hynix –7% to drag the Kospi –3.5% lower, while the Nikkei 225 fell 25% with Softbank now almost 50% down from its June peak. This could be a good time for investors to pick up some babies thrown out with the bath water, but it looks like there is a bit of buyers' strike on anything AI-related until this shakes out a bit more.
The S&P 500 notched its first decline in four days as Alphabet cracked after its earnings disappointed sky-high expectations. Caterpillar also had a horrid day despite posting better-than-expected revenue and earnings as sales for its construction industries business came in a bit soft. The scale of these moves on solid-enough earnings suggests markets have baked in super-strong earnings momentum so anything within the prints that suggests anything other than near-perfect execution is being severely punished. Neoclouds were hit as Microsoft's lower-than-expected capex number indicated that infrastructure companies are taking longer to build out data centre capacity - CoreWeave and Nebius down ~30% in October. Huge losses for Marvell, Fortinet and ServiceNow yesterday and there is some real damage across the board in pre-mkts with Reddit –22%, Twillio -17%, Illumina –11%, Stryker –10%, Dell-9%, AMD –8% as of pixel time. Overnight damage was focused on the big tech names in Asia with Samsung Electronics –3% and SK Hynix –7% to drag the Kospi –3.5% lower, while the Nikkei 225 fell 25% with Softbank now almost 50% down from its June peak. This could be a good time for investors to pick up some babies thrown out with the bath water, but it looks like there is a bit of buyers' strike on anything AI-related until this shakes out a bit more.
2.AI assumptions tested
The scale of the moves suggests investors had priced in near-perfect execution and earnings momentum. Alphabet's challenges highlight a broader problem: AI is disrupting traditional search economics faster than it is replacing lost revenue. While pressure on Google's core business raises concerns, it does not necessarily undermine the wider AI theme. Instead, investors are becoming more critical about whether the hundreds of billions being spent on AI infrastructure will generate sufficient returns. FWIW: The selloff looks a bit indiscriminate and shows that investors don't just want capex, they want to see the returns already. As for Alphabet, the cannabalisation of the core search business is the big concern specific to Alphabet rather than the wider AI story but it's all kind of connected. Google needs AI answers to continually improve to keep people coming back but it earns less on those queries than on traditional search. It has to shore up its core search business while also being at the forefront of disrupting the entire model. For the wider AI trade, we are starting to see a more critical evaluation of the return on investment from this monster AI splurge. If anything, the fact that core search is under pressure from AI is not a sign that the AI ecosystem is struggling.
3.FTSE 100 stands out amid global market weakness
Chipmakers weighed on a couple of the European bourses with the Stoxx 50 down –0.8% on ASML weakness. Shares in London however rose. The FTSE 100 looks like an island of tranquillity amid all the carnage in tech. It's often been the outperformer when the global market leaders – tech – turns south. Valuations remain compelling and earnings growth is good. UK stocks trade around 12x forward earnings, against the median since 1990 of 12.8x, while earnings are due to rise by 16% this year before slowing to 9% in 2027. The FTSE 100 remains a safe bet, fundamentally anchored by old-economy sectors that deliver tangible returns. It might not be flashy but it's reliable. We're also seeing some haven bid for bonds - less AI capex = less crowding out. And the dollar is down for a third day, lifting GBPUSD through 1.34 to test the 200-day simple moving average resistance at 1.34277 having blitzed the 50-day line at 1.3380 earlier today. The drop in US tech stocks and especially the significant post-FOMC drop in US treasury yields may be the drivers. EURUSD also trades firmer at 1.120 after touching a fresh 18-month low on the ECB decision yesterday (more below).
4.Strong UK corporate earnings support the market
Tech names were generally bid likely on the meltdown in AI-related names elsewhere. Experian, RELX and WPP were among the strongest gainers, all exposed to AI disruption. BT shares rallied 5% on reports Virgin Media is close to a deal to use its rival's fibre broadband network.
BP shares hardly moved despite a record profit surge on like Shell, insanely good refining margins. Profits surged 280% to $8.5bn, up from $2.21bn last year and well ahead of expectations of $7.33bn. Margins on barrels rose to $47 from $30. The bumper earnings have seen net debt nearly halve this year.
AstraZeneca shares rallied 3% as the company announced plans to restructure to boost its late-stage pipeline as it says it remains on track to hit $80bn in annual revenue by 2030. Operating profits last quarter rose 22% to $4.39bn with revenue +7% to $16.2bn.
NatWest closed the UK bank reporting season with pre-tax profits +1.9% to £2.2bn, despite an +8.9% rise in net interest income to £3.6bn as impairments rose 80%. That's the weakest profit growth among the UK banks this quarter, but NatWest is near the top when it comes to return on tangible equity.
