Morning wrap (06.11.2025)

US Equities Retreat: US indices recouped some recent losses, but futures ultimately pared yesterday's sharp gains. The S&P 500 closed the cash session up 0.37%, while the Nasdaq rose 0.65%.

Mixed Asian Session: Trading was mixed across Asia; the Nikkei 225 (JP225) fell 0.5%, contrasting with Chinese indices (CHN.Cash and CH50) which gained more than 1%.

Oil Attempts Rebound: Crude oil is attempting a slight recovery, gaining 0.35%, though WTI remains priced below $60 per barrel.

Precious Metals Edge Higher: Gold is up 0.2%, trading a dozen dollars shy of the $4,000 mark, and Silver gained 0.7%, surpassing the $48 level.

US Dollar Weakens: The dollar is distinctly lower today; EUR/USD is back above 1.15, AUD/USD trades above 0.65, and GBP/USD defends the 1.30 support level.

Qualcomm Beats Expectations: Qualcomm reported strong results for its fiscal Q4 2025, providing upbeat guidance. Revenue hit $11.27bn (vs. $10.8bn forecast), marking a 10% YoY increase, with adjusted EPS at $3.00 (vs. $2.87 expected). However, the firm posted a GAAP loss of $3.12bn due to a one-off $5.7bn tax-related write-down. Shares fell 3% in after-hours trading.

Arm Outperforms: Arm delivered robust results for fiscal Q2 2026, posting revenue of $1.14bn (a 34% YoY jump) and EPS of 39 cents (vs. 33 cents forecast). Arm guided for Q3 revenue of $1.225bn and EPS of $0.41, exceeding market expectations. Shares gained 4.5% post-market.

China Resumes US Wheat Purchases: China made its first purchase of US wheat in over a year, comprising two December shipments totaling 120k tonnes. This is seen as a positive signal indicating China's intention to honour the trade agreement (at least temporarily). Prices have already surged to 550 cents per pound, the highest since July.

Snapchat Jumps on AI Deal: Snapchat surged 14% in after-hours trading following the announcement of a partnership with Perplexity to integrate AI search and other tools into the social media app. Snap's stock has lost over 30% this year and more than 80% over the past five years.

Morgan Stanley Hikes Oil Forecast: Morgan Stanley raised its oil price forecast to $60 for 2026, citing the OPEC+ decision to maintain current output levels through the first quarter of next year. Furthermore, MS noted that the actual production increase from OPEC+ between March and October was only 500k bpd, significantly below the declared 2.6mn bpd.

Trump Deliberates Venezuela: Wall Street Journal reports suggest Donald Trump is hesitant about a direct attack on Venezuela. The US has not clearly stated the objective of the recent escalation (beyond tackling drug trafficking), raising questions on whether the goal is to oust Maduro or push for further concessions.

Rate Cut Probability: TD Securities indicates a high probability of an interest rate cut during today's central bank decision.

BoJ Rate Hike Opposition: The leader of Japan's Innovation Party, part of the ruling coalition, warned that a near-term rate hike by the Bank of Japan (BoJ) could send a negative signal to businesses regarding government plans. USD/JPY holds near the 154 level.

OpenAI Seeks Massive Credit: OpenAI is reportedly asking the US government for $1 trillion in loan guarantees to fund its AI infrastructure expansion.

Trump's Announcement Amidst Air Crisis: Donald Trump is scheduled to make a statement today at 3:00 PM (CET). Media outlets suggest the announcement aims to divert attention from the US air travel crisis caused by the government shutdown limiting the work of air traffic controllers. The number of flights is sharply declining, with plans to close 30 airports.

ECB Conference Begins: The ECB's Money Market Conference starts today, featuring speeches by key officials including ECB's Schnabel, Fed's Williams, and SNB's Tschudin.

Rare Earth Cooperation: Japan and the US are discussing a joint venture for rare earth mineral extraction near Japan's Minamitoi Island. The move aims to reduce reliance on China, with preliminary extraction targeted to begin next year.