The Morning Brief
Asia hands off a cautious tape to Europe and a fresh round of AI margin skepticism threatens to extend Thursday's tech-led selloff into the U.S. open on a morning stacked with earnings from American Express, Procter & Gamble, and SLB.
Overnight, the China and chip-supply story dominates Asia.
Daiwa downgraded CATL (300750) to Hold after its third-quarter results, and the Pentagon banned BYD (002594) vehicles from Kadena Air Base in Japan, the latest sign that U.S.-China friction is bleeding into hardware and defense-adjacent decisions. SK Hynix shelved IPO plans for its Solidigm subsidiary, a reminder that even red-hot memory and AI-storage names are being more selective about capital raises right now. In Japan, Fanuc (FANUY) posted higher net income and sales, one of the few clean upside prints in the region.
Europe leaned on energy and M&A.
Eni (E) announced a special dividend and an increased buyback after a strong third quarter, a rare bright spot in European earnings. Deutsche Bank upgraded Roche to Buy and ABG Sundal Collier did the same for ABB, while Rio Tinto said it will invest $1.9 billion in the Kangwinan bauxite project. On the deal front, Smith & Nephew and Johnson & Johnson's orthopaedics merger talks collapsed, and McCormick moved to acquire a majority stake in Unilever Pakistan Foods.
The AI trade is getting a margin reality check.
A report questioning whether Anthropic can hit 30% margins on its way to a $1.5 trillion valuation is feeding doubts that showed up directly in Thursday's close: the Nasdaq-tracking QQQ dropped 2.9% and Microsoft (MSFT) fell 2.1%, while Apple (AAPL) bucked the move, up 1.3% and still sitting on a 28% year-to-date gain. The S&P proxy SPY slid 1.2%. Money rotated toward safety, with the long bond ETF TLT up 1.9% even as gold (GLD) gave back 2.6% and oil (USO) firmed 1.7%. Adding to the AI unease, Senator Bernie Sanders and Representative Adam Schiff warned publicly about autonomous AI agents gaining access to bank accounts, a regulatory headline risk worth watching for the large banks (JPM, BAC, MS, C).
Notable pre-market movers:
AMTD IDEA Group (AMTD) is down nearly 10% in reference pricing and sitting on a steep 54% year-to-date loss, underscoring how thin liquidity in small-cap ADRs can amplify moves even on routine news. Clear Secure (YOU) ticked higher after a flurry of consumer-survey releases tied to its brand partnerships.
On the radar today:
American Express (AXP) and Procter & Gamble (PG) headline a packed earnings slate alongside SLB, First Citizens BancShares (FCNCA), Rogers Communications (RCI), NatWest (NWG), and Infosys (INFY). Watch bank earnings closely for credit commentary given the flight into Treasuries, and watch mega-cap tech for any follow-through on the AI margin debate.
Bottom line: the market walks into Friday with tech sentiment bruised and AI profitability under fresh scrutiny, so today's bank and consumer earnings will decide whether this is a one-day wobble or the start of a broader rotation out of the trade that has carried stocks all year.