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Hello everyone, I am Leonie Kidd. Below is today's Morning Squawk.
Impacted by the boost brought about by Anthropic, NASDAQ continued to rise for a second consecutive day, and global tech stocks also gained support overnight as a result.
The Federal Reserve is also a focal point of market attention. The market expects that at this week's meeting, the Fed is likely to adopt a hawkish stance of holding its ground, which will almost certainly pave the way for a rate hike in December.
Current progress: A brief upward trend
As the market continues to remain optimistic about the IPO announcement, which is of transformative significance for Anthropic, investors seem to be in for a second consecutive day of gains in the technology sector. Previously, this news had already driven a rebound in artificial intelligence-related stocks in Asia and Europe.
The company's major listing is set to take place on NASDAQ next month, which will test the enthusiasm of investors at that time. Previously, affected by the debt-driven super cycle of capital expenditure, over the past few weeks, the AI favorite stocks have faced selling pressure, and the market has experienced one of the most significant "regrettable buying" moments in the AI sector.
- The devil is in the details: A S-1 document over 300 pages long reveals a complex governance structure, with ordinary shareholders having virtually no say in their dealings with the founders.
- Chain reaction: The IPO of Anthropic will have a huge spillover effect.
Competing with the market for attention is the Federal Reserve.
The first day of the two-day conference will begin later today, and policy decisions will be announced at 2 p.m. Eastern Time on Wednesday.
- Why it's important: This is almost certainly a hawkish decision to hold back, as there is only one week left until the mid-term elections, yet inflation remains high.
- Analysis: The decision to raise interest rates in December is still under discussion. As indicated by CME FedWatch, the market pricing suggests a 90% probability of an interest rate hike in December.
Significant Fluctuations: Financial Report Observation
This morning, there was not much overall volatility on Wall Street before the market opened, but there were some fluctuations in European stock markets.
HSBC’s profits increased significantly in the third quarter, but still fell short of market expectations, and its conservative guidance led to a substantial decline in the bank’s stock price in London and Hong Kong.
- Analysis: Investors originally expected that HSBC would be able to benefit further during a phase when interest rate hikes were still favorable, and they also anticipated that the bank would benefit from the aggressive cost-cutting measures implemented by CEO Georges Elhedery.
Novartis raised its profit forecast earlier on Tuesday. The Swiss pharmaceutical company stated that despite the challenges posed by generic competition, sales still grew. The stock rose in Zurich.
- CEO Viewpoint: Novartis CEO Vas Narasimhan stated in the program “Squawk Box Europe” on CNBC that although the “patent cliff is a reality of this industry,” he remains confident in the company’s revised guidance.
Today's Financial Report: Aircraft and Canned Beverages
The following are several important financial reports released this morning:
Despite weakening demand in North America, Coca-Cola has still raised its profit forecasts. The company's stock price has risen by 32% so far this year, outperforming the S&P 500 index.
- Outlook: This is the third consecutive quarter that the beverage giant has raised its full-year forecast, driving its pre-market stock price higher.
Boeing has just announced that its third-quarter loss narrowed, driven by strong sales in its defense business.
- Exclusively: Phil LeBeau of CNBC will interview CEO Kelly Ortberg at 9 a.m. Eastern Time on the program Squawk on the Street. Last month, he told investors that it would take “a bit longer” than expected to stabilize production.
Election Economy: Only 7 days left...
There is only one week left until the mid-term elections.
- CNBC Survey: Find out what Republicans and Democrats fear most about each other. This survey might reveal "total polarization."
Finally...
Microsoft offers voluntary resignation programs to 60,000 employees, AI promotes efficiency improvement
Microsoft stated on Monday that it is offering buyout options to a wide range of employees as the company strives to strike a balance between investing in expensive artificial intelligence infrastructure and maintaining capital efficiency.
This software company announced a new voluntary resignation program for certain employees in the United States, Canada, India, and the United Kingdom, applicable to employees with 70 years of experience or less.
According to an informed source, approximately 60,000 people meet the qualifications. This individual has requested anonymity due to discussing internal matters. This move affects 27% of Microsoft's total workforce of around 223,000 employees.
CNBC's Ashley Capoot, Jason Gewirtz, Amelia Lucas, and Jordan Novet have contributed to this report.
John Melloy edited the content for this issue.
