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Hello everyone, I am Leonie Kidd. Below is today's Morning Squawk.
Investors will be assessing two major market forces today: the Federal Reserve's decision, as well as another round of financial reports from technology stocks.
Inflation is the common theme. Policymakers say that AI-driven demand boom, along with energy prices, has pushed up prices.
Currently, the futures market remains stable, and Federal Reserve officials also expect to keep interest rates unchanged.
What's happening: The futures market remains on the sidelines.
As investors remain on the sidelines ahead of a series of significant market events this afternoon, today's trading session is expected to get off to a more cautious start.
The Federal Reserve will announce its decision at 2 p.m. Eastern Time, and policymakers are almost certainly going to keep interest rates unchanged.
- Expert Opinion:CNBC's Steve Liesman will closely watch how Chairman Kevin Warsh faces a dilemma: on one side is his principle of "institutional reform" monetary policy, and on the other side are the responsibilities of the management committee.
- Analyst's View:In the most recent report, Krishna Guha from Evercore ISI stated: " Warsh — although he claims to dislike overindulging investors, he is very alert to market risks — should be able to demonstrate a reassuringly stable stance. However, there are substantial risks at the execution level."
- Immediate Response:After the press conference, CNBC's Closing Bell will connect with veteran bond investor Jeffrey Gundlach to hear his immediate reaction.
CNBC will also conduct an exclusive interview with the Minister of Finance Scott Bessent, who will discuss topics such as the economy and mid-term elections with CNBC's Brian Sullivan. The interview will take place at 4 p.m. Eastern Time in the United States.
- Last speech:Last month, Bessent warned during an interview with CNBC that the Trump administration would not provide AI with "immunity from liability."
The opening接力 from Asia was relatively positive. South Korean stock indexes soared overnight, due to the strong performance of SK Hynix, a major market heavyweight. The company's third-quarter operating profit far exceeded expectations, and it returned $25 billion to its shareholders.
- Why it's important:This could bring further boost to chip stocks such as Micron. SK Hynix already has a significant influence on the South Korean stock index, and it also provided an early signal for the AI trading sentiment that occurred later in the day.
- Section Updates:On Tuesday, chip stocks drove a rebound on Wall Street, following Broadcom's announcement that a group of banks would provide $63 billion in financing to purchase its chips and networking solutions, which will then be leased to Anthropic.
Significantly Volatile Stocks: Another AI Pulse Test
After today's closing bell, the most anticipated financial reports will come from Alphabet and Microsoft.
- background:After a period of volatility, market concerns regarding artificial intelligence debt have eased to some extent. However, more tests regarding AI debt are yet to come. In addition to these two key financial reports, Oracle will also hold an Investor Day on Wednesday.
Prior to this, Europe's largest banks have been releasing their financial results in large numbers. Here is a brief review:
Swiss banking giant UBS reported a nearly 30% increase in pre-tax profits this quarter compared to the same period last year.
- CEO Perspective:Sergio Ermotti stated in CNBC's Squawk Box Europe that he observed strong capital inflows into various business departments of the bank.
Deutsche Bank recorded record profits for the third consecutive quarter, and the asset management scale of this German bank has increased to $2.2 trillion.
- CFO Perspective:Raja Akram discussed how to maintain competitiveness with American counterparts during an interview conducted by CNBC in Frankfurt.
Robinhood has declined in after-hours trading. Previously, the performance of this retail trading platform fell short of expectations, and the decline in cryptocurrencies dragged down profits. The stock has fallen by nearly 40% from its high point in October last year.
- Subsequent:“Squawk on the Street” will interview CEO Vlad Tenev at 10 a.m. Eastern Time.
IPO Observation: Jio Surging Up
Backed by Meta and Google, Jio Platforms saw its stock price rise by over 20% on its first day of trading in India. This marks the largest IPO in Indian history, raising $3.2 billion in funds.
- Why it's important:Nomura has given Jio Platforms a ‘buy’ rating and set a target price of 1,340 rupees, which indicates a potential upside of 19.7% compared to its IPO price. The brokerage firm stated in the report that Jio’s capital expenditure cycle is basically over, and it is expected that the company’s free cash flow will improve significantly.
Progress: Challenges between Brazil and Israel
Two key elections are creating geopolitical uncertainty.
After the second round of voting in Brazil, Senator Flavio Bolsonaro has fled to the United States.
Due to not complying with the order from Brazil's Supreme Court to submit his passport, he was granted a visa to travel to the United States.
- Why it's important:This will exacerbate the tensions between Brazil and President Lula, following U.S. President Donald Trump's claims that he believes there may have been "fraud" in the elections.
Meanwhile, it seems that there is no clear winner in Israel's elections after voting on Tuesday. According to exit polls, neither Prime Minister Benjamin Netanyahu nor challenger Gadi Eisenkot has approached the number of votes required to form a governing coalition.
The official results are expected to be announced on November 4th.
Finally...
Trump joked that $5,000 in his Florida Mar-a-Lago estate "could only buy one hamburger, maybe plus a small dessert." This statement came a week before the midterms, at a time when voters' concerns about the cost of living are dominating the political landscape.
Trump promised that if the Republicans win both the House of Representatives and the Senate, he would distribute $5,000 to each adult citizen, stipulating that this money must be spent within the United States.
On Tuesday, at a rally in Texas, Trump said, "Go to Florida, go to any one of our great places. You can even come to Mar-a-Lago. The problem is, 5,000 dollars will at most get you one hamburger, and maybe a small dessert on top of that."
CNBC's Steve Liesman, Jeff Cox, Jenny Lee, Davis Giangiulio, Hugh Leask, Anniek Bao, and Tanaya Macheel have contributed to this report.
Edited by John Melloy for this issue.
