This is the communication from CNBC regarding Morning Squawk. Happy Tuesday, and I also wish the bull market a happy birthday – this round of bull market officially reached its fourth year yesterday. As CNBC wrote in Sarah Min, it may be more challenging for it to reach its next “birthday”.
This morning, stock index futures showed mixed movements, following a rather dull start to the week for the S&P 500 index.
Here are five things investors need to know before the start of trading days:
Too big to tip over?
Large banks kicked off a new round of financial reporting season this morning, and investors faced some surprises. JPMorgan Chase, the largest bank in the United States measured by asset size, reported revenues and profits that fell short of expectations, which is a rare instance of underperformance for the bank.
- JPMorgan's performance fell short of expectations, partly due to weak income from fixed-income trading and an increase in expenses in the third quarter that outpaced revenue growth. CEO Jamie Dimon stated that trading and investment banking activities in its Wall Street business unit "did indeed slow down."
- JPMorgan Chase's stock price fell by more than 3% before the market opened. However, after the bank raised its guidance for net interest income in 2026, the decline narrowed.
- In contrast, Goldman Sachs reported revenue that far exceeded expectations, partly due to a 72% year-on-year increase in stock trading income.
- Goldman Sachs stated that its advisory business revenue of $1.65 billion this quarter set a record for the firm. The stock rose by more than 3.5% before the opening of trading.
- Meanwhile, the stock price of Wells Fargo has been declining. Although the bank's profits exceeded expectations, its revenue fell short of what was anticipated. CEO Charlie Scharf stated that despite facing economic risks such as "higher interest rates, higher oil prices, and persistent inflation," Wells Fargo's consumers remain resilient.
- As mentioned by CNBC, you can view the live coverage of this morning's financial report.
2. Firm stance
Despite opposition from both parties, U.S. President Donald Trump did not renege on his decision to relax regulations on Russian diesel exports on Monday. He wrote on social media that he had "made the right choice."
Despite the agreement allowing Moscow to supply diesel to global markets over the next six months, Brent crude oil futures still rose above $106 per barrel on Monday. Higher oil prices put pressure on the stock market during Monday's trading, but crude oil futures fell slightly this morning, still remaining above $104 per barrel.
3. Service Delay
Following a recent attack on the capital airport of Saudi Arabia, Delta Air Lines has postponed the launch of its non-stop flights from Atlanta to Riyadh, Saudi Arabia.
After Houthi forces, supported by Iran, in Yemen claimed to have launched an attack that resulted in at least 12 deaths and hundreds of injuries, Riyadh's King Khalid International Airport remains closed. The Federal Aviation Administration (FAA) of the United States has advised U.S. airlines to exercise caution when flying over or in the vicinity of that country.
As pointed out by Leslie Josephs of CNBC, this flight route was originally set to become the first non-stop commercial flight between the United States and Saudi Arabia operated by a U.S. airline. Ed Bastian, CEO of Delta Air Lines, stated last week that when weighing whether to proceed with this flight route as planned, "safety will be the deciding factor." The direct flight was originally scheduled to launch later this month, but it has now been rescheduled for March next year.
4. Pricing Power
Meta released Muse Wonder on Monday, calling it the company's most advanced artificial intelligence model to date for driving digital assistants. To use this model, users need to subscribe to a package costing at least $20 per month.
As mentioned by Jonathan Vanian of CNBC, the pricing of Muse Wonder reflects __BJWKEEP_00005#'s broader efforts to develop revenue sources beyond its core advertising business, with artificial intelligence at its core. This new model will also be open to programmers who pay to use Meta Model API.
The person in charge of the company's artificial intelligence, Alexandr Wang, stated in an interview on Monday that the purpose of developing Wonder is to enhance the capabilities of “personal and professional” intelligent agents. The company also mentioned that this model boasts Meta “the strongest protection measures to date” to prevent “cyber abuse.”
5. Fried Chicken Battle
McDonald's hopes to gain an advantage by strengthening its chicken and beverage businesses. However, as reported by Brandon Gomez in CNBC, the chain brand is facing fierce competition.
According to the data from Consumer Edge, among the many fast-food chains that have managed to compete for consumers' spending away from McDonald's, many focus on these two areas. Chick-fil-A, 7 Brew, and Starbucks are all listed among the main brands that have managed to increase their market share among McDonald's customers.
Speaking of Starbucks: A spokesperson said on Monday to CNBC that the coffee chain "will not acquire" Chipotle, denying potential merger rumors. The stock price of Chipotle fell by nearly 4% during Monday's trading.
Daily Dividends
Federal Reserve Chairman of Cleveland, Beth Harkemack, stated that it would be appropriate to adopt a restrictive monetary policy stance amid concerns that consumer sentiment is becoming more focused on inflation. The following are her remarks to the American Business Economics Association on Monday:
"As time goes by month by month, the persistently high inflation has increased the risk of an ingrained inflationary mindset in the economy."
CNBC's Hugh Son, Laya Neelakandan, Leslie Picker, Ritika Shah, Kevin Breuninger, Sean Conlon, Spencer Kimball, Leslie Josephs, Jonathan Vanian, Brandon Gomez, and Amelia Lucas contributed to this report.
Caleigh Keating assisted in producing this newsletter. Josephine Rozzelle edited the content of this issue.
