The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
0926 GMT - Concerns about highly leveraged artificial-intelligence data-center developers' credit have triggered a selloff, but the risks remain largely company specific, says Julius Baer's Enrico Chinello. Neoclouds are more exposed to financing pressures than hyperscalers, though tighter credit conditions are more likely to raise borrowing costs for future debt issuance than disrupt current operations, he says. Recent results from TSMC point to resilient demand, with revenue exceeding guidance, he adds. Stronger processor rental rates and rapid AI-lab sales growth further support the outlook. Investors will be looking to the coming earnings season for more clarity, but Julius Baer remains constructive on cloud computing and AI, he adds. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0915 GMT - The artificial-intelligence trade shifts to a balance-sheet and credit cycle story from a purely growth story, Tickmill Group's Patrick Munnelly says in a note. "The market is increasingly asking not only whether AI demand is real, but who is funding it, on what terms and with what margin of safety," he says. The dive in Seoul-based AI cloud-computing firm Elice's shares on the first day of trading on Tuesday adds to concerns over debt-financed AI infrastructure investments. Investors are now differentiating cash-generative platform winners and high-quality semiconductor suppliers from capital-intensive infrastructure firms and leveraged financing vehicles, he notes. While the differentiation is healthy in the long run, it's destabilizing in the short run as positioning remains crowded, he adds. (sherry.qin@wsj.com)
0853 GMT - Tele2 growth remained slow in the third quarter, with a key profit metric coming in a little below consensus, Berenberg analysts write. New guidance suggests a fall in consensus earnings before interest, taxes, depreciation, amortization and the cost of leased assets, or Ebitdaal, but a rise in cash flow, the bank says. Sweden remains "highly competitive," according to Tele2's CEO. "Despite the strong dividend and balance sheet, we believe that Tele2 shares are expensive and M&A options may be limited." The bank retains its sell rating and 140 Swedish kronor price target. Shares rise 1.2% to 160.65 kronor. (dominic.chopping@wsj.com)
0825 GMT - Volvo sales should benefit from a rebound in the North American truck market, AlphaValue analyst Adrien Brasey writes. The bank raises its full-year 2026 sales estimate by 3.5% to 499 billion Swedish kronor. However, it has trimmed its EBIT estimate by around 1% to 54.7 billion kronor, implying an 11.0% margin, mainly reflecting lower profitability expectations in both trucks and construction equipment, amid higher material and freight cost inflation. For 2027, the bank has raised its sales estimate by 7% to 550 billion kronor, driven by a recovery in both trucks and construction equipment. Its 2027 EBIT estimate increases 15% to 68 billion kronor, implying a 12.4% margin. It as a reduce rating on Volvo stock with a 356 kronor target price. Shares fall 1.8% to 317 kronor. (dominic.chopping@wsj.com)
0822 GMT - Shares of European semiconductor companies are in decline after a day of gains among global stocks exposed to artificial intelligence. Investors bought tech stocks at a discount on Monday following sharp declines last week, but the selloff resumed on Tuesday. In Asia, South Korea's SK Hynix closed 4.2% lower, while Samsung Electronics shed 3%. In Europe, shares of Dutch semiconductor-equipment maker ASML Holding and smaller rival ASM International are down 2.7% and 3.1%, respectively. Dutch supplier of semiconductor assembly equipment BE Semiconductor Industries is down 2.8%. German chip maker Infineon Technologies stock loses 2.9%. STMicroelectronics shares are down 3%. Meanwhile, the E-mini Nasdaq 100 futures contract is 0.4% lower, pointing to a weak opening for tech stocks in the U.S. (mauro.orru@wsj.com)
