On November 5 (Wednesday) before the U.S. stock market opened, the futures of the three major U.S. stock indices showed mixed performance.
Pre-market Market Movements
1. On November 5 (Wednesday) before the U.S. stock market opened, the futures of the three major U.S. stock indices showed mixed performance. As of the time of writing, the Dow Jones Industrial Average futures were up by 0.04%, the S&P 500 Index futures were down by 0.14%, and the Nasdaq futures fell by 0.24%.
2. As of the time of writing, the German DAX index was down by 0.37%, the UK FTSE 100 index rose by 0.04%, the French CAC40 index declined by 0.05%, and the Euro Stoxx 50 index fell by 0.41%.
3. As of the time of writing, WTI crude oil dropped by 0.31% to $60.37 per barrel, while Brent crude oil fell by 0.20% to $64.31 per barrel.
Market News
Under the ongoing U.S. government shutdown, the 'ADP Employment Report' has become a rare barometer for economic trends, and this week’s non-farm payroll report is still expected to be absent. The latest ADP data on employment growth in the U.S. private sector will be released at 9:15 PM Beijing time on Wednesday. The market expects that the ADP report, often referred to as the 'small non-farm payroll,' will show that the number of new jobs in U.S. private enterprises increased by 28,000 in October. This would represent a significant reversal from the previous month. Last month, the ADP report indicated a decrease of 32,000 jobs, mainly due to a sharp decline in the service sector. The October non-farm payroll report was originally scheduled for release this Friday, but due to the ongoing record-length federal government shutdown, it remains unclear when the data will be published. Economists have warned that, due to the lack of official data, private-sector survey data may be overestimated, potentially causing unusual volatility.
The U.S. government shutdown is set to break records! On November 4 local time, the U.S. Senate again failed to pass a temporary appropriations bill for the federal government with a vote of 54 against 44. This means the federal government will remain shut down, and the current shutdown, which began on October 1, is about to surpass the previous record of 35 days set during the shutdown from late 2018 to early 2019, becoming the longest government shutdown in U.S. history. Goldman Sachs believes that mounting operational and political pressures may push lawmakers to reach a compromise, predicting that the shutdown is most likely to end around 'the second week of November.' Analysts at the bank stated that the current shutdown could become the one with the largest economic impact on record.
Wall Street warns: Tensions in the money markets may persist until November, pressuring the Federal Reserve’s balance sheet reduction policy. The money market has just concluded a month of extreme volatility, with the Secured Overnight Financing Rate (SOFR) surging 18 basis points last Friday — the largest single-day move outside the Fed's rate hike cycle since March 2020. Although SOFR declined slightly on Monday following some relief from month-end pressures, it remains above the Fed's key policy benchmark rates, including the federal funds rate. Other short-term rates in the overnight repo market, where banks lend to each other, are also trading above the Fed’s administered rates. Wall Street analysts say the strain in the money markets could persist into November as elevated funding costs continue to pressure the Fed to act to replenish liquidity before halting balance sheet reduction next month.
Panic-driven capital floods into U.S. Treasuries as strategists bet yields will fall to 3.8%. Amid concerns over high valuations in tech stocks impacting global indices, the outlook for U.S. Treasury bonds, regarded as the safest asset globally, has become a focal point for investors. Prominent figures on Wall Street, such as Morgan Stanley’s Ted Pick and Goldman Sachs’ David Solomon, have warned of potential further declines in equities, prompting strategists to consider whether there is room for further gains in the $73 trillion bond market. DBS Bank believes that if equity markets continue to decline, the yield on the 10-year U.S. Treasury could drop from its current level of approximately 4.07% to 3.8%; TD Securities predicts that this benchmark yield will fall to 3.50% by the end of 2026.
Global risk asset slump spurs gold buying! Gold prices stabilize and rebound after a sharp decline. Gold rebounded after experiencing its largest single-day drop in more than a week, as widespread risk aversion across financial markets boosted demand for safe-haven assets. On Wednesday, spot gold was trading at $3,965 per ounce as of this writing. In the previous session, spot gold prices fell nearly 2% due to the fifth consecutive daily gain in the U.S. Dollar Index. Global equities, amid persistent concerns over lofty valuations, extended their declines on Wednesday following the worst sell-off in nearly a month, while most commodities also moved lower in tandem.
