Today, investors need to pay attention to multiple market signals simultaneously: on one hand, Apple's financial report showed decent revenue, but the profit margin guidance fell short of expectations, putting pressure on the entire tech sector. On the other hand, there are reports of a surprise U.S. raid on Iran's Geshem Island, which led to a rapid increase in crude oil prices overnight and heightened enthusiasm for oil trading. Today is also the day of the U.S. mid-term elections.
Market Trends: Entering a Correctional Range
The market panic triggered by a single stock has spread to the Asian markets: stock markets in South Korea and Taiwan, China, where technology stocks account for a high proportion, have seen significant declines, and chip stocks in Europe have also fallen generally. The Nasdaq 100 index closed in a correction zone on Monday, falling more than 10% from its historical high set on October 6th.
Although yesterday's U.S. stock market closed without much fluctuation, the oil market is once again in turmoil, and the mid-term elections have begun. Today's market remains full of uncertainties.
Market Analysis
Group analyst Daniel Newman, in an interview, stated that the market trend for the AI sector in the next phase does not depend on financial report data. "Compared to the release of any financial report, this month's ceasefire agreement will be more beneficial to the AI sector. Lower oil prices can alleviate the pressure of interest rate hikes in December and at the same time reduce the capital costs for all data center builders."
Upcoming: The program “Squawk Box” will feature an interview with Bill Ackman, the CEO of Pantheon Square. Previously, Ackman has stated that geopolitical conflicts and inflation are suppressing upward momentum in the market. This time, he will share his views on market trends.
Key Developments: Apple Suffers a Blow
Apple's stock price is under pressure ahead of the earnings report. Although revenue exceeded expectations, the prospects for profit margins are disappointing.
Core financial report data:
- Earnings per share: EPS $2.10, market expectation is $1.99
- Revenue: $114.48 billion, market expectation was $113.39 billion
Although Apple's entire product line has seen strong sales performance, due to the global shortage of memory chips, the company has set a gross margin target of 45% to 46%.
Journalist Robert Humm stated that it was almost four years ago since Apple last provided such a low gross margin forecast.
New CEO John Ternus said to Mackenzie Segalos during the financial report conference call, "We have achieved a lot, and at this moment, we are absolutely convinced that the best times are yet to come."
Institutional target price adjustments: Morgan Stanley has lowered Apple's target price from $355 to $350; JPMorgan Chase has lowered it from $360 to $355.
Developments in the situation: Sudden military strikes
It is reported that the US military attacked Qeshm Island overnight, and Iran stated that it will respond "forcefully" to the US actions.
An American official revealed that the United States has been carrying out "limited strikes" against Iran in recent weeks. The report cited anonymous officials as saying that the U.S. is deliberately keeping a low profile regarding these military actions to avoid sending signals that could lead to an escalation of large-scale conflict.
Before the mid-term elections, the Trump administration has been downplaying expectations of large-scale armed conflicts; Vice President Pence, in an interview with CNN, expressed confidence in the "possibility of reaching a negotiated settlement."
Stimulated by this news, oil prices rebounded from the heavy selling pressure seen on Monday.
Election and Economy: The Day of Voting Approaches
Midterm elections have officially begun, and the market is analyzing the potential impact of the election results on the stock market.
Luke Fawcett outlines how the election will reshape the prospects of companies that are heavily influenced by Washington policy, with a focus on defense, healthcare, cryptocurrencies, and the AI industry.
Historical data shows that the stock market usually sees an upward trend after mid-term elections.
Journalist Eamon Jarvis will interpret what unexpected areas of cooperation may arise between the two parties on populist policy issues.
