Morning Bid: Markets hope for relief in Apple margins

European and global markets start the day on a more composed note, with Nasdaq futures showing modest gains following last week's sharp decline and oil prices dipping. Investors seem to be seeking some respite in Apple's earnings, as the tech giant is not pouring a lot of money into data centers at the moment. Analysts predict revenue of approximately $113 billion, a 11% increase from last year, and earnings per share at $2.00.

However, analysts are closely watching Apple's profit margins, given the company's rising costs for equipment, particularly chips and memory. Remarkably, analysts expect gross margins to be between 47% and 48%, which would be unprecedented for any other company.

Investors are also keen to learn about the progress of iPhone 18 sales, with pre-orders beginning in mid-October. Apple's shares have been a stable haven, rising for four consecutive months and gaining 27% so far this year, pushing its valuation past $5 trillion.

The mood takes a slightly tougher turn with AMD's disappointing results, which saw a nearly 11% drop last Friday. Intel also saw a 28% decline due to a disappointing outlook. Ahead of the week, the US midterms are a significant factor, as a Democratic win could lead to more political opposition to data centers and calls for controls on AI. Prediction markets favor a Democratic victory in the House, though the outcome in the Senate remains uncertain.

The US Treasury is set to announce its quarterly refunding this week, which could impact government borrowing. While oil prices have dropped almost 3% today, the reason remains unclear. Talks between Iranian and Qatari mediators continue, but attacks on tankers in the Gulf persist. The US has reportedly been warning allies in the Middle East about a possible renewed strike on Iran after the midterms.

Key developments that could influence markets on Monday include German retail sales for September, EU PMIs for October, US ISM for October and construction spending for September. ECB Vice-President Boris Vujcic, along with policymakers Jose Luis Escriva and Olivier Moulin, as well as Bank of Spain governor Jose Luis Escriva and Bank of France governor Emmanuel Moulin, will be making appearances. Federal Reserve Bank of Chicago President Austan Goolsbee will moderate a discussion.