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Hello everyone, I am Leonie Kidd. Below is today's Morning Squawk.
Investors need to distract their attention today.
On one hand, Apple will put pressure on the tech sector. Despite its solid performance, a disappointing gross margin outlook overshadowed its impressive financial report.
On the other hand, crude oil trading is also heating up. There were reports earlier that after the surprise attack on Iran's Geshem Island, the price of crude oil accelerated in overnight trading.
Of course, today is also the day of the mid-term elections!
What's happening: Entering the callback range.
Tensions surrounding artificial intelligence stocks are spreading to Asian trading, with markets in South Korea and Taiwan, which have a higher weight of technology stocks, experiencing significant declines. Chip stocks in Europe also generally fell. The Nasdaq 100 index closed on Monday within a correction range, more than 10% below its record high set on October 6th.
Futures performance remained flat, but with increased volatility in the oil market and the ongoing mid-term voting, the market expects another unpredictable trading period ahead.
- Analysis: Daniel Newman tells CNBC that the next trend in AI trading does not depend on financial reports. He said, "A ceasefire this month may have a greater boosting effect on AI trading than any single financial report. Falling oil prices will reduce the pressure for interest rate hikes in December and also lower the capital costs for everyone involved in building data centers."
- Next: After discussing how geopolitics and inflation are dragging down the "prosperous market environment," Squawk Box will interview Pershing Square, the CEO of Bill Ackman, to hear his views on market fluctuations.
Sharp fluctuations: Apple's stock price under pressure
Apple's stock price came under pressure during pre-market trading due to its revenue exceeding expectations, but the outlook for gross margin was disappointing.
The following are the main data:
- Earnings per share: $2.10, expected to be $1.99
- Revenues: $114.48 billion, with an expectation of $113.39 billion.
Despite the strong performance of its various product lines, this iPhone manufacturer still expects a gross margin of 45% to 46%, with Apple stating that this is in response to the global shortage of memory chips.
- Why it's important: According to Robert Hum of CNBC, Apple last provided guidance at this level nearly four years ago.
- Ternus to CNBC means: The new Chief Executive Officer, John Ternus, said during the financial report conference call to CNBC's MacKenzie Sigalos: "I believe that at this stage, with all the achievements we have made, we are only more and more certain that the best is yet to come."
- Target Price: Morgan Stanley has lowered its target price for Apple to $350 from $355, while Morgan Stanley has also lowered its target price to $355 from $360.
Developments in the situation: The surprise raid has triggered unexpected turmoil
Iran says it is prepared to respond "forcefully" if the United States launches strikes, following reports that the U.S. military conducted an attack on the island of Qeshm overnight.
An American official told The Wall Street Journal that Washington has been carrying out “limited strikes” against that country for the past few weeks. The report states that these military actions against Iran have been deliberately kept low-key in order not to convey any intention of a major military escalation, and the news cites the words of an unnamed official.
- Background: Before the mid-term elections, the Trump administration downplayed the expectation of proactive conflicts. However, Vice President JD Vance stated in an interview with CNN that he is full of confidence in the "possibility of reaching a negotiated settlement."
- Why it's important: Affected by these developments, oil prices are rising and have rebounded from the heavy selling on Monday.
Election Economics: Election Day
Midterm elections have arrived, and CNBC has been analyzing how the election results might affect the stock market.
CNBC's Luke Fountain has conducted in-depth research on how elections can reshape the prospects of certain companies that are highly exposed to policy changes in Washington, particularly in the fields of defense, healthcare, cryptocurrencies, and AI.
- Why it's important: Historically, stock markets tend to perform better during periods of divided governments.
- Volatility: The Eamon Javers of CNBC will investigate, and there may be some unexpected areas of cooperation in populist-style measures.
- Nighttime: Follow CNBC's Megan Cassella to gain an in-depth understanding of the swing districts in the House of Representatives and the Senate that deserve attention.
- Live Blog: Follow CNBC's live blog for the latest updates, starting at 12 noon Eastern Time. Click here to view.
Finally...
North Korea denies any involvement in the Binance hacking incident; researchers have traced the flow of billions of dollars in stolen funds
According to official media reports, North Korea denied the accusations of linking the Pyongyang incident with the Binance hacking attack, which is estimated to cost $6.3 billion, calling such accusations a "serious political provocation."
According to a report by Yonhap News Agency on Tuesday, citing the North Korean official news agency KCNA, Kim Yu-jong, the sister of North Korean leader Kim Jong-un, condemned the claim that FBI attributed this attack to the North Korean-related hacking group TraderTraitor.
Blockchain analysis firms, including Elliptic and Chainalysis, have also linked this attack and the subsequent transfer of stolen funds to North Korean actors.
The Daily Dividend
CNBC's Jason Gewirtz, Robert Hum, MacKenzie Sigalos, Priyanka Salve, Jenny Lee, Eamon Javers, Megan Cassella, and Garrett Downs contributed to this report.
John Melloy and Jack Sommers edited the content for this issue.
