Apple Shares Slip as Tech Sector Faces Broad Sell-Off (3 Nov)

Fiscal fourth-quarter revenue hits 114.5 billion dollars

Analysts had forecast revenue of approximately $113 billion, according to the Motley Fool and Reuters.

The company also reported earnings per share of $2.10, topping market forecasts. This figure exceeded the projected $56.54 billion, which represented a 15 percent climb and a slowdown from the 22 percent growth recorded in the previous three months.

China and iPad sales underperform expectations

Sales in China and the iPad business fell short of expectations. These results highlight challenges for the company beyond its core iPhone franchise.

John Ternus leads first earnings call as chief executive

John Ternus led this earnings call as the new chief executive officer. This event marks the start of a post-Tim Cook era for Apple.

Market scrutinizes Apple's artificial intelligence spending

Apple projects its capital expenditure for the year at $11 billion to $14 billion. This amount is lower than the $100 billion plus spending announced by AI-focused hyperscalers including Meta and Microsoft.

Analysts expect the market to scrutinize Apple’s comments on artificial intelligence during the earnings call, even though the company is not a major AI-capex player. Amazon and Alphabet warned that capital expenditures could increase next year despite current negative cash flow. The market penalized those firms for perceived excessive spending.

Northern Trust chief investment officer Eric Freedman wrote that investors are evaluating the balance between monetization and spending for AI hyperscalers. Investors are focusing on capex plans, financing needs, cannibalization of existing businesses, and evidence of returns.

Nasdaq 100 nears correction after broad tech sell-off

The Nasdaq 100 has recorded its worst month in over a year and is nearing an official correction after falling 9 percent from its early October high. Investors remain focused on a sharp sell-off in artificial intelligence stocks that occurred on Friday, with volatility expected to persist this week.

Microsoft closed at $507.12, down 2.83 percent, while Alphabet shares fell 0.30 percent to $278.99. Apple trading volume reached 55.4 million shares, which is 32 percent above the three-month average of 42.1 million shares.

JPMorgan projects S&P 500 movement based on midterm elections

JPMorgan’s market-intelligence team projects the S&P 500 could move down 25 basis points or up 50 basis points in the near term depending on midterm election results. A Republican sweep of the House and Senate would lift the index by 1 percent to 1.25 percent.

A Democratic House with a Republican Senate would boost the index by 50 to 100 basis points, while a Republican House with a Democratic Senate would add 25 to 75 basis points.

Craig Cohen of JPMorgan noted that the S&P 500 has risen in the year after every midterm election since 1950, averaging a 15% gain, possibly because incumbent parties lose seats and resulting gridlock benefits Wall Street.

Oil prices drop six percent on diplomatic developments

Brent crude and West Texas Intermediate each fell 6 percent on Monday as markets considered the possibility that the United States and Iran might revive diplomatic efforts to end their conflict.

A New York Times report that the United States and Israel are planning strikes on Iran after the midterm elections caused oil prices to spike in recent weeks.

Central bankers hold interest rates as Palantir earnings loom

Central bankers left interest rates unchanged at their most recent policy meeting, citing the need to monitor inflation trends before making further moves.

Investors now look toward corporate reports, with Palantir scheduled to report earnings after the market close later this week.