By Wayne Cole SYDNEY, Nov 2 (Reuters) – Stock markets stabilized in Asia on Monday as investors hoped Apple’s earnings later in the day would provide some relief to concerns about AI’s cash burn, while oil prices fell after talks between Iranian and Qatari mediators continued. Apple has been an oasis of “relative calm given that it doesn’t spend billions on data centers, and its shares have risen for four straight months to help it unseat Nvidia” as the world’s most valuable publicly traded company. Analysts expect quarterly earnings per share (EPS) of $2 on revenue of $113 billion, up from $1.85 in the same period last year. The company could also offer some guidance on the performance of iPhone 18 pre-sales, as pre-orders began in mid-October. The optimism helped S&P 500 futures rise 0.4%, while Nasdaq futures bounced 0.8%. The tech-heavy Nasdaq lost almost 7% in October, in its worst month since the ‘Liberation Day’ tariff drop in April 2025. Some upbeat news is urgently needed after concerns about negative cash flow and the scale of AI capital spending caused the cost of insuring against corporate defaults to soar last week. Intel’s nearly 29% drop on Friday has also raised the stakes for other chip groups, including AMD. An additional problem is the midterm elections in the United States, where a victory for Democrats in one or both chambers could result in more political obstacles for data centers. Analysts at Goldman Sachs expect capital spending by hyperscalers to nearly double to $800 billion this year and rise further to $1.2 trillion in 2027. At the same time, they expect the S&P 500’s earnings per share growth of nearly 30% in 2026 to slow to 18% next year. “The earnings results have underscored the fundamental challenge facing equity investors: Earnings growth is strong, but it is no longer accelerating,” Ben Snider, Goldman’s chief U.S. equity strategist, wrote in a note. “Likewise, the third quarter results support our view that AI investment spending will continue to grow, but that the growth rate of AI capital spending is peaking.” Adding to the atmosphere of unease were withdrawals from Binance as the world’s largest cryptocurrency exchange came back online on Sunday after hackers stole billions from the platform last week. Japan’s Nikkei fell 0.1%, but far from its initial lows, while South Korea added 0.8%, after losing 16% last month. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2%. In Europe, EUROSTOXX 50 and DAX futures rose 0.1%, while FTSE futures were flat. MORE RATE RAISES COMING The pullback in stocks last month provided a respite for safe-haven bonds, and investors wondered whether a sustained sell-off in the stock market could deter the Federal Reserve from raising interest rates in December. Futures still imply a 72% chance of a quarter-point rate hike, but they are now only pricing in 55 basis points of full adjustment compared to more than 70 basis points a month ago. 10-year Treasury yields rose to 4.941%, but remained well below their October high of 5.3645%, while 2-year yields stood at 4.612%. Among the central banks meeting this week, markets are betting on increases from the Reserve Bank of Australia, the Bank of England and the Riksbank, while the Bank of Norway remains on hold. Economic data due this week includes the influential US ISM manufacturing survey for October later on Monday, while the important payrolls report is due on Friday. Median forecasts are for an increase of 65,000 jobs, following the disappointing increase of 29,000 jobs in September, with the unemployment rate remaining at 4.2%. In currency markets, major currencies were virtually sidelined as all the action focused on stocks. The euro strengthened slightly to $1.1169, while the dollar was little changed at 157.75 yen. In commodities, oil prices fell as talks aimed at pushing forward a deal to end the US-Israel war against Iran continued, although oil tankers “continued to come under attack in the Gulf.” Brent futures fell 2.0% to $111.15 a barrel, although that follows a 13.6% rise in October, while U.S. crude futures fell 2.3% to $101.73 a barrel. [O/R] Non-interest-bearing gold rebounded 0.9% to $3,911 an ounce, after falling 6.8% last month amid rumors that some investors were having to sell to cover margin calls on stocks. [GOL/] (Reporting by Wayne Cole; Editing by Shri Navaratnam and Muralikumar Anantharaman)
