Yesterday’s stock market swings were wild, reflecting the current frenzy among U.S. investors, no doubt fueled by the collective anxiety ahead of Tuesday’s presidential election. On the S&P500, Paycom shot up 21%, Entergy jumped 15%, but Estée Lauder sank 22%, Aptiv dropped 17%, and MGM Resorts slid 11%. Meanwhile, Super Micro Computer, once the AI darling, fell another 11% after a brutal 37% drop the day before. Uber and Regeneron each lost 9%, eBay shed 8%, and then there’s Microsoft, the supposed “safe” bet, which tumbled 6%.

Let’s talk about Microsoft for a minute. Investors finally seem to be noticing that the big AI boom demands massive investments with profits that are either far off or uncertain—unless you’re at the start of the chain (Nvidia, TSMC…) or can pass along costs right away, like Amazon with AWS. For the rest, it’s trickier, and it shows in Microsoft’s CAPEX line. To sum it up, Microsoft used to spend around $15 billion a year from 2015 to 2023, but this year, it’s spending over $44 billion. In 2025, that’s expected to hit $56 billion, with spending continuing to climb. If analysts are right, Microsoft’s annual investment will average around $56 billion over the next few years—nearly quadrupling the previous cycle. Microsoft may have deep pockets, but this pace is a real shift in strategy. Yesterday’s sell-off felt like a wake-up call, made worse by the general mood of risk aversion.

The Nasdaq closed down 2.4%, with more than 75% of stocks in the red, while the S&P500 was close behind, dropping 1.9%. In Europe, it was a sea of red too, especially in France and Switzerland. September’s usual dip actually ended up being positive, but October—typically a better month—fell short. Japan was the lone bright spot, up 3% for the month, while the U.S. S&P500 slid 1%, Europe’s Stoxx Europe 600 lost 2.85%, and Hong Kong’s Hang Seng was down 3.9%. India took the hardest hit in October with a 6.1% loss, while Germany’s DAX kept losses down to 0.35%, propped up by SAP despite other economic struggles.

Friday, November 1, which would normally be uneventful, saw a sharp oil price jump after Axios reported that Iran might be preparing a strike against Israel. Over in China, Caixin’s Manufacturing PMI backed up yesterday’s official data, hinting that a small industrial recovery might be starting. On top of that, Beijing announced that real estate transactions are finally picking up, thanks to heavy government efforts to get households buying again. In the UK, borrowing costs are on the rise following Labour’s budget release. The Chancellor is in damage control mode, trying to avoid a repeat of the “Truss moment” when UK bond markets nearly unraveled due to a poorly thought-out budget.

With all this happening, investors are still laser-focused on today’s U.S. labor market data, due out at 1:30 pm. These stats are critical for the Fed’s rate decisions, and with only six days until the next monetary policy update, they’re crucial. Economists are expecting just over 100,000 new jobs added last month in the U.S.

On a lighter note, Bitcoin dipped below $69,000 as Donald Trump’s betting odds fell slightly over the past day. Sometimes the market rides on the smallest details.

In the Asia-Pacific region, Tokyo ended the week with a 2.5% drop, while Australia, South Korea, India, and Taiwan saw milder declines around 0.5%. China, ever the outlier, recorded gains, with Hong Kong up 0.9% and the mainland CSI300 index inching up 0.3%. In Europe, futures are barely green, lifted slightly by yesterday’s upbeat Amazon and Intel results in the U.S.

Today's economic highlights

In the United States, the change in non-farm payrolls and the October unemployment rate be announced at 8:30apm, before the manufacturing PMI (9:45am) and construction spending and ISM manufacturing at (10:00am). Full agenda here.

The dollar is worth EUR 0.9176 and GBP 0.7719. The ounce of gold rose to USD 2,758. Oil regained some ground, with North Sea Brent at USD 74.37 a barrel and US light crude WTI at USD 70.91. The yield on 10-year US debt stands at 4.23%. Bitcoin is just over USD 70,000.

In corporate news:

  • Amazon gains 5.8% pre-market after reporting on Thursday evening a profit and third-quarter sales above Wall Street's expectations, reassuring markets after previously expressing caution earlier this year. The online retail giant also said it expects good results for the holiday quarter.

