Shares steady as Apple earnings near, oil eases

Asian stock markets remained relatively stable on Monday as investors awaited Apple's earnings report to alleviate concerns about AI-related cash burn issues. Oil prices softened after ongoing discussions between Iranian and Qatari mediators. Apple has been a steady performer due to its lack of large data center expenditures, and its shares have risen consistently over the past four months, pushing it ahead of Nvidia as the world's most valuable listed company.

Analysts anticipate Apple's quarterly earnings per share to be $2, with revenue of $113 billion, representing a rise from $1.85 per share in the same period last year. Preliminary guidance for iPhone 18 sales may be announced, as pre-orders began in mid-October. This optimism contributed to a 0.4 percent increase in S&P 500 futures and a 0.8 percent rise in Nasdaq futures.

However, the tech-heavy Nasdaq faced a 7 percent decline in October, its worst monthly performance since April 2025's tariff dispute. Following a 29 percent drop in Intel on Friday, the pressure is mounting on other chipmakers, like AMD. With the U.S. midterm elections approaching, potential Democratic victories could introduce new obstacles for data centers.

Goldman Sachs analysts project data center capital expenditures to nearly double to $800 billion this year and potentially exceed $1.2 trillion in 2027. While AI investment spending is expected to continue growing, its expansion rate may be reaching its peak. Analyst Ben Snider highlighted that while earnings growth is robust, it no longer shows signs of acceleration.

The broader Asia-Pacific index of MSCI shares outside Japan experienced a slight decline of 0.2 percent. European indices saw a modest gain, with EUROSTOXX 50 and DAX futures increasing by 0.1 percent, whereas FTSE futures remained unchanged. Interest rates in the U.S. may rise again, with a 72 percent probability of a quarter-point hike in December, though the total tightening now stands at 55 basis points compared to over 70 basis points a month prior.

On Tuesday, 10-year Treasury yields rose to 4.941 percent, although they were far from October's peak of 5.3645 percent, while 2-year yields remained at 4.612 percent. Central bank meetings this week suggest that the Reserve Bank of Australia, Bank of England, and Riksbank will likely raise rates, whereas Norges Bank is expected to maintain its stance.

Key economic data, including the U.S. ISM manufacturing survey for October and the upcoming employment report on Friday, are anticipated to provide insights into job growth, which is forecasted at 65,000, a significant increase from the disappointing 29,000 gain in September, with the unemployment rate staying steady at 4.2 percent.

In foreign exchange markets, major currencies showed minimal movement as stock market activity dominated. The euro slightly strengthened to $1.1169, while the dollar remained unchanged at 157.75 yen. Oil prices declined as negotiations continued to reach an agreement on ending the U.S.-Israeli conflict in Iran, despite persistent attacks on tankers in the Gulf.

Brent futures dropped 2.0 percent to $111.15 a barrel, following a 13.6 percent surge in October, while U.S. crude futures experienced a 2.3 percent decrease to $101.73 a barrel. Gold, which had fallen 6.8 percent last month due to margin call concerns among investors, bounced back by 0.9 percent to $3,911 an ounce.