BP shares hardly moved despite a record profit surge on like Shell, insanely good refining margins. Profits surged 280% to $8.5bn, up from $2.21bn last year and well ahead of expectations of $7.33bn. Margins on barrels rose to $47 from $30. The bumper earnings have seen net debt nearly halve this year.
AstraZeneca shares rallied 3% as the company announced plans to restructure to boost its late-stage pipeline as it says it remains on track to hit $80bn in annual revenue by 2030. Operating profits last quarter rose 22% to $4.39bn with revenue +7% to $16.2bn.
NatWest closed the UK bank reporting season with pre-tax profits +1.9% to £2.2bn, despite an +8.9% rise in net interest income to £3.6bn as impairments rose 80%. That's the weakest profit growth among the UK banks this quarter, but NatWest is near the top when it comes to return on tangible equity.
5.Central banks stay cautious as growth holds up
The Bank of Japan left rates on hold and said its long-awaited goal of reaching 2% inflation had been reached. Markets expect the BoJ to hike in December.
The ECB left rates unchanged but the big story was that Christine Lagarde plans to stand down from her role as president early. Inflation risks remain tilted to the upside as energy prices remain elevated, the persistence of which could start to feed into broader inflation through indirect and second-round effects, though Lagarde noted that they don't see these risks as "material" at the moment. The reason to remain on hold therefore is that second-round effects are not materialising yet and because the rise in bond yields has done some work hard work in tightening financial conditions.
The real interest is around whether the ECB might intervene through the Transmission Protection Instrument (TPI), which allows it to purchase bonds of countries whose financing conditions have worsened because of non-country-specific reasons. On the topic of the blowout in Franco-German yield spreads, she said: "Should market development threaten the smooth transmission of our monetary policy, including through unwarranted and disorderly market movements, we have instruments available to respond, and the criteria and conditions under which this applies are well known, they are published." Of course, to qualify for the TPI the country in question needs to meet the EU's fiscal criteria – something that hardly applies to France.
US economic data came in supportive of a rate hike and begs the question: why didn't the FOMC raise rates on Wednesday? The economy expanded at an annualised rate of 3.4% in the third quarter, beating expectations for 3.2% as consumers remained strong, whilst also marking an acceleration from the 2.25 recorded in the second quarter. Consumer spending rose 3.8%, whilst the Fed's preferred gauge of inflation, the PCE index rose +0.5% on the month and +3.6% annually. The core PCE rose +0.3% MoM and 3.1% YoY.
Just a couple of words on the Binance hack – caveat emptor. Bitcoin is down 35 to $77k afterwards. Here's TRM: "October 29, 2026, an attacker moved approximately USD 6.36 billion out of Binance wallets on ten blockchains, most of it in about 20 minutes starting at 20:05 UTC. That makes this the largest crypto theft on record."
The ECB left rates unchanged but the big story was that Christine Lagarde plans to stand down from her role as president early. Inflation risks remain tilted to the upside as energy prices remain elevated, the persistence of which could start to feed into broader inflation through indirect and second-round effects, though Lagarde noted that they don't see these risks as "material" at the moment. The reason to remain on hold therefore is that second-round effects are not materialising yet and because the rise in bond yields has done some work hard work in tightening financial conditions.
The real interest is around whether the ECB might intervene through the Transmission Protection Instrument (TPI), which allows it to purchase bonds of countries whose financing conditions have worsened because of non-country-specific reasons. On the topic of the blowout in Franco-German yield spreads, she said: "Should market development threaten the smooth transmission of our monetary policy, including through unwarranted and disorderly market movements, we have instruments available to respond, and the criteria and conditions under which this applies are well known, they are published." Of course, to qualify for the TPI the country in question needs to meet the EU's fiscal criteria – something that hardly applies to France.
US economic data came in supportive of a rate hike and begs the question: why didn't the FOMC raise rates on Wednesday? The economy expanded at an annualised rate of 3.4% in the third quarter, beating expectations for 3.2% as consumers remained strong, whilst also marking an acceleration from the 2.25 recorded in the second quarter. Consumer spending rose 3.8%, whilst the Fed's preferred gauge of inflation, the PCE index rose +0.5% on the month and +3.6% annually. The core PCE rose +0.3% MoM and 3.1% YoY.
Just a couple of words on the Binance hack – caveat emptor. Bitcoin is down 35 to $77k afterwards. Here's TRM: "October 29, 2026, an attacker moved approximately USD 6.36 billion out of Binance wallets on ten blockchains, most of it in about 20 minutes starting at 20:05 UTC. That makes this the largest crypto theft on record."