  • Apple drops 1.1% pre-market, as investors worry about a decline in sales in China, although its quarterly revenue exceeded expectations.

  • Boeing - The aerospace manufacturer's stock rises 2.4% pre-market after a striking workers' union, the International Association of Machinists and Aerospace Workers (AIMTA), recommended approval of an improved offer, including a 38% wage increase. Union members are set to vote on Monday.

  • Chevron - The oil company beat third-quarter profit estimates on Friday, supported by higher production. The American group posted adjusted quarterly earnings of $2.51 per share, compared to the $2.42 anticipated by analysts.

  • Coterra Energy - The American oil and gas producer reported quarterly earnings below Wall Street estimates on Thursday, impacted by declining commodity prices.

  • Exxon Mobil exceeded third-quarter profit expectations on Friday, with strong oil production offsetting weaker prices. Additionally, ExxonMobil’s subsidiary, Esso, finalized the sale of the Fos-sur-Mer refinery—one of France's main refineries—and two other oil terminals to the Rhône Énergies consortium, comprising Trafigura and Entara, as announced by the companies on Friday.

  • Intel rises 6.1% pre-market after announcing on Thursday a revenue forecast for the current quarter above expectations. Following this, artificial intelligence semiconductor giant Nvidia gains 2% pre-market.

  • J.P. Morgan will pay $151 million to settle five open cases with the U.S. Securities and Exchange Commission, including allegations that the largest U.S. bank made misleading statements to brokerage clients, as the financial markets regulator stated on Thursday.

  • Juniper Networks exceeded expectations with its third-quarter revenue and profit on Thursday, driven by demand for its networking equipment.

Analyst recommendations:

  • Alnylam Pharmaceuticals: Citigroup maintains its buy recommendation with a price target reduced from USD 342 to USD 340.
  • Amazon.com: Goldman Sachs maintains its buy recommendation and raises the target price from USD 230 to USD 240.
  • Auto Trader Group: Deutsche Bank maintains its buy recommendation and raises the target price from 949 to GBX 1040.
  • Beazley: Peel Hunt maintains its add recommendation and raises the target price from GBX 750 to GBX 840.
  • Bristol-Myers Squibb Company: Goldman Sachs maintains its buy recommendation and raises the target price from USD 60 to USD 62.
  • Cf Industries Holdings: JP Morgan maintains its neutral recommendation and raises the target price from 76 to USD 82.
  • Estee Lauder: JP Morgan downgrades to neutral from overweight with a target price reduced from USD 113 to USD 74.
  • Fox Corporation: Morgan Stanley maintains its market weight recommendation and raises the target price from 38 to USD 40.
  • Generac Holdings: JP Morgan maintains its neutral recommendation and raises the target price from 178 to USD 180.
  • Gsk: Goldman Sachs maintains a neutral recommendation with a price target reduced from 1800 to GBX 1690.
  • Iqvia Holdings: Citigroup remains neutral with a price target reduced from USD 250 to USD 225.
  • Linde: Deutsche Bank maintains its buy recommendation and raises the target price from USD 510 to USD 515.
  • Mastercard: Punto Research maintains its buy recommendation and raises the target price from 541 to USD 564.25.
  • Ptc: Berenberg downgrades to hold from buy with a target price reduced from USD 210 to USD 196.
  • Quanta Services: B Riley Securities maintains its buy recommendation with a price target reduced from USD 343 to USD 335.
  • Regeneron Pharmaceuticals: Bernstein maintains its outperform recommendation and reduces the target price from USD 1135 to USD 1110.
  • Teleflex: Raymond James maintains its outperform rating and reduces the target price from USD 266 to USD 245.
  • Uber Technologies: Punto Research maintains its buy recommendation and raises the target price from USD 85.11 to USD 88.28.
  • Vontier Corporation: Citigroup maintains its buy recommendation with a price target raised from USD 40 to USD 44.
  • Watts Water Technologies: Goldman Sachs maintains a neutral recommendation with a price target raised from 195 to USD 197.
  • Zimmer Biomet Holdings: Goldman Sachs maintains its neutral recommendation with a price target raised from 116 to USD 118.