MARKET WRAPS
STOCKS: U.S. stocks surged as investors regained confidence that the midterm election results will be positive for the economy following a sharp selloff last week.
TREASURYS: Yields rose ahead of inflation data from the Labor Department.
FOREX: The dollar declined as the political backlash against AI infrastructure weighed on the currency.
COMMODITIES: Oil prices fell after President Trump downplayed the prospect of further U.S. strikes on Iran.
HEADLINES
Nvidia's Board Investigates Reports That CEO Was Spying Target After
Affair
Nvidia's board said it is launching an investigation into reports that
Jensen Huang has been the target of a foreign espionage effort, after the
CEO had a romantic relationship with an executive suspected of working
for Chinese intelligence.
U.S. officials last year concluded that Chinese citizen Alice Huang,
then a top executive at Megaspeed International, was sharing information
with the Chinese government while working with Nvidia to build data
centers in Asia, The Wall Street Journal earlier reported. Huang, who
also goes by Huang Le, isn't related to the Nvidia CEO.
Jensen Huang apologized to his staff Sunday for being unfaithful to
his wife.
Anthropic Prepares to Push Ahead With IPO Despite Market Jitters
Anthropic plans to forge ahead with its initial public offering later
this month despite recent market volatility tied to
artificial-intelligence investments.
The Claude maker has meetings lined up with key investors this week
and is aiming for its shares to start trading Thursday or Friday next
week, according to people familiar with the matter.
Investors are eagerly awaiting Anthropic's targeted valuation range,
which it is expected to unveil in a filing early this week. A week ago,
investors anticipated the company to target a valuation around $1.5
trillion, but after the steep selloff in AI companies Thursday, some
major investors are now pushing for it to be lower.
Skydance Plans to Cut $6 Billion in Costs Following Warner Bros. Deal
Skydance detailed plans Monday to slash at least $6 billion in annual
costs following its combination of Paramount and Warner Bros. Discovery
as it grapples with a massive debt load from the deal.
The company emerged from the $81 billion Warner deal with $87 billion
in debt and roughly $10 billion in cash. Skydance plans to cut costs by
eliminating layers of management, combining operations and reducing
technology expenses. It hopes to bring its debt down to more manageable
levels by the end of 2029.
Eventually, Skydance aims to reduce duplicative spending across its
expense base of more than $50 billion. That includes consolidating real
estate space, streamlining marketing, unifying technology and reducing
the number of third-party vendors it uses.
U.S. Balks at China's Demand for Tightly Scripted Trump-Xi-Putin Summit
Beijing wants any three-way summit among the leaders of the U.S.,
China and Russia to be a highly scripted affair, with each reading a
prepared statement and little room for discussion, according to people
familiar with efforts to organize the trilateral meeting.
But the Trump administration is pushing for a looser format that would
allow more exchange among the three leaders instead of scripted
monologues on the sidelines of the Asia-Pacific Economic Cooperation
summit to be held in southern China next Wednesday and Thursday.
The differences between Beijing and Washington on the ground rules and
agenda raise doubts about whether the extraordinary meeting will happen,
despite the U.S., China and Russia all expressing initial openness to the
idea.
Take-Two Forecast Disappoints as CEO Calls GTA VI 'Uncharted Territory'
Ten days from now, Take-Two Interactive is due to release what is
likely the most anticipated videogame in history. But first there's the
matter of corporate earnings.
For the quarter ended Sept. 30, Take-Two's bookings were down 18% from
a year ago, to $1.6 billion, just below Wall Street's estimate of $1.62
billion. Take-Two said results in the quarter were impacted by the
performance of NBA 2k27, released on Sept. 4, which delivered
lower-than-expected bookings.
Those numbers won't mean much, with Grand Theft Auto VI set to launch
on Nov. 19. Investors may be more thrown by the company's guidance, which
remains below Wall Street estimates for the current year. Take-Two
reiterated its fiscal 2027 bookings guidance of $8 billion and $8.2
billion, below the forecast of $8.62 billion.
Boeing Commercial Airplanes to Reduce Workforce by Around 5%
Boeing's commercial aircraft unit plans to reduce its workforce by
around 5%.
Stephanie Pope, chief executive of Boeing Commercial Airplanes,
announced the reduction in a Monday memo to the division's employees. She
said layoffs will be necessary to implement a revised business plan and
stabilize the company's supply chain.
"As shared in our third quarter earnings, we need to reset the pace of
our production rate ramps to provide our factories and supply chain
partners additional time to achieve stability," she said. "Adjusting our
production schedules and reducing aircraft output puts us in an
overstaffed position."
KKR's Nuttall Says Firm to Be Cautious With AI Bets
After investing vast sums in the artificial-intelligence boom in
recent years, KKR leadership on Monday sought to reassure investors that
its exposure to the sector remains under control.
Scott Nuttall, the co-chief executive of the New York
alternative-asset manager, said Monday AI bets make up about 1% to 2% of
the firm's total assets, and that nearly all its data-center capacity is
leased to governments and investment-grade corporations, entities
considered more dependable customers.
Nuttall made the comments following a week in which investors lost
confidence in the digital-infrastructure build-out, dumping AI and
technology companies' stocks over concerns about their high levels of
debt and dimmer growth prospects following Democratic victories in last
week's U.S. elections.
Honda to Invest $3 Billion in New Ohio Plant to Boost Hybrid Vehicle
Production
Honda is putting $3 billion toward building a new plant in Ohio to
boost production of its hybrid vehicles.
The automaker said Monday the facility would be capable of building
240,000 vehicles a year, bringing the company's total U.S. auto
production capacity to about 1.3 million vehicles annually.
The facility, which is expected to begin production in 2029, is part
of a broader push to bolster Honda's U.S. footprint and boost production
of its hybrid vehicles, as well as related engines and hybrid systems.
TALKING POINT Until AI sentiment improves, it's better to sit out the global tech trade, Citi tells investors
The tech-sector turbulence could get worse, strategists at Citi said Monday in a note downgrading the sector.
Citi's global strategy team of Beata Manthey, David Groman and Nikhil Jadhav announced a tactical adjustment to lower its rating of tech stocks globally and in the U.S. to neutral in a research note published Monday in the midst of a particularly turbulent period for tech stocks. The extent of the recent selloff has left the tech-dominated Nasdaq NDX COMP at forward valuations last seen at the onset of the COVID-19 pandemic in March 2020.
The volatility has prompted a major switch in market leadership from cyclical to defensive sectors, resulting in a 15% outperformance of the latter over the last month alone. Manthey calls this the "steady market, violent rotation" phenomenon. The Citi team now regards the risks to equity markets as more evenly balanced because earnings forecasts for 2027 have remained steady while stocks corrected and the drop in oil prices CL00 BRN00 may also offer support.
Despite the market drawdown, though, the report discusses the prospects for further weakness in tech XLK IYW.
Investors are now neutral on tech relative to their weighing in indexes, but the Citi analysts want the sector to turn "properly negative" before they would be inclined to recommend it.
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