Stock-Specific News
AMD’s (AMD.US) confidence is sky-high, but its earnings outlook can't keep pace with the hype generated by its major deal with OpenAI. Earnings reports show that AMD’s total revenue in Q3 surged 36% year-over-year to $9.25 billion, surpassing market expectations of $8.7 billion; data center segment revenue grew 22% year-over-year to $4.3 billion, exceeding market expectations of approximately $4.14 billion. Operating profit surged 75% year-over-year to $1.27 billion, while adjusted earnings per share came in at $1.20, higher than market expectations of $1.17. The company expects Q4 revenue to range between $9.3 billion and $9.9 billion, with a NON-GAAP gross margin of approximately 54.5%, in line with market expectations. However, the market views AMD’s guidance as underwhelming and somewhat disappointing, especially after its major procurement agreements with OpenAI and Oracle led Wall Street to repeatedly raise AMD’s earnings forecasts and target price. AMD’s latest outlook indicates that the revenue contribution and returns from its AI GPU business may materialize more slowly than some investors had anticipated. As of this writing, AMD shares were down more than 5% in pre-market trading on Wednesday.
Super Micro Computer (SMCI.US) has missed earnings expectations for six consecutive quarters and once again failed to deliver on its promises. Earnings reports show that the company’s Q1 revenue was $5.02 billion, down from $5.94 billion in the same period last year and falling short of analyst expectations of $6.09 billion. Super Micro Computer reported adjusted earnings per share of $0.35, below the analyst forecast of $0.41, though it marked an increase from $0.07 in the first quarter of fiscal 2025. This performance marks the sixth consecutive quarter in which both profits and revenues have fallen short of analyst expectations. Super Micro Computer had already tempered investor expectations ahead of its Q1 results announcement. In late October, the company lowered its Q1 revenue guidance from the previously expected range of $6 billion to $7 billion to $5 billion. As of this writing, Super Micro Computer shares were down nearly 8% in pre-market trading on Wednesday.
Pinterest (PINS.US) issues weaker-than-expected Q4 revenue guidance as slowing ad spending and tariff impacts emerge as concerns. Earnings reports show that Pinterest’s Q3 sales reached $1.05 billion, up 17% year-over-year and in line with market expectations; adjusted earnings per share came in at 38 cents, below Wall Street expectations of 42 cents. The company forecasts Q4 revenue to be between $1.31 billion and $1.34 billion. The midpoint of its revenue guidance, at $1.325 billion, is below the analyst consensus of $1.34 billion. Chief Financial Officer Julia Donnelly noted that there were signs of slowing advertising expenditures in the U.S. and Canada during Q3. “We believe the current overall trends and market uncertainties will persist, and new tariffs introduced in Q4 will also impact the home category.” As of this writing, Pinterest shares were down more than 18% in pre-market trading on Wednesday.
Toyota Motor (TM.US) reports a 27% year-over-year decline in Q2 operating profit, missing expectations, but raises full-year profit and sales guidance. Earnings reports show that Toyota’s Q2 revenue reached ¥12.38 trillion, up 8% year-over-year; operating profit fell 27% year-over-year to ¥839.6 billion, marking the second consecutive quarter of decline and falling short of the widely expected ¥863.1 billion. The company expects its operating profit for fiscal 2026 to be ¥3.4 trillion (a 29% year-over-year decrease). While this forecast is below the consensus expectation of ¥3.9 trillion, it is higher than the ¥3.2 trillion forecast provided in the company’s Q1 earnings report, as cost-cutting efforts and robust hybrid vehicle sales are expected to offset the impact of U.S. import tariffs. As of this writing, Toyota Motor shares were down 2% in pre-market trading on Wednesday.
Novo-Nordisk A/S (NVO.US) reports an 11% year-over-year increase in Q3 sales. The company’s Q3 sales (on a constant currency basis) rose 11% year-over-year to DKK 74.976 billion; operating profit (on a constant currency basis) declined 21% year-over-year to DKK 23.682 billion; net profit was DKK 20.006 billion, down 27% year-over-year. Earnings reports indicate that Novo-Nordisk’s diabetes and weight-loss drug segment generated Q3 sales of DKK 70.26 billion. Wegovy’s cumulative sales for the first three quarters of the year amounted to DKK 169.296 billion ($25.4 billion), surpassing Keytruda ($23.3 billion) and Eli Lilly’s Tirzepatide ($24.8 billion). Additionally, the company updated its guidance, projecting 8%-11% sales growth and 4%-7% operating profit growth for 2025 on a constant currency (CER) basis. As of this writing, Novo-Nordisk shares were up more than 2% in pre-market trading on Wednesday.
