A look at the day ahead in U.S. and global markets from Mike

Dolan

With next week's U.S. election now dominating thinking, the last

two megacap earnings reports of the week appear to have calmed

the stock market somewhat and a potentially noisy October

payrolls report is up next.

Amazon ( AMZN ) and Apple ( AAPL ) got different market

receptions to their updates overnight - the remaining two of

five "Magnificent Seven" firms reporting this week.

Amazon ( AMZN ) stock jumped 6% on forecast-beating profit and sales,

with the company indicating healthy results in the holiday

quarter thanks to its faster shipping times and a move to stock

lower-cost items.

It was a relief to markets that saw fresh doubts this week

about the speed with which the hefty spend on artificial

intelligence was translating into returns for Big Tech giants.

Apple ( AAPL ) underwhelmed with its beat and the stock is off about

1% before Friday's bell. Its AI-enhanced iPhone made a strong

start, pushing quarterly sales ahead of expectations. But a

modest revenue forecast raised questions about the holiday

season and a decline in China sales bothered some analysts.

Ailing chipmaker Intel ( INTC ) perked up, however, with a

7% rally overnight on optimism about a turnaround in its PC and

server businesses.

The market-wide upshot today is that index futures

look set to regain some of Thursday's heavy losses.

And more than 60% through the current earnings season, the

blended annual profit growth estimate for the S&P500 has

actually picked up pace to as much as 7.5% - well up on

pre-season forecasts of just over 5%.

With sovereign bonds markets focusing more attention

agitated by post-budget British gilts, U.S.

Treasuries remained relatively calm as the October employment

report is due later on Friday, the dead heat election race

enters its final weekend, and a second Federal Reserve interest

rate cut of the year is expected next week.

Although a month of storms may distort the numbers, a

Reuters survey showed nonfarm payrolls probably increased by

113,000 jobs last month after rising by 254,000 in September and

jobless rate is forecast to remain unchanged at 4.1%.

This week's private sector payrolls update for October and

weekly jobless data came in hotter than many had bet on, but

inflation readings were calm enough to keep futures confident

the Fed will deliver a quarter-point post-election rate cut next

Thursday.

The personal consumption expenditures (PCE) price index rose

0.2% in September, driven mainly by services but with goods

prices actually falling outright for a second consecutive month.

An annual 2.1% gain in the headline PCE price index was the

smallest since February 2021 and close to the Fed's target.

ISM and S&P Global release October U.S. manufacturing

surveys later on Friday too.

In Europe, British gilts and the pound calmed down somewhat

on Friday after a torrid week that saw 10-year yields hit their

highest in a year following heavy tax and borrowing plans in the

new Labour government's first budget.

Worrying on Thursday was a slide in the pound

even as yield premiums on gilts over other major

government bonds increased and money markets removed at least

one Bank of England rate cut from next year's horizon.

Markets still see an 80% chance the BoE will deliver its

second rate cut of the year next Thursday although its 5% policy

rate is now expected to remain above 4% through 2025 - almost

half a point higher than the expected Fed rate at the end of

next year.

Helping calm the piece on Friday, credit ratings agency S&P

said Britain's public finances were "constrained" after the

budget but added it had not revised its forecasts for borrowing.

"We have not changed our headline budget deficit forecasts

as a result of the budget announcement, partly because our

existing projections already contain wider deficits that reflect

lingering public spending pressures," it added.

Elsewhere, oil prices edged higher and world stocks

were mixed - with European indexes advancing but Japan's Nikkei

underperforming with losses of more than 2% on a

slightly stronger yen and the previous day's Wall Street slide.

Big U.S. oil firms top the earnings diary later.

Market bets on a U.S. election win for Republican Donald

Trump - Bitcoin, Trump Media and gold - were pared back.

The dollar index was firmer.

Key developments that should provide more direction to U.S.

markets later on Friday:

* US October employment report, October manufacturing surveys

from ISM and S&P Global

* US corporate earnings: Exxon, Chevron, PPL, Dominion Energy, T

Rowe Price, Cboe Global Markets, Church & Dwight, Cardinal

Health, Waters, LyondellBasell Industries, Charter

Communications

(By Mike Dolan, Editing by Hugh Lawson

[email protected])