Shares steady as Apple earnings near, oil eases

Asian share markets remained relatively stable on Monday, as investors looked to Apple's upcoming earnings to alleviate concerns over AI companies' increasing expenses. The tech giant, which has avoided significant investments in data centers, has seen its shares rise for four consecutive months, overtaking Nvidia as the world's most valuable listed company.

Analysts anticipate Apple reporting earnings per share of $2 on revenue of $113 billion, an increase from $1.85 a year ago. Preliminary guidance may also be provided regarding the early sales of the iPhone 18, with pre-orders beginning in mid-October.

The optimism surrounding Apple's earnings helped S&P 500 futures rise by 0.4% and Nasdaq futures increase by 0.8%. However, the tech-heavy Nasdaq lost nearly 7% in October, marking its worst month since the 'Liberation Day' tariff dispute of April 2025. Intel's stock plummeted nearly 29% on Friday, heightening concerns for other chipmakers, including AMD. The midterm elections in the United States could introduce additional political obstacles for data center development.

Analysts at Goldman Sachs predict that capital expenditures by hyperscalers will nearly double to $800 billion this year and continue to rise to $1.2 trillion in 2027. Despite the high growth in AI investment spending, the rate of capital expenditure in the AI sector appears to be peaking. This highlights the fundamental challenge facing equity investors, as earnings growth remains robust but no longer accelerating. Ben Snider, Goldman's chief US equity strategist, commented on this situation in a recent note.

In other global markets, Japan's Nikkei share index fell by 0.1%, while South Korea's benchmark index increased by 0.8%. MSCI's comprehensive index of Asia-Pacific shares outside Japan suffered a slight decline of 0.2%. Across Europe, EUROSTOXX 50 and DAX futures both rose by 0.1%, whereas FTSE futures remained unchanged. Central banks convening this week are expected to consider interest rate hikes, with the Reserve Bank of Australia, Bank of England, and Riksbank potentially raising rates.

Meanwhile, Norges Bank is anticipated to maintain its current level. Economic data releases this week include the influential US ISM Manufacturing report for October and the crucial employment figures scheduled for Friday. Median forecasts suggest a 65,000 increase in jobs, following September's disappointing 29,000 jobs gain, with the unemployment rate remaining steady at 4.2%.

In the currency markets, the major currencies exhibited minimal movement as the focus remained on stocks. The euro strengthened slightly to $1.1169, while the US dollar remained relatively stable at 157.75 yen. Regarding commodities, oil prices declined as ongoing discussions aimed at reaching a resolution to the US-Israeli conflict in Iran persisted.

However, tanker attacks in the Gulf continued to occur. Brent futures dropped 2.0% to $111.15 per barrel, following a 13.6% increase in October, while US crude futures declined by 2.3% to $101.73 per barrel. Gold, which is not subject to interest payments, rose by 0.9% to $3,911 per ounce, after falling 6.8% in the previous month due to concerns that some investors may need to sell to cover margin calls on equities.