Q3 revenue and gross profit both exceed expectations! Rivian (RIVN.US) achieves strong results driven by tax credits, while tariff pressures ease. Thanks to the joint venture project with Volkswagen and contributions from its software and services business, the company has achieved positive quarterly gross profit for the second time this year. Financial reports show that the company's Q3 revenue reached $1.56 billion, an increase of 78% compared to $874 million in the same period last year, surpassing analysts' average estimate of $1.5 billion. Excluding one-time items such as R&D, the loss per share was 65 cents, better than the expected loss of 72 cents per share. Regarding the closely watched gross profit metric, Rivian achieved a gross profit of $24 million in the third quarter, significantly outperforming the market expectation of a $38.6 million loss. As of press time, Rivian's stock was up over 3% in pre-market trading on Wednesday.
Strong AI capital expenditure drives Arista Networks (ANET.US) to surpass Q3 revenue and profit expectations. Arista primarily sells computer network switches used for communication in internet data centers, with Microsoft and Meta being its largest customers. In the quarter ending September 30, the networking solutions company reported total revenue of $2.31 billion, a year-over-year increase of 27%, surpassing market expectations of $2.27 billion; adjusted earnings per share were $0.75, higher than the consensus estimate of $0.71. Looking ahead, the company expects Q4 revenue to be between $2.3 billion and $2.4 billion, with the midpoint of $2.35 billion slightly above market expectations of $2.33 billion; adjusted gross margin is projected to range between 62%-63%, versus market expectations of 63.2%; adjusted operating margin is forecasted to be 47%-48%. As of press time, Arista Networks' stock fell more than 11% in pre-market trading on Wednesday.
Astera Labs (ALAB.US) reports a 104% surge in Q3 revenue, but Q4 EPS guidance falls below expectations. Financial results indicate that the company's Q3 revenue hit a record high of $230.6 million, growing 20% sequentially and surging 104% year-over-year, exceeding analysts' estimates of $206.5 million. The year-over-year revenue doubling was mainly driven by increased production across multiple product lines for AI platforms. CEO Jitendra Mohan noted that demand for signal conditioning, intelligent cable modules, and switch fabric product portfolios was robust and exceeded expectations, particularly amid large-scale production of new AI platforms. Non-GAAP diluted earnings per share were $0.49, compared to a loss of $0.05 per share in the same period last year. The company forecasts GAAP earnings per share of $0.20 for Q4, lower than the market expectation of $0.25. As of press time, Astera Labs' stock dropped over 3% in pre-market trading on Wednesday.
Tempus AI (TEM.US) reports Q3 revenue growth of 84.7% year-over-year, surpassing market expectations, while net loss widens by 5.5% to $80 million. The company's Q3 revenue reached $334.2 million, a significant year-over-year increase of 84.7%, surpassing the consensus estimate of $328.73 million. Net loss for the reporting period was $80 million, widening from a net loss of $75.8 million in Q3 2024. Notably, this quarter’s loss includes $35 million in stock-based compensation expenses and employer payroll taxes, increased amortization expenses related to the acquisition of Ambry, and a one-time expense of $12 million for debt extinguishment. Non-GAAP net loss per share was $0.11, better than the $0.24 loss per share in the same period last year and also outperforming the market expectation of a $0.17 loss per share. As of press time, Tempus AI's stock fell over 4% in pre-market trading on Wednesday.
McDonald's (MCD.US) reports better-than-expected same-store sales growth for Q3, but EPS misses expectations. Financial reports indicate that McDonald's Q3 revenue was $7.08 billion, in line with market expectations; global same-store sales grew by 3.6%, surpassing market expectations of 3.55%. Net profit was $2.28 billion; adjusted earnings per share were $3.22, falling short of market expectations of $3.33. The company expects operating margin for fiscal year 2025 to be in the mid-to-high 40% range and forecasts capital expenditures for the current fiscal year to be between $3 billion and $3.2 billion.
Preview of Key Economic Data and Events
21:15 Beijing Time, U.S. October ADP Employment Change
22:00 Beijing Time, U.S. October ISM Non-Manufacturing PMI
Earnings Preview
Early Thursday: Qualcomm (QCOM.US), Arm (ARM.US), Robinhood (HOOD.US), Applovin (APP.US), IonQ (IONQ.US), DoorDash (DASH.US), American Superconductor (AMSC.US)
Pre-market on Thursday: AstraZeneca (AZN.US), Backblaze (BLZE.US), Vistra Energy (VST.US), Autohome (ATHM.US), Zai Lab (ZLAB.US)