Markets in a Minute - Artificial-(ly Expensive) Intelligence
By: Zac Martin
Author: Zac Martin, Investment Associate
Week Ending October 31st – Artificial-(ly Expensive) Intelligence
Following the FOMC Meeting on Wednesday the Federal Reserve decided to cut the Federal Funds Rate by another 0.25%, with two members dissenting. With one member voting for a 0.50% cut and another voting for no cut at all. Additionally, Fed Chair Jerome Powell, stated that goods inflation has begun to accelerate over the past several months and stated that in the near term: “risks to inflation are tilted to the upside and risks to employment to the downside—a challenging situation.” Leading the market’s probability for a December rate cut to decline to 63% from 94%.
Earnings: this past week saw earnings reports from 5 out of the 7 largest US companies, AAPL, AMZN, GOOGL, META & MSFT. Generally, reports from these 5 were strong with several beating analyst estimates by double digits. The metrics that appear to be driving these stocks return was more guidance around 2026 Capital Expenditures. Between AMZN, GOOGL, META & MSFT analysts now expect these companies to spend nearly $470Bln capital expenditures for 2026. Above is a chart from JPMorgan's Guide to the Markets, highlighting these expectations.
The Week Ahead:
- JOLTS Report (11/4)
- ISM Manufacturing PMIs & ISM Services PMIs (11/5)
- Nonfarm Payrolls & Unemployment Rate (11/7)
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