November opens upbeat as earnings strength and AI push capital flows
Global markets kick off November upbeat. Corporate earnings beat expectations and calmer trade signals are lifting risk appetite. Short term this matters because futures are trading higher, Treasury yields eased and the dollar sits near three month highs. Longer term the story focuses on AI driven capital needs, exemplified by Meta NASDAQ:META selling $30 billion of bonds to fund AI projects and heavy tech capex that could compete with sovereign borrowing. The U.S. Supreme Court tariff hearing, OPEC+ output moves and weak Asian factory surveys add regional tension for the week. The picture echoes prior profit rebounds while testing Treasuries for new sources of demand.
Market tone this morning and key indicators
World markets started November in an upbeat mood after a stream of strong company earnings and softer trade headlines. Wall Street index futures were higher ahead of the open. Treasury yields edged lower from Friday highs while the dollar nudged up to three month highs. Crude oil prices stayed steady despite OPEC+
OPEC+ met market expectations and surprised by agreeing to a small rise in output for December, then pausing increases for the first quarter of next year. That outcome helped keep energy markets balanced and supported refining margins, according to commentary in the newsletter. Equity markets responded positively to the combination of earnings momentum and a clearer near term supply outlook for oil.
Macro events to watch this week
The U.S. calendar brings October manufacturing surveys from S&P Global and the ISM that will act as a partial substitute for regular government data that is on pause because of the ongoing shutdown. The shutdown has stretched past 35 days, increasing the chance of policy responses if food aid and other programs lapse this month.
The U.S. Supreme Court will hear arguments this week about the legality of a broad set of tariffs put in place under emergency authority. A ruling that strikes down the use of the 1977 International Emergency Economic Powers Act could create a temporary procedural hiatus and the possibility of rebates for firms that already paid. Administration officials have said tariffs could remain under alternate legal authorities if the court rules against the current approach.
Overseas, business surveys showed Asia’s manufacturing hubs struggled in October, with weak U.S. demand and trade measures under the current U.S. administration weighing on factory orders across the region. Meanwhile U.S. trade policy comments included a statement that the most advanced chips from NVIDIA NASDAQ:NVDA will be reserved for U.S. companies and kept out of China and other countries, a development with clear implications for supply chains and regional investment plans.
Corporate earnings, AI spending and rising leverage
Corporate America delivered a strong third quarter that matters now for market positioning. LSEG data put Q3 annual profit growth for the S&P 500 at almost 14 percent, five percentage points faster than analysts expected a month earlier. That upgrade helped lift sentiment beyond the core AI winners and into a broader range of names on the earnings calendar.
Attention focused on whether the AI investment boom will start to compete with sovereign bond issuance for capital. Meta NASDAQ:META stood out after a $30 billion bond sale last week to help fund AI projects. The newsletter framed that deal as a sign that not all megacap AI spending is coming from cash reserves and that leverage is creeping into a capex boom estimated at about $400 billion this year.
The earnings diary for the coming session includes a mix of technology and industrial names that will test the breadth of the profit cycle. Companies scheduled to report include Palantir NYSE:PLTR, Eastman Chemical NYSE:EMN, The Clorox Company NYSE:CLX, IDEXX Laboratories NASDAQ:IDXX, The Progressive Corporation NYSE:PGR, ON Semiconductor NASDAQ:ON, Coterra Energy NYSE:CTRA, Diamondback Energy NASDAQ:FANG, Williams Companies NYSE:WMB, Loews NYSE:L, Vertex Pharmaceuticals NASDAQ:VRTX, Hologic NASDAQ:HOLX, Pinnacle West NYSE:PNW, SBA Communications NASDAQ:SBAC, Public Service Enterprise Group NYSE:PSEG, Simon Property Group NYSE:SPG and Realty Income NYSE:O. Results from those reports will clarify how much of the broader profit upgrade flows beyond the AI leaders.
Policy signals and market implications
Federal Reserve commentary is adding nuance to the rally. Several Fed bank presidents expressed discomfort with the decision to ease policy at recent meetings, and traders are now pricing roughly a 68 percent chance of a 25 basis point rate cut in December. That probability influences how much the market prizes yield sensitive sectors and how corporations plan funding.
Treasury Secretary Scott Bessent said parts of the U.S. economy, particularly housing, may already be in recession because of high rates and repeated his call for faster Fed easing. Comments like that keep the debate about timing and scale of rate cuts in focus, even as markets react to earnings and corporate financing moves.
The convergence of factors this week creates several trade cues. Corporate bond issuance of the size seen from Meta NASDAQ:META can attract demand away from Treasuries if leveraged capex continues. OPEC+ output choices and strong refining margins provide a counterbalance by supporting energy sector profits. The Supreme Court tariff hearing could alter the trade policy backdrop and create temporary frictions for companies exposed to international supply chains.
What traders and investors should watch today
Watch the October manufacturing surveys for signs of momentum or further weakness in factory orders. Monitor earnings headlines for the firms listed above for evidence that the profit upgrade has breadth. Track Treasury yields and the dollar for clues about how markets price policy risk and corporate funding needs. Keep an eye on headlines from the Supreme Court and any shifts in tariff implementation that could affect costs and cross border flows.
The immediate market narrative is one of strong corporate results and calmer trade rhetoric supporting risk assets. At the same time new forms of corporate financing to support AI and capex plans have the potential to alter demand patterns in fixed income. That combination will be the defining dynamic for the session as traders weigh earnings, policy commentary and geopolitical developments.
