Market News

After all that waiting and wondering, what exactly did we learn from the Fed yesterday? Judging by the market reaction and pricing, I would say not a whole lot.

Fed chair Warsh spent a good chunk of time talking, even though it was a shortened press conference, yet December rate hike expectations did not materially change by much. All in all, quite the productive afternoon for the central bank, eh?

If I had to pack all of it in a sentence, I'd call it a whole lot of nothing for December market pricing but not necessarily a meaningless Fed meeting.

Prior to the decision, traders had priced in roughly 88% odds of a 25 bps rate hike for December. And now after Warsh's press conference? That sits roughly around 82% odds. If terms of basis…

Heading into the big tech earnings releases yesterday, Wall Street was hoping for a little reassurance that all those billions being poured into AI would eventually pay off. Instead, Alphabet has just handed investors another reason to question whether the AI spending frenzy is getting a little out of hand. Well, so much for big tech earnings coming to the rescue, eh?

S&P 500 futures are now down 0.5% and Nasdaq futures down by 1.4% as the market digests a rather mixed bag of earnings overnight.

The biggest culprit? Alphabet (or Google if you need another reminder of the face behind the mask).

Shares are down by roughly 10% in after-hours trading, wiping out almost $400 billion off its market value. The earnings release showed Google Cloud…

With major banks now aligned on a November hike, the decision itself is close to fully priced. The market focus shifts to the RBA’s guidance and whether it leaves the door open to February, which is where the Australian dollar and front-end yields have room to move. A hawkish statement that keeps February live would support the currency, while any signal of a pause would likely see it give back ground. Energy is the main external driver: an escalation in the Middle East that lifts oil would strengthen the case for further tightening, while a US-Iran deal after the midterms would ease it.

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The banks have stopped asking whether the RBA hikes next week and started asking when it stops, and the answer may depend as much on the Middle East…

• RBA set for fifth 2026 hike to 4.85% as banks flag risk of another move in February
• More on Samsung: shares slide up to 6.6% as shareholder-return plan is delayed to January
• US government builds $30bn stock portfolio across 43 deals in chips, minerals and quantum
• Alphabet slides over 9% after hours as search miss and $9bn cash burn overshadow Cloud
• Samsung Q3 operating profit jumps ninefold to record 107 trillion won on AI chip boom
• RBNZ’s Breman says chances of a December rate hike are high after surprise hold at 2.75%
• PBOC sets USD/ CNY reference rate for today at 6.7147 (vs. estimate at 6.6596)
• The view from China: CITIC Securities still sees a 25bp Fed hike in December
• NZ business confidence rises to +53 as pricing intentions hit highest…

The reaction suggests investors in memory chips are now pricing capital returns, not just earnings, so a payout delay can outweigh a record quarter. Analysts see scope for near-term rotation from Samsung into SK Hynix and Micron, which could widen the valuation gap between the Korean rivals until January. Samsung’s heavy capex lift is good news for chip equipment suppliers, but it competes directly with shareholder returns. Expect the stock to stay sensitive to any early hints about the size of the January plan.

--- Samsung made more money than any tech company ever has in a quarter, then told shareholders to wait until January to find out how much of it they’ll see.

Summary:

• Samsung shares fell as much as 6.6%, erasing earlier gains
• The…

The PBOC allows the yuan to fluctuate within a +/- 2% range, around this reference rate. More here on this.

• CNY strongest seeting since 2 February, 2023. 
• PBOC injects 1 trillion yuan through overnight reverse repos
• PBOC injects115 billion yuan of 7-day reverse repurchases
• 1 trillion yuan of overnight reverse repurchase matured today, thus the net injection was 115 billion yuan

This article was written by Eamonn Sheridan at investinglive.com.

Samsung’s guidance that the chip shortage will deepen next year is the most market-relevant line. It points to continued pricing power for memory makers and supports the read-through from SK Hynix’s upbeat outlook a day earlier. That backdrop fits with the heavy capex plans from US hyperscalers, Microsoft’s call among them, which underpin demand. The net profit miss may temper the reaction, though the operating figures were pre-announced and the market will focus on the outlook. The weakness in mobile and display highlights how concentrated Samsung’s earnings have become on a single cycle, leaving the stock exposed to any wobble in AI spending sentiment.

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Yesterday:

• SK Hynix Q3 operating profit beats at 83tn won, unveils 100tn won…

The market is rewarding AI spending that generates cash and punishing spending that consumes it, judging by Microsoft’s after-hours gain against Alphabet’s slide. For the AI supply chain, Alphabet’s guidance for significantly higher 2027 capex adds to Samsung’s call that chip shortages will deepen, supporting chip and data centre names even as it weighs on Alphabet itself. The search miss is the more lasting concern, as it gives the first concrete evidence for the long-feared risk that AI answers erode Google’s core ad revenue. Expect pressure on wider megacap tech sentiment at the open, with attention turning to Amazon’s results.

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Google Cloud is booming, but investors just learned that AI may be eating search and that the bill for the…

For investors, a government stake has become a recurring catalyst in chips, critical minerals and quantum computing. Announcements have tended to support the share prices of the companies involved, and they add a policy premium to those sectors. The Intel swing shows the flip side: government holdings are as exposed to market volatility as any investor’s. The concentration in Intel also leaves the portfolio’s headline gains sensitive to a single stock. The untested legal footing of some deal structures is a risk worth watching, since any legal challenge could unsettle the companies involved. The Venezuelan oil stake is a small but notable link between the portfolio and energy policy.

Washington now runs a stock portfolio worth tens of…

The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs. These include the previous day’s closing price, movements in major currencies, particularly the US dollar, broader…

CITIC’s call reinforces the market’s December hike pricing, but its view that the terminal rate stays near current levels points to a shallow end to the cycle rather than an extended run of increases. That combination supports the dollar into December, with less upside for Treasury yields further out. On oil, the brokerage sees no clear de-escalation path yet between the US and Iran, which argues for crude holding its risk premium. That in turn keeps upward pressure on the inflation backdrop the Fed is reacting to. Its note that dollar liquidity needs a fresh catalyst suggests funding conditions are unlikely to ease on their own in the near term.

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Earlier:

• Recap: Fed holds at 3.75%-4% in 10-2 vote as Cook dissents for a hike, December…

Breman’s comments push back against the dovish reading of Wednesday’s hold and look aimed at steadying the New Zealand dollar, which she has said could add to imported inflation if it stays weak. Pricing of around 77% leaves room for further repricing toward a December hike if incoming data cooperates, which would support the currency and front-end yields. Her emphasis that timing is uncertain keeps the risk of a second hold alive, so the kiwi’s recovery may be gradual rather than sharp. Fuel prices remain the main external swing factor, linking the RBNZ path to oil and the Iran conflict.

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A day after a hold that sank the kiwi, Breman is all but promising December, though she isn’t quite ready to put it in writing.

Summary:

• RBNZ Governor…