0756 GMT - Hyundai Rotem's earnings could be pressured by delays in new contract wins overseas, Nomura analyst Eon Hwang says. The analyst cuts his operating-profit forecasts for the South Korean armored-vehicle maker by 34.6% for 2027 and 29.4% for 2028. Hwang says lower revenue from tank exports to Poland contributed to Hyundai Rotem's below-consensus third-quarter earnings. The company also faced delays in new orders from the Middle East amid views that tanks may be losing relevance in modern warfare, increasingly dominated by drones and missiles. Still, he expects older tanks to be replaced with new-generation models equipped with counter-drone systems. Nomura expects new orders from Romania and Poland in 2Q 2027, later than previously forecast.(kwanwoo.jun@wsj.com)
0743 GMT - Eni could announce a 1 billion euro special dividend at its third-quarter results, RBC Capital Markets analyst Biraj Borkhataria writes. The Italian energy major's financial framework allows for a special dividend given oil prices have been above $90 a barrel and the extra cash could push its share buyback higher, he adds. The company has already increased its buyback for the year to 3.4 billion euros from 1.5 billion euros previously. Shares trade 0.3% higher at 26.23 euros.(adam.whittaker@wsj.com)
0743 GMT - Bitcoin held up better than its cryptocurrency counterparts during last week's market selloff and it won't take much fresh demand to push prices higher if the macroeconomic environment turns, says Yusuf Fakhro of ARP Digital. Last week, bitcoin fell 1.2%, while ether fell 4% and the S&P 500 fell almost 2%. "This fortnight was a risk-off wobble imported from the broader market, not a crack in the bitcoin story," he says. "Bitcoin held up better than the rest of crypto, the leverage is clean, the sellers are spent, and volatility has compressed to levels that usually precede a larger move," he adds. The flagship cryptocurrency is down 0.5% at $81,475. (joseph.wilkins@wsj.com)
0734 GMT - China's innovation zeal will act as a continued structural driver of its equity markets as companies seek equity capital, says BNP Paribas in a research note. This is reflected in the number of tech-frontier companies already listed or expected to come to market over the near- to medium-term, it says. Tech is currently the only sector with a compelling earnings story. Over the last six months, aggregate forward 12-month earnings for the tech sector have risen 30%, it says. The materials sector is in second place with forward 12-month earnings up 9% over the same period. The gains are the result of the increasing competitiveness of domestic inputs given aggressive innovation, BNP Paribas adds.(tracy.qu@wsj.com)
0732 GMT - Anglo American's third-quarter production update presents a mixed picture, J.P. Morgan analyst Dominic O'Kane writes. Its quarterly copper production was slightly lighter than expected but the miner's full-year copper cost guidance was lowered again by 4%, O'Kane says. The reduced copper cost guidance should lead to a small upward revision to full-year earnings consensus, he writes. Shares rise 2.3% to 3,972 pence.(adam.whittaker@wsj.com)
0730 GMT - European stock indexes slip at the open, extending sharp losses in the previous session. Technology and energy-intensive stocks falter. The Stoxx 600 falls 0.3%. London's FTSE 100 moves 0.2% lower, dragged by industrials. Distribution group Bunzl falls 4%, while Rolls-Royce drops 1.3%. Stocks linked to AI buildout drop in Germany and France. The industrial-heavy German DAX falls 0.5%, with Siemens Energy falling 2.7%. Siemens falls 3.4%. Industrials also drag the CAC 40--down 0.2%--in Paris, where Schneider Electric is 3.5% lower while chip maker ST Microelectronics drops 2.5%. Italy's FTSE MIB edges 0.1% lower while the Spanish IBEX 35 trades flat. The Dutch AEX is down 0.4% as AI stocks weaken, with ASML sliding 2.7%. (josephmichael.stonor@wsj.com)
0730 GMT - M&G has an edge from its low cost of capital which allows it to price annuities very competitively, Berenberg's Michael Huttner writes. The U.K. investment manager has low funding costs via its with-profits fund, which has 7.7 billion pounds of surplus capital. This means M&G can sustain solid new business growth, Berenberg writes. It also means M&G's target of attracting over 50 billion pounds in capital-light assets by 2030 is "fully achievable," Huttner adds. The company is also on track to meet its 2027 plan targets, Berenberg says. Shares are down 0.2%.
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