Markets
The 7am Briefing: Oil Falls 3% on Iran Talks as Apple Reports Tonight
Futures rebound from Friday's rout, Fed hawks speak up, and ISM lands at 10 a.m. ET.
HedgeWeekly Video & Briefing Desk ·
Top line: Four dollars: that is how far Brent has slipped from Friday's high as Iran's envoys keep talking in Qatar. US futures are clawing back part of Friday's tech rout, and Apple reports tonight. Here's the overnight picture and the day ahead, in about four minutes.
Before the bell: US futures as of 5:00 a.m. ET; other prices early Monday. S&P 500 futures +0.51% · Nasdaq 100 +0.87% · Dow +0.52%. 10-year Treasury about 4.93% · 2-year about 4.60%. WTI crude −4.33% to about $99.61 · Brent −2.8% to about $110.24. Gold +0.22% to about $3,908 · Dollar index little changed at about 101.94. Bitcoin +0.22% to about $77,976.
Markets and macro: 1. Futures try to steady after Friday. The S&P 500 fell 1.8% on Friday, its worst day since June, and the Nasdaq Composite lost 2.9%. Intel dropped 28.6%, its worst day since 1974, and a chipmaker index fell 7.2%. This morning Nasdaq 100 futures are up about 0.9%, Yahoo Finance data show. The Nasdaq Composite lost 5.2% in October. The VIX, Wall Street's fear gauge, eased to about 18.8.
Markets and macro: 2. Oil slides on Hormuz diplomacy. Brent fell 2.8% to $110.24 early Monday, AP reported, after trading above $114 on Friday, according to Saxo. Iran's foreign minister said negotiators in Qatar are discussing a proposal that could reopen the Strait of Hormuz within two days if Washington meets several conditions. He said there were no direct talks with the US. Separately, OPEC+ confirmed on Sunday that December output targets stay unchanged, Newsquawk reported.
Markets and macro: 3. Two Fed officials want more hikes. Dallas Fed President Lorie Logan said on Friday that the Fed needs at least two more quarter-point increases. Alberto Musalem of the St Louis Fed said further tightening will be needed "and soon". The Fed held its range at 3.75% to 4% last week, with two dissents in favour of a hike. Chicago Fed President Austan Goolsbee speaks at 11:15 a.m. ET today, Finviz's calendar shows.
Markets and macro: Also overnight: South Korea's Kospi rose 2.2% to 5,859.08 as SK Hynix gained 3.8%, while Japan's Nikkei 225 slipped 0.3%. China's central bank and securities regulator met financial firms on Monday to discuss market support, after October's factory gauge fell back into contraction.
Hedge fund moves: Pimco and Oaktree bid for Arini's bonds. The credit fund has received bids from both firms for some of its high-yield debt holdings, Hedgeweek reported, citing Bloomberg. The talks are preliminary. Arini is mainly selling its more liquid, better-performing positions, including Sabre debt. Its flagship fund lost about 26% this year through October 23, on course for its first annual loss. The firm still raised $1.5 billion earlier in October.
Hedge fund moves: Brazil's election burned macro funds. Managers that bet against a Lula win took heavy losses, Hedgeweek reported, citing Bloomberg. Vista Capital's Multiestratégia fund fell 24% in one day and Mar Absoluto 15%. Brazilian hedge funds had their worst day since 2017. Over the week, the Ibovespa fell 18% and the real weakened about 8.5% against the dollar. Local funds already had R$9.3 billion of net outflows in the first nine months.
Earnings to watch: Apple reports after the close. Analysts expect $1.99 a share on revenue of $113.4 billion, TipRanks reported. Options imply a move of about 4.25%. Palantir also reports tonight, with a 5 p.m. ET call. MarketBeat puts consensus at about $0.41 a share and $2.18 billion of revenue. Marriott reports before the open, with consensus earnings of $2.87 a share, Stock Titan's calendar shows. Estée Lauder and IDEXX also report this morning. Vertex Pharmaceuticals reports after the close, with consensus of $4.36 a share. AMD follows on Tuesday night.
HedgeWeekly Stockwatch:
Today's calendar (ET): 10:00 a.m. ISM manufacturing for October: forecast 54.7, prior 54.5. Prices paid: forecast 77.5, prior 77.9. 10:00 a.m. Construction spending for September: forecast +0.6%, prior +0.9%. 11:15 a.m. Chicago Fed President Austan Goolsbee speaks. 11:30 a.m. Three- and six-month Treasury bill auctions; 3 p.m. Treasury borrowing estimates. Later this week: midterm elections Tuesday, Bank of England Thursday, October jobs report Friday at 8:30 a.m.
Number of the day: About 340 basis points. That is the extra yield on US high-yield bonds over Treasuries, close to an 18-month high, according to Saxo. A basis point is one hundredth of a percentage point. Wider spreads raise borrowing costs for weaker companies, and they are the same pressure hurting credit funds such as Arini.
One thing to watch: Does Apple's report calm the AI-spending debate or add to it? Apple's iPhone and services numbers test consumer demand rather than data-centre spending. Watch whether tonight's moves in Apple and Palantir change the tone in Nasdaq futures before Tuesday's vote.